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Entries in Incapacity Planning (49)

Tuesday
Jun202017

Why Your Estate Plan Must Include Both Lifetime and “Death-time” Planning 

According to a March 2017 survey by Caring.com, six out of ten Americans have no will or any other kind of estate planning. Many said they’d get around to it, eventually. When they’re old. (The survey did find that the elderly are much more likely to have some plan in place.) It’s all too clear that most of us think “estate planning” is a euphemism for “death-time” planning. Indeed, in the Caring.com survey, one-third said that they didn’t need an estate plan because they didn’t have any assets to give someone when they’d died.

However, comprehensive estate planning isn’t just death-time planning. It’s lifetime planning, too. It’s about ensuring that your medical and financial decisions can be made by someone that you trust. Lifetime planning can help you address potential tax liabilities, find you benefit programs you may eligible for, and protect your family from costly guardianship or conservatorship court. It can make sure that a trusted party looks after and protects your affairs, if you’re not able to.

Lifetime Planning Tools:

As estate planners, we have an arsenal of lifetime planning tools to benefit clients, and we can custom-tailor such plans to an individual’s needs. Here are a couple of the most common (and necessary) lifetime planning tools you should discuss with us.

Revocable Living Trusts:

When people hear the word “trust,” they may think of “trust fund babies” or think that trusts are something only for the super-rich. 

However, a trust is simply a legal tool that can help almost anyone with property - not just the wealthy. In a trust, assets you own are re-titled and transferred into the trust. When this happens, technically, you no longer own your real estate, stocks, bonds and similar properties. Instead, the trust owns them all. But you still control everything in the trust: You can buy and sell these assets as if they were still in your name. In fact, revocable living trusts don’t even change your income taxes while you’re alive. You continue to file your tax returns as you always have, making them very easy to administer while you’re alive. And as the creator, or settlor of the trust, you can continue to make changes to the trust as long you’re competent to do so.

Once you die, the trust becomes irrevocable, meaning its terms can’t generally be changed. At this point, your chosen successor trustee distributes assets to beneficiaries (the people, such as your spouse, children, a church, or other charity, you named to inherit from you). In many respects, the role of the trustee is akin to that of the Executor of a Will. However, a trustee of a fully funded trust does not have to go through the public and expensive probate process. Trusts are private unlike wills, which can also provide valuable privacy to your family. While widely unknown, a Will becomes effective only after it has been approved by the Probate Court.

Durable Power Of Attorney:

Durable powers of attorney come in two forms. With a standard durable power of attorney, a person is legally designated to act on your behalf, in the ways specified in the document. You can make the durable power of attorney broad in scope or quite limited, and it becomes active as soon as you sign it. Under this document, the person may sign checks for you, enter contracts on your behalf, even buy or sell your assets. What they can do depends on what you authorized in the document.

In the case of a “springing” power of attorney (POA), also known as a conditional power of attorney, the person only has this authority if you become incapacitated. At that point, the POA “springs” into action.

There is no “best” power of attorney. We’ll work with you to determine which is the best fit for your needs and goals.

Health Care Power of Attorney:

In an instant, an accident can change a healthy, vigorous person into someone who can’t make her healthcare decisions. Others face a long decline in mental capacity because of a disease like Alzheimer’s. In either case, you want to empower those you trust to make medical decisions for you. Though health care legal documents vary somewhat by state, the general principle is that, through this document, you authorize someone to make medical decisions for you, if you no longer have the capacity to do so. You can also communicate your desired treatment and end-of-life care. However, those instructions may not be valid in every state.

A Holistic Approach:

Lifetime planning is a comprehensive approach to estate planning. And while it addresses needs of the living, comprehensive planning may also improve the after-death part of your plan as well, because it can reduce family conflict and preserve assets against court control or interference in the event of incapacity.

Contact an Experienced Estate Planning Attorney:

For insight into how to establish a trust and implement other lifetime planning options, we are here to help.

If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller. 

Wednesday
Jun142017

Integrating Community Property Trust Into Your Estate Plan

A well-crafted estate plan is comprised of many individual parts, and careful, trust-based estate planning is the best way to ensure the highest possible quality of life for you and your loved ones.

One way couples can make get the most mileage out of their estate plans is through community property trusts. This is a special type of trust that combines a couples jointly acquired assets as community property and can save a significant amount of taxes.

Why Community Property Trusts Are Beneficial:

The essential benefit of a Community Property Trust (“CPT”) is that the basis of community-owned property is stepped up when one member of the couple dies. Not only that—it also steps up the basis for the surviving spouse’s half of the property (rather than only half, which is what happens with “plain” jointly owned property). This means that the capital gains tax will take a much smaller percentage of the surviving spouse’s wealth when the property is sold.

The Limits Of Community Property Trusts:

There are two states in which CPT’s can be formed: Alaska and Tennessee. These trusts must be funded and have ongoing requirements to achieve their tax benefits. So, they are not a panacea and don’t necessarily fit every married couple’s situation.

How CPT’s Fit In With Other Estate Planning Strategies:

If your estate plan is robust and ready for all of life’s potential successes and challenges, it likely includes any number of revocable and irrevocable trusts, powers of attorney, long-term care directives, and miscellaneous probate-avoidance precautions.

Community property trusts can only work for the property you fund into them, meaning that you can and should have other strategies in place such as a revocable trust, will, power of attorney, etc. The same property cannot be managed under multiple trusts at the same time, so it is important for us to figure out which of your assets you’d like to set aside for other types of trusts before settling on the details of your CPT.

Community property trusts are not for everyone. However, if we can determine that setting one up is a realistic fit for you and your family, you can expect to save a large sum by avoiding taxes you would otherwise accrue. Schedule your complimentary Estate Planning Strategy Session with our office, to see whether this solution might be an effective addition to your other estate planning strategies.

If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.

Friday
Jun092017

6 Life Events That Require An Immediate Estate Plan Update

Estate planning is the process of developing a strategy for the care and management of your estate if you become incapacitated or upon your death. One commonly known purpose of estate planning is to minimize taxes and costs, including taxes imposed on gifts, estates, generation skipping transfer and probate court costs. However, your plan must also name someone who will make medical and financial decisions for you if you cannot make decisions for yourself.  You also need to consider how to leave your property and assets while considering your family’s circumstances and needs.

Since your family’s needs and circumstances are constantly changing, so too must your estate plan. Your plan must be updated when certain life changes occur. These include, but are not limited to the following Six: 1) Marriage, 2) The birth or adoption of a new family member, 3) Divorce, 4) The death of a loved one, 5) A significant change in assets, and 6) A move to a new state or country.

1. Marriage: 

It is not uncommon for estate planning to be the last item on the list when a couple is about to be married - whether for the first time or not. On the contrary, marriage is an essential time to update an estate plan. You probably have already thought about updating emergency contacts and adding your spouse to existing health and insurance policies. There is another important reason to update an estate plan upon marriage. In the event of death, your money and assets may not automatically go to your spouse, especially if you have children of a prior marriage, a prenuptial agreement, or if your assets are jointly owned with someone else (like a sibling, parent, or other family member). A comprehensive estate review can ensure you and your new spouse can rest easy.

2. Birth Or Adoption Of Children Or Grandchildren: 

When a new baby is born, it seems like everything changes—and so should your estate plan. For example, your trust may not “automatically” include your new child, depending on how it is written. So, it is always a good idea to check and add the new child as a beneficiary. As the children (or grandchildren) grow in age, your estate plan should adjust to ensure assets are distributed in a way that you deem proper. What seems like a good idea when your son or granddaughter is a four-year-old may no longer look like a good idea once their personality has developed and you know them as a 25-year-old college graduate, for example.

