Newman Law Group

Tustin Estate Planning Law Blog

How can I transfer assets to Fido?

Some people cannot imagine their lives without the companionship and affection provided by the family pet. In order to show their love and appreciation for the pet, many people choose to include the pet in their estate planning. In California, it is possible -- with a little planning -- to transfer assets to provide for a pet's needs after one's own passing. 

First, many people will want to choose a beneficiary who will later become the pet's caretaker. This can be a trusted family friend or an organization that will provide for the pet's needs. A person may select the beneficiary in his or her will and provide money for the care of the pet, but this provision is not always enforceable. 

Power of attorney lets individuals give authority to a helper

There may come a time in life when individuals become incapacitated and unable to care for their own affairs. At the time of such an event, it is beneficial to have a trusted person already in place who is authorized to help you by managing your financial and medical affairs. The power of attorney is the name of this type of authorization, and it is commonly used as part of an estate plan in California. 

In the absence of a power of attorney, the court will appoint one. The person appointed by the court may not be the one the principal would have chosen, but that person has whatever powers are granted to them by the court, and not necessarily the powers that would have been selected by the individual. Even if the person is a family member, there could be differences of opinion between the agent and the principal. 

Transfer assets with a special needs trust

A disabled individual faces certain unique struggles in saving money for his or her needs. For the disabled individual who has been disabled for his or her entire life, a parent may wish to transfer assets to that person upon death and ensure that he or she will have all needs provided for in the future. In some cases, however, a large pool of assets can jeopardize the disabled person's benefits and may not be worth the risk. California residents have several options when choosing to save for the benefit of disabled individuals. 

One way to support a disabled person with financial gifts is to set up a special needs trust. This type of trust allows the person to receive financial resources while holding the assets in trust. Since the assets are not in the disabled person's name, benefits programs are not affected. Distributions from the trust can be used for financial needs that are in his or her best interests, that aren't covered by other benefits programs, are for his or her sole benefit and are fiscally prudent. 

Wills are an important component of asset protection

An individual doesn't need to be Scrooge McDuck in order to benefit from an estate plan. Most individuals and their families can benefit from a carefully drafted and enacted plan. In California, wills and trusts can be an important aspect of asset protection. 

Experts recommend that everyone have a will. Not only does the will help a person designate to whom their assets will go, but it is an opportunity for a person to communicate his or her final wishes. In a will, a person could choose who will care for their children or pets, and it will name an executor who will help carry out one's final wishes. A will can contain very specific instructions for how to transfer one's property. In many locations, a will needs to be witnessed and signed by witnesses. 

Tax law changes impact estate planning and charitable giving

The Tax Cuts and Jobs Act of 2017 is sure to have some long-term impacts on American finances. Since the change is so recent, experts are still trying to dissect the implications and make predictions about financial futures. Some people claim that the raising of the estate tax threshold will lead to a reduction in charitable giving by high net worth individuals. Others say that, for estate planning purposes, some California residents may even increase their giving, even in light of the changes. 

Previously, there was a net worth limit of $5.49 million for individual estates and $10.98 million for couples as far as federal taxes were concerned. Over 80 percent of states have no inheritance taxes. As it was, the estate tax did not affect most Americans, and now that the limits have been raised, the taxes will affect even fewer. 

Making estate administration less complicated with organization

Over the years, a person is likely to amass a pile of stuff, both physically and on paper. When the time comes for estate planning, many people will choose to streamline and organize their estate to make estate administration easier for the person in charge. By applying commonly used techniques, California residents can have an easier time organizing their estates. 

After a person's death, the heirs will be responsible for sorting through and settling the affairs. One facet of closing out an estate is the physical stuff. In Sweden, individuals use a technique known as Swedish Death Cleaning, which encourages people older than 50 to start the process of sorting, selling and getting rid of items that they no longer use or want. This prevents one's heirs from having the burden of sorting through piles of things that nobody really wants to keep.

Health care planning helps achieve future goals

It's as old as the fable of the ant and the grasshopper. By now, most people know that planning for the future early can be a huge help later on in life. One way that individuals plan for future goals is through health care planning. California residents may choose to take certain steps toward end-of-life care now to ensure that needs are met further down the line. 

Assigning a power of attorney can allow an aging or incapacitated person to have their affairs managed by a responsible party while they are not able to. A power of attorney can manage finances and access medical information for the individual. Some people choose to use a revocable trust to allow a successor trustee to handle affairs easily when necessary. 

Trust preparation includes funding the trust

For many people, preparing for the future means making an estate plan. Instead of a will, some people choose to use a trust as a way to protect assets for heirs. One common trust preparation mistake is forgetting to transfer the title of assets into it. A trust is like a storage tote -- it only protects your valuables if you put them in it. California residents looking to offer the most benefit to their successors may find this reminder quite useful. 

In a revocable living trust, an individual and his or her spouse will transfer the title of all assets into it and serve as co-trustees. This won't change the trustee's ability to control the assets, but it will help the assets avoid probate in the event of the death of the trustee. After the trustee's death, the successor trustee can step in and begin to manage the assets. A successor trustee can also take charge if the original trustee becomes incapacitated. 

Naming, updating beneficiaries in wills could prove useful

It is not unusual for individuals to have different views on estate planning. Some parties may immediately consider it beneficial, and others may think it unnecessary or at least a low priority. Of course, even California residents who have created wills and other estate planning documents may not use their plans to full advantage if they make mistakes when naming beneficiaries.

One major issue that could lead to probate issues relates to not naming any beneficiaries at all. Some individuals may feel comfortable letting the court and state law dictate which surviving relatives receive what. However, not making designations could lead to drawn-out legal proceedings, and surviving loved ones could face conflict and contention over assets. Additionally, even if a person did have specific individuals in mind for bequests, if those ideas are not documented, they cannot be known in court.

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.