Newman Law Group

Tustin Estate Planning Law Blog

Power of attorney can be useful part of aging plan

A person will sign a number of legal documents throughout his or her life. It has been argued that the power of attorney document is among the most important. However, many individuals never have one. In California, individuals who wish to prepare for a time when they are no longer able to make decisions for themselves may wish to learn more about this type of legal designation. 

One should never assume that all powers of attorney are the same, or depend on rote, simple forms to designate such. Since a person chosen to be one's personal representative will have the ability to make binding decisions. An individual should strive to make the responsibilities and limitations clear, as well as specific preferences. Finding a trustworthy person who has the personality and time to devote to the task can be extremely important as well. 

Estate administration today includes access to digital accounts

As a society, individuals are creating and using digital data more than ever before. It has been said that between the years of 2012 and 2014, humans produce more data than human civilization has ever produced in the history of time before that. In California, after a person passes away, the executor may need to have access to a person's various digital accounts. Estate administration can possibly be eased if a person specifies instructions for handling these accounts in the will. 

Since the phenomenon is relatively new, the law is still catching up with technology. Recently, a group of lawyers recommended a draft uniform document stating that a person should be able to specify in a will what happens with the digital assets after death. At least 39 states have adopted the uniform document, and several more are considering laws on this matter in the upcoming year. 

Dynasty trusts can aid in reducing estate taxes

A person with a significant amount of wealth may wish to maximize the benefit of passing along the wealth to heirs, or they could also wish to have some control over what happens to the assets after he or she dies. Certain types of trusts, such as a dynasty trust, may be more helpful for this than the typical will. Another benefit of a trust over a will is that it aids in reducing estate taxes. For some California individuals, a dynasty trust can help them achieve their estate planning goals. 

A trust prevents a single person from owning a particular asset. When the item is placed in the trust, it is owned by the trust. Then, the trustee can also set guidelines about who controls the asset and how the asset will be managed. The trust will then operate by those rules. 

Wills could require an update in 2018

The new year brings new tax laws, and new policies may give reason to adjust estate planning documents. The major change is the raising of the threshold for the estate tax, and those individuals who will be affected by the change will likely want to review estate documents. For most people in California, wills and trusts benefit from frequent review, with updates whenever there is a major life change. 

For married couples, federal estate taxes apply only to those with accumulated assets in excess of $22 million. This doesn't mean that most individuals wouldn't benefit from an estate plan, however. An important aspect of estate planning has to do with financial health while one is still alive, and how one chooses to pass along any assets after death. Each state sets its own procedures as to how property and funds are routed after a person passes away, and unless the person designates another way to do so, state law will determine the outcome. 

Many reasons for a plan to protect estate assets

This time of year, many people resolve to get financial affairs in order so they are better prepared for the future. The reasons for a plan to protect the estate assets are many. Recently, a news article covered some of the most common reasons for estate planning, and also gave some insight into the types of estate planning tools, which may be of interest to California residents. 

Estate panning can protect the family, prevent unnecessary costs and support important goals. Less often, it is used to protect people from tax implications, but recent changes have made the estate tax a concern only for those who have an estate valued at $11 million, or $22 million for couples. Family benefits include financially protecting an inheritance for the heirs and a surviving spouse, providing for minor children or disabled individuals, and naming guardians for any minor children. Cost reducing benefits include minimizing income taxes, preserving the family business and preventing the loss of assets to creditors. A person can choose to support important goals by making a gift to charity via the estate plan.

A trust can transfer assets to specified trustees

When it is time to plan for the passing of funds and property to others, many people wonder about their options for doing so. Some choose a will, but another option to transfer assets is the trust. Trusts are documents that can help a person determine how and to whom certain assets are disbursed, and they also have specific benefits for those California residents who choose to create one. 

A trust comes with several benefits, the main one being that it allows a person to choose where assets go and when the beneficiaries can access them. A trust can also pass those benefits quickly and privately, as opposed to the public probate process that a will must undergo. The trust can even possibly save court fees and estate taxes for the heirs.  

Trust preparation: Don't make these mistakes

Those people who are looking toward the end of their lives are already one step ahead of the game. By laying down plans for an estate, a person is able to ensure that specific wishes for the distribution of assets are honored after death. Unfortunately, a person who makes certain estate planning mistakes may not get the desired outcome. Careful trust preparation can help one achieve one's goals. Luckily, informed California residents can be better prepared to make certain estate planning choices. 

When planning a trust, one should ensure first that documents are kept up-to-date, accessible and that the relevant individuals such as successors are aware of the documents. Also important is funding the trust. A trust is only as good as the assets contained within it, so a person who has created such a document should ensure that the assets are transferred into the structure. Some individuals choose a pour-over clause, which says that any of the trustee's assets not held within the trust are transferred into it upon death.

Medical power of attorney can offer help in time of need

Many individuals believe that estate planning is only for rich people. This is typically not the case, as certain aspects of an estate plan can ensure that individuals live the lives they envision for themselves until death. A medical power of attorney can be a helpful tool in any person's estate plan, and a person in California may wish to review the roles and responsibilities of such a person as part of creating an estate plan. 

During the time that a person may become incapacitated, a medical power of attorney can step in and relay the wishes of that person so they will be honored. A religious person who has strong views on blood transfusions may wish to choose a trusted individual to represent him or her in the event of a complication in which he or she cannot advocate for him or herself. The person chosen is considered the health care representative of the other person. 

Estate planning: not just for the wealthy

A good plan never hurt, and indeed it has helped many individuals go through a challenging situation more easily. Estate planning may sound like overkill to those who don't have millions to distribute after their deaths, but in fact, a good estate plan can make everything crystal clear and also reduce the amount of your assets that are lost to court costs and confusion. California residents have the ability to estate plan at any age, and they may find some good reasons for doing so. 

An estate plan, such as a will, can help the individual to name names and decide who will benefit from their accumulated assets upon death. A will can be challenged, however, so many individuals choose to begin giving away some of the assets before death. Tax laws enumerate the amounts that can be given without taxation, so a person may be inclined to research the law before giving too much away. 

Wills help those who wish to leave a legacy

Thinking about estate planning doesn't have to be a grim reminder of the inevitability of death. Reframe this idea, and it turns into a way to diminish the stress on family and loved ones at the time of one's passing -- a time likely to send those closest to you into a challenging time of grief. Individuals in California can look at estate planning in this light and possibly have some of their concerns alleviated. By learning more about wills, people may be more at ease when the time comes to plan their own will. 

In the event that one dies intestate, or without a will, the process will be presided over by a judge. The judge will choose the administrator of the estate, and the assets will be divided by state law. An intestate status may mean that the division of assets will not be in line with one's wishes, and that the process can be lengthy and potentially more costly.