Half of Americans are Wrong

A new survey discovers what Americans believe about estate planning and what they are wrong about.

Roughly half of Americans are wrong. No, that is not about politics and the roughly half of Americans who are on the other side of the aisle as you.

It is about estate planning.

A survey conducted by WealthCounsel revealed that roughly half of Americans believe estate planning is only for the wealthy and almost the same number of people believe they do not have enough wealth to plan for their estates.

These findings were reported by Wills, Trusts & Estates Prof Blog in "Survey Reveals Helpful Insights for the Future of Estate Planning."

Estate planning is not just for the wealthy.

Families can benefit from estate planning regardless the amount of assets they have. It is even beneficial to have an estate plan when you do not have any assets other than personal property.

The estate plan can be used to make sure the people who do get your personal property after you pass away are the people you wish to have it. But, an estate plan is about much more than property.

Estate planning is used to determine who will care for your minor children if something happens to you. It is also used to make important decisions in advance about the care you will receive at the end of your life and who will speak on your behalf when you are unable to do so.

Do not let a lack of (perceived) wealth stop you from estate planning. No matter how much money you have, having an estate plan will make things easier for you and your family.

A qualified estate planning attorney should be consulted to educate you on your options.

To speak with an estate planning attorney in Orange County, Long Beach or Corona, call 800-220-4205 for a private consultation. Or visit our website at www.OCElderLaw.com for more information. We handle all aspects of elder law, wills and trusts, asset protection and retirement planning. See why Marty Burbank and Josh Ramirez are the experts in estate planning in California.

Reference: Wills, Trusts & Estates Prof Blog (Oct. 21, 2016) "Survey Reveals Helpful Insights for the Future of Estate Planning."

Creating Incentives for Your Children

The wealthy have always struggled with how to incentivize their children to work hard for themselves and not just rely on family wealth and an inheritance.

One common concern among wealthy people is that leaving their wealth to their children may cause them harm. Many fear their children will stop working for themselves and just spend their parents' money.

There are many examples of wealthy heirs doing just that.

Recently, The Economist's 1843 Magazine looked at how wealthy people have addressed this dilemma over the centuries in "How to Make Inheritance an Incentive."

Andrew Carnegie, for example, famously left nothing for his heirs.

Today, using incentive trusts is a common method.

These trusts only give money to beneficiaries when certain benchmarks are met, such as getting a college degree and getting a job with trust payments tied to salary. How well these incentive trusts work, however, is up for debate.

Oftentimes, they have the unintended consequence of punishing children for doing things their parents would actually approve. For example, by giving a child more money from the trust based on how much they earn might discourage them from taking an easy or part-time job, but the child would also be discouraged from taking a lower paying public service job.

Incentive trusts can be written in such a way that heirs are encouraged to do appropriate things, but they need to be flexible.

It can be a good idea to give the trustee some discretion to make trust disbursements in accordance with conduct the trustee thinks the parents would have approved. Choosing a qualified trust administrator is an important process. For more information, please call 800-220-4205 to speak to a certified estate planning attorney about the best way to consider the administrator for your family trust. At OC Elder Law, we have the experience to help you with this important decision. Visit www.OCElderLaw.com for more information.

Reference: 1843 Magazine (Oct. 13, 2016) "How to Make Inheritance an Incentive."

Why the Wealthy Pay Less Income Tax

The Presidential election has brought attention to the fact that many wealthy people in the U.S. pay little income tax. Experts suggest that the issues discussed in the election are not the biggest reason for the phenomenon.

During the course of the Presidential election cycle Donald Trump has received criticism for breaking tradition and not releasing his income tax returns. While he has said it is because he is under audit, his opponent speculated that his returns might reveal that he did not pay income tax at all or that he is not as wealthy as he claims. Some of the mystery was solved when the New York Times published three pages from his leaked state tax returns from 1995.

The returns revealed that he could have avoided paying any federal income tax for up to 18 years because he had taken an almost $1 billion business loss that year. Trump seemed to confirm that was the case during a debate with Hillary Clinton.

However, as The Atlantic points out in "The Tax Code for the Ultra-Rich vs. The One for Everyone Else," the reason Trump pays little income tax is not the reason most of the wealthy also pay little.

The bigger issue is the way in which capital gains are taxed or in some cases not taxed. Capital gains are not taxed until they are realized, that is until the underlying asset is transferred. If the owner of the asset passes away without having sold the asset, then his or her heirs receive the asset with a step-up basis. They do not have to pay capital gains on any increased value of the asset that accrued before they received it when they decide to sell it.

As part of his plan for estate tax reform, President Obama has proposed eliminating this step-up basis.

Whether or not you agree with the wisdom of the current laws that allow many wealthy people to pay little in income tax, it is important to know the real reason it happens because that is what politicians are likely to be looking at when the estate tax comes up again in Congress.

Be sure to speak with a certified California estate tax planning attorney for your particular situation. Visit our website for more information, or call 800-220-4205 to speak with a California estate planning attorney in Orange County, Corona or Long Beach.

Reference: The Atlantic (Oct. 15, 2016) "The Tax Code for the Ultra-Rich vs. The One for Everyone Else."

Enforcing Charitable Pledges in a Trust

A lawsuit brought by Duke University has brought media attention to charitable pledges and whether they are enforceable against an estate.

It is common for wealthy people to make pledges to donate money to charity at some future date. Doing so gives the wealthy person time to come up with the liquid assets to donate, if necessary, and lets the charity know when to expect donations.

