Now that same-gender couples can legally marry in all 50 states, more Americans than ever before are enjoying the rights and benefits that come with marriage. Estate planning is one arena where these new rights and benefits are readily apparent.

While the planning vehicles available to same-gender and opposite-gender married couples are generally the same, there are a few unique considerations those in same-gender marriages should be aware of. Here are three of the most important things to keep in mind.

Relying solely on a will is risky: For several reasons, putting a trust in place—rather than relying solely on will—is a good planning strategy for nearly everyone. Upon the death of one spouse, a will is required to go through the often long, costly, and conflict-ridden court process known as probate. However, assets passed through a trust go directly to the named beneficiaries without the need for probate.

What’s more, a trust works in cases of both your death and incapacity, while a will only goes into effect upon death. Given this, it’s usually best for those in any marriage to create trust based plans.

Don’t neglect to plan for incapacity: Estate planning is not just about planning for your death; it’s also about planning for your potential incapacity. Should you be incapacitated by illness or injury, it’s not guaranteed that your spouse would have the ultimate legal authority to make key decisions about your medical treatment and finances.

Absent a plan for incapacity, it’s left to the court to appoint the person who will make these decisions for you. Though spouses are typically given priority, this isn’t always the case, especially if unsupportive family members challenge the issue in court. To ensure your spouse has the authority to make decisions for you, you must grant him or her medical power of attorney and financial power of attorney.

Medical power of attorney gives your spouse the authority to make health-care decisions for you if you’re incapacitated and unable to do so yourself. By the same token, financial power of attorney gives your spouse the authority to manage your financial affairs. And be sure to also create a living will, so that your spouse will know exactly how you want your medical care managed in the event of your incapacity.

Ensure parental rights are protected: While the biological parent of a child in a same-gender marriage is of course automatically granted parental rights, the non-biological spouse/parent still faces a number of legal complications. Because the Supreme Court has yet to rule on the parental rights of non-biological spouses/parents in a same-gender marriage, there is a tangled, often-contradictory, web of state laws governing such rights.

To ensure the full rights of a non-biological parent, you may want to consider second-parent adoption. But, by using a variety of unique planning strategies, your Personal Family Lawyer can provide non-biological, same-gender parents with nearly all parental rights without going through adoption. Using 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.

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

Marc Garlett Estate Planning Attorney

Whenever the topic of estate planning comes up, people invariably mention creating a will. And with good reason—having a will is a foundational aspect of your estate plan.

However, a will is only one small part of effective planning. In fact, if your plan consists of a will alone, you’re guaranteeing your family will have to go to court when you die. There’s a saying in this field of law: “Where there’s a will, there’s a probate.” And it’s no laughing matter.

One of my primary goals as an estate planning attorney is to keep my clients’ families out of court and out of conflict no matter what. Yet with only a will in place, your plan will fall woefully short of that goal, leaving your loved ones—and yourself, if you become incapacitated —susceptible to getting stuck in an unnecessary, expensive, time-consuming, and public court process.  

Here’s why having just a will is not enough:

A will offers no protection against incapacity
Awill helps ensure your assets are properly distributed when you die. But it offers no protection if you become incapacitated and are unable to make decisions about your own medical, financial, and legal needs.

Should you become incapacitated with only a will in place, your family would have to petition the court to appoint a guardian or conservator to manage your affairs, which can be extremely costly, time consuming, and traumatic.

Your family must go to court
While you may think having a will allows your loved ones to inherit your assets without court intervention, this is not true. For your assets to be legally transferred to your beneficiaries, your will must first pass through the court process called probate.

The probate process can be extremely distressing for your loved ones. The proceedings can drag out over years, and in most instances, your family will have to hire an attorney, generating hefty legal bills that can quickly drain your estate.

Moreover, probate is public, so anyone can find out the value and contents of your estate. They can also learn what and how much your family members inherit, making them tempting targets for frauds and scams.

And if you think you can just pass on your assets using beneficiary designations to avoid all of this… well, that’s just asking for trouble.

