1.  A will.  This document says who will inherit your property and possessions, and who will be your minor children’s guardian if you and their other parent have both died. It can also provide that life insurance proceeds and other assets will be transferred into a uniform trust for minors, to be used for your children’s care and education, if both parents have died.  This is the single most important legal document your family needs, and it can be short and to the point if your situation is simple. 

2.  An advance health care directive. It outlines what medical procedures you want taken if you are too ill or injured to state your wishes yourself.

3.  A health care power of attorney.  This permits your spouse / domestic partner to authorize medical treatment and receive medical updates for you if you are unconscious or too injured or ill to communicate.

4.  A Durable Financial Power of Attorney.  This allows your spouse or domestic partner to handle your finances and property if you become incapacitated. It is not appropriate for every couple, and it should never be given casually to other members of your family.

5.  A method for your spouse / domestic partner to avoid probate:

      a.  A revocable living trust  – if you own a house, brokerage accounts, and other assets, this document puts them into the name of your living trust, with you named as the trustee who has complete power to buy, sell, and transfer these assets as you wish.  Your spouse / domestic partner, another trusted person, or a bank trust department is named as the substitute trustee who can take over if you die or become incapacitated.

      b.  If you have few or no assets, you can get by with other legal mechanisms which will not help if you become incapacitated, but will help your spouse / domestic partner avoid probate if you die.  You can deed your home to a “tenancy by the entirety” of yourself and your spouse or a “joint tenancy with right of survivorship” of yourself and your domestic partner, and that person will automatically inherit all your interest if you die.  Vehicle titles can be placed in joint tenancy, and bank and brokerage accounts can either be owned jointly, or be made “payable on death” to your spouse / domestic partner or other person you choose.

6.  A letter of instruction. This provides funeral and other related instructions for your survivors.  It should also contain essential information they will need, such as the location of your key papers, your bank and brokerage account information, the name of your attorneys, and a contact list.  If you have a pet, this letter should include care instructions and your veterinarian’s name.

7.   Safe document storage:  keep signed copies of the above items at your attorney’s office and at your home in a fireproof box to which your spouse or domestic partner also has a key.  In addition to the above documents, your fireproof box should include copies of other financial and legal documents, such as a pet trust, life insurance policies, deeds, car titles, military records, birth and marriage certificates, divorce decrees, insurance policies, and real estate deeds, along with information about your bank and other accounts, retirement plan, any prepaid funeral plan, and long-term debts such as mortgages and car loans. This information is likely to be needed by your attorney and your executor, who must distribute your property and notify your creditors after you die.  

Call San Diego Law Firm for Legal Documents to Protect Your Family’s Future

Providing for your family’s future is a gift of love to those closest to you.  Making sure you and your spouse have basic legal safeguards in place can give you great peace of mind and make sure your family is fully protected if anything happens to you.  

San Diego Law Firm’s experienced will, trust, and probate attorneys can help you create a good plan to protect your family if you are no longer here. We prepare each will and trust document to fit your exact situation and your wishes, and we can readily update any documents you already have.  We can provide flat-fee estimates for all of our will and trust services once we know what your situation requires.  Please call us for an appointment at (619) 794-0243.  We look forward to helping you.

There are many specialized asset-preservation strategies, some involving a combination of trusts, partnerships, and corporations. You’ll want to plan, though, before the need arises.  If you transfer assets into a trust, a family limited partnership, or a corporation after a lawsuit is filed against you or your business, a court will likely treat the assets as though they were still in your name.

Here are three of the most common asset-preservation trusts:

1. Irrevocable life insurance trust.  In the United States, life insurance proceeds from a policy you own are counted as part of your estate for federal estate tax purposes, even if the proceeds are payable directly to your beneficiaries.  In addition, the cash value of the policy can be attached by creditors.

Both of these problems can be solved by putting your life insurance policy into an irrevocable life insurance trust.  You can fund the policy premiums with annual gifts to the trust. There will be no estate tax on the proceeds if the policy is put into the trust at least three years before you die. If the policy is put into the trust before any claims arise against you, the trust will also protect the cash value of the policy from your creditors. After you die, the trust will receive the insurance proceeds and will invest them for the benefit of the persons (usually, your spouse and children) you have named as “trust beneficiaries.”  A side benefit of this is that the policy proceeds can be held until any of the named beneficiaries, such as children or grandchildren, reach a certain age chosen in advance by you. 

2. Grantor-retained annuity trusts.  This trust is typically set up with a transfer of cash to the trust.  The cash is then invested.  As the “grantor” establishing the trust, you specify that you will receive an annuity at a specific rate – typically, around 6% – for a set number of years.  You can also specify that if you die first, your spouse will receive an annuity.  When both you and your spouse die, the remainder is then paid into trusts that will be automatically created for your children, or anyone else you specify.  Creditors cannot attach any funds other than the annuity payable to you each year.  Creditors can never attach the principal of the trust.