It also allows donors to keep their assets and profit off them in the time between when the pledge is made and when it is fulfilled. However, what happens if the pledge is not fulfilled?

The answer to that question has been in the news recently as Duke University filed a lawsuit against the estate of Aubrey McClendon and her $10 million unfulfilled pledge.

The Wills, Trusts & Estates Prof Blog looked at some ways a court might decide to enforce the pledge in "History of Charitable Pledges."

Basically, courts will first look to see if there is an enforceable contract, either bilateral or unilateral. Failing that, the court might try to use a legal doctrine known as “promissory estoppel.” In layman's language that means something like, "You made a promise and the other party relied on it. You received some benefit from your promise, so you should not be able to disavow it."

The bottom line is that the legal system has a public policy preference of seeing that charitable pledges are fulfilled and will seek legal ways they can be enforced. If you have questions about a charitable gift trust in California, please visit our website at www.OCElderLaw.com and schedule a private consultation with one of our trust attorneys in Orange County, Corona, Long Beach, Palm Springs or Palm Desert. We have certified Elder Law Attorneys on staff available to help. Call 800-220-4205 for a consultation.

Reference: Wills, Trusts & Estates Prof Blog (Oct. 9, 2016) "History of Charitable Pledges."

Estate Sale Agent Concerns

Estates sales can be an excellent way to get rid of personal possessions either as part of the estate administration process or for an elderly person preparing to move into a nursing home. Be careful when picking an agent to handle the sale.

Estate sales are increasingly popular as older Americans seek to get rid of a lifetime's worth of personal possessions they no longer need. This is especially the case as they prepare to move into smaller residences or nursing homes.

They are also popular with estate administrators who need to dispose of a deceased person's personal property and who do not have time to sell it all themselves. However, as estate sales have grown in popularity, more problems with estate sales agents are being reported.

This issue was picked up by the New York Times in "It Pays to Be Wary When Hiring an Estate Sales Agent."

Some people have reported that the estate sales agents they have hired have paid much later than expected, paid them less than promised and even bounced checks. To avoid having these problems with the estate sales agent you hire it pays to do your homework on the agent.

Do not just pick the cheapest agent you talk to. Ask around and speak to other people who have had estate sales about their experiences with agents. You want to make sure that you hire someone with a track record of expertise and fair dealing.

It is also important that you have a signed contract with the agent and that you get a copy of the contract for yourself. You might also consider speaking to an estate attorney and asking if the attorney knows reputable agents in the area. For more information, please contact our office at 800-220-4205, or visit our website at www.OCElderLaw.com.  We have Estate Planning Attorneys in Orange County, Long Beach, Corona, Palm Springs and Palm Desert.

Reference: New York Times (Sept. 23, 2016) "It Pays to Be Wary When Hiring an Estate Sales Agent."

Wyly Estate in More Legal Trouble

The SEC is seeking contempt charges against the executor of Charles Wyly's estate for failing to pay a multimillion dollar fine.

Charles Wyly and his brother Sam were well-known and wealthy Texas businessmen with billions in assets. The Securities and Exchange Commission alleges many of the assets were gainedfraudulently.

Before a court could render a judgment Charles Wyly passed away and the case became the responsibility of his estate and its executor, Wyly's son-in-law Donald Miller. 

In February of 2015, the estate was ordered to pay a fine of $101.2 million. That judgment is still under appeal, but that has not stopped the SEC from demanding payment, which the estate has failed to pay. 

In its latest move the SEC has asked that the estate be held in contempt of court for not paying up, according to Private Wealth in "SEC Eyes Contempt for Wyly Estate's Failure To Pay $101M."

It appears the estate may have made a basic mistake. 

While it appealed the judgment, the estate did not request a stay of the judgment pending that appeal. That means the estate has to pay the fine even though a court could eventually decide to overturn the judgment.

This should serve as a reminder to executors everywhere that they need to be very careful how they go about the business of handling the estate. It is important to make sure everything is done properly, especially when the estate is involved in litigation against the government.

If you need help navigating these postmortem issues, request a consultation with an estate planning attorney in Orange County, Corona or Long Beach can help you navigate these postmortem issues.

Reference: Private Wealth (Sept. 7, 2016) "SEC Eyes Contempt for Wyly Estate's Failure To Pay $101M."

Retirement Planning and Your Estate

Even if you do not consider yourself to be wealthy it is important to keep your estate plan in mind when retirement planning.

It can be tempting to think of different types of life planning in isolation. People do not necessarily start planning for how they want to live in retirement when they decide what courses to take in college and what type of career they would like to have.

Similarly, many people do not think about their estate planning when they are planning for their retirements. Estate planning is often left for much later.

However, this can be a mistake as Life Health Pro explains in "Bequest goals: more than just an issue for the wealthy."

The primary reason for this is that if you would like someone else to have a given asset after you pass away, then you need to make it so your retirement plan preserves that asset and that you do not have to use it. For example, if you would like to leave your home to your children, then your retirement plan needs to be sufficient enough for you not to have to sell the home to have funds to live on when you are no longer working.

This is true whether you have a large mansion or a more modest house.

What this means is that you should not think of life as entirely separate stages when you do your planning. Think about what type of estate you want to leave behind when you plan for your retirement and act accordingly.

