Articles Posted in ESTATE PLANNING

In San Diego, many residents lead a very healthy life style. These life styles lead to longer life. As part of any estate plan, insurance can play a significant component. Our law firm of Law Office of Scott C. Soady, A Professional Corporation, LLP recommends you investigate any business by using the San Diego Better Business Bureau before purchasing any long term care insurance from a company or individual. In addition, you should also contact the California Department of Insurance to make certain of the valid license status and any other information which would be important in making such an essential decision as to the insurance provider.

Our office practices in estate planning and long term care for the elderly. Please feel free to contact our office by phone or e mail and we would be pleased to offer you a complimentary and confidential consultation. We have an excellent article regarding long term care on our website.

Longer life expectancies and the coming surge in the retirement-age population have increased the demand for long-term care, as well as for insurance as one means of paying for that care. Long-term care encompasses a broad range of services for those with a prolonged illness, disability, or mental disorder. Unlike the focus of traditional medical care exclusively on certain medical problems, the goal of long-term care is the maintenance of an individual’s level of functioning.

In San Diego, many residents do not have an estate plan. No one wants to discuss their death or mortality and this is normal. In San Diego Probate Courts, however, the cost to the beneficiaries of not having an estate plan can cost thousands of dollars which could best be used by the family and not the attorneys and administrators. Our firm of Law Office of Scott C. Soady, A Professional Corporation, LLP will be pleased to offer you a complimentary and confidential consultation in the estate planning area and determine which estate plan is most appropriate for your needs including a revocable living trust which is the most basic estate planning strategy which will avoid probate costs and fees. Please feel free to call us or e mail us to set up an appointment.

Below are some generic comments about estate planning for all to consider.

Even the most detailed and carefully crafted estate plan should be revisited periodically to make sure that it is in line with changing laws and life circumstances.

In San Diego, many companies are formed as a limited liability company. At our firm of Law Office of Scott C. Soady, A Professional Corporation, LLP, we can form a limited liability company for you as part of your estate plan. Please feel free to e mail our firm with any questions on this or any other estate planning questions.

A limited liability company (LLC) is a business structure that combines some of the best features of sole proprietorship’s, partnerships and corporations. LLC owners, like their counterparts for partnerships or sole proprietorship’s, report profits or losses on their personal income tax returns. Like a corporation, however, the owners of an LLC have “limited liability,” that is, they are shielded from personal liability for debts and claims arising from the business.

Limited Liability

In San Diego, many families file married filing joint. In addition to this important tax filing status with the IRS, married couples can also use the marital deduction rule for the surviving spouse. This can result in significant savings in estate tax when the first spouse dies however this is not tax avoidance and tax deferral. Our law firm of Law Office of Scott C. Soady, A Professional Corporation, LLP are not Certified Public Accountants however we can form an estate plan which protects your rights and obtains your goals of avoiding probate and minimizing tax consequences. Always consult your CPA as to the significance of any taxable event.

The federal estate tax marital deduction is one of the most important estate planning tools available to a married couple. The basic marital deduction rule is that, upon the death of the first spouse, the value of any interest in property passing to the surviving spouse is deducted from the decedent spouse’s gross estate. This means that the amount passing to the surviving spouse escapes taxation in the decedent spouse’s estate.

There is no limitation on the value of property that can qualify for the marital deduction. By transferring sufficient assets to the surviving spouse in the proper manner, estate tax liability upon the first spouse’s death can be completely avoided.

In San Diego, many residents have life insurance. There are many companies which provide life insurance services such as Pacific Life, Farmers, Metropolitan Life Insurance Company and many others. Our firm of Law Office of Scott C. Soady, A Professional Corporation does not endorse or represent any of these companies and these links are provided as a courtesy.

Our firm can prepare an estate plan for you which is tailored to your individual needs. Please e mail us for a complimentary and confidential consultation.

Even if you have a relatively modest estate, life insurance can be an important aspect of estate planning for the obvious reason that it can substantially increase the value of your estate. Where the death of a person is premature and a young family is in need of support, life insurance may be the primary means for the family’s financial survival.

In San Diego, there are many owner-only business’ which are in operation. The San Diego Chamber of Commerce and San Diego Better Business Bureau have a partial list of these. An estate plan can include not only real property but also retirements and savings accounts. Below is additional information.

As a result of recent tax law changes by the IRS, a new retirement savings account is now available for “owner-only businesses.” An “owner-only business” is either a business that employs only the owner and immediate family members or a business that employs only the owner and employees who by law may be excluded from participation in retirement plans. Excludable employees include employees under age 21, employees with less than a year of service or who work less than 1,000 hours per year, certain union employees, and certain nonresident alien employees.

The new plan, sometimes called an Individual (k) plan, can be set up both by incorporated businesses or unincorporated businesses such as sole proprietorships and partnerships. When compared with other types of business retirement plans, an Individual (k) plan allows more flexibility in its funding and larger contribution amounts.

San Diego, California has many schools. In San Diego, there are public schools and private schools. The are schools in San Diego in the University of California San Diego system and also in the San Diego State system as well as the University of San Diego and other schools which are private.

