Estate Planning 101: Putting your affairs in order – what documents to collect to save your family

Generally, we think of “putting our affairs in order” as something we do after we get the terminal illness diagnosis from the doctor.  There are many reasons not to wait for that time to get your affairs situated, but I’ll leave that for another time.  Today I want to talk about what it actually means to get your affairs in order. First, though, let’s see why it’s important:

Have you ever been the one “in charge” after someone has died?  No?  Imagine this: your nearest and dearest loved one has passed away.  You’ve talked to the hospital and picked a mortuary, so that’s a process that’s been started.  It’s really hard to talk about your loved ones “body” or “remains” while you’re still trying to process the loss in the first few minutes or hours.  But then you feel like you have to DO something, so you head to the house to see if you can find the “important papers.”  Two things can happen at this point:

Scenario one is that you arrive, and already know where the estate plan is, and head right for it.  With it are all of the life insurance policies, retirement and bank accounts, instructions, pre-need funeral planning receipts and contact information, and smaller things like an address book to get in touch with all his/her friends, a locked box (which you have the key) with all of the computer passwords, safe combinations and the like.  There seems to be a lot to do, so you contact the estate planning attorney, who, after asking you a couple questions, says, “there’s nothing to worry about and nothing to do.  Take care of you, your family, and the final arrangements.  Then call me back in a couple weeks if you have questions, but the instructions should all be there…just don’t worry about it now.”  So this is what you do, as you start calling friends and family members and bracing for the days ahead.

Scenario two is that you arrive, and don’t know where anything is.  Does s/he even have life insurance?  Where are the bank accounts?  Was there a will?  Where is it?  You start tearing apart the desk, closets, cupboards,…and find nothing.  Now you’re grieving, in shock, have a million things to do, and now you can’t find anything.  This adds to your stress, so you call in other family members, who are now tearing apart the boxes in the garage.  Everything is chaos, and still no information.  It’s overwhelming to the family.

Which would you prefer your loved ones experience?

The former?  GREAT choice.  Now, here’s what to put in the file:

  1. Your estate plan, with trust and will.
  2. Your powers of attorney.
  3. Your life/long-term care insurance information.
  4. Your retirement information.
  5. Bank account information.
  6. Pre-need funeral planning documents.
  7. Investment account documents.
  8. Deeds of property, such as homes, vehicles and boats.
  9. Health, disability, auto and property insurance documents.
  10. Income source documents (social security, employment, investments, child/spousal support).
  11. Credit card statements and evidence of other debt.
  12. Important papers, such as marriage/birth/death certificates, passports, tax returns, military or genealogical records.
  13. Names/contact information of trusted professionals, such as accountants, lawyers, financial advisors, gardeners, house cleaners or caregivers, home repair professionals (electrician, plumber, roofer, chimney sweep, etc.).

And one final thought: make sure you have at least one trusted friend or family member who knows where it is and what’s in it.

Need more information? Contact us today to schedule your free estate planning consultation.

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.

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.

20% off in July!

Does your California divorce attorney knows estate planning? How about your California estate planning attorney? Make sure they know family law, too

There is a great deal of overlap between estate planning and family law.  So much so that, if you’re seeking a lawyer in either area, you should make sure you have one with experience in the other area of law.

Take your divorce lawyer.  Why would knowledge of estate planning be important?  Well, for starters, your divorce is going to end at some point.  And because divorces often take much longer than we’d like, we are often exhausted after they’re done, and have no desire to do any other kind of planning or work on the whole divorce issue.  But once the divorce is done, this is when the really critical aspects of your financial life and future come into play.  You need to change your beneficiaries on your retirements and life insurance.  You need to change and update your will and estate plan, your powers of attorney, and the guardians for your children.  A divorce lawyer without estate planning experience is not necessarily going to make sure you’re properly advised on these issues.

Conversely, let’s look at your estate planning attorney.  First, in blended families (where one or both spouses have children from a prior relationship), there are specific estate planning issues that overlap with family law.  In addition, it’s important to know whether either of the spouses has separate property.  Separate property is property that either spouse owned prior to the marriage.  If either has separate property, then putting the property into the trust without a separate property agreement transforms the property into community property….and this could make the owner spouse quite upset should the couple eventually decide to divorce.

These are just a few of the small issues that overlap, and there are many more.  So many that it would be detrimental to you and your family – not to mention your financial future – to consult with an attorney who lacks knowledge and experience in one of these areas.

 

Make sure your California divorce attorney knows estate planning. And your California estate planning attorney? Make sure they know family law, too.