To have your specific issues addressed, please call one of our California estate planning attorneys at 800-220-4205, or visit our website at www.OCElderLaw.com for more information. We have offices in Orange County, Corona, Long Beach, Palm Springs and Palm Desert, or we can visit you in the privacy of your own home.

Reference: Life Health Pro (Aug. 9, 2016) "Bequest goals: more than just an issue for the wealthy."

Keryn Redstone Agrees to Settle

Even after an agreement was reached between Sumner Redstone and Viacom’s CEO over control of the Redstone trust, Redstone’s granddaughter remained as a last hurdle to pass for control of the trust to go to Redstone’s daughter. Now, the granddaughter has also agreed to settle the dispute.

Recently, media mogul Sumner Redstone and his daughter Shari Redstone reached an agreement with Philippe Dauman to put an end to Dauman’s claim that Sumner Redstone was not competent to change the terms of his trust and that he had been unduly influenced by his formerly estranged daughter Shari to do so in her favor.

While that agreement ended most of the uncertainty concerning Redstone’s media empire, it did not end it all. Redstone’s granddaughter, Keryn Redstone, was still pursuing the matter.

Now, she too has reached an agreement, according to the Wall Street Journal in “Possible Accord Reached in Family Battle Over Sumner Redstone Trust.”

The settlement agreement is not yet finalized but in it the two sides have agreed to rewrite some terms of the trust to ensure Keryn Redstone that she will be treated fairly and equally along with Redstone’s other grandchildren. Keryn will also be allowed to meet with her grandfather for the first time since February 2016.

As long as talks between the two sides do not break down in the near future, this agreement should put an end to the challenges to Redstone’s competency that have plagued him this year for now and the foreseeable future. That should have investors breathing a sigh of relief.

Reference: Wall Street Journal (Aug. 26, 2016) “Possible Accord Reached in Family Battle Over Sumner Redstone Trust.”

If you have questions like “how does a trust work?” please call one of our estate planning attorney in California at 800-220-4205, or visit our website at www.OCElderLaw.com for more information. We have offices with Estate Planning Attorneys in Orange County and Corona. 

KFC Recipe Possibly Revealed by Will

The original recipe for Kentucky Fried Chicken’s famous 11 herbs and spices is one of the most valuable trade secrets in the U.S. It might have been accidentally revealed by showing an old will to a reporter.

No matter how new and innovative they might be, recipes cannot be copyrighted or trademarked. If you were to create a new steak sauce, for example, it does not matter how many bottles you sell. Anyone else could use the exact same ingredients in the exact same proportions and bottle the sauce for themselves.

In order to protect valuable recipes, they must be kept secret and anyone with knowledge of the recipes must be legally obliged to keep the secret. If that is not done, then the ability of the recipe’s creator to pass it on to his or her heirs in a way that retains its value is greatly diminished.

One of the most valuable such secret recipes is the 11 herbs and spices that Colonel Sanders used to create his original recipe for Kentucky Fried Chicken.

The recipe, which has been kept secret for decades, has now been possibly revealed as NBC News reports in “The Colonel's Secret Recipe Revealed? Not So Fast, Says KFC.”

While interviewing a nephew of Sanders, a reporter was shown a scrapbook that contained the will of Sanders’ second wife. On the back of the will was printed a recipe for 11 herbs and spices the nephew claimed was the original recipe.

KFC’s current owner denies that it is the correct formula.

If this does turn out to be the original recipe that needed to be kept secret by Sanders’ estate, it would be ironic that it was printed on the back of a will of all places.

If you have questions about your will or trust, please contact one of our estate planning attorneys in Orange County at 714-525-4600, or one of our estate planning attorneys in Corona at 951-264-5732. 

Please visit our website at www.OCElderLaw.com for more information on wills and trusts in California.

Reference: NBC News (Aug. 26, 2016) “The Colonel's Secret Recipe Revealed? Not So Fast, Says KFC.”

Divorce and Social Security

Not knowing about or not fully understanding Social Security benefits for divorced people could potentially cost some people a valuable source of income.

Divorce can be extremely expensive. It has been known to cause many people to lose their retirement savings or to make early withdrawals from retirement accounts. As a result, many of these divorced people are more reliant on Social Security benefits when they want to retire. Unfortunately, even then many find it difficult to get by.

If a divorced person did not work very much during the marriage and instead relied on the other spouse to be the primary breadwinner, then that divorced person might not be eligible for enough of a Social Security benefit to live on.

Nevertheless, as Money points out in “Will My Divorce Affect My Social Security Benefits?” an option is available.

A married person can forgo his or her own Social Security benefit and instead receive Social Security benefits equal to half of the spouse’s. Divorced people have the same option in many cases.

If you were married for at least 10 years, have been divorced for at least two years, and both you and your ex-spouse are at least 62 years old, you can choose to receive a Social Security benefit equal to half of your ex-spouse’s monthly benefit.

You can do so regardless of whether your ex-spouse has started receiving benefits. If you have been married more than once, you can choose which ex-spouse’s benefits to use as long as the above requirements are all met.

If you have questions about divorce and Social Security benefits or any other benefit questions, visit our website at www.OCElderLaw.com, or call 800-220-4205 to speak with an Elder Law Attorney in Corona or Orange County.

Reference: Money (Aug. 23, 2016) “Will My Divorce Affect My Social Security Benefits?”

An Odd Silence in the Presidential Campaign

The Presidential candidates talk nonstop about some issues. However, they have both been relatively silent on many elder law issues and what they might do so that more Americans can have financial security in their retirement years.

