30 Things Good San Diego

Will, Trust & Estate Lawyers

Want You to Know

Estate planning is a pretty big field, with lots to take into consideration with your lawyer. There are complexities and confusion; but at the end of it all, there’s no doubt that coming up with a solid plan is one of the best paths for retirement, saving, what you are able to leave behind, and—of course— making things easier on your loved ones.

What follows is a list of things that every credible San Diego will and estates lawyer would want you to know. Items range from funeral arrangements to important documentation to life insurance and IRAs. This list is by no means comprehensive, but it does give you a little insight into the complexities of estate planning.  So, here they are, in no particular order:

1. Trusts aren’t just for wealthy people.
2. Trust assets don’t go through the probate process and can be put into action right away.
3. Trusts keep your family business private.
4. You should share your plans with those they will affect.
5. Healthcare directives (Advance Directives) and financial powers of attorney are an important part of your estate plan.
6. Anyone with minor children in California should have an estate planning lawyer draw up standby guardianship papers.
7. Make sure your family can find your estate plan.
8. If you die without a will or trust, pretty much every decision is up to the courts—not you!
9. Wills and trusts can be contested, but it’s not nearly as common as you might think.
10. There is a very good chance that you will be physically incapacitated before you die.
11. Family members don’t always think clearly when an estate is being distributed.
12. Your ex-spouse may be entitled to your assets if you haven’t changed beneficiaries.
13. There are trusts to provide for everything from your pets to your family’s ability to travel the world.
14. You can place limitations on how and over what period of time your heirs get to use their inheritance.
15. A good San Diego will and estate lawyer can save you an unbelievable amount in probate fees, estate, property and income taxes.
16. You can use life insurance and other means to supply funds for a trust.
17. Websites that promise do-it-yourself planning kits are pretty much NEVER the answer – they necessarily need to be “one size fits all.”
18. Family members are not the only people you can choose as the executor of your estate—there are professionals who can do this job.
19. You can make annual gifts (currently up to $14,000 per person) tax-free while you’re still living – but if you may need long term care soon there are other restrictions that should be observed when making gifts.
20. There’s a big difference between a “will” and a “living will” (Both are important).
21. It’s never too early or too late to start your estate planning (But the earlier you start, the better).
22. Review your estate plan at least once a year.
23. Review your estate plan after any major life change.
24. As you age, your estate planning (and other legal) needs will change focus.
25. Money cannot ordinarily be left to minor children directly.
26. Make sure your family knows if you’re an organ or tissue donor.
27. Make funeral arrangements (and cover expenses) a part of your estate plan.
28. Small business owners need a succession plan
29. There are many ways that a San Diego will and estate lawyer can help you increase the value of your estate for your heirs (such as stretch payments for IRAs, avoiding taxes with a trust, etc.).
30. Your estate will be responsible for debts accrued during your lifetime.

If you have questions about any of these items or you are ready to get started creating an estate plan (or updating your existing plan) that takes into account your wishes for your finances, end-of-life affairs and providing for your family, feel free to contact our San Diego will and estate lawyers at (619) 281-1888 to schedule a consultation.

 

Are you ready to be your Parent’s Helper?

First Steps to Being Ready to Manage Your Elderly Parent’s Finances

Elder law attorneys in San Diego very often find themselves advising adult children of the elderly on the intricacies of managing their parents’ finances. Why get help from an Elder law attorney and not from an accountant? With rare exception, most of us know how to pay our bills. We don’t need an accountant to tell us when SDG&E or the water bill needs to be paid. Helping or handling a parent’s finances may seem straightforward at first, but without pre-planning senseless hurdles can make it stressful and unnecessarily difficult.

Too many children and grandchildren only realize that a senior’s finances have gone sideways when they see late notices in a mail pile or notice stacks of unopened mail. Parents often feel that their privacy has been violated when their lack of attention to paying their bills has been discovered. They often become evasive and defensive, when all you want to do is help.

Sometimes families are forced to deal with a senior’s financial situation without warning. These emergencies come to the surface after a bad fall or stroke which prevents a senior from handling their own affairs.

Adult children often come to an Elder law attorney to help them after their parent has suffered a debilitating health crisis. They are often in the dark. Culturally, to our own detriment, we are all trained to keep our finances private. Few seniors realize that failing to share makes it harder for them to stay captains of their own financial ships. Many seniors find it easier to be forthcoming about their finances with an elder law lawyer to provide against an uncertain future. Sometimes this is a first step that lets them begin to open up to their children. This can take time, for many senior seniors it feels wrong to speak about their finances with family members.

