Estate Planning Blog – Page 27

Ask These 5 Questions Before Gifting Assets

Gifting assets can be a useful estate planning tool if you need to reduce your estate tax bill or for long-term care planning purposes. You need to be sure, however, that your gift does not cause any unforeseen problems for you or the person receiving your gift.

Here are five questions you should always ask (and answer) before gifting:

Why is the gift being made? Are you making a gift out of love or is there some estate planning goal you are trying to reach? If it’s the latter, you need to be sure that the transfer of assets will be beneficial to you and your recipient. For example, if you are counting on Medicaid to pay for some of your long-term care, a gift could trigger up to five years of ineligibility unless handled correctly. Contact us or your own personal lawyer to evaluate your options.

Are you keeping enough for your needs? If you are making a large gift, you will need to do some long-term financial planning to ensure your gift does not compromise your future needs.

Are you expecting repayment? If your gift comes with an expectation on your part that you will be repaid, be sure your recipient understands that the gift is coming with these strings attached. Execute a promissory note so all parties are clear on the terms of your gift.

Are you expecting something else in return? If you are gifting property with the expectation that you will be allowed to live there, or gifting assets for someone else to hold for you, you should consider using a trust for these purposes instead. If you don’t, the recipient is legally in control of the gift and if they don’t do what you want with it — or worse, your assets become entangled in a divorce or bankruptcy — this could cause huge problems for you.

Will the recipient benefit from your gift? If your recipient has special needs, a gift could disqualify them from receiving important benefits. If he or she has financial or other problems like alcohol or drug dependency issues, the gift could be detrimental.

One of the best ways for you to gift assets is through a Wealth Creation Trust, which allows you to decide the best time for children or grandchildren to receive your gift and gives them the necessary time and experience to learn how to protect and grow the assets in the trust for future generations.

One of the main goals of my law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation. Call our office today to schedule a time for us to sit down and talk about a Family Estate Planning Session, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security.

All the best to your and your family,

July 21, 2014/0 Comments/by CaliLaw

Before You Take Off for Summer Vacation, Take on These 5 To-Dos

Estate Planning, Estate Planning Blog

It’s no surprise that Americans spend more time planning their summer vacations than they do planning their estate. After all, a vacation is a trip you want to go on, while the “eternal trip” is not.

However, wouldn’t you travel with more peace of mind if you knew you had taken the necessary steps to protect your family if something were to happen to you? That’s why you need to tackle these five important tasks before you go on that much-deserved summer vacation:

Guardians for minor children — if you have children under the age of 18, you MUST name a legal guardian (or guardians) to ensure that they will never be put in the hands of strangers or people you wouldn’t want raising them. If you do not name legal guardians before something happens, you give up the right to decide who will raise your children if you no longer can. You should name short-term guardians in case of emergency, and then plan for long-term guardianship. A full Kids Protection Plan® will ensure there is no gap in your children’s care, ever, no matter what happens.

Beneficiary review — if it’s been awhile since you updated your beneficiary forms for retirement accounts, life insurance or other assets, it’s time for a review — especially if there have been any major changes in your life. And keep in mind, it is generally a bad idea to list minor children as beneficiaries on insurance and retirement accounts. These should be passed to children through a Trust.

Estate plan review — if you have experienced a birth, death, marriage, divorce, property purchase, property sale, or other life-changing event since you last updated your estate plan, you need to be sure those changes are reflected by updating your plan.

Advance healthcare directive — if you become incapacitated and can’t make your own health care decisions, have you named someone who you can depend on to carry out your wishes? If not, you need to execute an advance health care directive that includes a durable power of attorney and a HIPAA release so your medical information can be shared.

Insurance update — is your life insurance still sufficient to meet the needs of your family? If not, or you’re not sure, then you should revise your policy before you hit the open road.