Millions of Americans are rightfully worried that they will not have enough money to live on when they retire and that they will ever be able to retire at all. It is a well-known fact that too many Americans have not saved enough for retirement.

Polling suggests that Americans would like to know where the Presidential candidates, Donald Trump and Hillary Clinton, stand on issues that would potentially affect retiring Americans.

Interesting, as Next Avenue points out in “Where Clinton and Trump Stand on Retirement Security,” both candidates have been mostly silent on elder law and retirement issues.

Donald Trump and Hillary Clinton have both said they do not want to cut Social Security benefits or raise the retirement age. They both do have plans they believe will lower Medicare costs as well.

That noted, on other issues of importance to seniors, such as access to retirement accounts, long-term health care costs, employment for seniors and more, the campaigns have been mostly silent. Figuring out where the candidates might stand on the issues requires trying to interpret vague party platforms or general statements from the candidates themselves.

Of course, candidates are not bound by their party platforms.

It is a shame neither candidate has said much on these important elder law issues.

As more and more Americans enter or near their retirement years, these issues will continue to become increasingly important in Americans’ lives. If you have questions about Social Security or Medicare, and how it will affect your retirement, please schedule a private consultation with one of our Elder Law Attorneys in Corona or Orange County. They can be reached at 800-220-4205, or you can visit our website at www.OCElderLaw.com for more information.

Reference: Next Avenue (Aug. 19, 2016) “Where Clinton and Trump Stand on Retirement Security”

Holding a Trustee Liable

One of the reasons that trusts are an effective estate planning tool is that the trustee is legally required to act in the best interests of the beneficiaries. However, it is increasingly difficult to hold trustees liable when they do not do so.

Trustees have tremendous power. Depending on the specific language of the trust documents, trustees can have wide latitude in deciding how trust assets will be invested and distributed. Giving trustees this power is important to make sure that the trust is operated in such a way as to maximize their value for beneficiaries.

With that power can also be the temptation for the trustee to act in his or her own interests instead of the beneficiaries. If that happens, then the trustee can be held liable.

That is the way everything is supposed to work, but as the Wills, Trusts & Estates Prof Blog explains in “The Many Ways Trustees Escape Liability” it can often be difficult to actually hold trustees to account.

Many people often waive their rights to hold a trustee liable either by consenting to a transaction before it is made or by signing a release from liability form. In both cases beneficiaries are supposed to be given full disclosure before waiving any rights. However, opinions about what constitutes full disclosure can vary.

Some trust documents themselves also limit the ability to hold trustees liable and courts always have the right to excuse a breach of duty by a trustee if the court finds it equitable to do so.

If you have a conflict with a trustee, make sure you receive expert legal advice about how to proceed. 

For more information, please visit our website at www.OCElderLaw.com, or call 951-264-5732 to speak with a trust attorney in Corona, or 800-220-4205 to speak with a trust attorney in Orange County.

Reference: Wills, Trusts & Estates Prof Blog (Aug. 11, 2016) “The Many Ways Trustees Escape Liability”

Paper Claims to Have Identified Prince’s Son

If a California newspaper is correct, then dividing up Prince’s estate will be much easier than previously thought. The paper claims that DNA tests have proven that Prince has a son.

Recently, the Minnesota probate judge overseeing the Prince estate threw out the claims of 29 people who said they were related to the late musician. Most people took that to mean that there were six possible heirs left to Prince’s fortune and that they will have to undergo DNA testing.

The Santa Monica Observer recently report on this in “SMObserved Finds Prince Rogers Nelson's Son--Uncanny Resemblance!”

The article claims that DNA testing has proved that another, previously unknown, man is Prince’s son, which would make him the musician’s sole heir.

The newspaper reports that Sheila Steman was a musician who used to perform in many of the same clubs as Prince. The story indicates that her son, Anthony Steman, may have been the result of a relationship with Prince.

The judge overseeing the case ordered that the results of the genetic testing of Steman be kept under seal, which the paper believes is proof that Steman is Prince’s son.

However, there could be other reasons for the decision and it is unclear how a small California paper would have such inside knowledge of a Minnesota court case that has received lots of attention from much bigger media outlets.

While Anthony Steman might prove to be Prince’s son, at this point it should still be viewed as a rumor.

If you would like to review or create a will or trust for your family, please contact one of our Estate Planning Attorneys in Orange County or Corona at 800-220-4205, or visit our website at www.OCElderLaw.com to see what we can do for you.

Reference: Santa Monica Observer (Aug. 9, 2016) “SMObserved Finds Prince Rogers Nelson's Son--Uncanny Resemblance!!”

Remarriage and Estate Planning

If you are planning to get remarried, it is important that you revise your estate plan before doing so, especially if you have children from a previous marriage.

One of the most challenging things for estate lawyers and probate courts to administer is the estate of someone who passes away without a current plan, who was married at the time of death and who had children from a previous marriage. In these cases, it has to be determined how much the spouse is entitled to and how much should go to the children from the previous marriage.

Depending on the terms of the divorce, an ex-spouse could also be entitled to certain assets of the deceased. Most of the difficulty can be avoided if, before getting remarried, people revisit their estate plans and make sure they are updated properly to reflect the expected marriage.

This was the subject of a CNBC article titled “Getting remarried? Protect your assets and your interests.”