A will doesn’t protect against creditors, lawsuits, or poor decisions
Passing on your assets using a will leaves those assets vulnerable to several potential threats. Your assets are not only subject to claims made by a beneficiary’s creditors, but they are also vulnerable to lawsuits and divorce settlements the beneficiary may be involved in. And if your beneficiary is immature or has poor judgment, a sudden windfall of cash could cause serious problems.

Not all assets are covered by a will
Some assets can’t even be included in a will. For example, a will only covers assets or property owned solely in your name. It does not cover property co-owned by you with others listed as joint tenants, nor does a will cover assets that pass directly to a beneficiary by contract, such as a life insurance policy or retirement account.

Don’t let your plan fall short
Though a will is an integral part of your estate plan, a will is almost never enough by itself. Instead, wills are often combined with other planning vehicles, such as living trusts, to provide a level of protection devoid of any gaps or blind spots. And here’s the thing: If your plan is incomplete, it’s your family that suffers, having to clean it all up after you are gone.

I want to empower you to feel confident that you have the right  combination of planning solutions for your family’s unique circumstances. Please let me know if you have any questions.

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

Marc

In the first part of this series, we discussed one of the most frequent causes for dispute over your estate plan. Here, we’ll look at another leading cause for dispute and offer strategies for its prevention.

Contesting the validity of wills and trusts
The validity of your will and/or trust can be contested in court for a few different reasons. If such a contest is successful, the court declares your will or trust invalid, which effectively means the document(s) never existed in the first place. Obviously, this would likely be disastrous for everyone involved, especially your intended beneficiaries.

However, just because someone disagrees with what he or she received in your will or trust doesn’t mean that person can contest it. Whether or not the individual agrees with the terms of your plan is irrelevant; it is your plan after all. Rather, he or she must prove that your plan is invalid (and should be thrown out) based on one or more of the following legal grounds:

  • The document was improperly executed (signed, witnessed, and/or notarized) as required by state law.
  • You did not have the necessary mental capacity at the time you created the document to understand what you were doing.
  • Someone unduly influenced or coerced you into creating or changing the document.
  • The document was procured by fraud.

Furthermore, only those individuals with “legal standing” can contest your will or trust. Just because someone was intimately involved in your life, even if they’re a blood relative, doesn’t automatically mean they can legally contest your plan.

Those with the potential for legal standing generally fall into two categories: 1) Family members who would inherit, or inherit more, under state law if you never created the document. 2) Beneficiaries (family, friends, and charities) named or given a larger bequest in a previous version of the document.

  Solution: There are times when family members might contest your will and/or trust over legitimate concerns, such as if they believe you were tricked or coerced into changing your plan by an unscrupulous caregiver. However, that’s not what I’m addressing here.

Here, we’re looking at—and seeking to prevent—contests which are attempts by disgruntled family members and/or would-be beneficiaries seeking to improve the benefit they received through your plan. We’re also seeking to prevent contests that are a result of disputes between members of blended families, particularly those that arise between spouses and children from a previous marriage. 

First off, working with an experienced lawyer is of paramount importance if you have one or more family members who are unhappy—or who may be unhappy—with how they are treated in your plan. This need is especially critical if you’re seeking to disinherit or favor one part of your family over another. 

Some of the leading reasons for such unhappiness include having a plan that benefits some children more than others, as well as when your plan benefits friends, unmarried domestic partners, and/or other individuals instead of, or in addition to, your family. Conflict is also likely when you name a third-party trustee to manage an adult beneficiary’s inheritance because he or she is likely to be negatively affected by the sudden windfall of money.

In these cases, it’s vital to make sure your plan is properly created and maintained to ensure these individuals will not have any legal ground to contest your will or trust. One way you can do this is to include clear language that you are making the choices laid out in your plan of your own free will, so no one will be able to challenge your wishes by claiming your incapacity or duress.

Beyond having a sound plan in place, it’s also crucial that you clearly communicate your intentions to everyone affected by your will or trust while you’re still alive, rather than having them learn about it when you’re no longer around. Indeed, we often recommend holding a family meeting (which we can help facilitate) to go over everything with all impacted parties.

Outside of contests originated by disgruntled loved ones, the potential for your will or trust to cause dispute is significantly increased if you have a blended family. 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. 

