Here's why you need an Estate Plan - My Press Plus

October 19th-25th, 2020 is National Estate Planning Awareness Week, so if you’ve been thinking about creating an estate plan, but still haven’t checked it off your to-do list, now is the perfect time to get it done.

When it comes to putting off or refusing to create an estate plan, your mind can concoct all sorts of rationalizations: “I won’t care because I’ll be dead,” “I’m too young,” “That won’t happen to me,” or “My family will know what to do.”

But these thoughts all come from a mix of pride, denial, and above all, a lack of real education about estate planning and the consequences to your family of not planning. Once you understand exactly how planning is designed to work and what it protects against, you’ll realize there is no acceptable excuse for not having a plan.

Indeed, the first step in creating a proper plan is to thoroughly understand the potential consequences of going without one. In the event of your death or incapacity, not having a plan could be incredibly traumatic and costly for your family, who will be forced to deal with the mess you’ll have created by neglecting to plan.

While each situation and family are unique, in this multi-part series I’m going to discuss some of the things most likely to happen to your loved ones if you fail to create a plan. This is the first:

Your family will have to go to court
If you don’t have a plan, or if you only have a will (yes, even with a will), you’re forcing your family to go through probate upon your death. Probate is the legal process for settling your estate, and even if you have a will, it’s notoriously slow, costly, and public. But with no plan at all, probate can be a true nightmare for your loved ones.

Depending on the complexity of your estate, probate can take years, or even decades, to complete. And like most court proceedings, probate can be expensive. In fact, once all of your debts, taxes, and court fees have been paid, there might be little left for your loved ones to inherit. And for whatever is left, your family will have to pay hefty attorney’s fees and court costs in order to claim them.

Yet, the most burdensome part of probate is the frustration and anxiety it can cause your loved ones. In addition to grieving your death, planning your funeral, and contacting everyone you’re close with, your family will be stuck dealing with a crowded court system that can be challenging to navigate even in the best of circumstances. Plus, the entire affair is open to the public, which can make things all the more arduous for those you leave behind, especially if the wrong people take an interest in your family’s affairs.

That said, the expense and drama of the court system can be almost totally avoided with proper planning. Using a trust, for example, we can ensure that your assets pass directly to your family upon your death, without the need for any court intervention. As long as you have planned properly, just about everything can happen in the privacy of our office and on your family’s time.

No more excuses
Given the potentially dire consequences probate can cause for your family, you can’t afford to put off creating your estate plan any longer. Next week we’ll look at how the lack of an estate plan will cost you control of who inherits your assets as well as when and how the inheritance is received.  

 

 

What Estate Planning Documents Do Your Young Adult Children Need?

While estate planning is probably one of the last things your teenage kids are thinking about, when they turn 18, it should be one of their (and your) number-one priorities. Here’s why: At 18, they become legal adults in the eyes of the law, so you no longer have the authority to make decisions regarding their healthcare, nor will you have access to their financial accounts if something happens to them.

With you no longer in charge, your young adult would be extremely vulnerable in the event they become incapacitated by COVID-19 or another malady and lose their ability to make decisions about their own medical care. Seeing that putting a plan in place could literally save their lives, if your kids are already 18 or about to hit that milestone, it’s crucial that you discuss and have them sign the following documents.

Medical Power of Attorney
A medical power of attorney is an advance directive that allows your child to grant you (or someone else) the legal authority to make healthcare decisions on their behalf in the event they become incapacitated and are unable to make decisions for themselves.

For example, a medical power of attorney would allow you to make decisions about your child’s medical treatment if he or she is in a car accident or is hospitalized with COVID-19.

Without a medical power of attorney in place, if your child has a serious illness or injury that requires hospitalization and you need access to their medical records to make decisions about their treatment, you’d have to petition the court to become their legal guardian. While a parent is typically the court’s first choice for guardian, the guardianship process can be both slow and expensive.

And due to HIPAA laws, once your child becomes 18, no one—even parents—is legally authorized to access his or her medical records without prior written permission. But a properly drafted medical power of attorney will include a signed HIPAA authorization, so you can immediately access their medical records to make informed decisions about their healthcare.

Living Will
While a medical power of attorney allows you to make healthcare decisions on your child’s behalf during their incapacity, a living will is an advance directive that provides specific guidance about how your child’s medical decisions should be made, particularly at the end of life.

For example, a living will allows your child to let you know if and when they want life support removed should they ever require it. In addition to documenting how your child wants their medical care managed, a living will can also include instructions about who should be able to visit them in the hospital and even what kind of food they should be fed.