The article lists some common estate planning mistakes that people make when getting remarried, including:

• ·         Not deciding whether beneficiary designations on financial accounts should be changed.
• ·         Not having a plan for which assets can be co-mingled with the new spouse’s assets and which should not be.
• ·         Not having an estate plan at all.
• ·         Not considering a prenuptial agreement.
• ·         Failing to give proper verbal instructions to family members.
• ·         Not deciding whether a house needs to be re-titled.
• ·         Not purchasing long term care insurance or otherwise planning for nursing home care.

Why take chances? Get the counsel of a qualified estate planning attorney to help you cover all of the bases.  To get started, please visit our website at www.OCElderLaw.com. Then schedule a private consultation with one of our Estate Planning Attorneys in Orange County at 714-525-4600, or one our Estate Planning Attorneys in Corona at 951-264-5732 today.

Reference: CNBC (July 28, 2016) “Getting remarried? Protect your assets and your interests.”

A New Type of Doula

Traditionally a doula is someone who offers care and support to a woman in labor to make the birth process easier. However, a new type of doula helps those at the other end of the life cycle.

Passing away is not as easy as it might seem. Patients in the dying process are sometimes confused, in pain or in need of comfort. Their loved ones are often just as confused and unsure about what they should say or even if they should say anything at all. Increasing awareness of these difficulties has led to an understanding that having a professional to assist dying patients and their families can be beneficial as the Washington Post reports in “Dying is hard. Death doulas want to help make it easier.”

Death doulas are trained professionals whose job is to assist the dying and their families. They attempt to make the transition from one world to the next easier. Sometimes that means that the doula just sits with a dying person and holds his or her hand so the individual knows he or she is not alone. Doulas will often help loved ones overcome their own emotions so they can say their final goodbyes. They have even been known to run errands for family members to make sure that families do not miss the final moments of a loved one’s life.

Anything that makes the end of life easier for the elderly and their families is welcome. Disputes that begin in sick rooms have often been known to linger for years between family members and can lead to family fights and even estate litigation.

To the extent that death doulas can make those disputes less likely, they offer a valuable service to the elderly and estate planners.

If you have questions about planning for the future, be sure to contact an estate planning attorney to see what is best for your particular situation. For more information please visit our website at www.OCElderLaw.com. If you would like to speak with an Estate Planning attorney in Orange County, please call 714-525-4600, or 951-264-5732 to speak with an estate planning attorney in Corona. We can help you assess your particular situation with an in-depth private consultation.  

Reference: Washington Post (July 22, 2016) “Dying is hard. Death doulas want to help make it easier”

Waiting for the Tesla Model 3?

If you are currently on the waiting list for the Tesla Model 3, what happens if you pass away before getting the vehicle?

The announcement of the Tesla Model 3 generated enough buzz that more than 300,000 people paid $1,000 dollars each to be on a waiting list for the chance to purchase the vehicle when it becomes available. As the car is not expected to start shipping until late in 2017, that makes it likely some on the waiting list will pass away before getting their hands on the coveted electric vehicle.

Bloomberg reported this development in “What Happens When You Die Waiting for a Tesla?”

The actuarial reality that people on the waiting list will pass away means they should be aware of what might happen to the right to purchase the vehicle in the event of death.

Everyone on the waiting list signed a contract with Tesla that explicitly states that the right to purchase a Tesla Model 3 is not transferable to another person without the prior approval of Tesla. This is included as Tesla was concerned that spots on the waiting list would be hoarded and sold at higher than retail value when the car starts shipping. Even estate permission from the company must be sought to transfer the right to purchase to an heir or beneficiary.

A spokesperson for the company told Bloomberg that should someone on the waiting list pass away, Tesla would be accommodating. They would either refund the $1,000 deposit or allow a transfer of the place on the waiting list to an heir.

If you have questions about setting up an estate planning  in Corona or Orange County, please visit our website at www.OCElderLaw.com, or contact on of our Estate Planning Attorneys in Orange County at 714-525-4600, or our Elder Law Attorneys in Corona at 951-264-5732 for a private consultation.

Reference: Bloomberg (July 13, 2016) “What Happens When You Die Waiting for a Tesla?”

You Are Never Too Old to Donate Organs

As many people enter their retirement years, they begin to think about the legacy they will leave. People often use estate plans as a vehicle to create their legacies, but they might be overlooking something else that they can do.

It is almost a universal human trait to want to be remembered by others after we die. Some people are in a position to be remembered by millions, if not billions of people. Most of us, however, are likely to only be remembered by those who knew us in life.

How we are remembered is what we call our “legacy” and it is something many older Americans worry about. The most common way to leave a good legacy is with a well-thought out estate plan that provides for our families. Some people include charitable donations in their estate plan, which helps out good causes and increases the donor’s legacy.

Another way to leave a legacy is though organ donation.

Although organ donation is not always thought about in terms of leaving a legacy, it is very much doing so. The person who receives the donation and their loved ones will certainly remember the donor and think kindly of them even though they probably never knew the donor personally. However, many senior citizens who might consider being organ donors think they are too old to do so.

A recent case in Scotland demonstrates that is untrue.

As MSN reported, a 107-year-old woman in Scotland who recently passed away donated and her corneas were used successfully in a transplant.

The article’s title was “107-year-old becomes Scotland's oldest organ donor .”

You are never too old to donate organs, so if you are considering being a post-death organ donor, do not let advanced age stop you from signing up.