 3. Divorce: 

Some state and federal laws may remove a former spouse from an inheritance after the couple splits, however, this is not always the case, and it certainly should not be relied on as the foundation of your plan. After a divorce, you should immediately update beneficiary designations for all insurance policies and retirement accounts, any powers of attorney, and any existing health care proxy and HIPAA authorizations. It is also a good time to revamp your will and trust to make sure it does what you want (and likely leaves out your former spouse).

 4. The Death Of A Loved One: 

Sometimes those who are named in your estate plan pass away. If an appointed guardian of your children dies, it is imperative to designate a new person. Likewise, if your chosen executor, health care proxy or designated power of attorney dies, new ones should be named right away.

 5. Significant Change In Assets

Whether it is a sudden salary increase, inheritance, or the purchase of a large asset these scenarios should prompt an adjustment an existing estate plan. The bigger the estate, the more likely there will be issues over the disposition of the assets after you are gone. For this reason, it is best to see what changes, if any, are needed after a significant increase (or decrease) in your assets.

 6. A Move To A New State Or Country

For most individuals, it is a good idea to obtain a new set of estate planning documents that clearly meet the new state’s legal requirements. Estate planning for Americans living abroad or those who have assets located in numerous countries is even more complicated and requires professional assistance. It is always a good idea to learn what you need to do to completely protect yourself and your family when you move to a new state or country.

If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller. 


Wednesday
May312017

5 Essential Legal Documents Required for Incapacity Planning

Comprehensive estate planning is more than your legacy after death, avoiding probate, and saving on taxes. Good estate planning includes a plan in place to manage your affairs if you become incapacitated during your life and can no longer make decisions for yourself. 

What happens without an incapacity plan?

Without a comprehensive incapacity plan in place, your family will have to go to court to get a judge to appoint a guardian or conservator to take control of your assets and health care decisions. This guardian or conservator will make all personal and medical decisions on your behalf as part of a court-supervised guardianship or conservatorship. Until you regain capacity or die, you and your loved ones will be faced with an expensive and time-consuming guardianship or conservatorship proceeding. There are two dimensions to decision making that need to be considered: financial decisions and healthcare decisions.

  •  Finances During Incapacity:

If you are incapacitated, you are legally unable to make financial, investment, or tax decisions for yourself. Of course, bills still need to be paid, tax returns still need to be filed, and investments still need to be managed.

  •  Health Care During Incapacity:

If you become legally incapacitated, you won’t be able to make healthcare decisions for yourself. Because of patient privacy laws, your loved ones may even be denied access to medical information during a crisis and end up in court fighting over what medical treatment you should, or should not, receive (like Terri Schiavo’s husband and parents did, for 15 years).

You must have these five essential legal documents in place before becoming incapacitated so that your family is empowered to make decisions for you:

1. Durable Power of Attorney:

This legal document gives your agent [called your Attorney-in-Fact] the authority to pay bills, make financial decisions, manage investments, file tax returns, mortgage and sell real estate, and address other financial matters that are described in the document.  

Financial Powers of Attorney come in two forms: “durable” and “springing.” A durable power of attorney goes into effect as soon as it is signed, while a springing power of attorney only goes into effect after you have been declared mentally incapacitated. There are advantages and disadvantages to each type, and we can help you decide which is best for your situation.

2. Revocable Family Trust:

This legal document has three parties to it: the person who creates the trust (you might see this written as “trustmaker,” “grantor,” or “settlor” — they all mean the same thing); the person who legally owns and manages the assets transferred into the trust (the “trustee”); and the person who benefits from the assets transferred into the trust (the “beneficiary”). In the typical situation, you will be the trustmaker, the trustee, and the beneficiary of your own revocable living trust. But if you ever become incapacitated, your designated successor trustee will step in to manage the trust assets for your benefit. Since the trust controls how your property is used, you can specify how your assets are to be used if you become incapacitated (for example, you can authorize the trustee to continue to make gifts or pay tuition for your grandchildren).

3. Advance Health Care Directive:

This legal document, also called a medical or Health Care Agent, gives your agent the authority to make healthcare decisions if you become incapacitated.

4. Living Will:

This legal document shares your wishes regarding end of life care if you become incapacitated. Although a living will isn’t necessarily enforceable in all states, it can provide meaningful information about your desires even if it isn’t strictly enforceable.

5. HIPAA authorization:

This legal document gives your doctor authority to disclose medical information to the agents selected by you. This is important because health privacy laws may make it very difficult for your agents or family to learn about your condition without this release. It is crucial that each fiduciary nominated in your estate plan that may need access to your HIPPA-protected health documents is granted such legal authority.

Is your incapacity plan up to date?

Once you get all of these legal documents for your incapacity plan in place, you cannot simply stick them in a drawer and forget about them. Instead, your incapacity plan must be reviewed and updated periodically and when certain life events occur such as moving to a new state or going through a divorce. If you keep your incapacity plan up to date and make the documents available to your loved ones and trusted helpers, it should work the way you expect it to if needed.

If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.

Sunday
May282017

Life Insurance and Estate Planning: Protecting Your Beneficiaries’ Interests

One misconception people have about life insurance is that naming beneficiaries is all you should do to ensure the benefits of life insurance will be available for a surviving spouse, children, or other intended beneficiary. Life insurance is an important estate planning tool, but without certain protections in place, there's no guarantee that your spouse or children will receive the benefit of your purchase of life insurance. Consider the following examples:

Example 1: David identifies his wife Betsy as the beneficiary on a life insurance policy. Betsy does receive the death benefit from the insurance policy, but when Betsy remarries, she adds her new husband’s name to the bank account where she deposited the death benefit. In so doing, she leaves the death benefit from David’s life insurance to her new husband, rather than to her children as she and David discussed before his death and which is what she indicates in her will.

Example 2: Dawn, a single mother, names her 10-year-old son Mark as a beneficiary on her life insurance. She passes away when he is twelve. The court names a relative as a guardian or conservator for Mark until he is of age. When Mark reaches his 18th birthday, his inheritance has been partially spent down on court costs, attorney’s fees, and guardian or conservator fees. Additionally, it hasn’t kept pace with inflation because of the restrictive investment options available to guardians or conservators. Dawn hoped the life insurance proceeds would be there for Mark’s college, but the costs and lack of investment flexibility mean there may not be as much as Dawn hoped.

Solution: Use a Trust as the Beneficiary on Your Life Insurance:

When estate planning, a common method for passing assets is by placing them in a trust, with a spouse or children as beneficiaries. The same approach may also be used for life insurance policy proceeds. You can designate the trust as the life insurance policy's beneficiary, so the death benefits flow directly into the trust. Two popular ways to accomplish this:

  1. Revocable Living Trust (RLT) Is the named beneficiary:

This option works well for those who have a modest-sized estate or who have already set up a trust. Naming your RLT as a life insurance beneficiary simply adds those death benefits to what you already have in trust, payable only to beneficiaries of the trust itself. The benefit of this approach is that it instantly coordinates your life insurance proceeds with the rest of your estate plan.

       2. Set up an Irrevocable Life Insurance Trust (ILIT):

For an added layer of protection, an ILIT can both own the life insurance policy and be named as the beneficiary. As The Balance explains, this not only protects the death benefits from potential creditors and predators, but from estate taxes as well.

With the estate tax exemption at $5.49 million per person in 2017, and a potential repeal on the legislative agenda of President Trump and the Republican Congress, you may not need estate tax planning. But everyone who’s purchased life insurance needs to take an extra step to ensure your loved ones' financial future. To discuss your best options for structuring your life insurance estate plan, schedule your complimentary Estate Planning Strategy Session with our office.

