ESTATE PLANNING

Published on: April 20, 2009

Issues of the “Sandwch Generation”

Many people in San Diego and throughout the country find themselves in the “sandwich generation.” They have children at home with all their issues, problems, and needs and they also have aging parents who have their own issues, problems, and needs. By some estimates, as many as 16 – 18 million people have the dual responsibility of caring for their elderly parents and their own young children. How do you approach your parents to discuss such things as an estate plan, health care directives, and planning for possible long term care?

One website uses the acronym TEMPO for advice on the talks that you should have with your parents. Topics that need to be addressed are long term health care, advance health care directives, a will or a trust in place, and their wishes about end of life issues.

T- Timing. It important to choose a good time to talk about such issues.

Published on: April 1, 2009

New Guide for Seniors Available in May

by Scott C. Soady

Seniors in San Diego as in other cities across California have many issues that are unique to them: Elder abuse, Medi-Cal planning and eligibility, social security, health care directives and powers of attorney, rights as a grandparent, and various estate planning issues.

There is a great publication published by the California State Bar that will be coming out in May. The guide called Seniors and the Law: A Guide for Maturing Californians is a comprehensive publication which addresses laws and legal issues relating to seniors.

The publication was first printed in 2003 but has been updated for the estimated 5.5 million residents of California who are over 60.

Published on: March 29, 2009

Procrastination Has Its Problems

by Scott C. Soady

We know that many Americans procrastinate about getting a will or a trust done. Especially in this economy where people have a lot of challenges, an estate plan, even if desired, sometimes doesn’t work itself up to the top of one’s To Do List. What happens if you procrastinate about getting an estate plan?

Probate – Without a trust or a will, your estate will wind up in the probate court. Statutory fees will have to be paid to the probate attorney and the administrator of your estate. Probate is not private – anyone can view probate records – and the distributions to your heirs can be delayed for as much as a year and in some cases, longer.

Without a will or a trust, your surviving spouse may not inherit your entire estate. Your spouse will inherit all the community property but will only get 1/2 to 1/3 of your separate property. The remaining property will go to the children.

Published on: March 17, 2009

Families Need to Greive Before Tackling Estate Issues

by Scott C. Soady

Sometimes we get calls within a day or two of a loved one’s passing away by family members who wonder what they should do. The first thing that should be done is to handle the bereavement process. Spend time with family and friends and begin the grieving process before anything else.

There are many resources on line and in San Diego for information on the grieving process.

The National Hospice and Palliative Care Organization is the largest nonprofit organization representing hospice and palliative care programs. In San Diego we have the Elizabeth Hospice, San Diego Hospice, and Hospice by the Sea to name just a few. For people dealing with the death of a child there is the Empty Cradle and the Jenna Druck Foundation.

Published on: March 10, 2009

Update, Update, Update Your Estate Plan!

by Scott C. Soady

Accidental disinheritance is a growing problem, not only in San Diego, but across the country. We have seen it in the cases of Anna Nicole Smith and Heath Ledger. Failure to update estate planning documents or beneficiary designations can cause unintended disinheritance or unequal distributions that may not have been intended.

One of the ways people accidentally cause a disinheritance is in a stepparent situation. As an example, suppose a man has a will he created when married to the mother of his children. After she dies, he remarries and writes a new will leaving everything to his new wife. When he dies, the new wife inherits everything and then leaves her estate to her own children. The husband’s children (her stepchildren) are disinherited, which was probably not the father’s intent. The way to avoid this was to have a trust set up with the new wife which could have provided that his wife had the use of the assets during her lifetime but upon her death, the husband’s children participated in the distributions. This is a situation where an experienced estate planning lawyer would have been worth the expense to draft an appropriate will or trust to take into consideration possible future scenarios.

Another way that a failure to update can cause difficulties is where a child is born after the estate plan is created and the child has special needs. A trust, if drafted correctly, usually will provide for after born children without the necessity to update the trust, however, if a child born after the trust is created has special needs and is on public assistance, a special needs trust needs to be prepared so if the parents die, the child does not receive his inheritance outright and lose his public assistance.

Published on: February 24, 2009

Bequests to “Care Custodians” Scrutinized

by Scott C. Soady

Many elderly people in San Diego are cared for at the end of their lives by caregivers and friends rather than family members. Sometimes they want to provide for those caregivers or friends in their will or trust. Such bequests however can be challenged by family members and other beneficiaries after a death.