San Diego Elder law attorneys are accustomed to helping families deal with these issues. Seeking out an experienced elder law or estate lawyer before problems arise can help you and your parent avoid awkwardness, embarrassment and heated emotions.

The biggest triggers, making families dive-in to rearrange senior’s affairs and empower adult children to manage their aging parent’s finances, are probably health events requiring long term care and sudden realizations that their parents have significant memory issues. Financial management problems make these types of events even more painful. At times like these, getting an answer to important questions may be difficult or even impossible. Sidelined seniors seldom can tell you who they owe, how much they receive each month or where they have bank and investment accounts.

Acting ahead of time, or at least before ordinary bill paying has become a problem, empowers older parents and adult children to act as a team and avoid being forced into a role reversal. Working with an Elder law attorney, a senior maintains control by putting into place the marching orders for how things should be handled. They get to choose how their financial safety can be monitored.

Using an Elder law attorney changes the paradigm. No disruptive and harsh role reversal is needed. A good Elder law attorney can coach a family and help seniors put in place tools protect themselves while staying actively involved in their own finances. Some home bill pay pre-planning mechanisms are legal documents, many are not. The goal is for our parents to put in place mechanisms to shield them from everything falling to pieces, if and when, illness or disability prevents them from doing what must be done. Proper planning allows a senior senior to choose who they want to have act for them and put in place alerts so that their chosen person, whether family member or friend, can step in and make certain the bills are paid and the lights stay on.

Watch out for assurances that having a basic revocable living trust and a standard springing power of attorney is enough to avoid this pitfall. Although they are a good starting point as a method to transfer the power to act, they fall short in making available accurate information to act upon. If planning in advance, putting in place an immediate limited power of attorney which allows others, including banks, pension plans, brokerages, and utilities to share information between family members is a good start. Your Elder law attorney can coach you and identifying tools to either prepare for or use to handle any crisis that arises.

Most Estate planners start the idea that their work is to help you be prepared if you die, planning for disability is secondary. Most of us will experience a period of time during which we are incapacitated before we die. For attorneys cross trained in Elder law the challenge is instead to help clients be prepared to live, protect their assets and have their wishes competently followed if they are incapacitated.

Advance planning helps prevent painful family conflict. If you can act to plan in advance, you will avoid a bad situation which can cost you the closeness you have with your parent. The earlier you and your parent start meeting with a San Diego elder law attorney that you trust, the more likely you are to get the information you need. As an added bonus, your parent will have the ability to make his or her wishes known in order to offer guidance on how to handle their affairs if and when all of the responsibility is passed on to you.

No matter what stage the parent is at, the subject needs to be discussed. Again, earlier is better, too many families miss the window of opportunity during which solutions can be put in place without a tug of war. It is hard to know what or when an event will occur which robs you of your opportunity to plan in advance. You may choose to start the conversation by relating it to your own estate planning or by bringing up a situation you heard about recently, such as the death of a celebrity. San Diego is blessed with a number of good attorneys who can offer suggestions on how to bring up the subject, as well as how to help steer the conversation in the right direction.

Attorney Joel Weissler has been helping families plan for life cycle events for over 25 years. He is available for consultation and for group speaking engagements through the Weissler Law Group at (619) 281-1888.

• WHAT HAPPENS WHEN A SAN DIEGAN DIES WITH DEBTS LEFT BEHIND?

In good times and in bad, San Diego will, trust and estate planning lawyers are intimately aware of their clients’ financial situations.  They see the plain facts; most people carry a heavy debt load.  Whether it is the person setting up an estate plan or one who has inherited from it, there are often questions regarding what happens to that debt.  Does money come out of the estate for medical bills?  Are adult children responsible for credit cards?  What happens to the mortgage?

As with so many aspects of law, the answers are somewhat complex, but here’s a basic look at what you and your San Diego will and estate lawyer might expect to see:

• Mortgage Debt

When a home is inherited, its mortgage is, too.  Federal legislation forces banks to work with families who have inherited an encumbered (mortgaged) home.  Watch out though, these banks will expect payments to be made and may be resistant to providing inheriting heirs with the information they need to meet their obligations under the outstanding loan.  The exception to this, are reverse mortgages.  Reverse mortgages come due shortly upon the borrower’s death – with a maximum extension of a year from death.  Fortunately, new rules protect surviving spouses, even if they aren’t ‘on the loan.’   In California, all home purchase and most refi loans (except cash out loans) are non-recourse.  This means that in most cases an individual’s other assets aren’t liable if a mortgage is higher than the home is worth.  For Federally insured home mortgages, lenders must allow family members to acquire a property, prior mortgage free, for 90% of the homes appraised value, no matter how high the mortgage.  