If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.

Wednesday
May242017

5 Reasons to Embrace the Emotional Side of Estate Planning

When you hear the phrase “estate plan,” you might first think about paperwork. Or your mind might land on some of the uncomfortable topics that estate planning confronts head-on: end-of-life decisions, incapacity, and your family’s legacy from generation to generation. Those subjects hit home for everyone.

But while that could feel like a reason to avoid estate planning, the emotional nature of these decisions is a reason to embrace the process with enthusiasm. Here are a few ways in which emotion in estate planning is a good thing:

  1. Estate Planning Creates Stability In Times Of Loss:

If you end up in a state of incapacity later in life, it’s guaranteed to be a difficult time for your family. If your estate plan doesn’t include detailed instructions for a trusted decision maker and an actionable long-term care plan, it’s guaranteed to be even worse. You can save your loved ones from the confusion about what to do and the pressure to make rushed choices if this occurs, allowing them to save their energy for processing the situation.

     2. Comprehensive Estate Plans Keep Emotional Matters Private

Detailed, trust-based estate planning with lifetime beneficiary directed trusts keeps your private matters out of the public eye. When your estate plan is scant—such as a simple “I love you” will—you’re running the risk of your estate going through court in a proceeding called probate. This means that choices become visible to those outside your inner circle. Because of the notice requirements, probate can also invite controversy and conflict which a private transfer would have avoided.

     3. Estate Planning Can Bring A Family Together:

Everyone has heard of a situation in which siblings argued over what their parents left them as beneficiaries. But the opposite is also quite true. When you get your family and other loved ones involved in your estate planning process, you gain a wonderful opportunity to show them how much you care. Creating your estate plan can strengthen the bonds of love in a family and serve as a reminder of those bonds for years to come.

     4. Your Estate Is About Much More Than Money:

Estate planning is about a whole lot more than just wealth distribution and taxes. During an estate planning session, we can talk about significant family heirlooms, your hard-won hobby collection, and other matters totally unique to your life. We can even dive deeply into the memories and intellectual property you want to make sure your beneficiaries receive, such as photos, art, and even recorded videos or audio files of family stories you’d like to share with future generations.

     5. An Estate Plan Means You’re Not Going It Alone:

You shouldn’t have to face trying times alone. Whether the estate in question is yours or a loved one’s, your estate planning attorney will have the answers. Let us take care of the nuts and bolts with regards to educating your appointed agents about their duties so you can know that your family will be in good hands if anything happens to you. The idea of setting everything straight on your own can be a stressful one, but these emotional decisions are much easier to make with a trusted advisor by your side.

We want you to feel ownership and investment in getting your estate plan to reflect who you are. Estate planning is an opportunity to look at some of life’s big questions and ultimately make sure your family feels your care for them through the choices you make. Schedule your free consultation with us today to see how we can create custom-made solutions that do just that.

If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.

Monday
May222017

How to Build Freedom From Court Interference Into Your Estate Plan

It’s clear why you might want to avoid court involvement in your estate for financial reasons, knowing that probate can quickly get costly and time consuming for those involved. But there is an emotional component to it as well. Your assets are just that: yours. And the idea of them being discussed and deliberated on in a public forum might not be such an appealing one.

If you feel that the matters of your estate should be kept private and that your assets should be distributed to your loved ones rather than eroded by court fees, you’re not alone. And luckily, all it takes to get there is a proactive attitude toward planning your estate. Let’s dive in:

A. Court Interference 101

Two of the most common situations in which the court becomes involved in your estate are guardianship and probate: 

B.  Guardianship and Conservatorship

When someone experiences mental incapacity, documents in their estate plan can direct a trusted person to carry out that individual’s wishes for the situation. But what if no such documents have been drafted? Then their business becomes the government’s business, too. A court proceeding called guardianship or conservatorship (also known as “living probate”) will be held to appoint guardians and conservators to manage the affairs of the incapacitated person.

C. Probate:

When an estate goes through probate, the court oversees the gathering of the probate assets, payment of any outstanding debts, determining whether a will is valid, and who the deceased’s heirs are. The proceedings ultimately determine who should receive the assets that are left after payment of debts, taxes, and costs.

D. Free Your Estate From Interference:

To avoid guardianship, conservatorship, and probate, you can work with us to keep your affairs out of court entirely.

  1.  Powers Of Attorney:

Agents or attorneys-in-fact are the individuals or entities you appoint to make decisions for you, be they medical or financial. You designate agents or attorneys-in-fact in a document known as a power of attorney. Durable powers of attorney are documents that continue in validity after the incapacity of the maker of the document (i.e. “durable” against incapacity). Since a durable power of attorney continues in validity, a durable power of attorney can help bypass the need for court-appointed guardianship or conservatorship.

       2. Trusts:

Trusts are agreements that hold some or all your assets, and trustees can be either individuals or corporate entities. Unlike wills, trusts do not go through probate. There are several types of trusts, and we can help you decide exactly which kind is best suited to your estate. By setting up and completely funding a revocable living trust, you can accomplish two important things. First, you can rest assured that your assets will be distributed to your chosen beneficiaries and won’t go through probate upon your death. Second, you also retain the ability to change or cancel the arrangement during your lifetime enabling you to adjust your plan as your financial or family circumstances change.

Ensure That Your Estate Plan Is Air-Tight:

Deciding on appropriate powers of attorney and drafting revocable living trusts are just two of the many steps we can take together to keep your affairs free from court involvement. With a solid estate plan put into place with the help of a trusted attorney, you can take comfort knowing that everything you’ve worked so hard to build and maintain will be passed along to only the people who matter most. Contact our office today to learn more about interference-proofing your estate plan.

If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.


 

Friday
May192017

Avoid Living Probate: How to Keep Guardians and Conservators Out of Your Estate

While most proactive individuals know the importance of having a well-rounded estate plan, it is typically considered as something that will take effect after they have passed away. But in fact, there are many ways in which comprehensive estate planning can have a positive impact on your life while you are still around to reap the benefits.

Planning for Incapacity:

Most people who reach old age come to a point at which they are no longer able to handle all their affairs on their own. In many cases this incapacity is due to dementia or other cognitive impairments associated with the elderly. At that point, the decisions they’ve made with their estate planning attorney can have major repercussions on their lifestyle and the handling of their wealth.

Take Alex for example. Long before Alex retired from his long and successful career as an IT manager at a large corporation, he put a cursory estate plan in place with a will detailing who would get which of his assets upon his death. But, Alex didn’t update his plan as he aged. In his late seventies, he developed Alzheimer's and it became unclear to his family how to proceed with his medical care and wealth management. Since Alex did not formally choose an individual to be in control of his affairs in the event of incapacity, it falls upon the court to appoint a guardian or conservator. Unfortunately, that’s where things get complicated.

What is guardianship?

Guardianship goes by a few other names, so it’s important to get familiar with various terms used to indicate similar and somewhat overlapping concepts. The other terms you may hear include “conservatorship,” “plenary guardianship,” and “living probate.”

It’s important to note that these terms are used in slightly different manners from state-to-state, with some states using “guardian” and “conservator” interchangeably. Others maintain the distinction of a guardian being a person who makes decisions about medical care and living arrangements, whereas a conservator makes decisions about property and assets. In either case, the guardian or conservator is essentially a substitute decision maker that’s authorized by the court to make decisions on behalf of the incapacitated person.