To reduce the likelihood of dispute, it’s crucial that your plan contain clear and unambiguous terms spelling out the beneficiaries’ exact rights, along with the rights and responsibilities of executors and/or trustees. Such precise terms help ensure all parties know exactly what you intended.

If you have a blended family, it’s also essential that you meet with all affected parties while you’re still alive (and of sound mind) to clearly explain your wishes in person. Sharing your intentions and hopes for the future with your spouse and children is key to avoiding disagreements over your true wishes for them.

Prevent disputes before they happen
The best way to deal with estate planning disputes is to do everything possible to make sure they never occur in the first place. This means working with a trusted attorney to put planning strategies in place aimed at anticipating and avoiding common sources of conflict. Moreover, it means constantly reviewing and updating your plan to keep pace with your changing circumstances and family dynamics.

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

Because getting divorced can be overwhelming on so many different levels, updating your estate plan often takes a back seat to other seemingly more-pressing priorities. But failing to update your plan for divorce can have potentially tragic consequences, some of which you may have never considered before.

In fact, this is something your divorce attorney probably won’t think to bring up, but it’s literally one of the most critical matters you need to handle if you’re ending your marriage. Last week, I discussed the first two estate planning changes you must make—updating your power of attorney documents and beneficiary designations—and today we’ll share the remaining three.

3. Create a new will

You should create a new will as soon as you decide to get divorced, because once you file, you may not be able to change your will. Rethink how you want your assets divided upon your death. This most likely means naming new beneficiaries for any assets that you’d previously left to your future ex and his or her family. And unless it’s your wish, you’ll probably no longer want your ex—or any of his or her family—listed as your will’s executor or administrator, either.

California has community-property statutes that entitle your surviving spouse to a certain percentage of the marital estate upon your death, regardless of what’s in your will. This means if you die before the divorce is final, you probably won’t be able to entirely disinherit your surviving spouse through the new will.

However, it’s almost certain you wouldn’t want him or her to get everything. Given this, you should update your will as soon as possible once divorce is inevitable to ensure the proper individuals inherit the remaining percentage of your estate should you pass away while your divorce is still ongoing.

4. Amend your existing trust or create a new one
If you have a revocable trust set up, you’ll want to review and update it, too. Like wills, the laws governing if, when, and how you can alter a trust during a divorce are complex. In addition to reconsidering what assets your ex-spouse should receive through the trust, you’ll probably want to replace him or her as a successor trustee if they are so designated.

And if you don’t have a trust in place, you should seriously consider creating one, especially if you have minor children. Trusts provide a wide range of powers and benefits unavailable through a will, and they’re particularly well-suited for blended families. Given the likelihood that both you and your spouse will eventually get remarried—and perhaps have more children—trusts are an invaluable way to protect and manage the assets you want your children to inherit.

By using a trust, for example, should you die or become incapacitated while your kids are minors, you can name someone of your choosing to serve as successor trustee to manage their money until they reach adulthood, making it impossible for your ex to meddle with their inheritance.

Beyond this key benefit, trusts afford you several other levels of enhanced protection and control not possible with a will. So you should at least discuss creating a trust with an experienced lawyer before ruling out the option entirely.

5. Revisit your plan once your divorce is final
During the divorce process, your main planning concern is limiting your soon-to-be ex’s control over your life and assets should you die or become incapacitated before divorce is final. Given this, the individuals to whom you grant power of attorney, name as trustee, designate to receive your 401k, or add to your estate plan in any other way while the divorce is ongoing are often just temporary.

Once the divorce is final and your marital property has been divided up, you should revisit all your estate planning documents and update them accordingly based on your new asset profile and living situation. From there, your plan should continuously evolve along with your life circumstances, particularly following major life events, such as getting remarried, having additional children, and/or when close family members pass away.

Don’t wait; act now!

Even though divorce can be one of life’s most difficult transitions, it’s vital that you make the time to update your estate plan during this trying time. Meet with a trusted estate planning attorney to review your plan immediately upon realizing that divorce is unavoidable.

Putting off updating your plan, even for a few days, during a divorce can make it legally impossible to change certain parts of your plan, so act immediately. And if you’ve yet to create any estate plan at all, an impending divorce is the perfect time to finally take care of this crucial task.