• Taxes

Taxes are sticky.  Most taxes stick to anything a person owing the taxes left behind. When it comes to paying bills left behind, taxes are usually exempt from claim period limitations and one of the highest priorities, needing to be paid before other debts.

• Medical Expenses

This is an area where things can get a little dicey, so definitely work with a local San Diego attorney with experience in estate administration and probate to minimize the amount of medical debt left behind.  Who pays what and when is a tough question for outstanding bills.  More surprising for many families is that  if a person who has passed away received Medi-Cal benefits, those benefits become a debt on death and may need to be repaid from the estate.   If heirs receive distributions prior to Medi-Cal being repaid, they can become liable for all or part of the debt.  Again, the responsibility for medical and nursing home expenses is very complex and should be taken to a lawyer.

• Credit Cards

As long as you aren’t a co-signer on a credit card, you aren’t personally responsible for them.  Remember, being an authorized user does not necessarily make you a co-signer. The companies can call the executor in order to collect from the estate, although there is a finite time frame in which to do so.  California law has procedures which can be followed to shorten the amount of time a person’s creditors have to come forward after they have died.  In addition, a good estate administration attorney can often get credit card companies to negotiate down outstanding balances in order to get a more certain and immediate payment.

• Duty to Not Pay Unenforceable Claims

If you are not the only heir, remember that you must exercise due diligence in confirming a debt before you can pay it.  Remember, too, that when a debt is paid for by the estate, it lowers the overall amount that is left to be inherited.  It is amazing how many companies are unethical in their collection efforts.  Many pursue claims they know are no longer legally enforceable and sometimes, purely fictitious claims show up. 

• Everyone Needs Help

Some debts must be paid from an estate.  Others do not.  Unfortunately, unethical collectors can haunt family members and it is hard to know what is what without good legal help.  A good San Diego will, trust and estate planning lawyer can help you deal with these issue properly when the time comes, or help your family proactively plan ahead to limit the value of your estate exposed to creditors using legal tools such as trusts.  To discover all of your options when dealing with someone’s debts after they have died, contact our centrally located Weissler Law Group office at (619) 281-1888 . 

Three California Estate Planning Myths: True or False

San Diego estate planning lawyers eat, sleep, and breathe estate planning. They see pretty much every kind of situation unfold.  The families of individuals who have taken the time to create solid estate plans nearly always fare better than those who do not.  Still, there is an amazing amount of misinformation, misconceptions and out and out myths floating around out there that stop people from taking action to protect their futures and families with an estate planning lawyer’s assistance.

Education is the key.  I feel it is incredibly important that San Diego Attorneys, Tax Professionals and Financial Advisors tackle these myths head-on and debunk those that aren’t true.

T or F:  Estate plans are just for those with lots of assets.

The answer is false.  So many people end up unknowingly damaging their estates and hurting their families because they just don’t think they have “enough stuff” to justify an estate plan.  This myth absolutely needs to be debunked!  Estate Planning is about control, both during your lifetime and after you are gone.  If you care about what medical decisions may be made for you if you are unable to make your own decisions – you need to make estate planning decisions. If you own anything and want to direct what those assets can be used if and while you are incapacitated, you need estate planning. If you care about getting as much of your property as possible to your chosen heirs, you need estate planning.

If you fail to plan and die owning anything, there will be a legal process in order to determine what to do with it after you die.  It doesn’t take a lot of assets to force a family to endure the probate process.  In California, not only is the Probate process long and drawn out, but it also costs money!  That money comes from the estate itself, meaning that those precious few assets you wanted to pass on could actually end up being sold in order to pay for probate and taxes.  Fortunately, working with an estate planning lawyer ahead of time allows you the opportunity to put in place structures which protect your assets and circumvent probate using whatever tools are appropriate for your situation.

T or F:  You don’t need an estate plan as long as your family knows your wishes.