If you need to do any of these things, don’t procrastinate. It’s time to take care of business. We can help make it easy for you to get your plan in order so your family is protected and provided for, no matter what. Call my office to schedule a time for us to sit down and talk about your individual situation, needs, and goals.

July 14, 2014/0 Comments/by CaliLaw

A Plan for Protecting Your Most Valuable Asset: Your Children

Estate Planning Blog, Kids Protection Planning

If you have young children, chances are your summer activities include some careful planning to keep them safe from harm. Unfortunately, even with proper precautions in place, accidents do happen – and not just to children. Have you planned for what would happen to your children if you were the one involved in a tragic accident?

If you don’t put the proper legal protections in place and the unthinkable happens to you, any number of things could happen to your children, and none of them are good:

Your children could be put in the care of Child Protective Services. You never want strangers determining your children’s fate, even temporarily.
Your children could be put in the custody of someone you would never want to have control over them by a judge who does not know anything about you or your family dynamics.
Your family could get into a fight over the custody of your children (and control of any assets you leave your children).
Your estate can be thrown into probate, with a large portion of your assets going to court costs and legal fees — money that your children could have used in the future.
Whatever is left over would go to your children as soon as they turn 18, in one lump sum they will likely not be prepared to handle properly.
Your children’s inheritance would be a matter of public record, putting every predator and scam artist on notice with details about the assets being transferred along with access to your children’s personal information.

Since there are so many bad things that can happen to your children should something bad happen to you, we have developed the Kids Protection Plan® for families with young children. This plan includes a comprehensive set of instructions and legal documents that will ensure your kids will be raised by someone of your choosing and that your assets are protected for their well-being.

To get started ensuring your kids will always be protected, call our office today to schedule an appointment for a complimentary Family Estate Planning Session to identify the best ways for you to provide a legacy of love and financial security for your family, no matter what.

All the best to you and your family,

July 7, 2014/0 Comments/by CaliLaw

Will the Inheritance You Leave Be a Blessing or an Albatross?

Estate Planning Blog, Inheritance

Rock musician Sting recently announced that his children will not inherit his estimated $300 million fortune, saying these riches are “albatrosses around their necks.”

The product of a British working class background, Sting is currently one of the world’s wealthiest musicians, but says he will not be passing that fortune on to his six children. In an interview with the Daily Mail, Sting said,

“I told them there won’t be much money left because we are spending it! We have a lot of commitments. What comes in we spend, and there isn’t much left. I certainly don’t want to leave them trust funds that are albatrosses round their necks. They have to work. All my kids know that and they rarely ask me for anything, which I really respect and appreciate.”

While this may sound a bit harsh, Sting’s concerns about inherited wealth are not uncommon among parents (wealthy or not) who wrestle with whether bestowing wealth upon their children or grandchildren will be a blessing or a curse.

Fortunately, for parents and grandparents with these concerns, estate planning does offer a valuable tool: a Wealth Creation trust, prepared using incentive provisions.

A Wealth Creation Trust with incentive provisions allows you to pass along your values along with your wealth by attaching incentives to the distribution of your assets. For example, if grandparents want to pass on wealth to grandchildren but want to be sure those grandchildren get a good education so they know how to handle their inheritance wisely, they can set up a Wealth Creation Trust that names scholastic circumstances under which the assets will be distributed.

If your desire is to nurture your children’s entrepreneurial spirit, you can establish a Wealth Creation Trust to provide funding for a business startup, which allows you to foster that spirit while passing on your values regarding the benefits of hard work.

While most parents want to leave something behind for their children, passing along a solid set of values as well as inherited wealth is generally the desired outcome. A Wealth Creation Trust allows parents and grandparents to accomplish this worthy goal.

If the idea behind a Wealth Creation Trust resonates with you, call our office to schedule a time for us to sit down and talk about a Family Wealth Planning Session, where we can identify the best ways to ensure you leave a legacy of love, values, and financial security for your family.