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

Template wills and other cheap legal documents are among the most dangerous choices you can make for the people you love. These plans can fail to keep your family out of court and out of conflict, and can leave the people you love most of all—your children—at risk.

The people you love most
It’s probably distressing to think that by using a cut-rate estate plan you could force your loved ones into court or conflict in the event of your incapacity or death. And if you’re like most parents, it’s probably downright unimaginable to contemplate your children’s care falling into the wrong hands.

Yet that’s exactly what could happen if you rely on free or low-cost fill-in-the-blank wills found online, or even if you hire a lawyer who isn’t equipped or trained to plan for the needs of parents with minor children.

Naming and legally documenting guardians entails a number of complexities that most people aren’t aware of. Even lawyers with decades of experience frequently make at least one of six common errors when naming long-term legal guardians.

If wills drafted with the help of a professional are likely to leave your children at risk, the chances that you’ll get things right on your own are much worse.

What could go wrong?
If your DIY will names legal guardians for your kids in the event of your death, that’s great. But does it include back-ups? And if you named a couple to serve, how is that handled? Do you still want one of them if the other is unavailable due to illness, injury, death, or divorce?

And what happens if you become incapacitated and are unable to care for your children? You might assume the guardians named in the DIY will would automatically get custody, but your will isn’t even operative in the event of your incapacity.

Or perhaps the guardians you named in the will live far from your home, so it would take them a few days to get there. If you haven’t made legally-binding arrangements for the immediate care of your children, it’s possible they will be placed with child protective services until those guardians arrive.

Even if you name family who live nearby as guardians, your kids are still at risk if those guardians are not immediately available if and when needed.

And do they even know where your will is or how to access it? There are simply far too many potential pitfalls when you go it alone.

Kids Legal Planning
To ensure your children are never raised by someone you don’t trust or taken into the custody of strangers (even temporarily), consider creating a comprehensive Kids Protection Plan®.

Protecting your family and assets in the event of your death or incapacity is such a monumentally important task you should never consider winging it with a DIY plan. No matter how busy you are or how little wealth you own, the potentially disastrous consequences are simply too great—and often they’re not even worth the paper they’re printed on.

Plus, proper estate planning doesn’t have to be a depressing, stressful, or morbid event. In fact, we work hard to ensure our planning process is as stress-free as possible.

What’s more, many of our clients actually find the process highly rewarding. Our proprietary systems provide the type of peace of mind that comes from knowing that you’ve not only checked estate planning off your to-do list, but you’ve done it using the most forethought, experience, and knowledge available.

Act now
If you’ve yet to do any planning, contact us to schedule a Family Estate Planning Session. This evaluation will allow us to determine your best option.

If you’ve already created a plan—whether it’s a DIY job or one created with another lawyer’s help—contact us to schedule an Estate Plan Review and Check-Up. We’ll ensure your plan is not only properly drafted and updated, but that it has all of the protections in place to prevent your children from ever being placed in the care of strangers or anyone you’d never want to raise them.

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

 

 

 

 

 

 

Go online, and you’ll find tons of websites offering do-it-yourself estate planning documents. Such forms are typically quite inexpensive. Simple wills, for example, are often priced under $50, and you can complete and print them out in a matter of minutes.

In our uber-busy lives and DIY culture, it’s no surprise that this kind of thing might seem like a good – if not great – deal. You know estate planning is important, and even though you may not be getting the highest quality plan, such documents can make you feel better for having checked this item off your life’s lengthy to-do list.

But this is one case in which SOMETHING is not better than nothing, and here’s why:

A false sense of security
Creating a DIY will online can lead you to believe that you no longer must worry about estate planning. You got it done, right?

Except that you didn’t. In fact, you thought you “got it done” because you went online, printed a form, and had it notarized, but you didn’t bother to investigate what would happen with that document in the event of your incapacity or death.

In the end, what seemed like a bargain could end up costing your family more money and heartache than if you’d never gotten around to doing anything at all.

