San Diego Estate Planning Lawyer Blog

Published on: October 25, 2012

National Estate Planning Awareness Week

This week is referred to by some as the National Estate Planning Awareness Week. It is an opportune time to examine your life and take steps to protect your assets now and in the future.

Each stage of life requires a different type of planning, but through it all it is critical to have the aid of professionals to ensure your work actually protects you and your family. In the San Diego area we encourage you to contact one of our estate planners for help. Every situation is different, but some of the more common planning tools include…

Health Care Proxy

Published on: October 8, 2012

The Uncertain Future of the Estate Tax

by Scott C. Soady

The present federal estate tax rates and levels are set to expire at the end of this year. Under current rules, only estates that have a total value of $5.2 million have any obligation, paying a top 35% tax rate on any assets over that amount. If Congress allows the current plan to expire, at the start of the year the exemption level will drop to $1 million at a top tax rate of 55%

There is a false assumption among some that this tax is only a concern for the super-rich. While middle and lower income families do not have to worry about the change, you may be surprised to learn that a lot of families may actually be affected by the reversion of this tax cut down to the $1 million mark. That is because for the purposes of this tax, the IRS Takes in all the value of an estate into account, including real property, life insurance, and business ownership, among other things. When all of that is added up, more people may fit into this group than is realized.

These are assets accumulated over a lifetime of hard work and sacrifice and no one wants to see them dispersed to the IRS. It is reasonable for these families to be concerned about their possible tax bill and plan accordingly.

Published on: October 4, 2012

Planning Steps for Children with Special Needs

by Scott C. Soady

Caring for a child with special needs and/or raising a child with disabilities is fraught with financial responsibilities that may be difficult to manage. These life situations require careful estate planning when the parent or caregiver is no longer around to make the necessary financial and other decisions for that child.

Believe it or not, some estimates suggest that lifetime care for a child with autism may add up to an estimated $3.2 million over that child’s lifetime in some of the more severe cases. This represents a significant challenge for the nearly 20 million U.S. families facing this struggle.

For this reason, it is natural for families who have a child with special needs to want to set aside assets in their children’s names or name them as beneficiaries in wills or life insurance policies. But some of this basic planning comes with pitfalls-most notably risking the child’s access to support services. Families must be mindful with their financial planning in order to avoid disqualifying their child from crucial benefits. In many cases a special needs trust should be used to provide for their child’s care instead of having their assets flow directly to the special needs child. On top of that, many parents need to consider how they should plan for their own retirement, since they may never have an “empty nest”.

Published on: October 2, 2012

Balancing Home Care vs. Assisted Living for the Elderly

by Scott C. Soady

With the number of seniors growing, and life expectancy on the rise, many families are weighing the difference between home care and some kind of assisted living for the elderly. Financial concerns always play a role in the debate. Other factors include the stress associated with caring for the elderly and the quality care they will receive.

Changing Norms

The nature and importance of long-term elder care has evolved in recent decades. In the past elder care was almost entirely done by families, as adult children rarely lived far from home and lifestyles allowed more flexibility for helping an ailing relative. Back then, nursing homes were almost unheard of.

Published on: October 1, 2012

Donating Your Car to Charity in California

by Scott C. Soady

You can donate your old car to raise money for your favorite charity and also qualify for an income tax deduction. Throughout California, local and national charities accept car donations. In some instances,

even if your car does not run, you can still claim the fair market value, which might be more money than you could afford to donate in cash. It also may be one part of a larger charitable component of your estate plan.

By donating a car to charity, it provides you with a way to help others instead of disposing of the vehicle in a junk yard. However, donors must follow some basic steps for the process to go through.

Published on: September 30, 2012

The Challenge of Contesting a Will

by Scott C. Soady

A “will contest” involves a formal objection raised against the validity of a will–part or all of the document can be contested. Law firms that practice estate planning are often asked about the validity of wills or the feasibility of overturning a will. In many cases the reality is that it is difficult to get the terms of a will thrown out–though it is not impossible. The main reason wills are so difficult to overturn is because there are only four very specific legal grounds that can be used.

Objection #1: Invalid Process

If a will was not signed in accordance with applicable state laws, the will is not valid. In most states, a will must be signed in the presence of at least two witnesses who observed the testator signing the document. The witnesses must also sign the will in each other’s presence order to make it valid. Not meeting these requirements are the most common reasons for a Will to be contested; especially if there is only one witness. In cases where the testator was not present, the defect can often be corrected if witnesses testify under oath that the testator confirmed to them that his signature was valid.

Published on: September 29, 2012

Establishing a Trust Fund for Pets in Your Will

by Scott C. Soady

Leaving money to pets in your Will is not as uncommon as you might think. In fact lots of people,

especially the elderly, want to make sure that watch dog Fido, or lap cat Fluffy, are well taken care after they are gone.

Leona Helmsley, the late 87-year-old real estate investor, set aside $12 million in her Will for the care of her beloved Maltese. A lot of people found the very idea to be absurd, but for those who loved animals, it was encouraging.

Published on: September 28, 2012

Protecting the Elderly from Scams

by Scott C. Soady

Financial involving money, property, goods or identity theft; or it might involve a senior being urged by friends or

family to sign a financial document that is not be in their best interest.

Sometimes it’s hard to determine where the scam begins and poor financial decision making ends,

Published on: September 11, 2012

Be Careful When Choosing Your End-of-Life Representatives

by Scott C. Soady

The person who will make choices for your end-of-life healthcare and the person who will handle your finances may not always be the same person. In fact, you might want to consider having different people handle each one.

A power of attorney is a legal document that gives another person legal authority to act on your behalf.

When you create such a document, you are called the principal and the person to whom you give this authority is called your agent. A power of attorney may give your agent power over all your affairs, or it may be limited, only giving your agent permission to handle a specifically defined task. If a power of attorney is made ‘durable,’ it continues in effect even if you become incapacitated. By changing the language in the document, you can also specify that the durable power of attorney not take effect ‘unless’

Published on: September 9, 2012

Leaving Everything in a Will ‘To Be Split Equally’ Can Cause Problems

by Scott C. Soady

Armed with good intentions many parents leave everything they own to their children after they die.

However, problems may arise if the language they used in their will says that “everything is to be split equally among the beneficiaries.” Using such language is often found in a simple will. It may work out just fine in some cases; but in bigger families, simply splitting everything equally may cause a lot of unnecessary squabbling. When the time comes to actually split up the inheritance, issues such as who gets the Swiss cuckoo clock in the hallway, Aunt Matilda’s silver spoon collection and Uncle Henry’s portrait over the fireplace, can become real concerns.

In fact, it’s not uncommon to see once-loving siblings fighting about their inheritance, and sometimes it begins even before their parents are even gone. It’s also not unusual for parents to accidentally promise various heirlooms to more than one person.