3 Reasons You Should Avoid It:

In the process of living probate, the court tries to settle on solutions that will fit the incapacitated individual’s best interests. However, there is a much better way. Here are just a few of the reasons guardianship and conservatorship are not ideal fallbacks:

    1. Cost To put it simply, living probate is expensive. The legal fees associated with court-appointed attorneys representing incapacitated individuals can chip away at their estates very quickly. Living probate also brings your affairs into the public sector.

    2. Privacy Alex may not have wanted his family to have to experience the financial and emotional costs of his living probate court proceedings, but he may also have felt less than enthusiastic about his personal affairs being discussed in a public forum.

    3. Clarity In addition to being costly and a compromise of privacy, living probate is also full of guesswork. If Alex had assigned powers of attorney and established long-term care provisions in his estate plan, his affairs would be handled exactly as he wished in the event of his incapacity. When the court is involved, they usually apply default rules of state law, which means the legislature is essentially making some choices for you and your family.

    How to Structure Your Estate Plan:

    What does an individual like Alex need to do to avoid the chance of his family having to go through living probate? There are a few specific steps we can take to make in planning your estate to ensure your affairs never end up in a court-appointed guardian’s hands:

    1. Powers of Attorney:

    A complete estate plan includes named powers of attorney who will fulfill the roles of guardians and conservators in the event of your incapacity. The difference is that these individuals will be chosen by you rather than by the court. There are several different types of powers of attorney for specific purposes, such as a healthcare power of attorney or a general durable power of attorney, the latter of which controls the management of your finances.

           2. Long Term Care Planning

    Although you may never need long-term care, building a strategy for it into your estate plan will allow you to relax knowing that you’ll receive long-term care according to your wishes if that becomes necessary. This type of planning also helps protect the assets in your estate plan from being used up on medical expenses before going to your beneficiaries.

    Avoiding guardianship and conservatorship through living probate is a relatively pain-free process if handled well ahead of time. Get in touch with us today to go over the parts of your estate plan that may need amending to give you and your family the best possible outcomes. We are here to help and can quickly get your estate plan in optimal shape.

    If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.

    Thursday
    May182017

    Do It Now: Name a Guardian for Your Minor Child

    We know it’s hard. Thinking about someone else raising your children stops us all in our tracks. It feels crushing and too horrific to consider. But you must. If you don’t, a stranger will determine who raises your children if something happens to you—your child’s guardian could be a relative you despise or even a stranger you’ve never met.

    Due to the importance of choosing an appropriate Guardian, and our experience seeing firsthand the difficulties people go through determining who to name—we have created a step-by-step Guide: How To Choose Your Child’s Guardian. To obtain your free copy, click here.

    No one will ever be you or parent exactly like you, but there is someone who could muddle through and provide for your children’s general welfare, education, and medical needs. Parents with minor children need to name someone to raise them (a guardian) in the event both parents should die before the child becomes an adult. While the likelihood of that happening is slim, the consequences of not naming a guardian are more than intense.

    If no guardian is named in your will, a judge—a stranger who does not know you, your child, or your relatives and friends - will decide who will raise your child. Anyone can ask to be considered, and the judge will select the person she deems most appropriate. Families tend to fight over children, especially if there’s money involved - and worse - no one may be willing to take your child; if that happens, the judge will place your child in foster care. On the other hand, if you name a guardian, the judge will likely support your choice.

    How to Choose a Guardian:

    Your child’s guardian can be a relative or friend. Here are factors our clients have considered when selecting guardians (and back up guardians).

    1. How well the child and potential guardian know and enjoy each other
    2. Parenting style, moral values, educational level, health practices, religious/spiritual beliefs
    3. Location - if the guardian lives far away, your child would have to move from a familiar school, friends, and neighborhood
    4. The child’s age and the age and health of the guardian-candidates:
    •  Grandparents may have the time, and they may or may not have the energy to keep up with a toddler or teenager
    •  An older guardian may become ill and/or even die before the child is grown, so there would be a double loss
    • A younger guardian, especially a sibling, may be concentrating on finishing college or starting a career.

          5. Emotional Preparedness:

             a. Someone who is single or who doesn't want children may resent having to care for your   children.

             b. Someone with a houseful of their own children may or may not want more around.

     

    WARNING:

    Serving as guardian and raising your child is a big deal; don’t spring such a responsibility on anyone. Ask your top candidates if they would be willing to serve, and name at least one alternate in case the first choice becomes unable to serve.

    Who’s in Charge of the Money?

    Raising your child should not be a financial burden for the guardian, and a candidate’s lack of finances should not be the deciding factor. You will need to provide enough money (from assets and/or life insurance) to provide for your child. Some parents also earmark funds to help the guardian buy a larger car or add onto their existing home, so there’s plenty of room for extra children.

    Factors to consider:

           1. Naming a seperate person to handle this money can be a good idea. That person would be a guardian of the estate or a trustee, but not guardian of the children.

           2. However, having the same person raise the child and handle the money can make things simpler because the guardian would not have to ask someone for the money.

           3. But the best person to raise the child may not be the best person to handle the money and it may be tempting for them to use this money for their own purposes.

     Compromise Will Likely be Necessary:

    Naming a guardian is a difficult decision for most parents. Keep in mind that this person will probably not raise your child because odds are that at least one parent will survive until the child is grown. By naming a guardian, however, you are being responsible and planning for a bad—but avoidable—situation arises. It’s important to realize that no one besides you will be the perfect parent for your child, so typically this means making compromises in some areas. Select the person you think will muddle through the best.

     Let’s Continue this Conversation:

    We know it’s not easy, but don’t let that stop you. We’re happy to talk this through with you and legally document your wishes. Know that you can change your mind and select a different guardian anytime you’d like. You are a parent and your job is to provide for and protect your children, so let’s do this—together. To get started, download your free copy of our Guide: Choosing Your Child’s Guardian. Next, contact our office to schedule your free consultation and we’ll get your children protected.

     

    If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.

    Wednesday
    Mar012017

    How to Choose Your Trustee

    While the term fiduciary is a legal term with a long history, it very generally means someone who is legally obligated to act in another person’s best interests. Trustees, executors, and agents are all examples of fiduciaries. When you pick trustees, executors, and agents in your estate plan, you’re picking one or more people to make decisions in your and your beneficiaries’ best interests and in accordance with the instructions you leave. Luckily, understanding the basics of what each of these terms means and what to consider when making your choices can make your estate plan work far better.

     Trustee:

    A revocable living trust is often the center of a well-designed estate plan because it is simply the best strategy for achieving most individuals’ goals. In a revocable living trust, your successor trustee will be responsible for making sure your wealth is passed on and managed in accordance with your wishes after your death or incapacity. Like each of the following individuals involved in your estate planning, it’s best to have a trusted person or financial institution carry out this vitally important role.

     It’s important to make the language in your trusts as clear as possible so that your trustee knows exactly how to handle various situations that can arise is asset distribution. Lastly, your trustee will only control the assets contained within the trust — not the rest of your estate, another reason that completely funding yourliving trust is incredibly important.

     Powers of Attorney:

    Your power of attorney is the document in your estate plan that appoints individuals to make decisions on your behalf if you become unable to do so yourself. There are a few different types of powers of attorney, each with their own specific provisions. There is quite a wide range of situations covered by various powers of attorney, and we can help you decide which types you’ll need based on your current situation and future goals. Here are two common types to cover in your estate plan:

    ●      Financial Powers of Attorney :

    Financial powers of attorney grant individuals the ability to take financial actions on your behalf such as purchasing life insurance or withdrawing money from your accounts to cover your costs. In most cases, powers of attorney are granted to individuals appointed as agents. However, especially regarding financial decisions, an institution like a trust company can also be named.

