Estate Planning for Blended families: Have step-children or a step-parent? Are you one? How to avoid (unintentionally) disinheriting your family

Estate planning presents unique issues for blended families.  Blended families are families in which one or both parents have children from a previous relationship.  The problem comes when one spouse dies without an estate plan, or an old or outdated one.  Generally, when spouses hold property in California (or anywhere in the US), they hold it in joint tenancy.  When one joint tenant dies, the other one gets the entire property.

Can you see where we’re going with this?

When one spouse of a blended family dies, then the other spouse generally gets all the property of the couple, often by default.  When it comes time to distribute the assets at the death of the second spouse, the second spouse can essentially disinherit the first spouse’s children.  The second spouse, with all the property in his/her name, has control over the ultimate disposition of the property.  If there is a family rift between the second spouse and the step-children, if the second spouse is negligent in creating an estate plan providing for the step-children, or in other cases, then the children of the first spouse to die can be left out in the cold.

Don’t leave your children out in the cold by failing to provide for them with an estate plan. Contact us today to schedule your FREE estate planning consultation.

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Don’t overlook these important estate planning concerns in divorce

When you get a divorce in California (and everywhere else!), there are important estate planning considerations to take into account.  In fact, these are so critical that you could end up leaving your estate to your ex spouse (ouch!), having your ex make important medical decisions for you, or – if you act hastily and without the proper information – you could get into trouble with the court system.

During Divorce:  First, when you file for divorce in California, regardless of whether it’s Alameda County, Contra Costa County, or any other county, once the other party is served, both of you become restrained from doing certain things.  One of these restraining order involves your will or trust, and prohibits you from making any changes to your will or trust once you’ve filed for divorce and served the other party.  One of the others prohibits either of you from changing or cancelling any insurance, such as life, health, auto/property, etc., or changing the beneficiaries on any insurance or other account where a beneficiary is named.  Do not make the mistake of cancelling your ex’s health insurance or changing your will after you have filed for divorce!

You may make these changes with permission from the other party or with a court order, and you may want to seek this.  Particularly if you have separate property, the last thing you want is for your ex to get it all if something happens to you. You may also want to get permission to change the beneficiary of your life insurance into a trust for your children, but you need permission for both of these actions.

One of the changes that you should make as soon as you can, and there is no court prohibition on this, is your powers of attorney.  For both health and finances, you want to make sure you designate someone other than your ex who will make decisions for you and manage your affairs should you become incapacitated.  If you’re lying in a hospital bed unconscious, do you really want your ex deciding whether to get surgery or wait to see if the medication improves your condition?

After Divorce:  Once your divorce is final, you want to make sure you change your will or trust, your powers of attorney (if you’ve not done so already), the beneficiaries on your life insurance, retirement and other accounts, and make sure you have enough life insurance for your children and long-term care insurance to care for yourself as you get older.

Want more information? Schedule a one-hour consultation by calling 925.307.6543.

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What to expect during the estate planning process in California

The estate planning process is often put off because of the feeling that it is a long, difficult process.  There are a lot of decisions to be made, a lot of time to be spent on making the decisions, and lots of long, boring meetings with the attorney.

Not so!  Well, perhaps this is the case with other attorneys, but I have found that my clients appreciate the ease of the process as well as the flexibility…and I do try to make it enjoyable & interesting.

The reality of it is – unfortunately – putting estate planning off until too late can mean a long, difficult, expensive probate process where your family, those you love the most in this world, suffer.

Making Decisions

This can be, and often is, the most difficult part of the estate planning process.  In fact, it often prevents the clients from proceeding.  What most potential clients don’t realize is that I can help you to make the decisions.  One of the advantages to creating a living trust as opposed to just a will is the ease with which changes are made.  I encourage my clients to make the best decision for right now, and then change it if circumstances change.  Plus, actually making a decision is critical.  Most couples may not have it nailed down who they want to be their children’s guardian, for example, but they have narrowed the field.  By not picking someone, if something should happen to them, then the position is open to anyone in the world who wants to petition, including those who the couple has excluded (and perhaps for good reason!).  It not only makes the issue of who will raise your children a crap shoot, but also could subject your child to a nasty custody battle.

The Process

I meet with my clients for an initial, no fee consultation to discuss their situation and potential estate planning needs.  We go over what they have, what they want, and the various options available to them.  Generally at that point most of the decisions are made, but sometimes a few remain to be decided.  Once all the decisions are made, we set a time for the estate plan closing.  This is a meeting where we sign all of the paperwork, and this takes about 90 minutes.  Other than the trust funding, which is straightforward, that is the extent of the process.  Usually just two meetings, the process is not nearly as daunting as it may seem.