Durable Financial Power of Attorney
Should your child become incapacitated, you may also need the ability to access and manage their finances, and this requires your child to grant you durable financial power of attorney.

Durable financial power of attorney gives you the authority to manage their financial and legal matters, such as paying their tuition, applying for student loans, managing their bank accounts, and collecting government benefits. Without this document, you will have to petition the court for such authority.

Peace of Mind
As parents, it is normal to experience anxiety as your child individuates and becomes an adult, and with the pandemic still raging, these fears have undoubtedly intensified. While you can’t totally prevent your child from an unforeseen illness or injury, you can at least rest assured that if your child ever does need your help, you’ll have the legal authority to provide it. Contact us if you have any questions.

 

How to Find an Old 401(k): 7 Ways - TheStreet

 

The days of working for a single employer for decades until you retire are over. Today, you are much more likely to change jobs multiple times during your career. According to the Bureau of Labor Statistics, today’s workers have held an average of 12 jobs by the time they reach their 50s.

Since people change jobs so frequently, it is easy to lose track of an old 401(k), especially if you only worked in a position for a short time. In fact, forgetting plans is quite common: it’s estimated that roughly 900,000 workers lose track of their 401(k) plans each year. And when you forget to cash out your 401(k) upon leaving a job, it may eventually be transferred to a bank, rolled into an IRA, or even sent to the state’s unclaimed property fund.

If you’re looking to increase your retirement savings, one way to start is to make sure you haven’t lost or forgotten about any old accounts. Here are 6 tips for tracking down a missing 401(k).

  1. Contact your previous employers: If your former employer is still in business, the easiest way to find an old 401(k) is to contact them. You can ask the human resources department or the plan administrator at the company to search their records to find out whether you participated in the plan, and if they still manage your account. Be prepared to provide the dates that you worked for the employer, your name, and your Social Security number.
  2. Find the plan administrator’s contact details: If your former employer has shut down or merged with another company, you can try to contact the organization that administered the plan to see if they still control your 401(k). If you have an old statement, it should contain the administrator’s contact information. You can also contact former co-workers and ask if they have copies of old statements from the plan.

    3. Review the plan’s annual tax return: If you can’t access your old plan statements, you can try to find the contact information for the plan administrator via the plan’s tax return. Most plans must file an annual tax return, Form 5500, with the Internal Revenue Service and U.S. Department of Labor. Search the website www.efast.dol.gov by entering the name of your old employer to find this form.

    4. Search unclaimed property databases: If you are unable to track down your account through your former employer or the plan administrator, you still have options. Depending on what happened to the company and how much money was in your account, there are a few different places to search.

    The National Registry of Unclaimed Retirement Benefits offers a database where employees can register names of former employees who left retirement funds with them. By entering your Social Security number, you can search this database for free to determine if you have any unclaimed retirement account balances.
    Additional online resources, such as missingmoney.com and unclaimed.org, similarly allow you to search for retirement assets in any states in which you’ve lived or worked.

    5. Search for default IRA accounts: If your old account had a fairly small balance, it may no longer be in a 401(k). For 401(k) accounts with balances of less than $5,000, a former employer might have rolled the funds into a default IRA account on your behalf. Default IRAs can be created when your former employer is unable to reach you to find out how you want the funds paid to you. You can search for such IRA accounts for free on the FreeERISA website.
    6. Search for terminated plans: If your former employer terminated its 401(k) plan, this doesn’t automatically mean your money is lost forever. The Department of Labor maintains a list of plans that have been abandoned or are in the process of being terminated. Search their database to find out whether the plan is in the process of—or has already been—terminated, and learn the contact details for the Qualified Termination Administrator (QTA) responsible for overseeing the plan’s shutdown.

    Keep track of your assets

The best way to keep track of your retirement accounts is to not lose them in the first place. Indeed, one of the most important parts of estate planning is to create a comprehensive inventory of all your assets, not just your retirement funds. By doing so, none of your assets will end up in our state’s Department of Unclaimed Property, and your family will know exactly what you have and how to find everything if something happens to you.

 

 

 

 

Family-Go-Bag-Comfort4-Survival-Kit—400-V2-AMP-min – Sustain Supply

In response to a series of wildfires that ravaged Southern California in 2017, I wrote a previous article explaining https://www.calilaw.com/saving-matters-12-must-items-pack-go-bag/ ready in the event a natural disaster or other emergency strikes your home. Go-bags originated with the US military, which requires its personnel to always keep one on-hand packed with the essential items needed to survive for at least three days following a disaster.When you have just minutes to evacuate, you won’t have time to think about what you should pack to survive the days—or weeks—to come, so the time to prepare for your family’s safety is now.