     ●     Advance Health Care Directive:

    Your Advance Health Care Directive, also referred to as your Health Care Power of Attorney, covers a wide range of specific actions that can be taken regarding an individual’s medical needs such as making decisions about the types of care you receive. For example, a health care power of attorney can be the doctor you most trust to gauge your mental competency.

     Executor:

    Your executor is the person who will see your assets through probate if necessary and carry out your wishes based on your last will and testament. Depending on your preferences, this may be the same person or institution as your trustee. You might also see this position designated as personal representative, but it means the same thing.

    Many individuals chose to go with a paid executor. This is someone who doesn’t stand to gain anything from your will, and is often the best choice if your estate is large and will be divided among many beneficiaries. Of course, family or friends can also serve, but it’s important to consider the amount of work involved before placing this burden on your family or friends. 

    Being an executor can be hard work and may have court-ordered deadlines, so it’s crucial to pick someone you know will be up for the job. They may need to hire a CPA to help sort out your taxes or a lawyer to assist in the process or to aid in dispute resolution. Therefore, choosing a spouse or someone else intimately involved in your life may not always be the wisest option, as they may not be up to the task at the time.

     Get in touch with us today:

    Let us help you make the process of picking your trustee, powers of attorney, and executor as smooth and headache-free as possible. Once you have these choices in place, you’ll be able to rest easy knowing that your estate plan is in good hands no matter what life brings. To ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.


     


     

    Sunday
    Feb262017

    Better to Play it Safe: Proactive Estate Planning & Cognitive Impairment

    Most financially savvy individuals begin planning their estate when they’re in peak mental shape. The idea that this might change at some point in the distant future is an unpleasant one, and they would rather go about their estate planning as if they’ll be as sharp as a tack late into their golden years. Unfortunately, this common approach of ignoring a potential problem and hoping it simply won’t happen can leave a giant hole in your estate plan. Read on to find out that this common hole can be more easily filled than you might think. 

    Expect The Best, But Plan for The Worst:

    The reality is that an individual’s chances of experiencing some form of cognitive impairment rise with age. While it’s never certain whether cognitive impairment will occur, smart estate planning means factoring it in as a very real possibility.

    As the huge baby boomer generation transitions from the workforce and begins to make their way into retirement, cases of Alzheimer's are expected to spike from the current 5.1 million to 13.2 million as soon as 2050. Alzheimer’s is just one of several cognitive impairment conditions along with dementia and the much more common mild cognitive impairment, or MCI, which is often a precursor to those more serious ailments.

    As U.S. life expectancies increase, the chances of living with cognitive impairment increase as well — with at least 9.5 percent of Americans over 70 experiencing it in one form or another.

    No matter your age or family history, cognitive impairment can affect anyone although it’s widely acceptedto affect mostly older adults. As you implement or revise your estate plan, it is well worth the effort to plan for this potential. Luckily, estate planning attorneys have developed good solutions to handle this circumstance and can help guide you on the best way to protect yourself and your family.

     An Easily-Avoidable Estate Planning Mistake:

    Consider Ashley’s story. A successful real estate agent with a stellar career in her hometown of Kalamazoo, MI, Ashley begins planning her estate in her mid-thirties.

    She partners with an estate planning attorney, and together they draft a revocable living trust with Ashley’s preferred beneficiaries and charities in mind, figure out guardianship for her two sons in case she and her husband pass suddenly, and settle on an appropriate beneficiary for her life insurance policy. Now that she knows where her assets will go after her death, Ashley rests easy assuming there’s nothing more that needs doing in her estate plan.

    Save Your Family From Obstacles and Conundrums:

    But forty years down the road, Ashley’s children realize her MCI is developing into Alzheimer’s. Although she’s occasionally visited with her attorney to adjust her plan, she never added any provisions for how she wanted her children and other guardians to handle a situation like this. Here’s where things get complicated.

    Ashley did not work with her estate planning attorney to put disability provisions into her trust and never worked with an insurance professional to purchase adequate income insurance or long-term care insurance. The care she requires to live her best life possible with cognitive impairment doesn’t come cheap. Those mounting care costs will likely quickly erode Ashley’s estate. As a result, her estate plan may no longer work as intended, since it no longer lines up with her actual asset portfolio.

    But since Ashley does not have the ability to rework her estate plan in her current mental state, her family is left with the burden of figuring out what to do while navigating a complex and bureaucratic legal system in the guardianship or conservatorship court. No one in the family really knows what Ashley’s wishes are regarding both serious medical decisions and financial changes. All Ashley’s family wants is to see her enjoying her remaining years in peace and security, but they are now tasked with using guesswork to make difficult choices on her behalf while a guardianship or conservatorship court watches every move.

    Give Us a Call Today:

    Factoring the potential for cognitive impairment into your estate plan doesn’t have to be a headache. In fact, a little effort now by legally designating who you want to be in charge and what you want them to do can have a wonderful impact on you and your family later on. We can work together to ensure your estate plan is ready for whatever life throws your way. If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.

    Friday
    Feb172017

    Why Factoring Long-Term Care Into Your Estate Plan Pays Off

    For most people, thinking about estate planning means focusing on what will happen to their money after they pass away. But that misses one pretty significant consideration: the need to plan for long-term care.

    The last thing any of us want to contend with when a health issue arises later in life is having to throw together a hasty estate planning solution in the face of mounting medical costs. Your best defense is careful planning with the help of a trusted expert.

    Why it’s so important to plan for long-term care:

    While only about 19 percent of current U.S. residents will need to reside under long-term care for a period of over three years, that number sharply increases when factoring in nursing home stays of a shorter duration — which will still have a substantial impact on your estate.

    Whether the care you need takes place in a nursing home, assisted living facility, or with an in-home provider, the costs can mount with alarming speed. For example, national average rates for assisted living hover around $3,500 per month. As those costs add up, you could see your assets dwindle much sooner than you’d hoped. Luckily, estate planning attorneys can help in several ways.

    What to go over with your estate attorney:

    If long-term care isn’t factored into your estate plan, you are probably not looking at a truly realistic and accurate representation of your assets. Talk to your estate planning attorney about the following factors in order to get on the right track:

    1. Set reasonable expectations for long-term care:

    It’s impossible to know what life will bring, but we can certainly make educated guesses. For example, are there any major diseases that run in your family? There is a chance you will have the good fortune of staying healthy well into your golden years, but estate planning is an aspect of your financial life in which it’s helpful to protect yourself against worst-case scenarios.

    In the estimated likelihood that you will require such care, at what age could you reasonably predict you’ll need it? Do you have any current health conditions to consider? Exploring these possibilities may not be the most enjoyable exercise, but it’s far better than facing the reality of long-term care with no plans in place.

    2. Consider a long-term care insurance policy:

    As Medicare or standard health insurance may not cover your costs, a long-term care insurance policy is one way to protect yourself against draining your financial assets. Ask for resources for finding an affordable premium that isn’t likely to increase prohibitively over time. Begin this process as soon as possible, as your premium will be lower the younger you are when you apply.

    Another potential oversight is assuming your long-term care will be covered by Medicaid. Discuss it as an option to determine your qualifications and get authoritative insights about the specificities of your unique financial situation in terms of Medicaid benefits.

    3. Get Smart About Living Wills and Trusts:

    To best prepare your loved ones for complex medical decisions, go over advance directives. In addition, discuss options for setting a revocable living trust, and possibly one or more irrevocable trusts, like a life insurance trust or a charitable remainder trust, as part of your long-term care planning.