June 30, 2014/0 Comments/by CaliLaw

The Legal Planning You Need to Do for Your High School Graduate

Estate Planning, Estate Planning Blog, Healthcare

If you’re the parent of a new graduate from high school this year, congratulations! I know you’ve put a lot of time and effort toward that diploma, and whatever their next step in life will be, you surely want to protect them just as much now as you always have.

So before you pack your kid off to college or just an apartment across town, you need to know that when they leave, they will be taking along many of the legal rights you held before they turned 18.

Once a child turns 18, they are no longer considered a child in the eyes of the law. As such, you no longer have the legal right to access their medical, school, or banking records without their permission. Here are three simple steps you should take before your child leaves the nest to help ensure their safety and your peace of mind:

1. Create an advance healthcare directive. Once your child becomes a legal adult, they need to have an advance healthcare directive that will allow you to access their medical records and make medical decisions for them in case they become incapacitated. This is essential in case of an emergency. They will also need to sign a Health Insurance Portability and Accountability Act (HIPAA) form that allows medical professionals to share information with you.

2. Use technology. The American Bar Association recently released a free app for iPhone and Android that allows you to store an advance directive and other important documents on a smartphone. The app comes in two versions: the Lite version stores a PDF version of an advance healthcare directive and HIPAA form; the Pro version ($3.99) provides more functionality, including the ability to email documents. The app is called My HealthCare Wishes and is available from the iPhone App Store or Google Play for Android devices. There are also online solutions such as DocuBank.com which stores medical records and allows those to be accessed by medical professionals anywhere in the world.

3. Add an ICE app to your child’s phone. Add an ICE (In Case of Emergency) app to the home page of your child’s phone that lists your contact information and also create an ICE listing in his or her phone contacts with this information. Your child is much more likely to always have their phone with them than to carry a printed card or document.

For more information on protecting your family, call our office to schedule a time for us to sit down and talk about a Family Estate Planning Session, where we can identify the best ways for you to ensure the security of your loved ones. Be one of the first two people to mention this article and we’ll waive our $750 planning fee PLUS create a free healthcare directive for your young adult child.

June 23, 2014/0 Comments/by CaliLaw

Father’s Day Reflections

Estate Planning, Estate Planning Blog, Legacy Planning

My daily goal is to be a better father today than I was yesterday. Some days I feel like I achieve it. Most days I don’t. But after opening my homemade Father’s Day cards and gifts this year, I decided to put pen to paper (actually, fingers to keyboard) as I reflected on the many challenges encompassed in that lofty objective, which I’m sure most other dads share.

At the top of that list would be protecting our children in every possible way, including legally. One of the most difficult things to do is think about the possibility we may die unexpectedly or too early, leaving our children without one of the most important people in their lives. But stepping up and making a legal plan to protect your children if something should happen to you is one of the best Father’s Day gifts you can give yourself and the people you love.

Here are 10 steps to help you get there:

1. List of potential guardians. Identifying the people you would like to raise your children if something should happen to you is the first step. Write down everyone you would consider, and for now, do it separately from your spouse.

2. Prioritize what’s important to you. Write down everything that is important to you when you think about how you want your kids to be raised. Do you want them to be raised with the same values you were raised with? Do you want them to live where they are living now? What about their education? List all your priorities and then rank them in order of importance.

3. Don’t make it about the money. Many people are tempted to turn to the person with the most money to be guardian, but providing for your children financially is your job. You can leave enough money behind to ensure your children are well taken care of by using life insurance, trusts, savings or a combination of all of these.

4. Compare your lists. Take your list of potential guardians and compare it with your prioritized list of what’s important to you, then rank the list of guardian candidates. You should wind up with a list of at least three good candidates that match your prioritized values.

5. List people you don’t want raising your kids. Think about all the people who may be in line for custody in case something should happen to both you and your spouse or co-parent and then create a list of those people you would never want raising your kids.

