Archive for the ‘Estate Plan’ Category2012 Basic Legal Protection for a FamilyFriday, December 23rd, 2011The new year offers a fresh opportunity to do the simple, affordable things necessary to protect your family’s financial future and peace of mind. Here is our 2012 checklist of seven essential legal protections that both you and your spouse or domestic partner should have in place to protect your family: (more…)
Three Trusts That Can Help Protect Your Assets from CreditorsWednesday, November 23rd, 2011If you are in business for yourself, or have a family-owned business, one of your long-term goals is probably to pass on as much as possible to your heirs while minimizing any federal estate taxes. To help achieve this goal, you may wish to consider utilizing legally-approved ways to protect your assets from ever being devastated by a malpractice, business, or real estate lawsuit that goes against you. (more…)
Providing for Children with Special NeedsFriday, January 28th, 2011Parents of special needs children face many unique challenges. They must balance medical, educational, and social issues in addition to the other normal trials of parenting. Raising a special needs child can also involve a complicated struggle to find the right resources to help the child. Parents also face financial challenges in caring for a special needs child due to medical bills that may not be covered by insurance, as well as increased educational expenses and costs of therapy programs. For parents who have children who may require care into adulthood, there is the added worry of ensuring their child will be cared for after the parents pass away. As one financial planner notes, parents of a special needs child must essentially plan for three retirements—both of their own and their child’s long-term care. A special needs trust is an estate planning tool that is available to help parents plan for and protect their special needs child’s future. A special needs trust can preserve government benefits, such as Supplemental Security Income (SSI) and Medi-Cal, for people with disabilities. These benefits have specific financial eligibility requirements. If a person with disabilities receives an inheritance when they reach adulthood, they may no longer be able to qualify for benefits. A special needs trust is a wonderful way to help provide for a special needs child through his or her adulthood. Under a special needs trust, a trustee (who may be a friend, relative, or the trust department of a bank) is named to hold property for the benefit of the child with disabilities after the parents are no longer alive. The trust is used to provide for various needs of a person with disabilities, without causing them to be disqualified for government benefits and programs. The trust may be funded by the parents’ life insurance policies or with monetary gifts from relatives. The trust can be customized based on the individual wishes of the family and the needs of the child. San Diego Law Firm’s attorneys have many years of experience in setting up special needs trusts, and are knowledgeable about the precise legal rules that must be followed. They can create a trust that will permit your child or disabled adult family member to receive all government benefits to which they are entitled, that will fit your family’s needs, and that will help ensure that your special needs child will be protected and cared for in the future. To learn more about special needs trust, and to receive expert legal help in setting up your child’s trust, please call San Diego Law Firm at (619) 794-0243 to schedule an appointment.
What Happens When a Person Dies Without a Will in California?Wednesday, December 22nd, 2010In California, if a person dies without a will or trust, the “intestacy” laws apply. These laws provide a way to determine what happens to property when the deceased person did not create a will or trust stating their wishes. Who inherits the property depends on several factors, such as whether the deceased person was married and whether they had children. Some people believe that a will or trust is unnecessary if their property automatically passes to their spouse and children under the law. However, a will and living trust are especially important for people who are married and those who have children to ensure the simple transfer of property, save on probate fees, and help safeguard a family’s financial future. (more…)
Living Trusts in CaliforniaFriday, September 10th, 2010What is a Living Trust? A Living Trust is a legal document that holds title to your assets on your behalf. You, as the “trustee” of the Living Trust, can move assets in and out of the trust, revoke the trust, or amend the trust at any time. However, after your death the trust becomes irrevocable and the assets in the trust are transferred to your “beneficiaries,” the people you want to inherit your property. Should a Living Trust be a Part of an Estate Plan? When deciding whether to make a Living Trust part of your estate plan, you should consider the benefits it can provide. One of the most important reasons to make a Living Trust part of your estate plan is to avoid probate. Under California law, if your estate has over $100,000 in assets at the time of your death, your estate must be probated whether or not you have a will. (Some assets, such as life insurance benefits paid to others, do not have to be included in calculating the $100,000.) Probate can be a time-consuming and costly process. However, assets conveyed to a Living Trust before death are not subject to probate, although a Living Trust generally does not contain every item you own, and a will is necessary to provide for the distribution of the remaining ones. If the value of those assets is less than $100,000, then no probate is required. Can a Living Trust Help Me Plan For a Disability? Without a living trust, if you become incapacitated, dramatic measures such as a court-supervised guardianship or conservatorship may be needed to manage your property. The advantage of a Living Trust is that you can specify who can manage your property if you become disabled. However, you need to make sure that your Living Trust is written to specifically address disability planning. Can a Living Trust Reduce Estate Taxes? A Living Trust may reduce estate tax liability. For example, a married couple can create an estate plan that qualifies for the federal estate tax exemption by having a Living Trust drafted as an “AB Living Trust.” This may be a useful document to include as part of an estate plan depending on the value of the estate, whether or not each spouse has separate property of a substantial value, and whether there are children who are to be provided for after the death of one parent. A final reason that a Living Trust may be valuable to you is that it keeps your information private. Probate is a court-supervised process that requires the disclosure of private records that you may not want to become part of public court records. If all your assets were handled in a probate, any person could find out who was going to inherit your assets and what those assets were. Estate planning is an intimate matter that you want handled with ease, efficiency, and a sense of trust between you and your attorney. Estate planning does seem complicated when there is so much to consider. Creating a living trust that will allow you the freedom to manage your assets while you are alive, plan for a potential disability, and avoid costly estate taxes takes the experience of a seasoned attorney. Call the team of estate planning attorneys at San Diego Law Firm at (619) 794-0243 for the living trust, will, and other estate plan options that will work best for you. The cost is surprisingly affordable, while the protection and peace of mind you’ll gain are priceless.