If you have questions about setting up an estate plan, please visit our website at www.OCElderLaw.com, or contact on of our Estate Planning Attorneys in Orange County at 714-525-4600, or our Elder Law Attorneys in Corona at 951-264-5732 for a private consultation.

Reference: MSN (July 6, 2016) “107-year-old becomes Scotland's oldest organ donor .”

Community Property and Your Estate Plan

If you are considering retiring to a state with community property laws, you should consider how your estate plan could be affected.

The main difference between community property states and other states is in how marital assets are considered to be legally owned. In a community property state, everything acquired during a marriage is considered to be equally owned by the husband and wife except for any inheritances solely made to one of them. Property acquired before the marriage is not community property.

This is different from other states where spouses can continue to acquire separate property after marriage.

As Barron's Penta Daily discussed in "How Community Property States Are Different," this has implications for estate plans, such as:

·         

Capital Gains – Community property states have a benefit for surviving spouses because the spouse receives a step-up basis on an entire home, for example, instead of only half the value of the home in other states.

·         Gifts – If one spouse gives a gift of community property without the permission of the other, the spouse who did not make the gift can revoke it later.

·         Life Insurance Trusts – Funding a life insurance trust for the benefit of a spouse needs to be done from non-community property or the entire purpose of the trust will be defeated.

If you live in a community property state, or are considering retiring to one, then contact a qualified estate planning attorney to learn the legal implications.

Reference: Barron's Penta Daily (June 28, 2016) "How Community Property States Are Different"

Unhappy in Retirement

A recent study revealed that more Americans than ever are unhappy or dissatisfied in retirement. If you are one of them, getting your affairs in order might help your security and satisfaction.

When working people think about retirement, they normally look forward to it. After all, retirement is supposed to be the reward for years of long work. Once retired, retirees no longer have to pay attention to a work schedule. They can do what they want when they want to do it.

It sounds great, right? However, according to a recent study discussed by Trust Advisor in "More People Are Unhappy In Retirement Than Ever Before," not everyone is happy and satisfied in retirement. That is somewhat to be expected.

Life is complicated enough. No longer "having to work" is not a miracle cure that can make everyone happy. It seems today that a greater percentage of people are unhappy and dissatisfied in retirement than in previous decades.

The reason for the increase is not exactly known. It has been suggested that more retirees are financially insecure than in previous generations. Others say it might be the result of more people having unreasonable expectations about retirement or merely a generational shift as Baby Boomers retire in greater numbers.

While happiness can be very elusive, satisfaction can be less so. For most people there is a certain level of satisfaction in knowing their affairs are in order in case there is an emergency. Thus, getting advanced medical directives and a general durable power of attorney will help with retirees' satisfaction levels.

Getting a complete estate plan should help as well because there is also satisfaction in knowing that family will be taken care of should anything untoward happen to you. If you’re in the market for an estate planning attorney in Orange County, call OC Elder Law today! (800) 220-4205

Reference: Trust Advisor (July 1, 2016) "More People Are Unhappy In Retirement Than Ever Before"

Media Denied Hearing in Prince Case

The judge overseeing the probate case concerning Prince's estate has denied a request from several media companies to be heard in the case. However, questions about media access to the case have not been definitively answered.

The issue of having cameras in the courtroom has always been a controversial matter. In determining whether to allow them, the judges have to balance the public's right to know, the media's First Amendment rights and the parties' rights to privacy. The public has grown used to television cameras in many high profile criminal cases.

However, television cameras in a high profile estate case are an entirely different matter. This balancing act has been thrust into the limelight by the death of Prince.

Previously, in the probate case involving his estate, the judge barred cameras, audio recordings and sketch artists. News organizations have sought to intervene in the matter to gain access, but the judge recently declined their request to be heard for the time being and allowed that he might schedule a hearing on it later.

The USA Today reported on this development in "Prince estate judge: No cameras at Monday hearing."

Prince was notorious for being extremely private about his personal life so it can be surmised that he would not want the media and television cameras near legal proceedings concerning his estate. Nevertheless, given the fact Prince did not have an estate plan his estate must go through the probate process, which is open to the public by default.

As an estate planning attorney in Orange County, I can tell you that this drawn out process could have been easily avoided. If the musician had taken the time to meet with an estate planning attorney to prepare an estate plan that avoided probate, then he could have distributed his estimated $300 million fortune in a way that preserved his privacy.

Reference: USA Today (June 25, 2016) "Prince estate judge: No cameras at Monday hearing."

State Sues Life Insurance Companies

Lawsuits from the Minnesota Attorney General should serve as an important reminder to anyone who has a life insurance policy as part of their estate plan.

Life insurance policies play a pivotal role in many estate plans. They are often used to provide needed cash to family members to bridge the gap between when the policy holder passes away and when the estate is settled. They can also be used to help equalize estate distributions between heirs when other assets are difficult to divide.

What if the life insurance company does not pay beneficiaries? In that case the goals of the estate plan are not met. It happens more than most people think.

In fact, this happens so often that the state of Minnesota has sued several life insurance companies and recovered approximately $200 million as CBS Minnesota reports in "State Suing Life Insurance Companies For Not Paying Beneficiaries."

The biggest source of the problem? Beneficiaries of the life insurance policies do not know that they are life insurance beneficiaries. As a result, they do not file a claim.

Even if the companies know that the policy holder has passed away, they do not seek out the beneficiary and pay on the policy. In most cases they are not legally required to do so. They can keep the money and use it for their own purposes until a claim is filed.