A variation on this trust exists where you anticipate that you may become the target of lawsuits – for instance, if you are a doctor who performs high-risk procedures.  Then the annuity can be made payable to your spouse, completely protecting it from creditors.  You can specify that if your spouse dies first, you will receive the annuity.  Although your annuity will then be available for creditors to attach, the trust principal will still be preserved.

3. Family limited partnership trust.  A family limited partnership trust usually combines business operations with asset protection and estate planning, and typically involves layering at least two entities.  First, assets are put into a family limited partnership.  These assets usually include your business, or the stock of your business.  Because creditors could foreclose on a partnership interest owned by you, the partnership is instead owned by a family trust.  In your status as trustee of the family trust, you control the trust, and therefore, the partnership, and therefore, your business.  This is a complicated but very flexible arrangement which can protect different assets from creditors, and each asset can be governed by its own terms.  It can also minimize estate tax if carefully drafted.

Asset protection is a complicated area of law, and each person’s finances, tax situation, and business must be considered on its own merits. If you would like the experienced business and estate planning attorneys at San Diego Law Firm to evaluate your particular situation for the suitability of asset-preservation strategies, please call us for an appointment at (619) 794-0243.  We look forward to helping you.

●    Disagreements over how property and assets in a living trust are distributed

●    Claims of wrongdoing in making or changing a will or living trust, such as undue influence that led to a spouse or child being disinherited

●    Claims that the trustee breached his or her legal obligations (fiduciary duties) to act in the beneficiaries’ best interest, such as by being careless or disloyal

●    Disagreements over improper trust administration of debts

●    Disputes over inheritance, including will contests

These probate, estate, or trust disputes carry the potential to permanently jeopardize family ties, but mediation offers the opportunity to reach a peaceful agreement.  It’s a given that everyone will have their differences, and mediation takes into consideration everyone’s goals to find solutions that can be mutually accepted.  Not only is probate and trust mediation a good alternative because of family concerns, but it almost always faster and less expensive than having a judge decide the issue. 

Keep in mind that the mediator is not your lawyer.  In other words, the mediator doesn’t represent you and can’t give you legal advice, which is why parties generally have their own attorneys.  Preparing for mediation is critical, and when representing you, San Diego Law Firm will always work to strengthen your legal position and your bargaining power. 

We understand the stresses you’re under, especially if you’ve recently lost a loved one, and we’re here to help with the legal challenges.  As experienced wills and trusts attorneys, we’ll work to maximize your options and give you the advice you need during mediation to make informed decisions.  We’ll also prepare or carefully review any mediated agreement and ensure it’s properly handled so it becomes a binding court judgment. Contact San Diego Law Firm’s skilled trust and probate lawyers at (619) 794-0243.

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.

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.

What is a Special Needs Trust?

Under the current Social Security public benefits system, a disabled individual is eligible to receive government assistance to provide for basic needs such as food, clothing, health care, and shelter.  To receive assistance, a recipient cannot have more than $2,000 in cash and assets in their name.  A Special Needs Trust is a legal document that allows a person with a physical or mental disability to have, held in trust for his or her benefit, an unlimited amount of assets without jeopardizing state or federal benefits. If monies are placed in a Special Needs Trust they are not considered part of your child’s assets and your child can still qualify for all benefits and programs.

Why Alternatives to a “Special Needs Trust” May Lead to Catastrophe for Your Child

Regardless of the size of your estate, leaving all of your money to a relative to care for a disabled child is risky.  When an individual holds those assets, they may be spent, ill-managed, or attached by judgment creditors.  But a Special Needs Trust guarantees that the funds will be held only for the benefit of your disabled child.  Judgment creditors of the disabled child or of a caretaker cannot attach money in a Special Needs Trust.

How Your Child Can Benefit from the Funds in the Trust

The money in the Special Needs Trust can be used to pay for a number of things, including vacations, care-giving services, and even a home for your child. Plus, it will provide you with the peace of mind that your child’s access to vital government services and benefits is not threatened.

Contact San Diego Law Firm to Set Up a Special Needs Trust for Your Child

A Special Needs Trust, like all trust and estate planning documents, must be drafted precisely to be valid.  In an age when technology makes us feel empowered to take matters into our own hands, legal planning for the future of a disabled child is not something you should try to accomplish on your own.  A Special Needs Trust requires specific language, and if it is poorly crafted it can cause your child to lose benefits and health care he or she would otherwise be entitled to.  Our estate planning attorneys at San Diego Law Firm are familiar with the public benefits system, and can prepare a Special Needs Trust that will accomplish the purposes you intend.  They can also integrate it with your will, living trust, and other estate-planning documents, so that it operates exactly as you intent.  For more information or an appointment, please call us at 619-794-0243.