    It’s also important to create a plan that allows someone you trust to access and utilize your financial resources for your benefit in the event of unforeseen medical circumstances. One common mistake is tying up assets in investments that lack liquidity when you need them most. For example, money locked into annuities can result in a fee for early withdrawal. Working with a team of that includes an estate planning attorney, financial advisor, and insurance professional can provide you and your family with the best overall solution.

    Take the time now to talk to an estate planning attorney about the best ways to maintain financial security in tandem with the demands of long-term care. Even if you don’t end up needing long-term care in you lifetime, you can enjoy the peace of mind knowing you’ll be covered.

    The process of completing a long-term care plan may sound daunting, but we’re here to help you by making it a streamlined experience—simply get in touch with us today and let us put you in a more secure position for the future. If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.

    Thursday
    Feb092017

    3 Famous Pet Trust Cases—Lessons Learned

    Things don’t always go according to plan. Sometimes, pet owners can get a bit creative when providing for their pets. Let’s look now at 3 famous cases involving pet trusts and distill important lessons from them.

    David Harper and Red:

    David Harper, a wealthy, reclusive bachelor in Ottawa, Canada, wasn’t exactly famous during his life. In his death, however, he made headlines by reportedly leaving his entire $1.1 million-dollar estate to his tabby cat, Red. Just to make sure his wishes were carried out, Harper bequeathed the fortune to the United Church of Canada under the stipulation that they take care of Red for him! The ploy worked.

    Lesson learned: You can be as creative as you desire in your approach to making sure your pets receive proper care after you’re gone.

    Maria Assunta and Tommaso:

    In a four-legged and furry version of the classic rags-to-riches story, wealthy Italian widow Maria Assunta rescued a stray cat from the streets of Rome and gave him a proper home and name: Tommaso. As Assunta’s health failed, she tried for several years to find an animal organization to entrust Tommaso. When no suitable organization was found, Assunta left the estate valued at $13 million directly to the cat in her will and named her own nurse as caretaker. She passed away in 2011 at the ripe old age of 94, knowing her beloved Tommaso would be well taken care of.

    Lesson learned: The best way to ensure the care of your pet is in writing, with a proper estate plan.

     

    Patricia O’Neill and Kalu:

    Patricia O’Neill, daughter of British nobility and ex-spouse of Olympian Frank O’Neill, had designated a fortune worth $70 million to her chimpanzee, Kalu and other pets, in her will - or so she thought. It was discovered in 2010 that the heiress herself was virtually broke, thanks to the shady dealings of a dishonest financial advisor. This story provides perhaps the most famous example of a pet trust gone dry while the owner is still living.

    Lessons learned: You can only give away what you have. If caring for your pets after your death is important to you, make sure your financial plan is in line with your estate plan and that you’ve taken appropriate steps to oversee your advisors.

     To summarize, establishing a pet trust is the best way to ensure that your beloved pets receive the care they deserve after you pass on. If you want to ensure that your family—including your pet animals—are cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.

    Wednesday
    Feb082017

    A Trust—the Best Option for Avoiding Probate

    Ideally, when someone passes away, the paperwork and material concerns associated with the estate are so flawlessly handled—usually thanks to excellent preparation—that they fade into the background, allowing the family to grieve and remember in peace.

    In fact, the whole business of estate planning—or at least a significant piece of it—is concerned with ease. How can assets and legacies be transferred to the next generation in a harmonious, stress-free, fair process?

    To that end, one primary goal of many people is to avoid the complications and costs involved with probate.

    There are many “tools of the trade”, that a qualified attorney can use to keep your assets out of probate—for example, establishing joint ownership on bank accounts and real estate titles, designating beneficiaries for life insurance policies and certain accounts, and so on. However, setting up a revocable living trust is quite often the best, most comprehensive option for avoiding probate. Let’s discuss why this is true.

    What is a trust?

    Often touted as an alternative to a will, a trust is a legal structure that permits management of your assets by a trustee on behalf of your beneficiaries. A living trust is established while you are still alive, as opposed to being created upon your death. You can be the trustee for your own living trust until you are no longer able to manage your financial affairs or pass away, at which point the responsibility for managing the trust passes to someone you designate as a successor trustee.

    How does a trust help you avoid probate?

    The purpose of probate is to transfer property ownership for all assets that were listed in your name when you passed away. A trust can bypass this process completely because your assets are transferred to the trust while you are still alive. Therefore, when you die, there’s nothing that needs to be transferred by the probate court (everything is already in your trust). Furthermore, a trust can cover virtually any type of asset, from real estate to vehicles to stock to bank accounts. When a trust is structured correctly with the help of an experienced estate planning attorney, your entire estate can stay out of probate court entirely. This process not only limits court costs, but it also maintains the privacy of your financial records while enabling your beneficiaries to enjoy the benefits of the trust without disruption or delay.

    Establishing a trust can be a bit complicated, and the process can cost a bit more upfront than a will; however, if you’re willing to invest a little more up front, a trust can be your best option for avoiding probate later. Especially in California, probate should generally be avoided absent extenuating circumstances.

    That said, as wonderful as revocable living trusts can be—always bear in mind H.L. Mencken’s warning that “For every complex problem there is an answer that is clear, simple, and wrong.”

    The key to planning effectively to minimize the likelihood of a drawn out, contentious, expensive process is to work with highly qualified, trusted people. Find a lawyer who genuinely cares about you and your family and who knows how to forge the right strategy for you and your family. If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.

    Tuesday
    Feb072017

    Trump’s Presidency—Synopsis of Impacts On Estate Planning

    It's official—the Electoral College voted on December 19, 2016, essentially completing the 2016 presidential election cycle. With that bit of uncertainty behind us and a fresh year starting out, here's what you need to know about planning your estate under the incoming Trump administration and Republican-controlled Congress. Regardless of how you feel about the election results, it is now the reality in which we currently live.

    President Trump’s Tax Plan:

    A new president usually means major shakeups in fiscal and tax policy, and Trump’s tax plan is no exception. Here are several of the proposed changes we will potentially see rolling out during his administration.

    1. The repeal of the estate tax;
    2.  Lower income tax rates;
    3. The introduction of a tax deduction for childcare costs;
    4. Dependent care savings accounts (DCSAs) with conditional matching;
    5. The switch from seven to three tax brackets;
    6. Increased standard joint deduction from $12,600 to $30,000;
    7. Increased itemized deductions cap from $100,000 to $200,000; and
    8. Decrease in business tax from 35 percent to 15 percent.

    Of these proposed changes, the repeal of the estate tax, also known as the “death tax,” means your assets would not be taxed by the government upon your death and would transfer in full to your beneficiaries. It is also predicted that the gift and generation-skipping taxes may be repealed as well. These actions could result in a greater ability to keep wealth within your family, but we must wait until we see the final legislation to know the exact mechanics. Additionally, the proposed changes would also negatively impact taxation on charitable gifts and other philanthropic gestures contained in your estate plan.

    Estate taxes differ from state to state, so the wisest move in your playbook is to go over your estate plan with an experienced estate planning attorney to discover how these changes may impact its other components.

    Of course, proposed policy changes must go through Congress, which has its own agendas and ideas about fiscal and tax policy. So, staying on top of new developments and in close contact with your team means you’ll be prepared for whatever unfolds over the coming years.

