Articles Posted in ESTATE PLANNING

In San Diego, California [as well as across the United States], April 16 is National Healthcare Decisions Day. In San Diego, with over 1,000,000 residents alone, this is a very important topic. In California, the Advance Health Care Directive is a form which is included in a living trust to insure that your wishes are carried out if you cannot make them for yourself due to incapacity or other factors.

A recent article in the San Diego North County Times highlights this issue. In this article, George Chamblin writes that a “new survey finds that most families, willing to hold meaningful discussions on other issues, are still hesitant to deal with death”. In our law firm of Law Office of Scott C. Soady, A Professional Corporation, LLP, we assist families in beginning the discussion on this topic. In addition, you can feel free to e mail to our firm for assistance in this discussion.

In San Diego, many residents have no estate plan. In our firm of Law Office of Scott C. Soady, A Professional Corporation, LLP, we offer a complimentary and confidential consultation to determine which estate plan is right for you. You can also feel free to e mail us. In San Diego, in the Probate Courts, the legal fee is 4% of the first $100,000, 3% of the second $100,000 and then 2% of the remaining $100,000’s in incremental units. For example, if your house is valued at $500,000 and your debt on the house is $400,000, the legal fee is calculated from the gross fair market value and not the net.

A recent article highlights the problems with estate planning. This is not a problem unique to San Diego. In San Diego, a revocable living trust can have the effect of avoiding probate fees and costs if properly set up and properly funded. The article addresses persons who procrastinate due to their fear of facing their own death, do not properly fund the trust with property which causes the estate to be placed into probate or try and do it themselves with out of date forms and documents.

Do not let this happen to you and your family. Our firm can assist with an estate plan which is within your budget and will save your family money and legal fees in the future. Failure to have an estate plan or failure to properly fund your estate plan can have the same effect of having the estate in probate court.

In San Diego, many residents are in the military. Also, in San Diego, many residents travel for business. There are many articles on this subject and they are easily searched in Google, Yahoo, MSN and other search engines with the key search terms for your own education. The AARP is a good source of information for seniors and non seniors alike and has an article regarding powers of attorney.

At our law firm of Law Office of Scott C. Soady, A Professional Corporation, LLP, we prepare individual estate plans based on individual needs. These can include a revocable living trust, durable power of attorney for finances, advanced health care directive and also other advanced estate planning strategies. Please feel free to e mail or call our office for any legal advice you need in this area.

In San Diego, a large number of residents have multiple retirement accounts which may include deferred compensation, deferred benefit or other compensation plan for retirement. These can take the form or an IRA; KEOGH; 403 plan or many others. Many parents also have a 529 plan for education for their children. Our firm does not give financial advice and are not financial planners or CPA’s. Our firm of Law Office of Scott C. Soady, A Professional Corporation can assist in advanced estate planning strategies to protect your legal rights and to obtain your legal goals of eliminating probate fees and costs and to protect your privacy in the distribution.

A recent article in the San Diego Union Tribune on April 20, 2008 focused on the Fleischman family. The husband is 53 and wants to retire from his job as a high school teacher in 7 years when he is 60. At that time, his now 12 year old son will be entering college as a freshman and his daughter, now 15, may be graduating early from high school and graduating college at the same time. The wife is a registered ER nurse and plans to work another 10 to 15 years.

The article does not state whether the Fleishman’s have a revocable living trust or estate plan in any form. If both of them were to pass away without a revocable lliving trust or other estate plan, their estate would need to be probated prior to distribution. Given the assets in the article, the probate fees and costs would be significant and would deplete the resources of the family which could have better been used for the children’s education.

In San Diego, California there are thousands of attorneys. Some attorneys in San Diego are in solo practice and some in partnerships or other business formations. It is, of course, not unusual for an attorney to pass away while representing current clients or having documents of former clients. Many clients do not know that there is a system in place for assisting client’s to have their original estate planning documents transferred. In addition, if the attorney lacks capacity to continue to represent clients or is no longer a member of the State Bar of California, then this system will also apply.

In this procedure, the original estate planning documents in the control of the attorney may be transferred to another attorney of to the Superior Court Clerk of the County in which the client’s last residence is. For ease of use, clients can contact the State Bar of California or the San Diego Superior Court Clerk’s Office.

Estate planning documents which are included in this are a signed original will, declaration of trust, trust amendment or other document modifying a will or trust, a signed original power of attorney, a signed nomination of conservatorship and some other writings.

Rancho Bernardo is in the City of San Diego even though it is far north. Our law firm of Law Office of Scott C. Soady, A Professional Corporation, LLP is located in Rancho Bernardo off the I-15 at Bernardo Center Drive. We offer a complimentary consultation for you to obtain information if the legal strategy of what estate plan is appropriate for your individual factual and family situation. Please feel free to e mail or call our firm.

Federal estate tax law provides a method by which families can reduce the tax consequences of transferring the family home to the younger generation. The device for accomplishing this is called a qualified personal residence trust (QPRT).

An individual may create a QPRT by transferring his or her residence to a trust (usually for the benefit of family members), while retaining for a particular period of time the right to live in the residence for free. The tax laws treat the transaction as a gift of the remainder interest in the trust, rather than as an outright gift of the residence itself. There is a tax on that gift, but there is no later tax on the value of the whole residence at the time of the grantor’s death, as there otherwise could be but for the use of the QPRT. As a rule, the more that a home can be expected to appreciate over the term of a trust, the more beneficial is the use of a QPRT.