The answer is false.  There are a couple of problems that San Diego estate planning lawyers encounter with this line of thinking.  First, and probably most importantly, is that just because you and/or your family wants things to happen in a certain way, there’s no guarantee they will.  Without estate planning work, the California legislature’s wishes will be followed.  Your family may not be allowed to follow your wishes and may not be able to follow their own wishes.  Instead, your loved ones will be forced to follow the laws of the state of California—even if these go completely against what you wanted.  Second, and perhaps more importantly. everyone experiences grief differently.  After a death, small token items with emotional connections can become much more important.  Things become a substitute for the love they claim.   The probate process hits the grief sticken hard.  It encourages family members to resolve questions by legal challenges.  Within the probate process you cannot count on your child properly remembering your true preferences and instead not remembering different wishes which can lead them to find ways to subvert them for their own gain.  The best way to avoid both of these kinds of drama is to work with a San Diego estate planning lawyer who knows how to ensure that things go the way you want as a matter of law.

T or F:  Trust funds are for more than passing on money.

The answer is true.  While we may have certain ideas about trust funds as a result of watching too many movies, a whole lot of people aren’t clear on what they can really do.  For example, your San Diego estate planning lawyer can help you set up a trust in order to limit the taxes your estate (and heirs) will have to pay later.  Trusts also provide you with a big say in how your heirs are able to use or lose the inheritance you are leaving behind.  On the one hand, do you want them to have free rein, to pay for  their own or their children’s education, to use going on vacation or fixing their car? On the other hand. do you want your life’s savings to be at risk if they divorce or have their own financial troubles? These are just some of Client’s wishes that trusts are used to handle.

When we look back at our lives, it easy to see that even a small amount of money, useable for the right thing at the right time could have made a big difference. Even if you don’t have a ton of assets, a skilled San Diego estate planning lawyer can help you create a roadmap that will be followed by both the courts and those you’ve left behind.  From avoiding probate and un-necessary taxes to preventing family fights and ensuring that your grandkids go to college, working with an estate planning lawyer in San Diego is the first step in protecting what you hold dear.

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Many people visiting their wills, trusts and estates lawyers in San Diego are unprepared to face the news that their income may drastically change upon the death of their spouse.  Unfortunately, this is something that sneaks up on a lot of San Diego couples who haven’t considered this or discussed it with their will and trust attorney. Although sometimes hidden in our blind spots, it is a no-brainer that paychecks for a working spouse will disappear if they die.  Retired couples often don’t think about this risk, but they should.  For example, the spouses of veterans are often surprised to find that VA benefits can end or be greatly reduced when the veteran passes away. 

VA benefits aren’t the only type of income that can come to a halt in these situations, either.  Union pensions can also stop or be reduced when the union member spouse dies.  Likewise, total Social Security benefits usually drop at the first death.  This is distressing news for those left behind who expected to maintain their lifestyle and to live on these sources of income.  Together, the death of a spouse, a drop in income can be a devastating one-two punch.

This is just one of the many surprises that can be in store when it comes to a surviving spouse’s ability to support him or her self.  The loss of those forms of revenue can be catastrophic. Too often, able bodied seniors, who have been widowed, find themselves being forced to go back to work.  For those who can’t work they often become dependent on government programs, or help from their children, just to get by.

A good San Diego will, trust and estate lawyer will help you to plan for this contingency.  There are several ways that the various forms of income can be replaced, such as through insurance policies and other types of strategic planning.  There are also ways to plan for care expenses to prevent them from consuming the nest egg that may be needed later by the surviving spouse.  The key, of course, is to anticipate these needs in advance so they can be provided for in the estate plan. 

Attorney Independence Makes a Difference 

Unlike commissioned insurance and investment brokers, your estate planning attorney can make recommendations free of any pressure to make a sale and earn a commission. If you let them, your San Diego will, trust and estate planning attorney will help you.  Together with your lawyer you can and should take a hard look at what income you have now and what income you would have if your partner were to die.  You can look critically at what your expenses are now, and what they will be later.  The goal of this type of planning is to develop strategies that work with your current situation in order to protect you, whether you are forced to face this soon or in many years.  Few couples die together at the same time.

This sort of planning isn’t just for the old.  For example, a younger couple might need to consider how to fund a college education for their children if one of them passed.  That couple’s estate planning lawyer could help determine what kinds of structures, products or trusts could be used to make sure the money is there later.  This is a distinct contrast to the likely needs of an older couple.  Each couple working with a competent estate planning attorney will find the best approach is to create a plan that suits their unique circumstance, young or old, with or without children.

Losing a loved one is hard enough without the added financial burden that can come from losing his or her income, too.  Estate planning discussions should include more than who gets Grandma’s china.  It isn’t just about ‘if you die’ it is also about ‘if you live.’ Make sure you discuss all your sources of income with your San Diego estate planning lawyer.   