The California Probate Code lists seven categories of people who are presumptively unable to inherit under a will or a trust. The list includes the person who drafted the will or trust, the law firm, attorneys or employees of the law firm that are asssociated with the drafting and “care custodians.” A care custodian is defined to include a number of agencies and any “individual providing health care services or social services to elders or dependent adults.”

Those persons mentioned in Probate Code section 21350 who are left an inheritance are subject to higher scrutiny before they can inherit. They can inherit only if they can prove by “clear and convincing evidence” that the bequest to them “was not the product of fraud, menace, duress, or undue influence.” This can be difficult to prove after the death of the individual making the will or trust.

Published on: February 20, 2009

When to Plan for Long Term Health Care

by Scott C. Soady

The simple answer to this question is “before you need it” however knowing when that is can often be difficult. Most of us know to plan for retirement but sometimes we don’t recognize the need to plan for when we or our parents can no longer take care of ourselves.

People are living longer and more people will need long term care than in past generations. Some people do not realize that often what strikes the elderly is not a physical ailment but a mental condition which Medicare will not cover. Medicare typically covers such things as skilled nursing but it usually does not cover custodial care. Paid caregivers at home or home health aides, a nursing home, or other assisted living facilities will not usually be paid for by Medicare.

The time to consider the expenses of long term care is before it is needed so that you can explore such options as long term health care insurance, a spend down of assets to qualify for Medi-Cal, or community services that may be available. Taking the time now to plan, before there is a need, will give you peace of mind to deal with the difficult decisions that arise when the time comes.

Published on: February 17, 2009

No Inheritance Tax in California

by Scott C. Soady

Those of us who live here in San Diego know what a great place San Diego is to live and work. Besides the wonderful weather and the proximity to the beautiful beaches of La Jolla, Del Mar, and other coastal areas, there is another benefit you might not realize. California is one state that does not have an inheritance tax.

17 states and the District of Columbia assess an inheritance tax on the portion of an estate received by an individual. This is in addition to the federal estate tax levied on the estate before it is distributed. As we reported in earlier blogs, a federal estate tax will have to be paid on estates over $3.5 million in 2009. States which have an inheritance tax assess it separately against each beneficiary and each beneficiary is responsible for paying the tax to the state, although there may be a lower tax rate for spouses and children of the deceased as opposed to a distant cousin.

A revocable living trust can help reduce estate taxes for couples in California as can other advanced estate planning techniques. If you need to set up a trust or want to know your options for reducing estate taxes, contact us. The experienced estate planning attorneys at Law Office of Scott C. Soady, A Professional Corporation would be happy to meet with you at no charge for your first consultation.

Published on: February 12, 2009

San Diegans Following in Famous Footsteps?

by Scott C. Soady

Are you following in the footsteps of past Americans utilizing trusts?

If you have a revocable living trust, you are in good company. Many famous people from the past utilized trusts as part of their estate plan.

When the 13 colonies declared independence in 1776, the richest man was a Senator from Pennsylvania named William Bingham. He created a trust in 1804 for his vast estate in Maine.

Published on: February 5, 2009

Why Estate Planning is Critical for Women

by Scott C. Soady

There are some interesting statistics about women in this country. We all know that women live longer than women and many outlive their husbands. But did you know that 75% of women will become widows at some point in their life? Unbelievably, the average age of a woman when she becomes a widow is 55 years of age! Some agencies compiling statistics suggest that the odds of needing long term care at some point is 50%. Can you guess who the caregivers will be? Women. Women are three times more likely than men to be a caretaker for their spouse. In addition women often wind up being the caregiver for one or both parents.

Because women are having to pick up the pieces after a spouse’s death or incapacity and deal with financial issues, women own a majority of the publicly traded stock in this country. Women own 70% of the wealth and inherit 75% of all the estates. What all these statistics show is that it is essential for women to participate in the estate planning process and understand basic estate planning just as it is advisable for women to become educated about financial issues.

Basic estate planning documents that are recommended for a married couple are a revocable living trust, pour over wills, durable powers of attorney for finances, and advance health care directives. Without such documents, what happens when a husband becomes incapacitated and is unable to sign necessary documents to sell a house, obtain a refinance, or create a trust? The wife has to go to court to have her husband declared incompetent and have herself appointed as his conservator, a costly, stressful, and sometimes lengthy process.