Not just about filling out forms
Unfortunately, because many people don’t understand that estate planning entails much more than just filling out legal documents, they end up making serious mistakes with DIY plans. Worst of all, these mistakes are only discovered when you become incapacitated or die, and it’s too late. The people left to deal with your mistakes are often the very ones you were trying to do right by.

The primary purpose of wills and other estate planning tools is to keep your family out of court and out of conflict in the event of your death or incapacity. With the growing popularity of DIY wills, tens of thousands of families (and millions more to come) have learned the hard way that trying to handle estate planning alone can not only fail to fulfill this purpose, it can make the court cases and conflicts far worse and more expensive.

The hidden dangers of DIY wills
From the specific state you live in and the wording of the document to the required formalities for how it must be signed and witnessed, there are numerous potential dangers involved with DIY wills and other estate planning documents. Estate planning is most definitely not a one-size-fits-all deal. Even if you think you have a simple situation, that’s almost never the case.

The following scenarios are just a few of the most common complications that can result from attempting to go it alone with a DIY will:

  • Improper execution: For a will to be valid, it must be executed (i.e. signed and witnessed or notarized) following strict legal procedures. If your DIY will doesn’t specific guidance or you fail to follow this procedure precisely, your will can be worthless.
  • Court challenges: Creditors, heirs, and other interested parties will have the opportunity to contest your will or make claims against your estate. Though wills created with an attorney’s guidance can also be contested, DIY wills are not only far more likely to be challenged, but the chances of those challenges being successful are much greater than if you have an attorney-drafted will.
  • Thinking a will is enough: A will alone is almost never sufficient to handle all of your legal affairs. In the event of your incapacity, you would also need a health care directive, and/or a living will plus a durable financial power of attorney. In the event of your death, a will does nothing to keep your loved one’s out of court. And if you have minor children, having a will alone could leave your kids’ at risk of being taken out of your home and into the care of strangers, at least temporarily.

In many ways, DIY estate planning is the worst choice you can make for the people you love because you think you’ve got it covered, when you most certainly do not.

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

Aretha Franklin, heralded as the “Queen of Soul,” died from pancreatic cancer at age 76 on August 16th at her home in Detroit. Like Prince, who died in 2016, Franklin was one of the greatest musicians of our time. Also like Prince, she died without a will or trust to pass on her multimillion-dollar estate.

Franklin’s lack of estate planning was a huge mistake that will undoubtedly lead to lengthy court battles and major expenses for her family. What’s especially unfortunate is that all this trouble could have been easily prevented.

A common mistake
Such lack of estate planning is common. A 2017 poll by the senior-care referral service, Caring.com, revealed that more than 60 percent of U.S. adults currently do not have a will or trust in place. The most common excuse given for not creating these documents was simply “not getting around to it.”

Whether or not Franklin’s case involved similar procrastination is unclear, but what is clear is that her estimated $80-million estate will now have to go through the lengthy and expensive court process known as probate, her assets will be made public, and there could be a big battle brewing for her family.

Probate problems
Because Franklin was unmarried and died without a will, Michigan law stipulates that her assets are to be equally divided among her four adult children, one of whom has special needs and will need financial support for the rest of his life.

It’s also possible that probate proceedings could last for years due to the size of her estate. And all court proceedings will be public, including any disputes that arise along the way.

Such contentious court disputes are common with famous musicians. In Prince’s case, his estate has been subject to numerous family disputes since his death two years ago, even causing the revocation of a multimillion-dollar music contract. The same thing could happen to Franklin’s estate, as high-profile performers often have complex assets, like music rights.

Learn from Franklin’s mistakes
Although Franklin’s situation is unfortunate, you can learn from her mistakes by beginning the estate planning process now. It would’ve been ideal if Franklin had a will, but even with a will, her estate would still be subject to probate and open to the public. To keep everything private and out of court altogether, Franklin could’ve created a will and a trust. And, within a trust, she could have created a Special Needs Trust for her child who has special needs, thereby giving him full access to governmental support, plus supplemental support from her assets.

While trusts used to be available only to the mega wealthy, they’re now used by people of all incomes and asset values. Unlike wills, trusts keep your family out of the probate court, which can save time, money, and a huge amount of heartache. Plus, a properly funded trust (meaning all of your assets are titled in the name of the trust) keeps everything totally private.