As an estate planning tool in San Diego, for individuals who want more control over their investments, a Coverdell Education Savings Account (formerly called an “Education IRA”) may be an attractive alternative to a 529 plan. A contributor to a Coverdell account can choose investments and change them, depending on his or her investment strategy. Earnings are tax-free as long as they are used for qualified education expenses. The 2001 tax law also has improved this method of saving for elementary, secondary, and college education costs. Beginning January 1, 2002, the annual limit on contributions will increase from $500 to $2,000.

An increase in the phase-out income range for married taxpayers filing jointly will allow more taxpayers to contribute to a Coverdell account. For beneficiaries with special needs, rules stopping contributions when the beneficiary turns 18 and requiring that the account be emptied when he or she turns 30 have been removed. As with 529 plans, a contributor to a Coverdell account can claim an education tax credit, though not for the same educational expenses for which Coverdell account money was used.

Sa Diego, California has many different schools both public and private. The ever increasing tuition and fees in schools in San Diego, California has made the planning of the costs part of estate planning as many persons use their assets in their estate plan to pay for school for their children.

In San Diego, California, many financial institutions offer these types of 529 plans. Some financial institutions in San Diego which may provide these include the Bank of America, Wells Fargo, Washington Mutual and others.

The ever-rising cost of a college education has led to the creation of college savings plans that have been given various federal tax advantages. Among these are “529 plans,” named after the section of the Internal Revenue Code that sets forth requirements for favorable tax treatment of qualified state tuition programs. 529 plans vary from state to state with regard to investment options, contribution maximums, and state income tax treatment. One type of 529 plan allows taxpayers to purchase tuition credits for a designated beneficiary, thereby locking in today’s college costs. A second type allows the donor to contribute to an investment account to pay for a beneficiary’s higher education expenses, such as tuition and room and board.

In San Diego, California, there has never been mass public transportation as in other major cities. As such, in San Diego, most commuters rely on theirr automobiles. Given the high number of uninsured drivers in San Diego, it is important to make sure that you have both uninsured and underinsured coverage on your automobile. This has relevance in estate planning as all of your assets can be seized if you owe for medical bills or for other damages and your insurance does not cover. You need to report to the Department of Motor Vehicles if there is a personal injury in an accident or if the property damage meets the reporting requirements. Always make sure that the legal name of the vehicle is in the name of your living trust.

In one case, a woman called the insurance agency she had done business with for 10 years and told the agent she needed “full” automobile coverage. According to her, no one discussed what level of insurance would provide adequate protection. Instead, she was sold a policy that provided only the minimum amounts required by state law for uninsured and underinsured motorist coverage. The woman and her husband sued the insurance agency for negligence after their son was seriously injured when he was struck by an underinsured motorist and their expected damages exceeded their insurance coverage. The insurance agency, whose line of work is more used to criticism for overzealous selling, was instead in the position of being sued for not selling enough of its product. It is always advisable to contact the California Board of Insurance to make sure that the agent is licensed to sell the type of insurance you are purchasing.

Insurance agents are not personal financial counselors or risk managers for their customers. They generally fulfill their duty to the insured simply by providing the coverage requested by their customers, who typically know more about the extent of their assets and their ability to pay premiums. The agents do not have a duty to advise a client to obtain different or additional coverage. In this case, though, the court ruled that an exception to this no-duty rule arose because there was a “special relationship” between the insured and the insurance agent.

In San Diego, California, when a person dies, the time to implement estate planning strategies has passed. It is important to meet with a local attorney in San Diego who can assist with this estate planning process. It is important to consider a revocable living trust when both spouses are competent and able to make decisions.

When an individual dies, there is the possibility that his or her estate will be subject to the federal estate tax. However, only estates exceeding a certain level in value are subject to this tax. That level is now set at $1 million for persons dying in the years 2002 and 2003. The current $1 million exclusion amount is based on what is called the “unified credit against estate tax.” In the case of an unmarried person’s death, the application of the unified credit is straightforward. In 2002 and 2003, an unmarried person can leave the $1 million exclusion amount tax-free to whomever he or she wishes. Similarly, each spouse of a married couple is entitled to leave the exclusion amount tax-free at his or her death. t

In the case of a married couple, estate planning steps can be taken to insure the maximum use of the unified credit. The typical situation is where each spouse (assuming, for purposes of the example, the death of the first spouse in 2002 or 2003) has an estate worth something less than the $1 million exclusion amount. If the husband’s estate is worth $750,000, for instance, and he dies first, his estate will escape the estate tax because its value is below the exclusion level, but the $1 million exclusion amount will not be fully used by his estate. The ideal would be to move assets from the wife’s estate to the husband’s estate so as to bring his estate to the $1 million level. This would allow the full use of the exclusion in the husband’s estate and would reduce the value of the wife’s estate so that, given the likely increase in the value of the wife’s assets following the husband’s death, the wife’s estate may be kept below the $1 million exclusion amount at her death.