In Mira Mesa, many people hold their real property in a revocable living trust. This is to protect their beneficiaries from probate fees and costs and to try and insure privacy in the distribution of their estate. In the below case [not from Mira Mesa] homes were taken from people without their consent and this affected their estate plan. Our firm of Law Office of Scott C. Soady, A Professional Corporation, LLP would be pleased to offer you a complimentary and confidential consultation either by phone, in person or e mail.

In one of the most controversial eminent domain decisions ever, the United States Supreme Court ruled in 2005 that a city’s exercise of its eminent domain powers to take private property in furtherance of an economic development plan satisfied the constitutional requirement that such power be used only for a “public use,” even though private developers stood to profit handsomely from the city’s actions. In reaction to that ruling, some state legislatures have been busy crafting legislation to limit the use of condemnation powers in such circumstances. For their part, the owners of property targeted for condemnation have considered how they still might fend off the taking, or, failing that, how to maximize the compensation that the government must pay.

In a recent case, a landowner was not able to defeat a condemnation initiated by a city so that a new hotel could be built on the property, but he did receive maximum compensation from an obviously sympathetic jury. The landowner was an immigrant who had spent two years and a lot of money renovating a warehouse and building a mail-order cigar business. When two private developers were unsuccessful in negotiations to buy the property as a site for a hotel, they instead reached an agreement with the city whereby the city would condemn the property for their desired use and the developers would pay the costs and fees associated with the condemnation.

When the city was first attempting to buy the property, it sent the landowner a toxic waste notice requiring him to investigate whether any toxins existed in the ground. The landowner tried to comply, but after spending many thousands of dollars he found no toxins. The city would later admit in the litigation that such an investigation was not really feasible so long as a building remained on the property. The toxic waste notice, and especially its suspicious timing, came to be seen as a tactic to put pressure on the landowner during the negotiations leading up to the condemnation.
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In Poway, many persons have a revocable living trust. This is an excellent estate planning strategy and the goals are to avoid probate fees and costs and also for privacy. A revocable living trust, however, is “tax neutral” and is not an advanced estate planning strategy. Our law firm of Law Office of Scott C. Soady, A Professional Corporation, LLP offers a complimentary consultation on advanced planning strategies and techniques in person, over the phone or by e mail. Our law firm works with Certified Public Accountants in the area of tax advice.

Upon the death of the owner of stock in a closely held corporation, the fair market value (“FMV”) of the stock must be determined before an estate tax return can be filed. For gifts of such stock, it is also necessary to ascertain the value of the stock for gift tax purposes. Unlike publicly traded stock, the value of which can be determined easily on the Internet or in a newspaper, stock in a closely held business has a value that is more difficult to nail down. By definition, the shares are held by a much smaller number of people and are not widely traded.

Fair market value means the price at which property would change hands between a willing buyer and a willing seller when neither party is under any compulsion to buy or sell and both parties have a reasonable knowledge of relevant facts. Calculating the FMV of closely held stock generally starts with an estimate of the total value of the closely held company itself. Application of discounts (or premiums) to account for the specific circumstances of the company then reduces (or increases) the FMV of the stock.
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In Chula Vista, there are many corporations. These are licensed, in the state of California, by the Department of Corporations. Our law office of Law Office of Scott C. Soady, A Professional Corporation, LLP can handle the incorporation of your business from start to finish. Please feel free to e mail our firm or call us for a complimentary consultation. A corporation can be part of an estate plan.

As a separate entity in the eyes of the law, a corporation does not go out of existence if one or more of its owners dies. Instead, a corporation stays alive until its owners decide otherwise. Transfer of the ownership of the corporation is accomplished by selling its stock. New owners are added either when existing owners sell some of their stock or the corporation itself sells more shares of stock. The smaller the enterprise, the more likely it is that the owners, for whom the corporation may be both their property and their employer, may agree to restrict the sale of the stock in order to maintain control.

The particular circumstances of each new business and the differences in the governing laws of the states make generalities difficult. That said, the factors on the debit side of the ledger for corporations include the costs of setting up the corporate entity, the need for a separate tax return, and the burden of “double taxation.” Double taxation means that the corporation is taxed on its profits, and the shareholders are then taxed on their dividends. On the credit side are limited liability for the owners and easy transfer of ownership.

In National City, there are many business entities which are not incorporated. Our law firm of Law Office of Scott C. Soady, A Professional Corporation, LLP can handle the incorporation of your business and also assist with the legal requirements for your corporation to remain in good standing. A corporation can be part of an estate plan. Please feel free to e mail us or come in for an appointment to discuss your business succession planning as well as incorporating your business.

At or near the top of the list of characteristics favoring the corporate structure is the fact that, since the corporation is treated as a legal “person” separate from the people who own and run it, the shareholders as a rule are not personally liable for the corporation’s debts. Instead, their risk is confined to their investment in the company. To every rule there is an exception, however, and here the exception has the colorful legal name of “piercing the corporate veil.” If the owners do not comply with the statutory requirements for running a corporation, or if they blur the lines too much between corporate and personal finances, the legal fiction of the corporation as a separate entity is ignored and the owners are on the hook for the corporation’s losses.