Chose an estate planning and trust attorney who cares about more than selling you a ‘distribution on death trust’ in single meeting .  Planning is all about life and preparing for life cycle events.  A good legal counselor will get you ready for the bumps and curves that life cycle events present.  If you choose the right estate planning lawyer they will help you get and keep control of your circumstance during your life and after. With a firm grip on your situation and priorities, an estate planning attorney can help you maneuver through the maze of possible solutions to protect you, your spouse and those people and things that are important to you. 

Attorneys Joel Weissler and Damien Snow are available and can be reached at (619) 281-1888.  The Weissler Law Group is based in the Mission Valley area of San Diego and serves clients  throughout San Diego County.

San Diego is a City filled with people on the move.  Some moving in and some moving out.  San Diego trust and estate planning lawyers carry the responsibility to help their clients prepare for life cycle events and plan for the best ways to financially care for their families after their deaths.  Separate from helping clients deal with what life throws at them, an Estate Planning Attorney, must also plan and prepare documents which are compliant with a complex maze of state laws.  This becomes more complicated when more than one state is involved. The laws and rules that apply to wills, trusts, powers of attorney, as well as, marital inheritance rights vary from state to state.  Some differences are minor, while others can impact both trust and planning documents significantly.  Someone who already has established an estate plan including a  trust in one state, needs to know that they should at least review it with an estate planning lawyer when relocating to another state.

For example, if you have created a trust in California, but then move to Florida for retirement, it’s a good idea to meet with a trusts lawyer in your new city.  Likewise, someone moving from somewhere else in the U.S. to San Diego should contact a San Diego trust attorney to review the documents and potentially amend them to satisfy California law.

If someone is incapacitated, or after a death, when a trust is administered, it is usually done under the laws of the state where the person resides or resided.  This can get a little tricky if you have residences in two states—say, if you’re a “sun-bird.”  In those situations, it’s best to work with trusts lawyers in both states.  The changes needed may be as small as changing a little wording, but they could also be more complicated.

There are some estate planning documents that should always be reviewed with an estate planning lawyer when moving to a new state.  Powers of attorney are vital for determining who can act for you if you become incapacitated.  Powers of attorney are administered under state law.  Powers of attorney drawn up by a trust lawyer in Scottsdale may be disregarded by banks, care facilities and hospitals in California.  Unfortunately, different looking documents with different wording may be rejected even if sister-state rules say the documents should be accepted and help from the Courts is always uncertain, slow and expensive.

It is possible to have trusts and other estate planning documents set up in more than one state, though the complexities of doing so are definitely something that should be done with the guidance of a knowledgeable professional with plenty of experience in multi-state planning.

For many, the largest consideration in cross state or multi-state wills and trusts planning is money.  The right trust, done the right way, under the correct state laws, can save you property taxes, income taxes, and an enormous amount of hassle and frustration.  By working with a good trusts and estate attorneys, you can find what structure and documents hold the best benefits for you, your estate, and your heirs. 

If you are new to California, or maintain a part year residence in more than one state, and have questions about what can work in your situation, please give me a call at (619) 281-1888.

 

For some, it’s all about the kids.  A lot of San Diegans only come in to see an estate planning lawyer to figure out how to take care of their kids once they are gone.    For those with minor children, this might revolve around choosing legal guardians, setting up educational trusts, and making sure there is someone to manage any assets left for the kids.  Beyond that, parents never stop being parents.  Parents want to be certain that their deaths don’t disrupt their children’s lives, and most of all, they want to pass on three things to their children:  memories, advantages in life and financial security.  These are good reasons but they skirt around the real reason which is to maintain control over themselves, their children and their assets.

But what about those who don’t have children?  What do those with money and no kids direct their estate planning lawyers to do?

Who Are These People?

According to a recent Gallup Article, 14% of adults over age 45 are without children.  There are quite a lot of adults without children who are doing their estate planning.  As a group, these childfree individuals and couples tend to be more educated and affluent than the general population.  Forty-five and up is a broad group of people – from dual income no kid couples to singles nearing retirement. 

Big Issues

For individuals without children, some estate planning choices can be more difficult.  The vast majority of individuals with children empower their children to act for them in financial and medical decision making if they do not have a spouse to make those decisions for them.  According to a Bloomberg Article by Rich Miller (analyzing Bureau of Labor Statistics data), 50.2% of all Americans over 16 years and older are now single.  If this is true of individuals without children, then that group of over 7% of the populace faces a doubly daunting challenge in choosing who should act for them if they are incapacitated or have died.

