Newman Law Group

Tustin Estate Planning Law Blog

Early planning can make for easier estate administration

Starting planning early can ensure heirs have an easier time upon one's passing. Estate administration comes with work and responsibility, and the more time and planning that one invests in the process now, the less confusion and suffering will result for the ones left behind. In California, there are benefits to early estate planning. 

Early planning allows the individual to thoroughly review the assets. It gives time to collect account information, deeds, titles and other important documents all in one safe place, and allows the individual to make a comprehensive plan for administration. When the time comes, the executor, or the successor trustee, will have an established plan in place to follow to ensure that loved ones are protected and final debts are paid off. 

Power of attorney accused of theft

Choosing an individual who will manage one's affairs can be an important decision. A recent news story highlights a potential problem when the power of attorney is given to the wrong person. A woman hired by the previous power of attorney was able to have the authority transferred to her, which she then allegedly used to pilfer funds from a bank account. People in California contemplating their choice for this role may learn more about why having a trusted person working for them can be vital. 

The role of a power of attorney is to handle the financial affairs of a person who is no longer capable of doing so alone. Often, the person who is given the responsibility is a younger relative or trusted counsel. Many individuals who are older find themselves in need of this type of assistance, such as the 101-year-old woman in the recently reported case. 

Estate tax changes may affect estate planning

Many individuals like to have a plan for anticipated major changes in life. For some, estate planning is important for the inevitable event of someone's passing. When creating a plan, many folks in California wonder about how estate taxes could affect them and whether proposed changes could alter existing plans.

The estate tax only affects a small number of wealthy individuals. Less than one percent of estates will be affected by this tax since the current threshold is $5.6 million. Two plans are circulating, one in the House and the other in the Senate, that will either double the limit or eliminate it altogether. Some experts worry that the elimination of this tax could affect charitable giving in the United States. Typically, wealthier individuals use charitable giving to avoid paying the estate tax.

A trust can be a measured way to transfer assets

When it comes time to plan the gifts of inheritance, some individuals may find themselves a bit uneasy. If a person has accumulated a tidy little sum of wealth, he or she may have various reasons for apprehension when it comes time to transfer assets. One may be concerned about the heirs' ability to handle large sums of cash without harming themselves, or there may be concerns about how the money will be spent. In California, individuals with these types of concerns about their heirs may choose to use a trust to bequeath their estate. 

A trust allows the planner to put a structure around the gift of the inheritance. The estate, instead of being given as one lump sum, can be invested into accounts that pay out quarterly, monthly or annually. This gives the planner the peace of mind that the lump sum will not overwhelm the heirs. 

Evolving technology can change how wills are honored

A recent court case shows that attitudes about technology and legal documents are shifting. Not every jurisdiction will share the same interpretation of the law, and in fact, this particular court case did not happen within the United States it serves as an important reminder of how technological updates can affect estate planning. Before individuals start text messaging their wills, though, they should consider the benefits of formal estate planning in California.

The international case involved a man's unsent text message. In the message, he gave his wishes that the wife be left out of the will, indicated where stored money was kept and revealed his wishes for spreading his ashes. Even though the text was never sent, the court ruled that the text served as the man's last will and testament.

The right executor can mean a seamless probate

Those in California who take the time to plan their estates often have to make difficult decisions. Among those delicate choices may be the naming of an executor. This is not a decision to be made lightly or hastily, for example, simply naming the oldest child to the position. Because an executor is responsible for completing many vital tasks to carry an estate through probate, it is important that the testator chose a person with certain qualities.

In most states, an executor must be bonded so that heirs are protected against someone who might try to misappropriate assets from the estate. Someone with poor credit or delinquent debt may not be able to obtain this bonding. In addition, the testator will want to choose an executor who is younger to reduce the possibility of the executor passing away before the testator. One way to circumvent this is to make a general appointment, such as naming any children who have reached a certain age.

Health care directives can ease end-of-life transition

At the end of life, many people do not wish to have certain life-saving interventions, choosing instead for methods that ease the transition to death. Some feel that heroic measures are unnecessary and that instead they would just like to be kept comfortable until passing. In California, health care directives are legal documents that set out a person's wishes for end-of-life that can be referred to in case of emergency or if the person is no longer able to communicate their wishes. 

One statistic claims that only 25 percent of people have advance directives in place. An advance care planner can work with an individual to determine what options exist for end-of-life care, choose which option best fits their preferences and needs, and share those preferences with medical staff and family. The planning process can be as simple as a single conversation, or it may be a multi-step process. 

Access to original documents helpful to estate administration

In the wake of the fires ripping across the state, many individuals have lost everything. Not least among the items lost are important documents vital to estate administration. By keeping the documents in a safe place in California, an individual may reduce the likelihood that the estate process will be delayed. 

Some experts recommend storing documents such as a will or a trust in a safety deposit box in a bank. When another person has access to the box, such as the executor or trustee, they will be able to implement the estate plans even if the person's home has been destroyed by a natural disaster. If the original or a duplicate original will can be located, then the estate may enter probate. However, if the will is missing, and was last thought to be in the possession of the testator, then the missing will is considered revoked. 

Hefner had foresight when it came time to transfer assets

Hugh Hefner, the Playboy icon who embodied the concept of a carefree, pleasure-seeking life, also saved time for sober, careful planning. At least it appears so to a couple of experts who have recently written about the issue. They say the famous California publisher took care with his plan to transfer assets

Hugh Hefner remarried late in life and also was a father to four children. He controlled assets of high value, spread across savings, real estate and his business. Similar circumstances have certainly made chaos in other families when close attention was not paid to the division of the estate property. 

Pick a power of attorney carefully

When an employer hires someone, efforts are made to pick the right person for the job. A power of attorney selection process can be similar. An individual will want to make sure that the chosen person has the skills and emotional maturity to handle important decisions for the person granting the power should the maker become incapacitated. In California, there are two types of power of attorney, medical and durable, and each has a specific duty. 

Some experts believe that a good basic guideline for determining whether a person is appropriate to be given POA is the "checkbook across the table" test. Would the person being selected be a trusted individual with the checkbook? Could that person be counted on to responsibly pay bills and handle the financial affairs? If the person can pass the checkbook test, then the role may be an appropriate one for that person.