    More Benefits to Revocable Trust-based Planning:

    There are also many non-tax-related benefits to trust-based planning that you can take advantage of regardless of which proposed changes take place under the new administration and Congress. Just a few key benefits of trust-based planning include:

    1. Greater privacy for your family and avoidance of probate;
    2. Incapacity protection and avoidance of conservatorship or guardianship;
    3. The creation of lifetime beneficiary directed trusts providing long-term asset protection benefits to your heirs;
    4. Ensuring the protection of your asserts during your lifetime; and
    5. Ensuring that your desires for taking care of your loved one’s after you pass away are effectuated.

    Schedule a Call with Us:

    Not even the nation’s top financial experts know exactly how Trump’s presidency and the Republican-run Congress will impact estate planning best practices for every citizen, but a skilled estate planning attorney can guide your estate planning in a smart, careful, and decisive manner.

    We’re here to help you navigate policy changes to ensure your estate is managed as beneficially as possible for you and your family for generations to come. If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.


     

    Sunday
    Feb052017

    The Pros and Cons of Probate

    In estate planning circles, the word “probate” often comes with a starkly negative connotation. Indeed, for many people—especially those with larger estates—financial planners recommend trying to keep property out of probate whenever possible. However, the probate system was ultimately established to protect the property of the deceased and his/her heirs, and in a few cases, it may even work to an advantage. Let’s look briefly at the pros and cons of going through probate.

    While in certain situations a probate proceeding can be the most effective manner of distributing a decedent’s estate [for instance, if there is a large amount of contention between beneficiaries, it may be advisable for a successor trustee to commence a court-controlled probate process to limit personal liability], in California, it generally should be avoided absent extenuating circumstances.

    The Pros:

    For some estates, especially those in which no will was left, the system works to make sure all assets are distributed pursuant to state law. Here are some potential advantages of probating an estate:

     1. It provides a trustworthy procedure for redistributing the property of the deceased if no will was left.

     2. It validates and enforces the intentions of the deceased if a will exists.

     3. It ensures taxes and claimed debts are paid on the estate, so there’s a finality to the deceased   person’s affairs, rather than an uncertain, lingering feeling for the beneficiaries.

    4. If the deceased was in debt, probate gives only a brief window for creditors to file a claim, which can result in more debt forgiveness.

     5. Probate can be advantageous for distributing smaller estates in which estate planning was unaffordable.

    The Cons:

    While probate is intended to work fairly to facilitate the transfer of property after someone dies, consider bypassing the process for these reasons:

     1. Probate is a matter of public record, which means personal family and financial information become public knowledge.

     2. There may be considerable costs, including court, attorney, and executor fees, all of which get deducted from the value of the estate.

     3. Probate can be time-consuming, holding up distribution of the assets for months, and sometimes, years.

     4. Probate can be complicated and stressful for your executor and your beneficiaries.

     5. You have no control over the distribution of your property after you pass, whereas by planning for distributions during your lifetime you have full control over where your assets ultimately end up.

     6. In California, because the fees paid to the Probate Attorney and Executor are defined by the California Probate Code, you do not have much control over the cost of settling your estate once you pass away.

     7. Probate is generally more expensive than creating and maintaining a revocable trust during your lifetime. As way of example, the following asserts the combined fees paid to the Probate Attorney and Executor in California for taking your estate through the probate proceeding after you die.

     a. If on the date of your death the value of your gross estate (“Gross Estate”) is:

                                      i.   $150,000

    1.  The Statutory Attorney & Executors Fees are:

    a.   $11,000

    b.  Gross Estate:

                                        i.   $250,000

    1.   The Attorney & Executors (“Probate”) Fees are:

    a.  $16,000

    c.  Gross Estate:

                                         i.    $500,000

    1.    Probate Fees are:

    a.   $26,000

    d.   Gross Estate:

                                          i.    $750,000

    1.    Probate Fees are:

    a.   $36,000

    e.   Gross Estate:

                                          i.    $1,000,000

    1.      Probate Fees are:

    a.   $46,000

    f.   Gross Estate:

                                          i.    $1,250,000

    1.    Probate Fees are:

    a.   $51,000

    g.  Gross Estate:

                                          i.    $1,500,000

    1.    Probate Fees are:

    a.   $56,000

    h.   Gross Estate:

                                           i.    $1,750,000

    1.    Probate Fees are:

    a.    $61,000

    i.    Gross Estate:

                                            i.    $2,000,000

    1.    Probate Fees are:

    a.    $66,000

    j.     Gross Estate:

                                             i.     $2,500,000

    1.     Probate Fees are:

    a.    $76,000

    k.    Gross Estate:

                                             i.    $3,000,000

    1.    Probate Fees are:

    a.    $86,000

    l.     Gross Estate:

                                             i.    $3,500,000

    1.    Probate Fees are:

    a.    $96,000

    m.  Gross Estate:

                                              i.    $5,000,000

    1.    Probate Fees are:

    a.   $126,000

    As you can see, the cost of creating your estate plan during life is almost always going to be less than the cost of the fees that will ultimately be paid to the Probate Attorney and Executor if when you die you do not have an estate plan, or you solely have a Will without a properly funded revocable trust. Remember, a Will is not effective until after it goes through a probate proceeding.

    Bottom line: While probate is a default mechanism that ultimately works to enforce fair distribution of even small estates, it can create undue cost and delays. For that reason, many people prefer to use strategies to keep their property out of probate when they die.

    A talented attorney whose practice focuses solely on estate planning can help you develop a strategy to avoid probate, ensure that your post-death desires are realized, and make life easier for the next generation. If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.

    Wednesday
    Dec282016

    3 Reasons You Want to Avoid Probate

    When you pass away, your family may need to visit a probate court in order to claim their inheritance. This can happen if you own property (such as a house, car, bank account, investment account, or another similar asset), which is solely in your name. Although having a Will is a good basic form of planning, a Will does not avoid probate. Instead, a Will simply allow you inform the probate court of your wishes—your family still must go through the probate process to make those wishes legal.

    Now that you have an idea of why probate might be necessary, here are 3 key reasons why you want to avoid probate at all costs possible.

    1. It’s all public record:

    Almost everything that goes through the courts, including probate, becomes a matter of public record. This means when your estate goes through probate, all associated family and financial information becomes accessible to anyone who wants to see it. This doesn’t necessarily mean account numbers and social security numbers, since the courts have at least taken some steps to reduce the risk of identity theft. But, what it does mean is that the value of your assets, creditor claims, the identities of your beneficiaries, and even any family disagreements that affect the distribution of your estate will be available, often only a click away because many courts have moved to online systems. Most people prefer to keep this type of information private, and the best way to ensure discreteness is to keep your estate out of probate.

    2. It can be expensive:

    Thanks to court costs, attorney fees, executor fees, and other related expenses, the price tag for probate can easily reach into the thousands of dollars, even for small or “simple” estates. These costs can easily skyrocket into the tens of thousands or more if family disputes or creditor claims arise during the process. This money from your estate should be going to your beneficiaries, but if it goes through probate, a significant portion could go to the courts, creditors, and legal fees, instead.

    3. It is a long process:

    While the time frame for probating an estate can vary widely from state to state and by the size of the estate itself, probate is not generally a quick process. It’s not unusual for estates, even seemingly simple or small ones, to be held up in probate for 6 months to a year or more, during which time your beneficiaries may not have easy access to funds or assets. This delay can be especially difficult on family members going through a hardship who might benefit from a faster, simpler process, such as the living trust administration process. Bypassing probate can significantly speed the disbursement of assets, so beneficiaries can benefit sooner from their inheritance.

    If your assets are in multiple states, the probate process must be repeated in each state in which you hold property. This repetition can cost your family even more time and money. The good news is that with proper trust-centered estate planning, you can avoid probate for your estate, simplify the transfer of your financial legacy, and provide lifelong asset and tax protection to your family. If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.