In 2020, we’re not only dealing with deadly wildfires again in California, we’re still in the middle of the COVID-19 pandemic, which has already killed more than 180,000 Americans and seems unlikely to disappear anytime soon.

In light of the increased dangers posed by the pandemic, I decided to update my previous go-bag article. Although most of the items you should have in your go-bag remain the same, here we’ll cover the supplies and documents you should pack to deal with COVID-19. Whether you are forced to temporarily relocate somewhere other than your home, require hospitalization, or are subject to quarantine, the pandemic comes with unique risks that call for additional preparation.

The go-bag revisited
Before we discuss the estate planning and other key documents you should include in your go bag, we need to mention some general supplies to include to help protect your family from contracting COVID-19. Along with the personal sanitary items listed in the previous article, you should add the following items:

  • Face masks and/or face coverings
  • Hand sanitizer containing at least 60% alcohol
  • Lysol or other disinfectant sprays
  • Disinfecting wipes
  • Disposable gloves

Now, when it comes to your estate plan, even if you have all of the necessary planning documents in place and updated, they won’t do you any good if your loved ones don’t know about them or can’t quickly locate them during an emergency. Without immediate access to your plan, if you become seriously ill or injured, medical and financial decisions can be dangerously delayed or be made by someone other than the people you would want.

And the need for your plan to be easily accessible is particularly urgent during the pandemic. Due to the highly contagious nature of COVID, there’s a good chance your family members will not be allowed to accompany you if you are hospitalized or forced to quarantine. For these reasons, adding your estate plan and other important documents to your go-bag is a must.

While all of your estate planning documents should be included in your go-bag, be sure to include your up-to-date medical power of attorney and living will along with copies of your health insurance or Medicare card and a summary of your medical history. In your medical history, you’ll want to mention any chronic underlying medical conditions and illnesses, as well as list all prescriptions drugs, over-the-counter medications, and/or supplements you are currently taking—and don’t forget to list any known allergies.

Make sure your loved ones know about your go-bag, and where to find it. To make it as portable as possible, download your plan and other essential documents to a thumb drive you can carry in your go-bag and upload additional copies to the cloud.

 

Safeguard your belongings—and memories
While protecting your family’s health, safety, and well-being is the primary purpose of packing a go-bag, you should also take steps to prevent the financial devastation that can result from having your home and other property destroyed in a disaster. Obviously, having the appropriate levels of insurance coverage in place is your first task.
But to make sure the insurance companies fully reimburse you for what you stand to lose, you should also take video and photos of all your belongings. Such visual documentation can not only ensure you are able to replace your assets, but that your insurance claim is processed as quickly and smoothly as possible.

Finally, if you own your home, it should be titled in your living trust and your living trust MUST be identified as an “additional named insured” on your homeowner’s policy. Pull out your policy and check for that now. This often-overlooked detail can cause big problems in the event a claim must be made.

 

Estate Planning Essentials for Same-Sex Couples - WillWritten Will Writing

 

A case on the Supreme Court’s docket for October could have a major impact on the parental rights of same-gender couples seeking to adopt or foster children. In February, the high court agreed to hear Fulton v. City of Philadelphia, which deals with whether taxpayer-funded, faith-based foster care and adoption agencies have a Constitutional right to refuse child placement with LGBTQ families.

In March 2018, the City of Philadelphia learned that Catholic Social Services (CSS), an agency it contracted with to provide foster care services was refusing to license same-gender couples as foster parents. This was despite the fact the agency consented to abide by a city law prohibiting anti-LGBTQ discrimination.

The city told CSS it would not renew their contract unless they abided by its nondiscrimination requirements, but CSS refused to comply, and the city cancelled its contract. CSS then sued the city, claiming it had a First Amendment right to refuse licensing same-gender couples, since those couples were in violation of their religious beliefs.

Both a federal judge and the 3rd Circuit Court of Appeals sided with the city, noting the city’s decision was based on a sincere commitment to nondiscrimination, not a targeted attack on religion. From there, CSS took the case to the Supreme Court.

Rampant discrimination at the state level
LGTBQ adoptions are particularly contentious right now at the state level. The Supreme Court has yet to rule on the issue of the parental rights of non-biological spouses in a same-gender marriage. Given this, many married same-gender couples looking to obtain full parental rights in every state turn to second-parent adoption, as the Supreme Court has previously ruled that the adoptive parental rights granted in one state must be respected in all states.