So, what are you waiting for?

Why and when you need an estate planning/elder law attorney in California

Top reasons why you may need an estate planning or elder law attorney:

1. To keep more of your assets and money for your family than for the government or attorneys
2. To have peace of mind that your family and all you have worked for is protected
3. To avoid the state’s plan for the passing of your estate (probate) because it is complex, difficult, expensive, and time-consuming, and you want to make sure you don’t put your family through it
4. To acknowledge that your needs will change as you age, and it takes critical planning to ensure that you and your family are cared for as you grow older
5. Because the government (through Medicare/MediCal/Medicaid) will not be sufficient for your long-term care, and you know that an attorney can help you to evaluate your options to make sure you are protected

Top reasons when you may need an estate planning or elder law attorney:

1. Your estate becomes worth $150,000 or more (not including debt) or you’ve just had a child.
2. Your loved one has been diagnosed with dementia or Alzheimer’s
3. You are worried that you do not have a plan in place for your estate and family after you’re gone – everyone needs a plan, regardless of age, estate size, or family composition
4. You are concerned about your or your loved one’s ability to cope with rising costs, continue to pay bills, or provide for ongoing medical care
5. Your child has just turned 18 and as an adult, needs his or her own Powers of Attorney to ensure that the correct person can act for them in an emergency.

Do you have any of these concerns? If so, call us at 925.307.6543 or schedule an appointment online using the link to the right. We look forward to meeting you!

Not married? Why you need estate planning, too

If you’re not married, you may think that you don’t need an estate plan. Not true! Generally, you need to get yourself an estate plan once you buy a house or have a child – or both! When you own real estate, your estate will (particularly in California) go above the $150,000 exemption for probate. This means that, once you own property in California, your estate will go through probate. Probate is what you want to avoid like it’s a disease: it will take 18-24 months to settle your estate and also take about 10% of your gross estate in fees – and that fee is not taking any indebtedness into consideration. And that’s just to start.

Once you buy a house, therefore, you need an estate plan. In addition, once you have a child, you need to have an estate plan because you will need to decide who is going to take care of your child should you be unable to. This can only be done in your will. In addition, if you don’t have handy who is responsible for your child if you become injured or incapacitated, then the police could TAKE your children if something happens to you. Just think: you’re out to a nice dinner, the babysitter’s with little Suzy, and you get into an accident on the way home. The police won’t be leaving little Suzy with the 17 year-old babysitter, and if you don’t have clearly posted who is to be responsible for Suzy, then the police could TAKE your child. You don’t want that to happen.

Both of these circumstances – buying a house and having a child – necessitate an estate plan, regardless of whether you are married or not. In fact, it becomes more important to have an estate plan when you’re single because you don’t have the potential benefit of joint tenancy.

What are you waiting for?

Estate planning 101: Why creating your living trust isn’t enough

The centerpiece of any good estate plan is your living trust.  This is the document that allows your estate to pass without going through probate, paying 8-10% of your gross estate in fees and expenses, and forcing your family through 2-3 (or 5-6) years of court appearances, lawyers and judges making decisions about your property.  Proper estate planning can also help you to minimize or eliminate estate tax.  Having no estate plan or having just a will won’t do this.

But proper estate planning includes other consideration and critical documents as well, and should not be overlooked in your planning.

1. FUNDING your trust. All of your assets – yes, all of them – should be titled in the name of your trust. Hopefully, your estate planning attorney transferred your real property (house) into the trust, but generally, you are responsible for transferring the rest of your assets, such as bank accounts, stocks, and life insurance. At our firm, we even help you with this because it’s so important.
2. Pour-Over will.  You still need a will, even if you have a living trust, because anything that is not in your trust will need to go into probate.  There are a couple important things to know about your pour-over will.  First, it includes your nomination of guardian, so this in itself is a reason why it’s so important.  Second, while you will be funding your trust with all of your property (and thus will not likely need a will), things can happen where you are not able to put your property in your trust, such as when you are the subject of a wrongful death suit or if you don’t have possession yet of the property before you pass away.  Third and finally, the will is called a “pour-over” because pours over anything probated into your living trust.
3. Powers of attorney.  You need powers of attorney, one for your property/assets and one for health care. Powers of attorney go into effect when you are still alive but you are incapacitated due to illness or accident.  These determine who will be making medical and care decisions on your behalf (and paying your bills) when you are unable.  These are key because, if you wait until you are already incapacitated to get one, then your family must go through the court process of getting a conservatorship, which is lengthy and expensive.
4. Assignment/Distribution of Personal Property.  These documents first put all of your personal property (your furniture, cars, pets and other personal belongings) into your trust, and then list how they will be distributed upon your death.  These are important because often the biggest arguments after you are gone are about the smallest things, like the jewelry and china.  Don’t leave your family fighting because you didn’t leave instruction.
5. Certificate of Trust.  This is the four-page summary of your trust that you will use to transfer your property into your trust.  Instead of having to take the whole binder, or even the whole 30-page trust document into the bank – and share the detail of the contents – you use the four-page summary that maintains your privacy and makes it much easier to copy and share with your account holders.

