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It’s always interesting to see what famous people have done for their estate plans. The first three Presidents of the United States died with very diverse estates and wills.

George Washington had a blended family. He married Martha who was a widow with two children. George and Martha never had any children of their own but George was close to his nephews and adopted Martha’s children. George wrote his will himself, providing for Martha, his children, grandchildren, and slaves. He apparently had about 300 slaves. He left the majority of his estate to Martha in a life estate which means she had the benefit of the assets until her death. He provided for his nephews and made many bequests to his family and Martha’s. He also wrote in his will that he wanted to free all of his slaves upon the death of both he and Martha. Martha apparently freed some of them after George died but when Martha followed him in death, the executors did not free the remaining slaves.

John Adams, the second President of the United States, had a minimal estate, estimated to be about $100,000. Adams struggled to maintain the life style of a president with the meager salary a president had in those days. He and his wife Abigail bought some property in Massachusetts and accumulated a large library. Abigail died first and when John died, he left his residence, land, and library to his son, John Quincy Adams, with the condition that he provide for his brother Thomas an amount of money equal to half of the value of the library. The rest of the estate went to his other two sons, his grandchildren, and a niece of Abigail.

A recent article in the Wall Street Journal reported how retirement planning is short changing women. The article has a number of interesting points:

1. A survey by MassMutual found that women’s retirement accounts were, on the average, just 2/3 the size of men’s. That is unfortunate because since women live longer than men, they need more money than men do to have a comfortable retirement.

2. About 2/3 of women between the ages of 75 and 84 live alone, making it more important that they have saved enough to see them through.

One of the documents of our revocable living trust package is a document called a “pour over” will. Many clients ask why they need a will when they are doing a trust. Wasn’t one of the reasons to create a trust to avoid the probate process that is necessary with a will?

A “pour over” will is a specific type of will that accompanies a living trust. A “pour over” will is like a safety net. If you transfer all of your assets into your revocable living trust, then the pour over will not be necessary. But what if you accidentally or intentionally leave an asset out of your trust? In some situations a decedent may forget to title an asset in the name of his trust. A common example is when you refinance your home. Lenders ask you to take your property out of the name of the trust but don’t always put it back into the trust for you after the refinance. If you did not have a “pour over” will, the property would have to be distributed according to the laws of intestacy, which may not be the same as the beneficiaries of your trust.

With a “pour over” will, any assets owned at death and not otherwise titled will be “poured over” into your existing trust and be distributed according to the trust provisions after the asset is probated. Only the one asset not titled in the name of the trust, or otherwise transferred because of a beneficiary designation, will have to go through probate. In the example of a refinance, suppose you took your residence out of your trust to refinance and forgot to put it back in. Your trust provides that your residence is to go to a specific charity. With no “pour over” will, the residence will go through probate and be distributed to your intestate heirs, probably your children if you have no spouse. With a “pour over” will, the residence will still go through probate but will be “poured over” into your trust and be distributed to the charity you named.

A disclaimer is a technique in estate planning whereby a beneficiary refuses to accept an asset that has been given to him. If someone makes a gift or leaves certain assets or even their entire estate to a beneficiary and the beneficiary “disclaims” it (refuses to accept it), the assets pass to someone else.

There are a number of reasons why someone would want to “disclaim” property. One reason to “disclaim” is that the beneficiary already has a taxable estate and by disclaiming the assets, their tax liability is reduced or eliminated. Another reason for disclaiming an inheritance may be to avoid losing one’s eligibility for public benefits. In estate planning for couples, a trust called a “disclaimer trust” uses the technique of disclaiming to specify that after the first spouse dies, the disclaimed property passes to a special trust designed to protect the property from estate taxes when the second spouse dies.

When someone disclaims property, the property passes as if that person were deceased. As an example, assume a situation where the beneficiary of a trust is a parent and the parent’s children are the alternate beneficiaries. The parent already has significant wealth so decides to disclaim the property. His children would then receive the property without a gift tax.

Probate is the process of transferring title to assets upon the death of an individual who dies with a will or without a will or trust. The person who has to begin the probate and follow through is the person named in your will as executor or someone the court appoints if you died without a will, called your administrator.

Many states have streamlined the probate processes however California probate has not and it can be confusing for the layman. Probate is initiated by filing a petition in the Probate Court to have yourself appointed to manage the estate. In San Diego County, the petition will either be filed in the downtown probate court or in north county. Letters Testamentary are issued if you were named as the Executor of the will or Letters of Administration if you are asking to be appointed administrator of an estate where there was no will. Once the letters have been issued, the personal representative (executor or administrator) can begin to inventory the assets in the estate, pay creditors, have the assets appraised, and ultimately transferred to a beneficiary or liquidated for distribution. The major difference between an estate with a will and an intestate estate (one without a will or a trust) is that where there is a will, the estate will be distributed in accordance with the provisions of the will. If there is no will, the estate will be distributed to the heirs at law of the decedent.