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:

      ●    If You’re Survived by a Spouse or Domestic Partner

Your surviving spouse or domestic partner will receive your full share of “community property” (your shared marital property as determined by California’s community property laws).  You might also have your own “separate property” (usually this is property you owned before marriage or inherited while married).  Assuming that your separate property never turned into community property, then your spouse or domestic partner will get a share of those assets.  He or she will either get all, half, or a third of your separate property depending on whether you have certain relatives.  Those relatives (usually children) would receive the rest. 

      ●    If There’s No Spouse or Domestic Partner

If you had children (or a grandchild from a child who died), then they’ll inherit your estate.  If you didn’t have any children, then the hierarchy goes from parents, to siblings, to grandparents, to aunts and uncles, to cousins, and then more distant family members.  Keep in mind that once there’s someone eligible to inherit, the probate court won’t give property to anyone who’s further down on the hierarchy.  For example, if you have children, your parents will not inherit anything from you under the intestacy system.

What the Intestacy Rules Leave Out

When there’s no will or trust, the rules for distributing your property ignore many things that you probably think are very important.  For example:

      ●    Strained Family Relationships - Maybe someone who you wouldn’t want to inherit from you will under California’s intestacy rules.

      ●    Protecting Adult Children (From Themselves) - You may have a child who’s over 18, but who’s likely to seriously mismanage his or her inheritance, or lose it to creditors.  To avoid this situation, you’d probably want to establish a trust that can include safeguards.

      ●    Some People & Organizations Can Never Inherit From You - Even if you’re in a long-term relationship, your significant other won’t be eligible to inherit from you if you didn’t marry or enter into a domestic partnership.  Your friends, charities, and other organizations that you may want to leave a gift for also won’t receive anything. 

      ●    Leaving Loved Ones Out, Even If They’re Related - Your family member may not get to share in the inheritance, even if you would have wanted them to.  California’s intestacy system is a hierarchy.  Certain relatives (like a spouse or children) are higher up on the hierarchy than others (like parents, aunts, uncles, or cousins).  Under this system, your property is meant to be inherited by the relatives who are as high up on the hierarchy as possible.  As soon as there’s someone who can inherit, relatives who are lower on the list are shut out.

Create Your Own Plan Instead

If you create a will or trust, then you can usually decide who gets what and how.  You’ll also be able to control how much they get.  For example, even if you want your children to receive most of your property, you can still make gifts to a niece, friend, or others. 

After you’ve made your will and trust, watch out for pitfalls that can lead to intestacy (or partial intestacy).  In part, this means making sure all your property is covered by a valid estate plan.  If you get new assets after creating your will and living trust, then let us know.  For the same reason, any changes to your will or living trust need to be made carefully. 

We’ll advise you on your best options, so you can learn about the benefits of estate planning.  Remember, avoiding probate is not your only goal.  Estate planning is about taking control, while also finding the best way to minimize any taxes.  Get essential help with your will and living trust by contacting San Diego Law Firm’s experienced estate planning attorneys at (619) 794-0243.

Your choice of guardian is one of the most important decisions you’ll make in your will, so how do you decide?  In “How to Choose a Guardian,” mother of three Denise Oliveri proposes that you figure this out by answering five questions.  To decide who will be right for the job, she suggests you evaluate age and health concerns, moral and educational values, financial ability to care for a child, and whether your child would have to move away.

Property & Money Matters

Splitting up responsibilities – Sometimes you’ll find it’s best to name different people to handle the parenting and the finances.  This will depend on the personalities, schedules, and skills of those who you would want to care for your child.  In this case, you can name a “guardian of the person” to raise your child, and a “guardian of the estate” to manage money and assets left behind for your child. 

Decide how the inheritance should be handled – Remember that you may only want certain property to be gifted under your will if your chosen guardian accepts the appointment in court.  That way, you can make sure these resources are available for your kids even if the person you nominated turns down the guardianship.  We’ll ensure you take this and similar considerations into account so that your will matches your wishes.  Another option is to create a living trust that names a trustee to manage finances.  This can be a better option for you and your kids, and give you more control over how and when money will be spent. 

Making sure your wishes are carried out

Choose alternates – In the event the guardianship becomes necessary later on, what happens if the person you choose can’t act as guardian any more?  You can plan for this possibility by naming alternate guardians.  This gives you greater security that your child or children will be cared for by someone you’ve chosen.