6. Exclude the people you don’t want as guardian in writing. Write a confidential letter of instruction outlining who you would never want raising your kids and why. This letter will be sealed away unless someone on the list tries to gain custody. Having that letter will make it less likely those people would want to pursue a claim in court.

7. Name temporary guardians. We all hate to think that this could happen to us, but we know it happens to others like us every day — couples leave their children with a babysitter and get into a terrible accident. The babysitter calls and calls, but there is no one to answer. The police are summoned and the children have to be placed with Child Protective Services. It’s terribly frightening. To prevent this possibility, you should name local temporary guardians who can take over in these circumstances until long-term guardians are appointed.

8. Make it all legal. Once your choices are made, you will need to legally document them. If you don’t, a judge will make these decisions for you. We can help you create a comprehensive Kids Protection Plan® as well as other estate planning essentials like a will, powers of attorney, health care directives and even a trust that will ensure your plan is done right and will last for as long as you need it.

9. Make a plan for your assets. Once you’ve taken care of your children, be sure you take care of your assets. We can explain how a trust can be used to bypass the court system and protect your assets.

10. Leave more than money. Your lasting legacy should be much more than just money; it should also be those valuable intangibles that reveal who you are through your insights, values, wisdom and experiences. We make this possible as part of your legacy planning process, helping you digitally capture and pass on your own story and your aspirations for your loved ones.

Call our office to schedule a time for us to sit down and talk about a Family Estate Planning Session, where we can identify the best ways for you to ensure your legacy of love and financial security for your family.

June 16, 2014/0 Comments/by CaliLaw

Greatest Wealth Transfer in History Underway – What’s Your Plan?

Estate Planning, Estate Planning Blog, Legacy Planning

A new study by the Boston College Center on Wealth and Philanthropy found that the greatest wealth transfer in history is currently underway, with more than $59 trillion passing to heirs, charities and Uncle Sam between now and 2061.

The majority of this wealth — $36 trillion — is passing directly to heirs and another sizeable chunk — $27 trillion – is passing to charity, either through final bequest or total lifetime gifts.

And even though the study notes that the transfer of $59 trillion is the largest in history, it goes on to estimate the final figure will likely be even higher – much higher.

So what is your plan for either transferring or receiving inherited wealth?

If you don’t have one – and far too many people don’t – I encourage you to start planning now, since in my view your estate plan is more of a process than a static document. In fact, my relationship with clients continues long after the estate planning documents have been signed.

As your life changes and your family grows, legacy planning will play an important role in how you choose to transfer wealth to future generations. The law firm you choose to work with on your legacy planning should keep all your estate planning documents accessible to you in an electronic file, and schedule timely reviews so they can furnish you with three very important services:

1. Ensuring all your assets are owned correctly so your family isn’t stuck dealing with an expensive, unnecessary, and public Probate Court process. Establishing a Trust once and then never looking at it again isn’t the answer — regular updating and assurances that all your assets are documented and owned properly, is the right way to do things.

2. Making sure the guardians you have named for your minor children, the trustees you have chosen to carry out the terms of your trust, and the agents you have designated to make health care decisions for you in case you cannot make them yourself are still the people you want in charge.

3. Helping you record your values, experiences, family history and the other important intangibles you want to pass on to future generations so they are never lost. A comprehensive estate plans should cover far more than just your money, focusing on what matters most — your values, insights, stories and experiences. The things most often lost when someone dies.

Call our office today to schedule a time for us to sit down and have a Family Estate Planning Session, so we can help you look at what would happen now if something were to happen to you and ensure everything passes to your loved ones exactly the way you want.

June 9, 2014/0 Comments/by CaliLaw

I Hate Estate Planning

Estate Planning, Estate Planning Blog

It sounds crazy, I know. An Estate Planning attorney who actually hates the words “estate planning”?