A “Special Needs Trust” Can Help Families Secure Their Child’s FutureFriday, August 20th, 2010Parents who want to leave property and investments to their children can utilize general estate planning tools to distribute their assets upon their death. However, families who have children with special needs require an estate planning device that ensures their disabled child is protected once they enter adulthood, both while the parents are living and after they have passed away. If you have a disabled child, an estate planning device you should consider is a Special Needs Trust. Many national associations that provide support to families with special needs children, such as the Autism Society of America, recommend using a Special Needs Trust as part of your estate plan. (more…)
How to Use a Life Insurance Trust to Avoid Estate Tax on Life Insurance BenefitsMonday, June 21st, 2010Benefits of Life Insurance Knowing loved ones will be financially cared for in the event of death can give a family breadwinner great peace of mind. Life insurance is a valuable tool in any estate plan because of the benefits it provides. First, life insurance can help family members bare the financial consequences of an unexpected death. The National Funeral Directors Association approximates the average expense of a funeral to be upwards of $6500.00. This is a cost that may be prohibitive unless there is a reliable and immediate source of funds which can be used to pay for high funeral expenses. Second, a life insurance policy ensures the loved ones’ future financial security. For example, if the family’s primary income earner passes away, a well funded life insurance policy will provide money to meet current and future household expenses such as mortgage and education costs. If you want to ensure that all of your life insurance proceeds are used for the purposes which you intend, you may want to consider having your attorney prepare an Irrevocable Life Insurance Trust for you. Life Insurance and Estate Tax What you may not know is that the proceeds paid on a life insurance policy are included in an estate (everything you own when you die) for estate tax purposes. This means the size of the estate is actually inflated by the face value of the policy. For example, if you have real estate, bank accounts, and stocks that add up to $2,000,000 you may think that only $2,000,000 of the estate will be subject to the federal estate tax rate. However, if you have $500,000 worth of life insurance it is considered part of your estate, and estate taxes will be due on $2,500,000! The underlying reason life insurance benefits are included in an estate is because the policy holder is deemed to “own” the proceeds so that the IRS can fully tax those proceeds as part the deceased persons estate at death. Reduce Estate Tax With a Life Insurance Trust One way to avoid tax on life insurance proceeds is to establish an Irrevocable Life Insurance Trust, or ILIT. Under an ILIT, the life insurance policy is not “owned” by the decedent or his or her spouse. Therefore, the proceeds are not considered part of the decedent’s estate. This is done by transferring ownership of a life insurance policy to the trustee of an ILIT. After ownership interest of the life insurance policy is transferred to the trustee, you’ll no longer “own” the policy and the proceeds can’t be taxed as being part of your estate when you die. Advantages and Disadvantages However, there are a few drawbacks to consider in setting up an ILIT. For example:
Our estate planning attorneys at San Diego Law Firm know the complexities involved in making sure loved ones and assets will be cared for and protected in the worst-case scenario for a family. We can answer your questions about life insurance trusts and other estate planning tools that you can use to ensure that 100% of life insurance proceeds go to the beneficiaries instead of to paying estate taxes. Also, we can look over your existing estate plan to make sure that all potential “fail-safe” mechanisms are in place. Call us at 619-794-0243 for advice and a consultation on ILIT issues.
Dying Without a Will or Trust in California: Do You Know What Happens?Friday, May 14th, 2010The decision of who inherits your property (and how) can either be made by you, or can be decided by the State of California. Let’s say that you never create a will or trust. Who would inherit your money and property? Dying Without a Valid Will (Intestacy) If you don’t leave behind any instructions for how you want your property divided (such as with a valid will or living trust), then California law steps in so that the probate court can distribute your property to your heirs. A person who dies without a valid will is said to have died “intestate.” In these situations, California’s intestacy laws apply. These laws decide which family members will inherit by creating a hierarchy. Sometimes things get more complicated, but here are the basics: (more…)
Lifetime Planning: How Can a California Power of Attorney Help You? Part 2Friday, April 23rd, 2010As discussed in the previous post, a power of attorney is a great tool that lets you plan for possible of incapacity in the future, but this document can also be used now in your day to day life if you’d like. Decide if you want your agent’s powers to start now, or later Just as important as what your agent can do is when they can do it. A power of attorney can give your agent power right away, or hold off until a future event or condition happens. We’ll explain the benefits and drawbacks with either option. Your decision will depend on who you will name as your agent and your personal circumstances. (more…)
Lifetime Planning: How Can a California Power of Attorney Help You? Part 1Friday, April 23rd, 2010In California, a “financial power of attorney” is a document you can use to give someone permission to manage your money and property and make decisions on your behalf. Choosing someone to manage your finances Whoever you choose to handle your finances through your power of attorney is known as your “agent.” If this person steps in because you aren’t able to manage your finances, then you’ll depend on your agent to keep things on the right track for you. (more…)
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