That said, 11 states currently permit state-licensed adoption agencies to refuse to grant an adoption, if doing so violates the agency’s religious beliefs. In other states, the law specifically forbids such discrimination, but as we’ve seen in the Fulton case, those laws are being challenged.

Estate planning offers another option

No matter how the Supreme Court rules, same-gender couples seeking parental rights have another option—estate planning. It may be surprising to hear, but it’s critically important for you to know that when used wisely, estate planning can provide a non-biological, same-gender parent with necessary and desired rights, even without formal adoption.

Starting with our Kids Protection Plan®, couples can name the non-biological parent as the child’s legal guardian, both for the short-term and the long-term, while confidentially excluding anyone the biological parent thinks may challenge their wishes. In this way, if the biological parent becomes incapacitated or dies, his or her wishes are clearly stated, so the court will keep the child in the non-biological parent’s care.

Beyond that, there are several other planning tools—living trusts, powers of attorney, and health care directives—we can use to grant the non-biological parent additional rights. We can also create “co-parenting agreements,” legally binding arrangements that stipulate exactly how the child will be raised, what responsibility each partner has toward the child, and what kind of rights would exist if the couple splits or gets divorced.

Secure parental rights—and your family’s future
Whether you are married, or in a domestic partnership, even with no children involved, it’s critically important you understand what will happen in the event one (or both) of you becomes incapacitated or when one (or both) of you dies. Proper planning can ensure your beloved is left with ease and grace, not a financial and legal nightmare that could have been avoided.

With proper guidance and support, you can ensure your partner or spouse will be protected and provided for in the event of your incapacity or when you die, while preventing your plan from being challenged in court by family members who might disagree with your relationship.

 

 

 

Tiger King: Joe Exotic's former zoo handed to rival Carole Baskin ...

 

Anyone who has seen the hit Netflix documentary Tiger King: Murder, Mayhem, and Madness can attest that it’s one of the most outlandish stories to come out in a year full of outlandish stories. And while Tiger King’s sordid tale of big cats, murder-for-hire, polygamy, and a missing millionaire may seem too outrageous to have any relevance to your own life, the series actually sheds light on a number of critical estate planning issues that are pertinent for practically everyone.

Over seven episodes, Tiger King provides several shocking, real-life examples of how estate planning can go horribly wrong if it’s undertaken without trusted legal guidance. In this article, we’ll discuss some of the worst planning mistakes made by key people in the documentary, while offering lessons for how such disasters could have been avoided with proper planning.

The Feud

While the documentary’s dark, twisted plot is far too complicated to fully summarize, it focuses primarily on the bitter rivalry between Joe Exotic and Carole Baskin, who are both owners and breeders of big cats. Joe, the self-professed “Tiger King,” whose real name is Joseph Maldonado-Passage, runs a roadside zoo in Oklahoma filled with more than a hundred tigers, lions, and other assorted animals.

Carole is the owner of Big Cat Rescue, a Florida-based sanctuary for big cats rescued from captivity. As an avid animal rights activist, Carole goes on a public crusade against Joe, seeking to have his zoo shut down, claiming that he exploits, abuses, and kills the animals under his care.

The feud between Joe and Carole goes on for decades, and eventually peaks after Carole wins a million-dollar trademark infringement lawsuit against Joe and Joe is ultimately convicted of hiring a hitman to kill Carole and sentenced to 22 years in federal prison.

Although the clash between Joe and Carole takes center stage and exposes key estate planning concerns related to business ownership and asset protection (which we’ll have to cover in a separate article) the most egregious planning errors are made by Carol’s late husband Don Lewis.

Missing millionaire

Don, a fellow big-cat enthusiast who helped Baskin start Big Cat Rescue, mysteriously disappeared in 1997 and hasn’t been seen since. After having him declared legally dead in 2002, Carole produced a copy of Don’s will that left her nearly his entire estate—estimated to be worth $6 million—while leaving his daughters from a previous marriage with just 10% of his assets.

Carole was not only listed as Don’s executor in the will she presented, but she also produced a document in which Don granted her power of attorney. However, the planning documents Carole produced were deemed suspicious by multiple people who were close to Don for a number of reasons.

Don’s daughters and his first wife claim that Don and Carole were having serious marital problems before he disappeared, and that Don was planning to divorce Carole. As evidence of this, we learn that Don sought a restraining order against Carole just two months before he vanished, in which he alleges Carole threatened to kill him. A judge denied the restraining order, saying there was “no immediate threat of violence.”