Just hear me out. I hate estate planning because it conjures up the image of a bunch of stuffy, old lawyers sitting around a giant conference table, scheming about who’s going to kick the bucket next and how to divvy up the inheritance they’ll leave behind.

Ugh! So let’s draw the line right now:

There are two types of ‘Estate Planning’ attorneys, and they couldn’t be more different. From the way they attract and engage clients all the way to their impact on generations yet unborn.

The type of Estate Planning attorneys most people think of belong in the same category as the stereotypical lawyers at the butt-end of jokes. The kind nobody wants to invite over for dinner. The kind nobody wants to deal with for a minute longer than absolutely necessary (because they’re nickel and diming anybody and everybody in 6-minute increments).

They eagerly take as a client, whoever walks in the door. Sell them a plan they can’t understand, and then fail to fund it, update it or ensure that it actually performs for the family in their time of greatest need.

But let me tell you about the other type. This type of attorney is a lot more like a family friend who also handles the legal technical work of ensuring the families in their community have a solid relationship with their loved ones – and their legacy – that outlasts them for generations to come.

They serve their community by freely educating families who genuinely need the planning they provide. They do a thorough job of discerning the values, vision and needs of these families and business owners. They design estate plans that get funded, are kept up-to-date, and perform as promised upon death. And I am proud to count myself as one of these types of attorneys.

Estate planning, the way my camp practices it, would better be called something like “Legal Life Design,” or “Life Consciousness Development,” or “Family Legacy Engineering.” I wish the word for this legal practice area was something profound, intriguing, complex, bold, and intense. Because it is all of those things.

Here’s a little secret: Estate planning is a deep spiritual experience for me. My life becomes more fulfilled and connected every time I support a family through the process. Participating in their growth and family harmony is extremely rewarding. Plus, it’s a service needed by every parent in our country, whether they realize it yet or not.

It helps parents become better people – which in turn makes them better parents. And that’s where the magic is.

Estate planning is really an opportunity to meet oneself at the doorway between life and death. As an attorney, I get to escort people to that doorway, help them look back so they can see their accomplishments, their losses-the legacies they’ve built. I help them see the honor and dignity in their lives and bear witness to the essence of who they are.

Then together we look toward the future; their hopes, dreams, aspirations and vision for themselves and their families. Then I interject the worst-case scenarios and help them work through it all. It’s important work because the worst things that can happen are the only things that stand between their past and their future.

Then (and this is where the lawyer in me emerges), I help them understand the legal landscape and offer perspective on how things are versus how things could be. I give my clients a chance to choose the road their family will take if they aren’t there to guide them. Consciously, thoroughly, thoughtfully.

Fear lifts. Freedom enters. Liberation of heart and mind settles in.

And my clients are no longer afraid. No longer afraid to die, no longer afraid to live.

People tell me all the time that their experience with estate planning was nothing like they expected. They say they had no idea the burden they were carrying until it was lifted. They say they feel freer, clearer, more in love, and more alive. They come away from the experience more at ease and comfortable then they’ve been in a long time.

To help liberate another human from their fears and free them to live a bigger life. How sacred, how awesome, is that?!

It’s why I love what I do. And I would be thrilled to transform the way you look at estate planning, too. To guide you along the path toward ensuring your family will be protected and provided for, no matter what. To help you secure the peace of mind knowing things will be as easy as possible for your loved ones during the worst of times. To support you in living consciously, proactively, and fully.

If that feels right to you, call my office today to schedule a time for us to sit down and talk. Because this is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge.

If it’s something you’ve been thinking about, don’t keep putting it off. Follow your heart, take action, and change your life.

June 2, 2014/0 Comments/by CaliLaw

Your Legacy Should Be More Than Just Money

Estate Planning Blog, Legacy Planning

One of the most striking aspects of the recent opening of the National September 11 Memorial & Museum is the voice recordings left on the phones of the victims’ families of their last messages to loved ones. We hear so many stories of family members who keep voicemails and answering machine messages for years after a loved one dies. There is something so comforting about hearing the voice again of someone you love and miss.