The lesson to be learned from this is that when life insurance is a part of your estate plan, then you need to ensure that the beneficiaries are aware of the policy and know to file a claim when you pass away. You do not have to tell them before you pass away, but someone reliable should know at least where to find your policy documents at the appropriate time.

If you need an estate planning attorney in Orange County, please visit our website at www.OCElderLaw.com, or call us at 714-525-4600. You can also visit us at our Corona Estate Planning attorney’s office, located at 1185 Magnolia Avenue in Corona, or call 951-264-5732. We can walk you through all the details of setting up your estate plan and making sure your life insurance benefits will be well planned out.

Reference: CBS Minnesota (May 18, 2016) "State Suing Life Insurance Companies For Not Paying Beneficiaries."

Who Profits From the Sumner Redstone Situation?

The continuing battles over Sumner Redstone's competency in court and the media is not profiting shareholders in the companies that he owns, but someone is profiting from the situation.

The current fight over Sumner Redstone's competency and his decision to oust Viacom's CEO, Philippe Dauman, from his family's trust and holding company is something of a media circus and a three-way battle between Redstone, Dauman, and Redstone's daughter, Shari Redstone. The battle is not only being waged in court, but also in the media, both in the mainstream press and in the tabloids.

As it has been going on, Viacom's stock price has taken a severe hit to the dismay of shareholders. 

But, even if shareholders are not profiting, someone else is as the New York Post reports in "Sumner Redstone's legal saga has lawyers rolling in cash."

To the surprise of the judge in the case at a recent hearing 22 lawyers stood up to make an appearance. As costly as it is to have a lawyer appear in court, it is almost certain there is an even greater cost in paying all of the lawyers who did not appear in court but who are likely working on the case in the large law firms that represent the parties.

Public relations firms are also profiting from the situation as they have been hired to help control the narrative in the media.

A lesson to be learned from this situation is that it is extremely costly anytime an elderly person's competency has to be litigated in court. While it is unclear what could have been done differently to prevent the Redstone situation, many other competency battles can be prevented by making sure you have powers of attorney in place long before you might need them.

Contact a qualified Elder Law Attorney in Orange County at 714-525-4600 or call 951-264-5732 for our Corona Estate Elder Law Attorneys, or visit our website at www.OCElderLaw.com to help you with your California Estate Planning needs.

Reference: New York Post (June 11, 2016) "Sumner Redstone's legal saga has lawyers rolling in cash."

The Greatest of All Time's Estate

Boxing legend Muhammad Ali recently passed away. The details of his estate plan are not yet known, but he left behind a large estate and family.

With the passing of Muhammad Ali, a true sports icon has left the scene. At this early stage it is not yet known what type of estate plan he had, but since he had a long bout with Parkinson's disease, it is assumed that he did have a plan.

The Daily Mail recently reported on what is currently known about his estate in "Ali's family to spar over his $50million fortune: Fourth wife Lonnie will act as executor as his NINE children, exes and brother prepare to enter the ring for a slice of inheritance."

The known details include:

·        
It is believed that Ali's fourth wife, Lonnie, will act as the executor of his estate.

·       
  His known potential heirs include nine children, a brother and his ex-wives. However, it is not currently known which if any of them will inherit a portion of Ali's estate or how much. For that reason, it is not currently possible to know whether a challenge to his estate plan is likely.

·       
  It is estimated that Ali's net worth at the time of his passing was approximately $50 million.

·         Up until the time of his death Ali continued to earn money through the company he founded, GOAT LLC. However, he sold the majority of the company a few years ago and retained only a 20% interest in it.

·     
    His estate also includes property in Arizona and Kentucky. It is also possible that his estate will include memorabilia from his fighting days that could potentially be worth millions.

Marty Burbank knows how important it is for a person with Alzheimer’s Disease or Parkinson’s Disease to have an estate plan with a special needs trust. For more information about Estate Planning in Orange County or Corona, CA, please visit our website at www.OCElderLaw.com, or call 714-525-4600 to schedule an appointment.

Reference: Daily Mail (June 2, 2016) "Ali's family to spar over his $50million fortune: Fourth wife Lonnie will act as executor as his NINE children, exes and brother prepare to enter the ring for a slice of inheritance."

Same-Sex Partner Estate Tax Case

A recent ruling by a New Jersey tax court illustrates that the legality of same-sex marriage does not solve all estate difficulties for same-sex couples who were not able to get married previously.

In 2004 New Jersey passed a domestic partnership law giving same-sex couples who registered as domestic partners some of the legal protections married couples enjoy. For example, the law exempted a surviving partner from paying the state's inheritance tax, but not the estate tax.

New Jersey is one of the few states with both taxes and requires that the higher of the two be paid. Long time partners Rucksapol Jiwungkul and Maurice R. Connolly Jr. registered as domestic partners in that same year.

In 2007 New Jersey passed a civil union law exempting same-sex couples from both the estate tax and the inheritance tax. Jiwungkul and Connolly did not enter into a civil union as a matter of principle.

Same-sex marriage became legal in the state in 2013 and the two made plans to wed according to Bloomberg BNA in "Same-Sex Partner Not Spouse for New Jersey Estate Tax Break."

Six days before the planned wedding Connolly passed away unexpectedly. Jiwungkul was the executor of the estate. In that capacity he paid approximately $100,000 to the state for the estate tax.

Later he filed an amended tax return and asked to have the amount refunded, claiming that he should be exempt from it. The state refused and the case went to tax court.