    Friday
    Dec232016

    5 Mistakes Made by Successor Trustees—How to Prevent Them

    When establishing a trust, you need to give serious thought to choosing your successor trustee—the person who will administer your trust once you’re no longer able to do so. This individual ideally should be:

    1. Someone you trust implicitly.

    2. Someone who is organized, responsible and meticulous.

    3. Someone who can remain steadfast to your wishes in the face of family disagreements and other disputes regarding the trust.

    That said, even the most capable, well-intentioned successor trustees can make mistakes when managing affairs. Here are five surprisingly common mistakes along with steps to take to prevent them from happening.

    1. Faulty Record-keeping:

    To ensure that a trust fulfills its purpose without being contested, the trustee must keep accurate, detailed records of income and distributions. Your trustee must also be prepared to report these figures regularly to the beneficiaries and heirs. If these records are incomplete or inaccurate, the door is opened for someone to challenge the trust, potentially leading to lengthy and costly court battles.

    To prevent this mistake: Hire an accountant to assist the successor trustee in record-keeping, and make sure the trustee and the accountant make a connection before the trustee takes over.

    2. Misunderstanding the Fiduciary Role:

    Many trustees mistakenly assume their job involves acting in the best interests of the person setting up the trust. In reality, his or her job is to act in the interests of the beneficiaries of the trust. Furthermore, the trustee may be legally liable for any failure to protect the beneficiaries against bad investment advice concerning the trust.

    To prevent this mistake: Detail the fiduciary role of the successor trustee in the trust documentation itself, and be certain that the trustee understands his/her role.

    3. Not Collaborating Effectively with Your Established Financial Team:

    The successor trustee’s failure to communicate with key members of your team while administering your trust can lead to inaccuracies, misunderstandings and significant, preventable financial losses.

    To prevent this mistake: Make sure your trustee is properly introduced to, and connected with, your attorney, CPA, financial planner and anyone else involved with your estate planning.

    4. Failing to Discuss Compensation:

    If your appointed trustee is a close friend or family member, the topic of compensating the trustee may be glossed over or forgotten. This oversight can result in a lack of morale or even resentment if managing the trust becomes difficult or time consuming.

    To prevent this mistake: Bring up the topic of compensation yourself when you establish the arrangement; be as generous as you deem necessary; and put the compensation terms in writing.

    5. Failing to Remain Objective:

    Many people choose a close family member as a trustee. This strategy can be appropriate, especially when privacy matters. However, disputes about money can happen even in the tightest-knit families, and it can be difficult to near-impossible for a relative to remain neutral when resolving those fights. The end-result could be decisions that family members perceive to be unfair or that wind up being inconsistent with your intentions.

     To prevent this mistake: Make certain the person you choose can remain neutral and faithful to the terms of the trust, even under duress. If there is any doubt, consider hiring a corporate trustee with no emotional connection to the family or estate.

    Selecting a successor trustee is one of the most important decisions you will make during your estate planning process. If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.

    Wednesday
    Dec142016

    3 Tips for Overwhelmed Executors

    While it is an honor to be named as an executor of a will or estate, it can also be a sobering and daunting responsibility. Being a personal representative requires a high level of organization, foresight, and attention to detail to meet all responsibilities and ensure that all beneficiaries receive the assets to which they are entitled. If you’ve found yourself in the position of “overwhelmed executor,” here are some tips to lighten the load.

    1.  Get professional help from an experienced attorney:

    The caveat to being an executor is that once you accept the responsibility, you also accept the liability if something goes wrong. To protect yourself and make sure you’re crossing all the “i’s” and dotting all the “t’s,” consider hiring an experienced estate planning attorney at the beginning. Having a legal professional in your corner not only helps you avoid pitfalls and blind spots, but it will also give you greater peace of mind during the process.

    2. Get organized:

    One of the biggest reasons for feeling overwhelmed as an executor is when the details are coming at you from all directions. Proper organization helps you conquer this problem and regain control. Your attorney will help advise you of what to do when, but in general, you’ll need to gather several pieces of important paperwork to get started. It’s a good idea to create a file or binder so you can keep track of the original estate planning documents, death certificates, bills, financial statements, insurance policies, and contact information of beneficiaries. Bringing all this information to your first meeting will be a great start.

    3. Establish lines of communication:

    As an executor, you are effectively a liaison between multiple parties related to the estate: namely, the courts, the creditors, the IRS, and the heirs. Create and maintain an up-to-date list of everyone’s contact information. You’ll also want to retain records, such as copies of correspondence or notes about phone calls for all the contact you make as executor. Open and honest communication helps keeps the process flowing smoothly and reduces the risk of disputes. It’s worth repeating because it’s so important -- keep records of all communications, so you can always recall what was said to whom.

    If you have been appointed as an executor, and you are feeling overwhelmed, we can provide skilled counsel and advice to help you through the process. We can also help you set your own estate plan, so your family can avoid the stress of probate. If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.

    Friday
    Dec092016

    3 Celebrity Probate Disasters and Lessons to Learn from Them

    With all the wealth accumulated by the rich and famous, one would assume that celebrities would take steps to protect their estates once they pass on. But think again: Some of the world’s richest and most famous people have passed away without a will or a trust, while others have made mistakes that tied their fortunes and heirs up for years in court. Let’s look at three high-profile celebrity probate disasters and discover what lessons we can learn from them.

    1. Tom Carvel:

    As the man who invented soft-serve ice cream and established the first franchise business in America, Tom Carvel had a net worth of up to $200 million when he passed away in 1990. He did have a will and accompanying trust that provided for his widow, family members and donations for several charities, but he also named seven executors, all of whom had a financial stake in the game. The executors began infighting that lasted for years and cost millions. In the end, Carvel’s widow passed away before the disputes could be settled, essentially seeing none of the money.

    Lesson learned: “Too many cooks spoil the broth.” Your trustee and executor may have to make tough decisions. Consider naming executors and trustees who have no financial interest in your estate to reduce the risk of favoritism. Also, consider have only a single trustee and executor rather than a committee.

    2. Jimi Hendrix:

    Passing away tragically at age 27, rock guitarist Jimi Hendrix left no will when he died. What he did leave behind was a long line of relatives, music industry bigwigs, and business associates who had an interest in what would become of his estate - both what he left behind, and what his intellectual property would continue to earn. An attorney managed the estate for the first two decades after Jimi’s death, after which Jimi’s father Al Hendrix successfully sued for control of the estate. But when Al attempted to leave the entire estate to his adopted daughter upon his passing, Jimi’s brother, Leon Hendrix, sued, launching a messy probate battle that left no clear winners.

    Lesson learned: When you don’t leave a will or trust, the effects can last for generations. An experienced estate planning attorney can help put your wishes in writing so they are carried out after your death rather than opening a door to costly conflict.

    3. Prince:

    The court battle currently in preparation over Prince’s estate is a celebrity probate disaster in action. When the 80’s pop icon died in early 2016, he left no will, reportedly due to some previous legal battles that left him with a distrust of legal professionals in general. The lines are already being drawn for what will likely be a costly and lengthy court battle among Prince’s heirs. Sadly, there’s even a battle looming about determining who his heirs are—for certain.

    Lesson learned: Correct legal documentation protects your legacy. Don’t let a general distrust or a bad experience cause your heirs to fight and potentially lose their inheritance.

    These celebrity probate disasters serve as stark reminders that no one’s wealth is exempt from the legal trouble that can occur without proper estate planning. As always, we are here to help you protect your family and legacy. If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.