Depending on the decedent and the provisions of the will, there can be challenging issues that deveop such as a family allowance, probate homestead, and handling objections from family members. Look for a later post on these issues.

It’s hard for most people to plan for their death but one of the greatest gifts you can give your loved ones is to create an estate plan and with it a List of Guidelines for Location of Assets and Final Instructions.

In addition to your will and trust, you should prepare and keep current a list of your assets and a letter of instruction to provide the executor or trustee with important information to handle your estate and personal affairs in the most efficient manner. Copies should be distributed to your executor or trustee (if other than yourselves) and one copy should be in the binder that contains your will or trust.

The Location of Assets list should contain the following if applicable to you:

We have all heard of a QTIP, but do you know what it means in the context of estate planning?

If you are in a second or third marriage, as many people are in San Diego, you may know that a QTIP is a type of trust. It is a common type of trust which provides for your current spouse but also ensures that ultimately your estate will pass to your own children.

QTIP actually stands for Qualified Terminable Interest Property and is often used in cases of blended families where there are “his”, “hers”, and “their” children. For example, a husband may set up a QTIP trust to provide income for his second wife when he dies.The husband names his children from his first marriage to be the ultimate beneficiaires when his wife dies. There are some strict guidelines for such a trust which an experienced estate planner can explain to you. Some of those are that all of the income from the trust must go to the surviving spouse for her lifetime. The surviving spouse cannot use trust assets to benefit a new spouse or her own children. When the surviving spouse dies, the remainder of the trust must go to whoever the Settlor has designated in the trust document, which in this example would be the husband’s children.

No, HIPAA is not a female Hippo. In the medical and estate planning field, HIPAA stands for the federal Health Insurance Portability and Accountability Act of 1996. HIPAA and California’s codification called CMIA (Confidentiality of Medical Information Act) have provisions in them to prevent health care providers from disseminating your health information or medical records. The privacy rules are set forth at the U.S. Dept of Health and Human Services.

The regulations require written authorization from a patient before a health care provider or health care organization can release health information. So if you want your family, loved ones, or anyone else to have access to your medical information, you must sign a written HIPAA and CMIA release.

Medical providers such as doctors, dentists, hospitals, clinics, laboratories, pharmacies and any other health care providers, health care organizations, or insurance companies who violate privacy rules are subject to severe penalties. A non intentional failure to comply with HIPAA can result in a fine of $100 per violation up to $25,000 maximum per year. If a health care provider knowingly obtains and disseminates private information, criminal penalties can include up to a $50,000 fine and 1 year in prison. Even stiffer penalties and more jail time can be imposed if private information is used for commercial advertising, personal gain, or done in malice.

There are numerous examples of famous people who have died without a will or who had an outdated will or a poorly drafted trust. Some of these examples have resulted in disastrous consequences after an untimely death. Anna Nicole Smith died leaving everything to her son who predeceased her and apparently had no provision for later born children or for her long time partner Howard Stern. Heath Ledger died with an outdated will that left his estate to his parents and sisters with no mention of his daughter or girlfriend Michelle Williams, the mother of his daughter.

It is doubtful that these celebrities intended for these consequences to occur if they died suddenly. They certainly had the ability to retain the best estate planning attorneys in the country. While some blame has to rest with the individuals themselves for not updating their wills to provide for partners and children born after their wills were prepared, it seems apparent that the original documents which were prepared failed to anticipate future events. Since properly worded documents were not prepared to anticipate the future, these celebrities were deprived of the ability to decide such things are how their children would inherit assets, who would be in charge of the money during the time they were minors, who would invest the money, or who they would have preferred to care for their children if both parents died.

Just like these celebrities, you need an experienced estate planning attorney that will determine the appropriate estate plan for you and draft documents that will stand the test of time. Such documents need to remain effective if you have another child in years to come, if a child predeceases you, or there is a common disaster that may involve your entire family. At the law firm of Law Office of Scott C. Soady, A Professional Corporation we can assist you with an estate plan that will anticipate future events in your life and remain viable for many years after its execution. Call us or e mail us to take advantage of a complimentary and personal consultation about this or any other estate planning issue.

Donation of organs and tissues has rapidly increased over the last 5 years. Here in San Diego we have several hospitals that received awards in 2007 for their success in increasing organ donation rates at their hospitals: Kaiser Permanente, Scripps Mercy Hospital, Sharp Hospital, and Palomar Hospital. That means that San Diego citizens are remembering what a wonderful gift an organ or tissue donation can be.

Almost 100,000 people in this country are awaiting organs. Organs that are in demand are kidneys, livers, hearts, lungs, eyes, pancreases, and intestines. Tissues that can be used are bone marrow, skin, tendons, ligaments, heart valves, and connective tissue. Some people think no one would want any of their organs or tissues after they are done with them but the fact is that corneas and other tissues can sometimes be used regardless of your age.

You don’t even have to die to be an organ donor. Many people have given family members and even complete strangers a kidney. To donate bone marrow you can register as a bone marrow donor and be put in a national registry. Here in San Diego the entities handling tissue and organ donation are Life Sharing,