The law in the case was clear. As Jiwungkul was a domestic partner he was not entitled to the estate tax exemption. The court could have granted him an exemption by citing extraordinary circumstances, but the judge declined to do so.

The case illustrates that same-sex couples still need to be mindful about what different legal statuses mean for their estates.

No matter what your preference is, if you have a family and/or significant other, you should have a trust in place for when the time comes. For more information or to meet with an estate planning attorney in Orange County, please visit our website at www.OCElderLaw.com, or call 714-525-4600 to schedule a private consultation. We have offices conveniently located in Fullerton and Corona.

Reference: Bloomberg BNA (May 17, 2016) "Same-Sex Partner Not Spouse for New Jersey Estate Tax Break."

Executor Duties and Errors

The duties of the executor of an estate are well known by industry professionals, but not always well known by the laypersons who are appointed as executors. This leads to those executors making common mistakes that would be easily avoidable had they sought professional advice.

It is common for people to name a close relative or friend to be their estate's executor. Most people do it without thinking about it too much; it is just the way things are done.

However, when that friend or relative performs his or her duties avoidable mistakes are often made because they are not familiar with the process and do not seek professional advice.

The National Law Review discussed some of these mistakes in "Common Pitfalls Made by Executors of Estates," including:

·         Many executors fail to get proper certification from the court before beginning their duties. A court must grant approval of the executor's assignment before the executor has legal authority to act.

·         Executors often fail to notify all potential heirs to an estate and instead only notify those people mentioned in the will. This can lead to claims against the estate.

·         Executors should open a bank account for the estate instead of using their own personal accounts.

·         Executors often do not resist the temptation to distribute estate assets before claims against the estate are paid. This is especially troubling if assets are distributed before taxes are paid and can lead to personal liability for the executors.

·         Executors are required to keep detailed and accurate records about how they handle estate assets. Many do not do so.

Bottom line: Consult with an experienced estate planning attorney in Orange County to help you select an appropriate fiduciary and get his or her permission before making it official. For more information, visit our website at www.OCElderLaw.com, or call us at 714-525-4600 to schedule an appointment.

Reference: National Law Review (May 13, 2016) "Common Pitfalls Made by Executors of Estates"

Baby Boomers' Retirement Mistakes

If you want to leave an inheritance for your children and grandchildren, it is important to make sure that your assets are not all spent in your retirement. That requires good retirement planning. Unfortunately, Baby Boomers are collectively making a lot of mistakes.

The best estate plan in the world can be rendered completely useless if there are no assets for the estate to distribute. A trust, for example, is just a piece of paper if there are no funds for the trustee to manage and distribute to beneficiaries.

Despite this truism many Baby Boomers are not properly planning for their retirements, which is a good way to make sure that their estates will lack assets.

Fox Business recently wrote about some of these mistakes in "Baby Boomers' Retirement Woes Summed Up in 5 Statistics."

These mistakes include:

·         Social Security – 59% of Baby Boomers are planning to rely heavily on Social Security. The problem is that Social Security benefits are not designed to provide a full income and they may need to be cut in the future.

·         No Savings – 45% of Baby Boomers do not have any retirement savings at all.

·         Postponed Plans – 30% of Boomers report that they have had to postpone their planned retirements due to lack of savings.

·         Stopped Contributions – 30% of Baby Boomers stopped making regular contributions to their retirement accounts. It is important to make contributions even if you do not think you need any more money in the accounts.

·         Debt – 44% of people over the age of 65 still have debt that needs to be paid off. Debt payments cut into the amount of money they have for living expenses.

This is not good news for Baby Boomers or the children expecting to inherit from them. Luckily the estate planning lawyers at www.OCElderLaw.com can help! Whether you’re a parent trying to plan your estate, or if you’re a child trying to protect your inheritance, call our elder law attorneys in Orange County at 714-525-4600.

Reference: Fox Business (May 15, 2016) "Baby Boomers' Retirement Woes Summed Up in 5 Statistics"

Nursing Home Evictions Increasing

Elder Law advocates claim that nursing homes are increasingly turning to improper evictions to rid themselves of patients they view as undesirable or difficult.

Under federal law nursing homes can only evict residents under limited circumstances. However, elder law advocates claim that increasingly nursing homes are not limiting themselves to those circumstances. Instead, the nursing homes are evicting residents who are difficult to care for because of dementia, residents who have family members that complain about the care and residents who are otherwise difficult.

According to the Seattle Times in "Nursing homes turn to eviction to drop difficult patients" evidence from federal data appears to back the advocates' claims.

In fact, complaints to the Long Term Care Ombudsman Project are up 57% since 2000.

This is a big problem for nursing home residents and their families because most of the time there are few other options for the evicted residents other than staying in a hospital.

While residents have the right to appeal the evictions it is costly to do so. Sometimes, even when the resident wins the appeal, government agencies still do not require the nursing home to take the resident back.

To make matters worse, nursing homes found to have acted improperly are rarely, if ever, punished or fined.

Nursing homes themselves disagree with the advocates.

The American Care Association claims that the evictions are proper, but does agree that a national policy discussion is necessary to come to terms with the increasing number of nursing home residents who are difficult to care for.

If you have questions about paying for nursing home care in Orange County, please visit our website at www.OCElderLaw.com, or call 714-525-4600 for more information.

Reference: Seattle Times (May 8, 2016) "Nursing homes turn to eviction to drop difficult patients"