Wouldn’t it be wonderful if you were able to leave something like this behind – not a voicemail or message that could easily be lost, but a full recording of the hopes and dreams you have for your children and grandchildren, your own history and life lessons you feel are too important to die with you.

You may have even been intending to do this for some time, but have just never gotten around to it. You may have even written a letter and stuck it away hoping it would be found by the right person at the right time. Unfortunately, this does not always happen – and your words are simply too precious to leave that to chance.

Part of my firm’s mission is to make this possible as part of your legacy planning process, helping you capture and pass on more than just your assets, but also your own story and your aspirations for your loved ones through a special video recording we produce for each of our clients. It’s a gift your family will cherish forever!

Think about how much you would love to have a recording from your grandparents or parents who are no longer here, and what that would mean to your children as well. Your lasting legacy should be much more than just money; it should also be those valuable intangibles that reveal who you are through your insights, values, wisdom and life experiences. It’s a gift your family will cherish forever as an heirloom to be passed down from generation to generation, and we are honored to be able to provide it for our clients.

Call our office to schedule a time for us to sit down and talk about the best ways for you to ensure you leave a lasting legacy of love and financial security for your family. Be one of the first two callers to mention this article to receive a complimentary and comprehensive Family Estate Planning Session.

May 27, 2014/0 Comments/by CaliLaw

Unconditional Love Doesn’t Have to Mean Unconditional Inheritance

Estate Planning Blog, Inheritance

Most parents love their children unconditionally and want to do whatever they can to smooth life’s rough patches for them. But that unconditional love doesn’t necessarily mean parents should unconditionally trust their children when it comes to leaving a hefty inheritance.

Here are some smart ways parents can pass their love along while still protecting the wealth they have spent their lifetimes working hard to accumulate:

Annual exclusion gift test. A parent can gift up to $14,000 every year to each child without incurring gift taxes; both parents together can give a total of $28,000 to each child. You can use this annual exclusion gift to test the waters on how your children will handle a financial windfall. Do they pay off debt, save it or place it on the ponies? Their actions can give you insight into how they might handle their inheritance.

Incentive trust. Parents that have worked hard to accumulate their wealth often worry that a large inheritance may harm a child’s ambition to succeed on their own. If that is a worry for you, an incentive trust allows you to set goals or milestones for your children to achieve before distributions are made.

Staged distributions. Parents can create a trust with the distributions tied to different ages, stages, or life events (graduating college, starting a business) so the inheritance is doled out over time.

Leave a legacy. Creating a personal foundation to support the causes you believe in, and involving your children early on in that foundation, will help them learn about the responsibilities that come with wealth and create empathy for a world outside their own.

Hold the cash. Instead of giving cash directly to your children, consider alternative giving strategies, like paying down their college or home loan mortgage debt. This will make a big difference to their financial future without tempting them with large amounts of cash.

Wealth creation trust. As mentioned in a previous post, one of the best ways your unconditional love can be expressed to a child or grandchild is through the establishment of a wealth creation trust to commemorate a birth, milestone birthday, or event, and then directing monetary gifts to the trust over time.

When your child gets to be an age specified in the Trust, he or she can step into the role of Co-Trustee of the Trust, learning how to operate the trust and best utilize the funds in the Trust. He or she will be trained on the best types of investment for the Trust, learn the purpose of the Trust (to encourage the creation of wealth from one generation to the next, rather than the squandering or wasting of assets); how to protect it (keep the investments in the name of the Trust, regardless of how funds are used, so always title investments properly and sign on behalf of the Trust); and how to create more wealth in the future using the Trust assets.

One of the main goals of my law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation. Call my office today to schedule a time for us to sit down and talk so we can identify the best strategies for you to ensure your family receives a legacy of love and financial security.

May 19, 2014/0 Comments/by CaliLaw