Don’s daughters also claim that around the time the restraining order was filed, their father created a will that left the vast majority of his estate to them, and he did so in order to minimize any claims Carole might have to his property should he pass away. Additionally, Don’s administrative assistant, Anne McQueen, said that before he disappeared, Don gave her an envelope containing his new will and a power of attorney document, in which he named Anne as his executor and power of attorney agent, not Carole.

Anne said Don told her to take the envelope to the police if anything should happen to him. According to Anne, the envelope with Don’s planning documents was kept in a lock box in Don’s office, but she claims Carole broke into the office and took the documents 10 days after he disappeared. Anne believes Carole forged the will and power of attorney she ultimately presented to the court.

Carole vehemently denied all of these claims. She further alleged that Don sought to disinherit his children in his will, and it was only at Carole’s suggestion that Don left them anything at all.

Although law enforcement investigated Don’s disappearance from Tampa to Costa Rica, Hillsborough County Sheriff Chad Chronister said the investigation failed to uncover any physical evidence, only a conflicting series of stories and dead ends. In light of this, Don’s estate passed through probate in 2002, and his assets were distributed according to the terms of the will Carole presented, leaving Carole with the bulk of his $6-million estate, and leaving Don’s daughters with just a small fraction of his assets.

While there’s more to the story surrounding Don’s planning documents and Carole’s suspicious actions, let’s look at the planning mistakes Don made and how they could have been easily prevented.

The Big Lesson: Always work with an experienced estate planning lawyer when creating or updating your planning documents, especially if you have a blended family. If Don’s children and assistant are correct and Don created a will that left his daughters the bulk of his estate and disinherited Carole, it appears he did so without the assistance of an attorney. This was his first big mistake.

There are numerous do-it-yourself (DIY) estate planning websites that allow you to create various planning documents within a matter of minutes for relatively little expense. Yet, as we can see here, when you use DIY estate planning instead of the services of a trusted advisor guiding you and your family, the documents can easily disappear or be changed without anyone who can testify to what you really wanted. In the end—and when it’s too late—taking the DIY route can cost your family far more than not creating any plan at all.

Even if you think your particular planning situation is simple, that turns out to almost never be the case. There are a number of complications inherent to DIY estate plans that can cause them to be ruled invalid by a court, while also creating unnecessary conflict and expense for the very people you are trying to protect with your plan.

And while it’s always a good idea to have a lawyer help you create your planning documents; this is exponentially true when you have a blended family like Don’s. If you are in a second (or more) marriage, with children from a prior marriage, there’s an inherent risk of dispute because your children and spouse often have conflicting interests, particularly if there’s substantial wealth at stake. The risk for conflict is significantly increased if you are seeking to disinherit or favor one part of your family over another, as Don was claimed to have done with Carole.

Finally, as we saw with Don, if your loved ones can’t find your planning documents—whether because they were misplaced or stolen—it’s as if they never existed in the first place. Yet, if Don had enlisted the support of an experienced planning professional, his documents would have likely been safeguarded from being lost, stolen, or destroyed.

 

 

Prenup: Romance killer or wealth protector? - The Globe and Mail

 

 

Last week, I discussed some of the pros and cons of using prenuptial agreementshttps://www.calilaw.com/prenuptial-agreement-pros-and-cons/ . Here, we’ll look at different estate planning vehicles that could provide similar—or even better—protection than prenups.

 

Revocable living trust created by you: By setting up a revocable living trust and funding it with your separate assets before getting married, those assets would likely be considered non-marital property and not subject to division by the court upon divorce—as long as you never commingle any of those assets with your spouse after your marriage. To ensure your separate property assets stay separate, it’s vital that you create and fund the trust with your assets before the marriage and never add any assets acquired or created during the marriage.

 

If you commingle assets acquired during the marriage in a trust containing your separate non-marital assets, a court could declare all of those assets as marital property subject to claim as part of a divorce settlement. To this end, a revocable trust only protects your separate assets from divorce if they remain separate from marital property throughout the whole length of your marriage.

 

You can also use a revocable living trust to provide for your surviving spouse and children from a previous marriage in the event of your death or incapacity. Unlike a will, assets held by a trust are not subject to the court process known as probate, so those assets would be immediately available to your spouse and kids, sparing your family the time, expense, and potential conflict of probate.