In addition to these documents, I consider it part of my job to help you ensure that ALL of your affairs are in order.  This includes your pre-need funeral arrangements, ensuring you have enough life insurance, that you have long-term care insurance, and are doing what you need to do now to have the retirement that you want.  These additional services are not provided by me and I don’t get anything for referring someone to you.  But I have spent lots of time getting to know the best professionals in each of their respective businesses, because I want to refer you to only the best to be able to take care of all of your needs.

If your estate planning professional is not providing all of these services – and more (follow up, ongoing communications, updates on law, etc.) – then perhaps you should reconsider who you are talking to, or at least ask some questions.  Your family is worth it.

The intersection of estate planning and divorce: a checklist to avoid disaster

Often, after the time, expense, and emotional upheaval of California divorce (as well as moving, adjusting to life as a single person/parent, dealing with tightening finances…etc. etc.), the last thing on anyone’s mind is estate planning.  Yes, it’s one of the things on the list of things to do…later, when you have time.  When you’re emotionally ready to think about it.  Right?  Well, the reality is that just post-divorce IS the best time to do estate planning.  Why?

1. Because it’s on your mind since you’re working to get the rest of your life in order.
2. It’s critical to get your ex-spouse off of your accounts and as your beneficiary.  You really don’t want him/her inheriting from you, do you?
3. It’s really not that hard, and in fact rather than being draining or difficult, can not only be empowering but help you to really feel like your life has restarted.

Here are the key estate planning items you need to take care of post-divorce (and note you probably can’t do these during your divorce due to the ATROs):

1. Create a new (or initial) living trust and will to protect your assets and your beneficiaries.
2. Cancel any old estate plans.
3. Sign a new power of attorney for asset management.
4. Sign a new health care advance directive power of attorney.
5. Designate the guardian for your children should you pass away.
6. Get new life insurance to meet your (and your children’s) needs.
7. Update the beneficiary on your life insurance, retirement accounts (401Ks, IRAs, etc.) and other payable on death (POD) accounts.
8. Make sure your assets are retitled in your name only.
9. Let people know you’re no longer divorced, like banks, health care providers, and other trusted advisors so no one gives out personal or confidential information inadvertently.
10. Talk to your parents about estate planning, the importance, and how it will help everyone if they create an estate plan (it helps them to leave a legacy and saves you the additional intense difficulty of probate).

Doing these simple tasks will help you to feel stronger, in control, and empowered to take on life’s next challenge.  What are you waiting for? Make an online appointment by clicking here.

Holiday trip planned? Put your mind at rest with an estate plan

Frequently I have clients who come to me for an estate plan in the weeks and months before going on a trip.  Because they are going into unfamiliar territory, they want all of their affairs in order prior to their departure.  While I will be pleased with any reason that gets someone in to prepare their estate plan, it seems to me that the dangers of everyday life are high enough that we don’t have to wait until we go on a trip to be worried about our affairs.

I used to hear that most accidents occur close to home, and I would guess that this is still the norm.  With car accidents (please stop texting and driving!) as well as holiday mishaps, there is plenty of reason to be nervous about accidents at home.  So why wait?

One of the reasons I hear about why folks wait to do their estate plan is that they think it’s going to be difficult and time-consuming.  They don’t know what decisions to make or who to turn to.  With my clients, just about everyone says, without prompting from me, that the process is extremely easy, far simpler than they expected, and that I helped them throughout the process.  What many of my clients don’t understand is that it is part of my job to walk you through the process, ensure you understand all the options available to you, and help you to make the right decisions for your family.  Now, I don’t make your decisions – of course not! – but I can go over the advantages and disadvantages of the various options, or help give you things to think about in making critical decisions.

