Is It Time to Update My Estate Plan?

Is It Time to Update My Estate Plan? I am often asked what are the events that should make one update an estate plan. Here are my general guidelines: Marriage or Divorce of you, your children, grandchildren or business or life partners; Contemplation of Marriage, especially second marriages, Registered Domestic Partnerships or Divorce; Birth of children or grandchildren; Death of a spouse, children, grandchildren or business or life partners; Serious or life threatening illness of you, your children, grandchildren or business or life partners; Disability of you, your spouse, a parent, sibling, child, grandchild, or a dependant or handicapped dependant that may require special considerations or a special needs trust; Substantial change in your personal estate size, whether increased or decreased; Before any significant business or personal litigation; On any significant change of assets or interests; Especially on any major change in the estate tax laws! Like we just had in 2012. These things do not all require updating your estate plan but any of them should cue you to seek legal...

In Case of Death List

In Case of Death List The following agencies need to be notified of your loved one’s passing. Not all may apply to your situation: Social Security Administration Veteran’s Administration (if the decedent formerly served in the military) Defense Finance and Accounting Service (military service retiree receiving benefits) Office of Personnel Management (if the decedent is a former federal civil service employee) U.S. Citizen and Immigration Service (If the decedent was not a U.S. citizen) State Department of Motor Vehicles (If the decedent had a driver’s license) Credit card and merchant card companies Banks, savings and loan associations and credit unions Mortgage companies and lenders Financial planners and stock brokers Your estate planning attorney Pension providers Life insurers and annuity companies Health, medical and dental insurers Disability insurers Automotive insurer Mutual benefit companies All three credit reporting agencies: Experian, Equifax, and TransUnion Any memberships held by the decedent (ex: health clubs, professional associations, clubs, library etc.) You can list the decedent on the Deceased Do Not Contact List, maintained by the Direct Marketing Association, which is a service that removes the decedent from all direct mailing...

Revoking the Irrevocable Trust

Revoking the Irrevocable Trust It is more than wishful thinking! When is an irrevocable trust revocable? It seems like something you could never do based on the word ‘irrevocable’ but there are ways to get around this. Borrowing from wine terminology, it is called “decanting a trust” and here is the who, what, where, why and when of it all: Who can decant? Decanting is done only by the Trustee of the Trust. What is decanting? Decanting is the process of transferring property from one trust to another. Specifically, the term applies when a trustee transfers property from one irrevocable trust to a new trust that has terms different than the original. Typically, the beneficiaries are the same though some may have changed. Where to decant? The Probate code allows for decanting with or without court intervention in California. If all beneficiaries agree, no court intervention is needed. If there is dissension, you will need to file a Petition in Probate Court. Why decant a Trust? The terms of an irrevocable trust are typically not subject to change. With decanting, a trustee has the ability to effectively change the terms even though he or she is doing so by transferring the property to a new trust that has new terms. In states that allow for decanting, this is one method a trustee can use to more effectively manage the trust without having to go before court to seek judicial permission to take certain actions. In states that don’t have decanting provisions, like California, you may not even need to go to Court to do this. When is decanting used?...

Elder Abuse

Elder Abuse What is Elder Abuse? It is the neglect, exploitation or “painful or harmful” mistreatment of anyone who is 65 or older (or any disabled dependent adult age 18 to 64). It can involve physical intimidation, violence, psychological abuse, isolation, abandonment, abduction, false imprisonment or a care giver’s neglect. It could also involve unlawful taking of a senior’s money or property. In short, it can involve various crimes, such as theft, assault or identity theft. But when the victim is 65 years old or older (or a disabled dependent adult), the criminal faces stiffer penalties under various protective statutes. If a relative is refusing to visit unless you give money or do something for them, or if you are being compelled to “lend money” or change your estate plan to favor a care giver or family member, or if you are being threatened with harm if you don’t do what you are asked, it is all a form of something called “elder abuse”. Elder abuse can be physical abuse or financial abuse or neglect. You need to reach out for help right away. It is not OK for anyone to treat you this way. While the elderly are already extremely vulnerable to abuse, issues of mental impairment and dementia are additional significant factors that make seniors even more susceptible to elder abuse and/or neglect. Elder abuse happens everywhere - in poor, middle class, and upper-income households and in far too many long-term care facilities. It is a problem that has no demographic or ethnic boundaries. Because family members, close friends, and even professional care givers are often the...

For Animal Care

For Animal Care Providing For Your Pets In The Event of Your Death or Hospitalization For many people, a pet is an important and comforting part of life, often filling the void of an empty nest or loss of a family member. The love and companionship given by pets is immeasurable and many people feel they would do anything for their pets, but then, they never get to it. The care and well-being of the pet is a primary concern. This is particularly so in the event of a pet owner’s death or hospitalization. Below is a summary of how to plan for the care of a pet in the event of a pet owner’s death or hospitalization. I will start with hospitalization or “non-death” reasons for being unable to care for your pet. Upon the incapacity or hospitalization of the pet owner, advance arrange-ments should be made to ensure care of the pet while the pet owner is hospitalized or incapacitated. Some people have other people they live with who will care for the pet but many do not. Too often, a pet is ignored when something happens to those who live alone. Arranging For Friends/Relatives To Provide Short-Term Care. It is easy if you know you are going to need care but often this is out of your control. A pet owner should try to find a friend or relative who is willing to take care of his/her pet during these periods. The owner should leave word, preferably in writing, at home and with a neighbor, or with the building management and/or superintendent, for the friend or...

Estate Tax Exemption “Portability”: Is it right for you?

Estate Tax Exemption “Portability”: Is it right for you? One of the significant changes under the American Taxpayer Relief Act of 2012 (ATRA) enacted in January, was to make estate tax exemption “portability” permanent. What is “portability”? When one spouse dies, portability allows the surviving spouse to use the deceased spouse’s unused exemption amount. This means that if you didn’t get around to doing estate planning, there may be a safety net with portability. This may mean that married couples can now maximize the benefits of their combined exemptions without the need for sophisticated estate planning involving multiple trusts. Portability does simplify estate planning, but should you rely on it? Doing so may be appropriate under certain circumstances. But for many people, particularly the affluent, more-sophisticated strategies continue to offer significant benefits. Life and Planning Before Portability Before portability, the traditional approach for maximizing a couple’s exemption amounts was to employ an “A-B trust”. Generally, the “A” trust is a marital trust and the “B” trust is a credit shelter, or “bypass,” trust. For this strategy to be most effective, spouses should “equalize” their estates by, to the extent necessary, transferring assets from one to the other. When one spouse dies, his or her assets are used to fund the credit shelter trust up to the exemption amount (currently $5.25 million) less any gift tax exemption used during life. This trust benefits the surviving spouse for life and then distributes the remaining assets to the couple’s children or other beneficiaries. The excess, if any, goes into the marital trust, which benefits the surviving spouse and qualifies for the unlimited...
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