 

Note that since a revocable trust is “revocable” by definition, there is no asset protection for assets in your revocable trust, meaning that a revocable living trust will not protect your assets from creditors during your lifetime. If you want to achieve protection from both a future divorce and future creditors, you may want to consider one of the irrevocable trusts below.

Irrevocable trust created by your family: You can protect your assets from divorce by having your parents (or another loved one) establish an irrevocable trust for you before your marriage. Then, the Investment Trustee of the irrevocable trust (who could be you) could purchase all of your existing assets in an arms-length transaction and manage those assets inside of the trust, where they are totally protected from a future divorce and any future creditors.

Note that this strategy does require special provisions to ensure you cannot make distributions to yourself from the trust without the approval of an “independent trustee.” This trustee could be a best friend or a professional trustee, but cannot be anyone related or subordinate to you.

Your parents or grandparents could also leave any future inheritance you are to receive to this irrevocable trust, ensuring that your inheritance would also be protected. If this irrevocable trust is properly established and the terms are well-drafted, all assets the trust owns—and any assets left to you in the future—will be fully protected from a future divorce, future creditors, and even from estate taxes and probate upon your death. Yes, I like these trusts a lot.

 

Irrevocable trust created by you: It’s also possible for you to establish an irrevocable trust for yourself and gift your assets into the trust to keep them safe from divorce. However, this strategy is not as airtight as having a parent or grandparents establish the trust for you.

When you gift assets to an irrevocable trust, there’s a risk that a spouse or future creditor can claim fraudulent conveyance, depending on how soon you gift those assets after creating the trust. That said, if you are looking for asset protection and an alternative to a prenuptial agreement, and do not have a parent or grandparent available, a self-settled irrevocable trust can be a great second-best alternative.

Start your marriage off right
If you are getting ready to tie the knot and would like to ensure that assets you bring into the marriage don’t end up being lost in a future divorce settlement or are protected for your kids from a prior marriage, it is important to take action now. Once you are married, many planning options are off the table.

 

And regardless of your concerns about divorce, you definitely need to create or update your estate plan to protect and provide for your soon-to-be-spouse and any children you have in the event of your death or incapacity.

 

 

Vanessa Bryant Asks Judge To Include Daughter Capri In Kobe ...

 

In January, I wrote about how the deaths of NBA legend Kobe Bryant and his 13-year-old daughter, Brianna, demonstrated the vital need for estate planning for people of all ages. At the time, little was known about the planning strategies Kobe had in place to protect and preserve his estimated $600 million estate for his wife, Vanessa, and three surviving  daughters, Natalia, 17, Bianka, 3, and Capri, 7 months.

Since then, court filings made by Kobe’s widow have shed light on both the successes and failures of Kobe’s estate planning efforts. On the positive side, Kobe created an extensive estate plan, which included the Kobe Bryant Trust to protect his assets, reduce estate-tax liability, and pass on his wealth to his family.

While the contents of the trust remain private (one of the many benefits of this type of estate planning!), the court documents do provide a summary of the trust’s terms. Upon Kobe’s death, the trust was set up to allow Vanessa and her daughters to draw from the principal and income of the trust’s assets during Vanessa’s lifetime, with the remainder going to their children upon Vanessa’s death.

However, while the trust lists Vanessa and his oldest daughters Natalia, Brianna (who died in the crash with her father), and Bianka as beneficiaries, his youngest daughter, Capri, who was born just six months before Kobe’s death, was not included in the document. Reportedly, Kobe and his lawyers simply never got around to amending the trust to add Capri before his untimely death at age 41.

 

A tragic oversight
Seeking to fix this oversight, Vanessa Bryant and Kobe’s best friend Robert Pelinka, Jr.—who were named Co-Trustees—petitioned the Los Angeles probate court to modify the trust by adding Capri as a beneficiary with equal rights as her sisters. Unless the court agrees with the petition, Capri will be ineligible to inherit her share of the family estate held in the trust, which could amount to wealth and assets worth hundreds of millions of dollars.

 

According to the petition, the trust was created in 2003 after the birth of the couple’s first child, Natalia, and its intent was to provide for the support of Vanessa and all of the couple’s children following Kobe’s death. As evidence of this intent, the petition points out the fact that Kobe amended the trust to add daughters Brianna and Bianka after they were born.

Although it’s likely the court will agree to the trust’s modification to include Capri, the fact remains that Kobe and his legal team made a major error by not updating his plan immediately following her birth. This mistake has undoubtedly cost Vanessa not only hefty sums of money in legal fees and court costs, but it also eliminated the trust’s biggest benefits by failing to keep Kobe’s surviving family members out of court and conflict, as well as exposing many of the estate’s details to the public.