Think your choices through in your will – If the person you’ve chosen is comfortable with taking on the role of guardian and accepts, then your next step will be to include your guardianship decisions in your will and the other parent’s will.  If you’ve chosen a couple to act as co-guardians, we’ll prepare your will to make sure it accurately reflects your intentions.  For example, if the couple later divorces or one spouse dies, will you still want either spouse to be your child’s guardian?

Don’t leave it all for the judge to decide

As long as you’ve nominated your guardian in a valid will, then the chances are the court will appoint the person you’ve chosen as guardian.  The court will only deny the appointment if it’s necessary to protect your child’s best interests.  You may recall Michael Jackson’s mother was approved as guardian to his three children, as reported by CNN, despite concerns of her age.

If you didn’t name a guardian in your will, then the decision will be left completely in the judge’s hands.  The court will try to make the best decision for your child, but the appointed guardian may be different from who you would have wanted.  Remember, it’s not enough to just come to an informal agreement about guardianship with your family and friends.  Your nomination has to be properly made in your will. 

Our experienced wills, trusts, and probate attorneys are here to help you understand guardianships and its responsibilities.  We’ll also prepare a will and living trust that’s comprehensive enough to truly carry out your goals.  Don’t miss a chance to help ensure your children’s security and well-being will be protected.  Contact San Diego Law Firm at (619) 794-0243.

For many, accountings are provided on time and with no need for objection.  For others, a series of challenges arise that have to be dealt with quickly before time runs out.  Beneficiaries sometimes find themselves in one or more of the following situations:

- The trustee or executor (or other fiduciary) doesn’t provide the required accounting and refuses to do so

- An account is made, but it turns out to be incomplete or incorrect

- You haven’t received required distributions from your share of the inheritance

- In managing the trust property or estate, you believe the trustee or executor may have spent or invested money carelessly or even wastefully

If you have similar concerns, we’ll work to quickly resolve the issue, and when needed we’ll petition the court for an order directing the trustee or other administrator to provide the accounting, or object to the accounting that’s been given.  Keep in mind that deadlines apply to your challenge of an accounting.  If you’re serving as a trustee, executor, or other fiduciary, we can prepare any accountings you’ll be required to submit.  Even if an accounting is waived, it’s often wise for executors and trustees to create an accounting that records all transactions.  No matter what the issue, we know how important it is to handle these matters tactfully and to strive to maintain harmony in your family after a loved one has passed away.  At the same time, it’s important to make sure your rights as a beneficiary are dealt with fairly, and to do so we can begin an accounting action or take any other necessary steps.  If you are serving as a trustee, executor, administrator, or other fiduciary, we’ll provide you with the guidance you need to properly carry out your many other duties in opening a probate or administering a living trust.  Act to protect your inheritance by contacting San Diego Law Firm’s experienced wills, trusts, and probate attorneys at (619) 794-0243.

What are valid reasons for challenging a will or trust?  Hollywood’s favorite example is the deathbed will, where – in a dramatic portrayal – the will is signed just moments before passing away, disinheriting everyone except for the person who callously pressured the testator into signing.  If there were a will contest here, what would the empty handed family members allege as grounds for the challenge?   One issue is capacity, because the deceased may not have had the level of capacity legally needed to change or create the will if the testator’s mental competence had grown too weak in his or her final moments.  Not only that, but the benefited person may have exercised duress or undue influence over the testator.  Other common reasons to contest a will include forgery, fraud, the existence of a more recent will, omitted children or spouses, and errors in executing the will.  If under the facts the legal requirements are met for any of these grounds, then the will or part of it is invalidated and property will instead be distributed according to California’s laws on inheritance, or possibly according to another will or trust.

The new California law on no contest clauses will be applied starting January 1, 2010, but it will affect wills that became irrevocable as of January 1, 2001 (for example, if a person dies on or after this date, the will becomes irrevocable at that point).  The law lists three categories of actions that are considered “will contests,” and anything else will not trigger the no contest clause and its threat of forfeiture.  If the challenger wins the will contest, then the no contest provision has no consequence because the will is ignored.  If the challenger loses, then typically the no contest clause will be enforced unless there was “probable cause” to dispute the will. 

It may be time to create or update your will and living trust to reflect this new law as well as recent case law.  We’ll also plan on the most effective way to include a no contest clause when you make amendments to these documents, and discuss the pros and cons of these clauses so you can decide on whether to include a no contest clause in your will or trust.  If you think you’ll be involved in a will contest, we’ll assess whether you’re a proper party to bring the action, and if you have possible grounds for a contest.  Whenever possible we’ll seek resolution without resorting to litigation.  Also keep in mind that a will contest must be brought within certain time limits so act soon.  Contact San Diego Law Firm’s experienced attorneys at (619) 794-0243 for help with any aspect of the probate and inheritance process.