San Diego Estate Planning Lawyer Blog

Published on: May 4, 2009

What is the meaning of the term “capacity” in California?

Many people, particularly estate planning lawyers toss the term “capacity” out as though everyone knows what the term means. Often you hear people talk about someone “losing capacity” in the sense of not being able to make a will or trust or take care of their finances. What exactly does the term “capacity” mean in the context of making a will or a trust?

The California Probate Code provides that a person is not “mentally competent”to make at will if either of the following is true:

Published on: April 28, 2009

Gifting or Loaning Money to Your Kids

by Scott C. Soady

Often as parents or grandparents, we want to give or loan money to our children or grandchildren. Sometimes these amounts can be substantial and the question arises as to whether it should be a gift or loan. If the amount is significant, you may feel also feel that out of fairness to your other children, the loan or gift should be mentioned in your estate plan to even out the eventual distribution of your estate.

You first need to decide whether a gift or loan is appropriate. A loan means you expect to be repaid while a gift is given without any expectation that the money will be repaid.

If your assistance is to be a gift, remember that in 2009 you can gift $12,000 to any one person. If you are married and want to give a gift to your child for a car or a down payment on a house, for example, you and your spouse can give $24,000 per year. If the amount is over $12,000 per person, the IRS requires that you file a gift return.

Published on: April 23, 2009

What Happens to Your Online Accounts When You Die?

by Scott C. Soady

Most people in our high tech society have online accounts such as ebay, Pay Pal, Facebook, Linked in, etc. not to mention their online banking accounts, brokerage accounts, and others with passwords. Some people have photographs and documents stored in their computer and have passwords to get into their computer. What happens when someone dies and no one knows the passwords?

If you bank online or you conduct business on line, your family or your executor or trustee may need to access those accounts to close them, transfer funds, or conduct business. You may also want them to respond to emails, retrieve photos, or post a final blog if you have one.

Accessing online accounts can be difficult. Google for example requires proof of death and will provide access only to an executor or trustee. Facebook won’t provide access at all. Banking institutions and investment companies all have their own rules and regulations for access.

Published on: April 20, 2009

Issues of the “Sandwch Generation”

by Scott C. Soady

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 17, 2009

Being a Successor Trustee in These Tough Economic Times

by Scott C. Soady

Depending on who you talk to about the economy, “things are going to get worse before they get better” or “things are looking up.” There is no question though that the real estate market is down in San Diego. The stock market is also not what it was several years ago. How does this affect a Successor Trustee who is trying to administer an estate and make distributions to beneficiaries?

A Trustee of course has a duty to safeguard the trust assets, invest and manage the assets in some cases, and distribute the assets to the beneficiaries according to the terms of the trust. The beneficiaries naturally want to receive as much as possible and sometimes do not want to wait for the market to turn around. You may find yourself as a Trustee having to decide whether to convert some assets into cash to put into a money market account or CD. You may have no choice but to sell real property even though home sales are down. It is a difficult decision to make as to whether to wait out the problems in the market and it is just one of the many decisions you may have to make as a Trustee.

One thing that makes it easier is if all the Beneficiaries are on the same page as to what should be done. As a Trustee, try to keep all the beneficiaries informed. If the property is on the market, keep them apprised of the sales price, comparable sales in the area, and all offers. Consult with financial advisors, realtors, or others in the know to get their opinions. An experienced estate planning firm such as Law Office of Scott C. Soady, A Professional Corporation can help you administer a trust in a way that will limit your liability as a Trustee and make your responsibilities and duties a bit easier. Contact us for a complimentary consultation.

Published on: April 13, 2009

Part III Who Needs an Advance Health Care Directive?

by Scott C. Soady

The short answer to this question is just about anyone unless they are a minor. Anyone over the age of 18 can execute a health care directive and they are simple to fill out. The reality of life is that it is often unpredictable. We never know when an unexpected medical crisis may occur.

Most of us remember the case of Terry Schiavo, the young mother who fell into a coma in Florida, resulting in a long struggle between her husband and her parents as to whether she should be taken off life support. Recently in San Diego, the news reported on divorced parents whose son is in a similar vegetative state and they disagree as to what should be done.

Anyone being admitted to a hospital should have a health care directive and in fact most hospitals will request that you provide them with a copy of yours or execute one if you don’t already have one. Certainly seniors and anyone facing serious health problems should have one so that an agent is designated to make health care decisions and there are instructions for health care that set forth your wishes.

Published on: April 10, 2009

HIPAA – Part II What are Advance Health Care Directives and What do they have to do with HIPAA?

by Scott C. Soady

A document called an Advance Health Care Directive appoints a family member or friend to make health care decisions for you if you become physically or mentally unable to make them for yourself. The person you name is called your “Agent” and you usually name back up Agents as well in case your first choice is unable or unwilling to act. These agents will carry out your wishes concerning life support, medication, nutrition, and other treatment options. In the document called the Advance Health Care Directive, you can set forth whatever provisions and perameters you want concerning these types of issues. You can also specify your preferences for burial, cremation, and funeral arrangements and set forth your wishes for organ donation.

It is important that your agent have access to your medical information. As we indicated in the last blog, under HIPAA and CMIA, your medical information is private and a release must be signed by you to allow your agent to access the information. Having the appropriate HIPAA language in your Advance Health Care Directive is important.

The estate planning attorneys at Law Office of Scott C. Soady, A Professional Corporation always include an Advance Health Care Directive in the Revocable Living Trust package for trust clients. If you need such a document (or your adult children need one) we can also prepare them separately. If you have a trust already in place, make sure that this document is included with your trust and also check to see if it contains the HIPAA language. Many trusts which were prepared several years ago may not have the HIPAA language. You also may have a similar document that was drafted years ago called a Durable Power of Attorney for Health Care or a Living Will. These documents also probably do not have the HIPAA language.

Published on: April 7, 2009

What is HIPAA?

by Scott C. Soady

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.

Published on: April 4, 2009

Unusual Will Contest before Death of Testator

by Scott C. Soady

In the category of “stranger than fiction,” a lawsuit has been filed in Arizona by a man who was cut out of his mother’s will. The problem is that she is not dead yet. Here in the San Dieigo Probate Court, will contests are filed but after the death of the testator (the individual who made a will before their death.)

The lawsuit filed by Robert Jaeger seeks $1 million in punitive and compensatory damages from his brothers and sisters on the basis that they interfered with an expected inheritance by persuading his mother to cut him out of her will. Jaeger claims that he took care of his mother for seven years and in return she promised to leave him her house when she died. His mother changed her will to leave her estate to her other children instead. The mother, Patricia English, says that her son was unemployed, spent her money, failed to find work, and became more and more demanding. In any case, she says, she had the right to decide who should inherit her house when she died. The siblings are fighting over English’s house which has $130,000 equity. She has no other assets.

In Arizona as in California, there is no cause of action for interfering with an expected inheritance. Only Maine and Florida have such causes of action while the person who executed the will is still alive. The court in Arizona has ruled however that the suit can proceed.

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.