Trusts also offer several protections for your assets and family that wills alone don’t. With a trust, for example, it’s possible to shield the inheritance you’re leaving behind from the creditors of your heirs or even a future divorce.

Don’t wait another day
Regardless of your financial status, estate planning is something that you should immediately address, especially if you have children. You never know when tragedy may strike, and by being properly prepared, you can save both yourself and your family massive expense and trauma.

Don’t follow in Franklin’s footsteps; use her death as a learning experience. Proper estate planning can keep your family out of conflict, out of court, and out of the public eye. If you’re ready to create a comprehensive estate plan, or need your plan reviewed, call us today.

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

 

Marc Garlett Estate Planning Attorney

Most Americans do not have a simple will as part of their estate plan. You might believe that a will is only for the rich and famous, and not the average person who has a far smaller net worth. Or, you may think that a will is entirely unnecessary if you have a trust, jointly owned property, or have named beneficiaries on your insurance.

So, to the question of the day – do you really need a will? The short answer is “yes.” In fact, everyone who owns anything – no matter how much or how little – should have a will. This is because a will puts you in charge of directing your wishes and the distribution of assets upon your death. Without a will or other estate plan you forfeit control and state law determine who gets what after your death. Even if you have a trust, jointly owned property, or have named beneficiaries on your insurance, a will is critically important as a “backup” plan.

As a practical matter, the simpler your affairs are (and the fewer assets you own) the less complicated your will and overall estate plan needs to be. But keep in mind, it does not take much to complicate your estate, legally speaking. For example, if you have minor children you must name a guardian for those children in the event of your death – and not only in your will as most traditional estate plans do, that leaves holes which could cause your minor children to be placed into temporary foster care, something which no parent wants.

Many people believe if they have made beneficiary designations on life insurance policies, property deeds or retirement accounts that a will is not necessary at all.  While it is true those particular designations ensure the people you intended receive benefits or inherit those assets, the distribution stops there. If there are other assets you own – such as a car, a china set, or jewelry for examples – or if you would like to give part of your estate to a charitable organization, a will becomes essential.

Furthermore, when a person dies without a will (referred to as intestate), the estate goes into probate. Probate is a judicial process by which the court decides the rightful heirs and distribution of the assets of a deceased person. Going through probate without a will can be both more time consuming and expensive than it is with a will. This is because your will can waive certain probate requirements (like having the executor post a bond or obtain judicial approval to have an estate sale). And again, probate without a will follows the state’s intestacy laws which may likely result in a less-than-perfect split of assets that may not be in line with the deceased’s wishes and often leaves many surviving loved ones unhappy.

Family dynamics also play a part in estate planning, something state intestacy laws do not account for. Many people have blended families. There may have been second or third marriages. Older couples may choose to cohabitate after a death or divorce and never legally get married. You may have to treat your children differently on current accounts due to distance, and without a will, those assets will not be distributed equitably.

It is important to note that a will can also include a no contest clause, reducing the likelihood of potential heirs arguing over its contents.

Creating a will as part of your estate plan is primarily about passing your wealth to your loved ones only after you die since a will only “works” after it’s gone through the probate court process. A will gives you both independence and control of what happens to your assets after your death. Instead of leaving the distribution of your property to California’s intestacy laws, a will can put your wishes down on paper and direct a selected person to carry out your desires exactly as expressed.

But before you decide a will is all you need, read my article next week to learn more about another, more comprehensive strategy — the revocable living trust.

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

Marc Garlett 91024

Estate Planning, 91024Most people know they need a will. And many of them fully intend on writing a will … someday. But life is busy and the will keeps getting put off. Eventually, someday becomes never.. In fact, nearly half of American adults will die without a will in place. So what happens if you die without one?

The Legislature Writes Your Will

Your state’s legislature has passed laws that dictate who will get the property of someone who dies without a valid will. These are called the laws of “intestate succession.” (“Testament” is simply another name for a will. If you die without a will, you are said to have died “intestate”-that is, without a testament.)