And the most unfortunate part of the whole situation is just how easily this oversight could have been avoided.

 

Stay up to date
It’s a popular myth that estate planning is simply a matter of creating the proper documents, filing those documents away for safekeeping, and only revisiting them upon the creator’s incapacity or death. However, this is far from the truth. Indeed, this oversight by Kobe’s lawyers illustrates why most plans—even those created by multi-millionaires—fail to keep families out of court and out of conflict. And though Kobe’s family can easily absorb these costs, your family probably can’t without significant impact.

As Kobe’s case shows, even the most well-intentioned plan can prove ineffective if it’s not regularly updated. Estate planning is not a one-and-done type of deal—your plan must continuously evolve to keep pace with changes in your family structure, the legal landscape, your assets, and your life goals.

And unfortunately, this kind of thing happens all the time. In fact, outside of not creating any estate plan at all, one of the most common planning mistakes we encounter is when we get called by the loved ones of someone who has become incapacitated or died with a plan that no longer works because it was never updated. Unfortunately, by the time they contact us, it’s too late.

We recommend you review your plan at least every 3 years to make sure it’s up to date, and immediately modify your plan following events like births, deaths, divorce, and inheritances.

Dedicated to empowering your family, building your wealth and defining your legacy,

 

 

 

 

It’s an unfortunate fact that predators emerge during times of crisis to take advantage of people. That means the COVID-19 pandemic can leave your elderly parents vulnerable in more ways than one. But even when things go back to normal, this chronic problem of financial exploitation will still be a risk.

We see it happen far too often. Maybe your parents live several hours away, or in another state or country, and someone in their community gets close to them. Or maybe they have a close relationship with a financial advisor who isn’t really looking out for their best interests. This person could even be another family member, friend, business partner, hired caregiver, professional advisor, or just a casual acquaintance.

Sometimes, when bad actors become involved with your parents’ lives and assets, it can lead not only to a loss of money, but even a loss of personal freedom. One of the worst cases of this I’ve heard of is the case of Milo, a retired veteran living in Arizona, and his son Greg, who lives in California. It all started when Milo asked Greg to help him protect his small amount of money from a family member who was “borrowing” it freely. All Milo had was a savings of $140,000 and payments of $3,700 per month from social security, a pension, and veteran’s benefits.

To help his father out, Greg applied for guardianship of Milo’s money, and the court granted it. But at the same time, without notifying Greg, the court appointed a professional financial Conservator that neither Milo nor Greg knew. The Conservator quickly set to draining Milo’s small savings, with the court barring Greg from filing any more motions.

The situation escalated even further when the Conservator decided to move Milo from his assisted living facility to a cheap lock-down facility where he wouldn’t even have access to the outdoors. This would, of course, free up more money for the Conservator to access. Before this could happen, though, Greg hurried to pick his father up and bring him back to California with him.

Now, the two are essentially on-the-run from authorities, who are trying to bring Milo back to Arizona and under the control of the Conservator. Milo and Greg are out of funds and are now trying to raise capital to mount a legal battle and free Milo from this terrible situation.

The scariest part is that Milo and Greg had all the proper legal documents in place. Sometimes, though, that is not enough to protect your parents from being taken advantage of—even to this extreme. Especially in a time of stress and confusion like the COVID-19 pandemic we are currently living in, it is vital to be vigilant and get the best possible counsel to avoid something like this happening.

This isn’t meant to make you paranoid or distrustful of the people around you, or of how your parents handle their own lives. Well, maybe it is a little. Mostly, though, it’s a call to encourage you and your family to be aware, educated, and empowered in knowing what risks are possible for your parents, and for your future inheritance.

Look out for the following “red flag” actions from influencers:

  1. Preventing important communication between family members;
  2. Withholding documents from other family members;
  3. Encouraging financial gifts or economic benefits to recently met connections (usually in the same network as your parents’ “new friend”);
  4. Naming recently met connections as attorney-in-fact (under a financial power of attorney), or as a joint owner on financial accounts, real estate, and other assets;
  5. Giving financial advice that may not be in your or your parents’ best interests, but rather in the interests of the advisor.

We recommend you start talking with your elderly parents now about how they want their affairs to be handled. Also, you should immediately investigate any situation where you suspect your loved ones are being taken advantage of. There have been too many cases of financial abuse or inappropriate influence where family members are too late to stop the bad actor.