There is a great deal of overlap between estate planning and family law.  So much so that, if you’re seeking a lawyer in either area, you should make sure you have one with experience in the other area of law.

Take your divorce lawyer.  Why would knowledge of estate planning be important?  Well, for starters, your divorce is going to end at some point.  And because divorces often take much longer than we’d like, we are often exhausted after they’re done, and have no desire to do any other kind of planning or work on the whole divorce issue.  But once the divorce is done, this is when the really critical aspects of your financial life and future come into play.  You need to change your beneficiaries on your retirements and life insurance.  You need to change and update your will and estate plan, your powers of attorney, and the guardians for your children.  A divorce lawyer without estate planning experience is not necessarily going to make sure you’re properly advised on these issues.

Conversely, let’s look at your estate planning attorney.  First, in blended families (where one or both spouses have children from a prior relationship), there are specific estate planning issues that overlap with family law.  In addition, it’s important to know whether either of the spouses has separate property.  Separate property is property that either spouse owned prior to the marriage.  If either has separate property, then putting the property into the trust without a separate property agreement transforms the property into community property….and this could make the owner spouse quite upset should the couple eventually decide to divorce.

These are just a few of the small issues that overlap, and there are many more.  So many that it would be detrimental to you and your family – not to mention your financial future – to consult with an attorney who lacks knowledge and experience in one of these areas.

An attorney who makes house calls?!

Yes, I make house calls.  In fact, the majority of my appointments are in my client’s homes.  I do have an office in Dublin, & several other offices around the Bay Area for Elder Law clients (VA and MediCal benefit planning clients), but I find that the house calls are more common, more appreciated, and better all around.  Here’s why:

  1. Many of my clients are older and appreciate not having to travel to an appointment.  I had a client who lived just about 6 miles from my office, but in his mind, my office was in another country!
  2. I offer flexible appointment times, such as weekends and evenings, so making the appointment at a client’s home is easier for travel.
  3. I appreciate being able to avoid Bay Area traffic, so I work with my clients so we all avoid it.
  4. I am not the kind of attorney who sits in her office all day, waiting for the phone to ring, so I am often on the go anyway.
  5. It’s not weird.  Really, it never is.  We usually sit in the dining room, at the table, and everyone is more relaxed and comfortable.
  6. Ah, comfort.  No one likes to talk about their eventual demise and dividing up their stuff amongst their family.  Being in a safe, familiar environment instead of a stuffy attorney’s office can make it easier (not that my office is stuffy!).
  7.  I work with networking partners who work all over the Bay Area, and if I have a referral from Santa Rosa or South San Jose, I can work with them due to my willingness to travel.

My tag line is “Unlike any attorneys you’ve ever met.”  I use this because many of my clients, friends and referral partners tell me this.  I want to blast the stereotypes of lawyers being distant, hard to reach and talk to, stuffy, boring, inflexible, and dismissive.  I know that my clients are putting their lives into my hands, so I want to treat that as if it is the most precious gift, as it is.  My clients and their families deserve the best, so this is what I give to them.

Planning for the worst: are estate planning attorneys doomsdayers?

Doomsdayer: one who speaks of Judgment Day or is characterized by predictions of disaster.  I was just writing about what happens when new parents find themselves in an accident and disabled…simultaneously.  The chances of this happening, I suppose, are not very great.  But the consequences if it should happen are so great that I think it is imperative to plan for it.

We have insurance for our homes, our cars, our lives, our businesses, and our health.  Other than health insurance, how often do we need that insurance?  If you weren’t required to have car insurance, would you have it?  Is it really worth it to pay monthly for a once-yearly flat tire change or jump?  How many accidents are we in yearly?  I mean individually – how many have you been in?  I have been in one in 22 years of driving.  Property insurance is another beast: the chance may be small that we lose our home to fire or earthquake or tornado or theft, but the devastation would be so complete, the insurance is well worth it. But we don’t create estate plans as a matter of course, as I think we should.  An estate plan is a kind of insurance for your family, that when you’re gone, your family and your estate, the assets you’ve worked your whole life to accumulate, will be protected.

So, why, when it comes to estate planning, do we avoid it?  We know we are all, without a doubt, going to die someday.  We know that, unless our gross estate has less than $150,000 in it (for California) – anyone with a house, really – that our estate will go through probate.  We know that young people die every day.  We know that probate takes 2-3 to 5-6 years to complete and can cost our family, can take the inheritance from our heirs, in the amount of 8-10% of the gross estate.  We know our family will suffer having to take our estate through probate, and that creating an estate plan will avoid it entirely, give our family a painless, quick, very low cost transfer of our entire estate…and yet we put it off and put it off and put it off.

Why?