The laws of intestate succession generally give your property to your heirs at law – your nearest family members. If you leave a spouse and children (or grandchildren), your property will usually be divided among them. If you die without children, some of your property will probably be given to your parents, siblings, nieces, or nephews. Different states use different percentages for dividing the property. If you don’t leave any close family members, your property may be divided among more extended family, such as grandparents, aunts, uncles, and cousins. In the rare situation where you don’t have any close-enough blood relatives alive when you die, the state government gets to have your property.

As an example, suppose that you live in California and your only close family members are your spouse and your sister. Under California law, if you die without a will, your spouse will get half your property and your sister will get the other half. But if you leave behind your spouse and three children, then your spouse will get one third of your property, and your children will equally divide the rest. (This doesn’t include things that you and your spouse owned together; in California, your spouse gets to keep all of those.)

Without a will, you also have no control over what happens to your family heirlooms or other special items. In a will, for example, you can leave your wedding ring to your daughter, or your coin collection to your brother. But without a will, all those special things may end up being sold so that the money can be divided among your heirs.

A Judge Chooses the Guardian for Your Children

If you have young children, maybe the most important part of your will is naming someone to be their guardian, in case both you and your children’s other parent die.

It always takes a court order to appoint a guardian. But the judge will appoint the person you name in your will, unless there are serious reasons not to (for example, if the person has been convicted of child abuse). If you die without a will, however, and haven’t named a guardian, the judge will have to choose someone without your input.

As careful and caring as the judge may be, he or she doesn’t know your children or what you would decide for them. The judge may make a decision that you would never make yourself. And if a guardian has to be named, he or she will become the most important person in your children’s lives, helping them overcome the tragedy of losing their parents and influencing them to go on to lead happy, productive lives. Do you really want to leave that decision up to a complete stranger?

With help from the right attorney, writing a will can be easier than you may think. We would love to empower you to legally protect and financially provide for your family, no matter what the future holds. Call us today and schedule an appointment to talk about how to ensure your family is always well taken care of.
Marc Garlett 91024

 

inheritance 91024One of the most prevalent misconceptions when it comes to estate planning is that a Will is all most people need. But before you fall into this trap with your own estate plan, consider these five circumstances where a will simply doesn’t work:

Avoiding Court. To take effect, a will must go through the probate process at your death (or a conservatorship if you become incapacitated while still living), which can be lengthy and deny your heirs (or family while you are incapacitated) a quick resolution to the distribution of your estate (or the ability to pay your bills while you are incapacitated). There are also situations which complicate probate even further such as having minor children or owning property in another state.

Protecting privacy. Once a will is open to probate, it is a matter of public record and open to everyone — meaning that anyone can get access to it and learn the details on everything you owned and exactly where it is going. Wills can also contain personal information that is attractive to identity thieves.

Protecting you in case of incapacity. Since a will only goes into effect upon death, it provides zero protection for you if you should become incapacitated and no longer able to handle your own financial affairs or make decisions about your health care. If that were the case, your family would have to go through the stress and expense of petitioning the court to appoint a guardian or conservator to handle your affairs. This is costly and can even drain your entire estate. This can easily be avoided by having advance medical directives and a financial power of attorney drawn as part of your comprehensive estate plan.

Protecting your assets. Passing assets to heirs via a will does not provide any protection for those assets. Once they are distributed, they become vulnerable to a divorce actions, civil lawsuits, creditors, and even bad financial decisions by your beneficiaries. Placing your assets in a trust gives you control over how and when they are distributed, and protects them from creditors and judgments. This is one of the most powerful aspects of a living trust.

Passing real estate. When your home passes to your heirs through Probate (which it will do without a trust in place) it loses the step up in tax basis that a trust can provide. That means your heirs (who are most likely your family) will have to pay capital gains tax on the difference between the value of the home when you bought it versus the value of the home now. This can be another huge financial burden to bear on top of the already expensive cost of Probate.

See, trusts aren’t just for the wealthy because wills aren’t always the best way to protect and pass on even modest financial assets. Comprehensive estate planning should use living trusts and other legal tools to preserve your assets and make things as easy as possible on your family. Taking care of your family, after all, is really what it’s all about.

To you family’s health, wealth, and happiness,
Marc Garlett 91024