24Jan2017

10 Reasons to Update Your Will or Trust

January 24, 2017

Changing a Trust, Changing a Will, Update Trusts, Update Wills, Updating your estate plan Estate Planning, Trusts, Wills

Many people will prepare estate planning documents and place them in a safe deposit box and forget about them. There are many reasons to review and update your documents. Below are 10 reasons that should prompt you to review your documents.

The beneficiaries you named in your will or trust are deceased.
New people in your life should be named in your will (e.g. birth, adoption, or possibly marriage).
New laws. You need to periodically check to see if new laws impact your estate planning documents. New Tax laws may make the type of trust you have with your spouse inappropriate now.
If you move to a different state, don’t assume that your will or trust conforms to the requirements of your new state. Each state has its own legal requirements for making a will.
Change in guardians, personal representatives, or trustees.
Children reach the age of eighteen.
A substantial increase or decrease in the value of your estate.
The acquisition or disposition of a significant asset.
You should see an attorney about reviewing and updating your estate plans prior to reaching 70½ years of age if you have an IRA, 401(k), or other qualified plan that requires you to begin taking distributions at age 70½.
The passage of time is reason enough. You should review your estate planning documents every three to five years.

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If you have questions about making changes to your will or trust call Annette Dawson-Davis Attorney at Law 805.498.0909 or email: [email protected].

Source: www.findlaw.com

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Tips for Estate Planning Conversations

19Dec2016

Starting a conversation about estate planning

December 19, 2016

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conversation about estates, estate planning, family, trustee Estate Planning, Trusts, Wills

Communication is the key to a successful estate plan. It is also important that your successor trustee be good with people and money and be able to communicate well and honestly with your beneficiaries.

Below is an article from Fidelity with some tips on getting the conversation started about an estate plan.

Tips for Estate Planning Conversations

By Fidelity.com

Even in the most open families, conversation often quiets when two subjects arise: death and money.

For both parents and adult children, confronting the prospect of each other’s deaths can be uncomfortable. Privacy around financial matters is often a key concern, even among close family members.

Why conversation is critical

When it comes to estate planning, there are often significant financial and personal benefits to being transparent and having sensitive conversations. For example, you might assume one of your likely survivors would be comfortable managing a certain asset or serving as trustee, when in reality that person is not up to the responsibility.

From the survivors’ perspective, it’s important they understand your intentions and plans for your estate. Lack of clear communication during estate planning (or an inadequate or outdated plan) can not only reduce the amount your beneficiaries receive, it can also result in uncertainty and conflict for them in an already difficult time.

If you do most of the work on your family’s finances, you’ll want to be certain of your survivors’ comfort level with taking on the task and their understanding of your intentions. For some, it may be best for a professional to assume the responsibility. Consult with your attorney or advisor.

Survivors may even make decisions based on erroneous ideas of what the deceased would have wanted. For example, when communication is lacking, some surviving spouses think honoring their loved one means keeping investments exactly as they were at the time of death. Eventually, this could lead to an outdated portfolio and missed growth opportunities.

Additional benefits of dialogue

The benefits of having a dialogue about estate planning within your family don’t stop at asset protection and an accurate understanding of intentions. Such an open dialogue can:

Bring your family a sense of empowerment, that you are taking control of each other’s collective future rather than leaving some elements to chance.
Pass on family values.
Help your family develop a common understanding and a common philosophy for how you and your family’s legacy will be carried out through generations.
Help prepare the family in the event you or another family member becomes incapacitated.
Help other members of your family—your parents, your siblings, or your children— develop a responsible plan.
Allow your family to take advantage of some of the best tax strategies.

How to get the conversation started

Despite how important this conversation can be, it may still be difficult to initiate. There is certainly more than one right way to begin a dialogue; however, here are a few suggestions to help guide you:

Pick a positive, comfortable environment during a period of relative calm. Don’t wait until a time of crisis when it may be too late to make adequate plans and family members may not feel emotionally able to talk.
Be sincere about your intentions. Be clear that you are initiating these talks out of concern that proper plans are in place and are understood.
Stress the importance and benefits of this conversation to everyone affected.One way to do this is to show an example of an estate that was improperly handled because family members had failed to discuss their plans with each other.

Adult Child

As an adult child, make sure your parents have their own plans and will be properly cared for if one of them passes away or becomes incapacitated.

Parent

As a parent, make sure your children have an understanding of your plans and wishes; if the children are still minors, make sure the appointed guardians are willing and clear on your intentions.