And because of those things, it’s far easier than you may think it is.  So don’t wait until you have to go on a trip.  Do something to put your mind at ease this holiday season – get an estate plan and put your affairs in order. Use the link at the right to schedule your no-cost consultation with us today!

An attorney versus online estate planning: Legal Zoom can and WILL hurt you

I see Legal Zoom is being sued for not preparing an estate plan that did what it said it would.  Banks and financial institutions would not accept the Legal Zoom documents to fund the individual’s trust.  As I always tell my clients, your estate plan is not worth the paper it’s printed on unless and until you fund your trust.  And the Legal Zoom documents?  Were seen to be unacceptable to the banks and financial institutions.  In addition, the information given by Legal Zoom on estate planning is supposedly designed to give users a “general understanding of the law” but “is not guaranteed to be correct, complete or up to date.“

Really?  Legal Zoom can’t even guarantee that the “general understanding” is correct?  Do you really want to trust everything you’ve worked for – your assets, your estate, and your family, to a company that can’t even get basic law correct?

Further, Legal Zoom tells you, on their website, that 80% of people who fill in blank forms do so incorrectly.  Legal Zoom is, in effect, saying to their users they they are very likely to do the forms wrong, but they should do so anyway.  Why would you do this?  I have seen it time and again, when I send out my intake forms to my estate planning consultations.  Nearly everyone marks something that ultimately is incorrect after we’ve had some time to talk about it.

Finally, a lawyer in Minnesota went through the process of getting a will using Legal Zoom.  You can see his video here.  What is enlightening is that the will was packaged well, and was better than the lawyer expected.  But the reality is that there were MANY provisions, standard, important provisions, that were left out of the will.  A will is a pretty basic document for an attorney to complete, and Legal Zoom couldn’t even get it right.  I won’t go into the detail  of the missing provisions, but suffice to say there were a number of critical paragraphs missing.

Haven’t you worked too hard to leave your estate plan to chance?  Why is it a better option to save $1,500 on an online estate plan, just to cost your family – your closest loved ones – tens if not hundreds of thousands of dollars in untangling your messed up estate plan?!  I know times are tough, and we’re all looking to save dollars where we can.  But this is about your entire life.  Do not work your entire life to screw it up in the end.

We have an automated estate planning process that allows clients to save up to 50% on their estate plans by inputting their information in an online format.  Their answers, and indeed their entire estate plan, is be personally examined, reviewed, and assembled personally by us, but because of the online aspect, it will be at a significantly lower cost.  This option helps to combine the needs of my clients who know they need an estate plan but want a lower cost, but aren’t willing to risk everything just to save a few dollars.

Click here to access our online estate planning portal.

Top five excuses to avoid preparing your estate plan…

1. I don’t want to think about it. No one wants to think about getting older, becoming incapacitated, or leaving this world. We all believe that we’re going to live forever. But we’re not. In fact, we’re all going to go sometime, so denying that it’s happening at all is not going to stop it. Chances are, too, that you DO in fact think about it, and your thoughts take on the quality of worrying (if you’re not thinking about it now, believe me, you will as you get older). Worrying about it is not going to protect you and your family; only doing something – your estate plan – will stop the worry and give you peace of mind. If you’re going to be thinking about it anyway, why not just get your estate plan done?
2. I don’t have time. You might think that preparing your estate plan will take hours and hours, involve multiple meetings, and generally deprive you of family time, work time, and free time. Not so! Most of my estate plans are completed in two one-hour meetings. Yes, there are serious questions that you have to answer, but you’ve certainly already thought about most of them and they’re really not all that hard to answer anyway. All told? Two, maybe three hours total.
3. I don’t have money. If you leave your estate to probate, then your heirs are not going to receive up to 10% of your gross estate, and in fact may be PAYING to transfer your property. You’ll be leaving your family tens if not hundreds of thousands of dollars LESS than if you would have had an estate plan. Why wouldn’t you spend a quarter to save $100?
4. I don’t have enough money to need an estate plan. A estate with just $600,000 (think house, life insurance and some retirement) can save nearly $100,000 by creating an estate plan over going through probate. Could you stand to save $100,000? Is your family worth it?
5. I trust my family to do what’s right. Putting the decisions in the hands of your family is more of a burden than anything else. Once something happens to you, your loved ones will be shocked and grieving (you are still shocked when someone passes, even when you’re expecting it). Allow them to grieve – allow them the time and space. Don’t add to their suffering by also making them guess what you would have wanted.

What are you waiting for? Contact us today to schedule your free estate planning consultation.