Ideally, you’ll know the value of your parents’ tangible assets (i.e., home, car, business, stocks) and intangible assets (i.e., generational stories, personal relationships, theological legacies). Additionally, you should be working with an advisor to help you understand how family dynamics and the law will impact you, and everything that matters to you and your parents when they’re gone.

Dedicated to empowering your family, building your wealth and defining your legacy,

With all the media about “digital wills” and “online estate planning” it could be tempting to think you can do your estate planning yourself, online. And, maybe you can. But, if you do, you need to know the potential pitfalls. Online estate planning could be a big trap for the unwary and end up leaving your family worse off than if you had done nothing at all.

First and foremost, before you do any of your own online estate planning, it’s critical to understand your family dynamics, the nature of your assets, and what the state of California would say should happen to your assets if something happens to you. You see, if you don’t do estate planning, the state does have a plan for your assets if you become incapacitated or when you die. You need to know what that plan is, so you know whether you want to change it.

But Don’t I Need a Will and Can’t I Just Do It Online?
Here’s the funny thing about estate planning: the one legal document that everyone thinks they need most actually does the least.

Every adult does need SOME estate planning. A will is always a good idea because it says who gets, and who oversees distributing, what you have. However, if the default law would have given your assets to the same people you would choose and authority to the person you would name anyway, then an online will would probably do nothing valuable for you at all.

Even a properly drafted will does not keep your family out of court (a will must always be adjudicated by a judge). And if drafted improperly, it could require the person you’ve named to handle things for you to get a bond, which is like an insurance policy. These are expensive and can be hard to get for an executor who has less than a stellar credit score. If your named executor cannot get a bond, it would then mean the court would appoint a court ordered executor, and that can be costly for your estate. This is just one of the examples of how having a will prepared online, can create more expense for the people you love. Unfortunately, all the online will preparation solutions I’ve reviewed don’t even mention this risk.

So, yes, you can do your own will online, but at what potential cost for the people you love?

The Problem with Online Wills
DIY online estate plans (and even many estate plans created by lawyers) usually include three or four basic documents: a will, a financial power of attorney, an advance health care directive, and possibly a trust.

But, honestly, completing these documents without counsel is simply not enough to guarantee your estate will be executed as simply, affordably, and effectively as you would wish.

For instance—are you sure there isn’t some missing consideration that could lead to turmoil as your family tries to figure it out? Did you know that most family fights don’t even happen over money, but over lack of clarity? Have you considered all your extended family, including stepchildren and ex-spouses? What will be done with all the personal, sentimental items you want to pass on to your children?

And there have been far too many scenarios where seniors, even those who had some estate planning done, get caught in the court system or even declared incompetent, and then have court-appointed guardians named, who then drain their accounts. In many cases, their assets are gutted before they can go to their kids. You don’t want that to happen to you or your family and a do-it-yourself will makes that outcome more likely, not less.

What about making sure your family knows what you have and where it is? An online will won’t tell them that. There’s nearly $10 billion being held in the California department of unclaimed property; much of it because someone died and their family lost track of their assets.

So how can you be sure you’ve got everything covered, legally?

With online wills and DIY estate planning docs, you wouldn’t even know what questions to ask to uncover the potential risks to the people you love, who deserve to receive what you’ve created in your life, without a big mess.

Think about this: do you know anyone who has lost family relationships because, after a loved one died, the family ended up in an irrevocable fight? Maybe this has even happened in your own family. I see it all the time and the consequences—both, financial and emotional—can be devastating.

And, it’s all unnecessary.

Yes, even if there are attorneys on staff at these online companies, they don’t get to know you and your family dynamics enough to spot the real issues that could arise. They are, instead, focused on a one-size-fits-all solution and easy answers to complex issues.

The Kind of Help Your Family Deserves
Many lawyers who specialize in estate planning often base their work on template documents. Even if they are well-intentioned, they’re working with an old, traditional system that places the focus solely on providing documents. But the documents are only as good as the understanding a lawyer has about your family dynamics, the nature of your assets, how the law will apply to your situation, and how the documents can be written as simply as possible to achieve your wishes. You need much more than just a set of four or five filled-out template documents to address all those complexities.

Your plan should include an inventory of your assets and guarantee they are all owned in a way that will keep your family out of court and conflict while ensuring everyone named in your plan has what they need and understands your choices. Most importantly, you should understand your plan and ensure that it passes along more than just your money.

Do it yourself estate planning is risky. While it may be better than nothing, it may also be worse. And it won’t be until after you are gone that your loved ones find out that answer.

Dedicated to empowering your family, building your wealth and defining your legacy,