Grandparent or other

As a grandparent or other relative,ensure your grandchildren, nieces, nephews, etc., will be taken care of through your own estate planning, as well as coordinating with their parents on their plans, too.

View the entire article here on Fidelity.com.

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8Nov2016

Payable on Death and Transfer on Death

November 8, 2016

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account beneficiaries, payable on death, probate, transfer on death Estate Planning, Probate

A client came to my office because a deceased relative’s beneficiary designation at a financial institution was made out to the “Estate of her deceased relative.” There was no way to avoid a probate. It is such a shame that my client has to go through a probate when a correctly filled form would have prevented the probate. The form should have listed her name and not the “Estate of her deceased relative.” Probate costs and fees to transfer the account will be at least $10,000. It is my suggestion that you check all your financial account beneficiary designations.

Payable on Death (P.O.D) is a term used by banks and financial institutions to designate who the beneficiary is who will receive the account when the account holder dies. Designating a beneficiary prevents heirs from going through a probate. The problem is when the bank does not ask the client to fill out a form to designate beneficiaries. Problems also arise when one bank is bought out by another bank and the beneficiary designations are lost. If the accounts are over $150,000.00 a probate must be started. Have you filled out the forms to designate your beneficiaries on your checking and savings accounts, deposit accounts, mutual funds, savings bonds and certificates of deposits accounts?

A Transfer on Death (T.O.D.) designation also lets your beneficiaries receive assets when you die without them going through probate. Generally speaking we use these for Individual Retirement Accounts ( IRAs) and 401(k)s. We usually do not want pre-tax accounts to go into a trust, because we want the transfer on death beneficiary to roll over the account to receive the tax benefits. When people list their living trust as a beneficiary on their retirement accounts it creates tax issues for the beneficiaries. The account will be taxed before distribution into the trust. Please check with your attorney and financial advisor, especially if you have minor children, before designating beneficiaries on your financial accounts.

Ask your bank for a POD beneficiary form. Complete the form and follow your bank’s instructions for the form.

Contact me if you have questions in regards to P.O.D. or T.O.D. issues.

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8Oct2016

Is a Special Needs Trust needed?

October 8, 2016

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assets, Special Needs Trust, Trusts, Wills Estate Planning, Probate, Trusts, Wills

Occasionally I get questions from people about different trusts for their estate. I recently received an email asking about Special Needs Trusts, that I thought would be good to share.

Dear Annette,

My aunt and uncle have one son who is mentally handicapped, he lives in a group home where he is supervised and works. This is my aunt and uncle’s only heir. They are in their early 70’s my cousin is about 49 now.

What do they need to do if something happens to either one of them or both of them?

Do they need to set up a special needs trust?

Your Aunt and Uncle need to set up a special needs trust for the benefit of your cousin. If they do not, he will likely inherit cash making him ineligible for the governmental benefits he needs. A person who receives Medi-Cal and is in a program that follows the SSI rules can only have $2,000 of countable assets. All assets are countable unless specifically excluded, examples of Excluded assets are a home (he or she lives in), household goods and personal effects, an automobile, life insurance with a cash value of less than $1500, a burial plot and a revocable burial fund of $1,500, or les

A special needs trust allows a trustee to purchase extras that do not supplant the beneficiaries governmental benefits. For instance you cannot use the special needs trust funds to purchase groceries, meals or give them cash, but you can use the funds to pay for extras like clothes, phones, recreational equipment, television and cable, haircuts, glasses, airline tickets, travel, durable medical equipment, medical insurance, medical treatment for which public funds are unavailable, dental care, education and tuition. This is not a complete list, but I think it will give you the gist of why the special needs trust is so important for your cousin’s future.

Please have your Aunt and Uncle contact me and I would be happy to assist them in setting up this trust.

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1Sep2016

What is Probate?

September 1, 2016

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Estate Planning, Probate, Trusts, Wills

Parents hold a family together. When parents die, siblings who value money more than anything fight and things can get ugly fast. Siblings who feel jealous, or slighted because they didn’t get the red bike, hire lawyers to fight with their family. This costs everybody time, money and destroys any hope of continuing family relationships.

What is Probate?

Probate is the process of transferring property when someone dies without proper planning. Probate Court transfers title to property to those people named in a will, or entitled to take under the law. Probate is costly, time consuming, psychologically challenging and public. Court fees are expensive and probate attorneys receive a percentage of the entire estate.

How can I avoid probate?

With the proper tools, your family can avoid Probate. In California people with real estate need to have a living trust. Do you or your parents have a living trust?

Learn more about Probate or contact Annette Dawson-Davis, Attorney at Law 805.498.0909