Who do you trust?

Younger adults without children may have their parents or siblings available to step in to act, as well as nieces and nephews.  Unfortunately, it is rarely that simple. 

While our national entrepreneurial and tech booms have created a still growing class of younger men and women who have come into money before they’ve had the opportunity to get married and/or start a family, long work hours are leaving them without large circles of close friends outside of work.  This narrows their range of choices.  We are seeing co-workers serve as executors and successor trustees for individual who they barely knew outside of the workplace. This can be an invitation for surviving family members to get bent out of shape.

Older adults without children may find that their best choice of a person or company to act for them may be a professional trustee.  Professional trustees range from Trust Companies with nationwide reach to individuals who are licensed Professional Fiduciaries, Attorneys or CPAs.

Who do you love?

Of course, many of the people described above will want at least a portion of their estate to go to family members.  Aunts and uncles may want to set up college funds for their siblings’ kids or grandkids.  Adult children may want to leave support behind to make sure that Mom and Dad are set for retirement and beyond. 

Young or old, many people seem to be showing an interest in leaving some of their wealth to charitable causes.  Many individuals without children are choosing to leave more than a tithe (10%) of their assets to support their causes or make a difference when they are gone.  San Diego will and trust lawyers sometimes refer to this as “legacy planning.”  Their client identifies a cause that he or she is particularly interested in supporting and then names that cause as a beneficiary in their will, trust or on certain accounts or policies.  A growing approach for public good minded individuals is the use of donor-advised funds.  Funded during lifetime (creating a current charitable deduction), or at death, these alternatives to the foundations created by the very wealthy hold and invest funds to be given to charities selected by the donor immediately or at a later date.  By using a donor advised fund, you can provide for charitable gifts to be made and causes to be supported, long after you are gone.

Planning Early Is Key

The fact that an individual does not have children does not make the need for estate planning any less important.  The California Probate Code has a plan for your assets if you don’t make a plan.  Arguably, men and women without children have more incentive to make their wishes legally binding and known. They cannot just “leave everything to the kids.” 

We all spend a lifetime building our nest eggs.  We don’t want those eggs tossed about without care.  Most individuals want a say in what happens to the money they’ve accumulated over their lifetimes.  Equally importantly, almost everyone wants a say in who can make medical and financial decisions for them in an emergency if they cannot do so for themselves.  There may be charities you want to benefit and there are choices to be made in the best way to support the causes you believe in.  

If you are an adult without children, it is important that you meet with an estate planning attorney.  An estate planning lawyer can create for you the tools and structures needed for you to control your property and insure that your medical treatment wishes are followed. 

When friends ask when they should see an estate planning attorney, I tell them “we all drive on the freeway; we don’t know which day is ours.”  See one before your family needs for you to have seen one.  Attorney Joel Weissler and Attorney Damien Snow can be reached at (619) 281-1888.

 

2015 Annual Tax Free Gifting Limits to Non-Citizen Spouses Change – But Many Will Still Fall Into the Trap

Estate and Gift Tax Basics: 

Our tax code imposes a substantial tax on all transfers of wealth within the United States. Each U.S. Citizen has access to two or three exceptions to this tax regimen.

First, each citizen has a shield from gift and estate taxes which, starting in 2015, will protect up to $5.43 million dollars from transfer tax. This is an increase from 2014 when only $5.34 million was exempt. This is sometimes called the unified exclusion amount because it can be used in whole or in part against either gift taxes during your lifetime or against estate taxes after your death.

There are also category exclusions which exclude certain types or amounts of gifts from being subject to estate tax. These category gifts neither count against your unified exclusion amount nor are they subject to tax. These category gifts include annual gifts. Each U.S. person may make up to $14,000 in current gifts to any person they want without tax. They can also make gifts of this amount or less to as many people as they want, all without tax. A second category are favored direct gifts for the benefit of a person. Under this category, payments made to pay another’s medical bills or educational expenses are not considered gifts.

The third and, perhaps the most generous category, are transfers to spouses. If the recipient spouse is a U.S. Citizen, the donor/giver spouse may give to them any amount without tax. Unfortunately, this unlimited spousal gift exclusion does not apply if the recipient spouse is not a U.S. Citizen. The spousal gift exclusion for gifts to non-citizens goes up next year to $147,000, up from $145,000 for 2014. Any gifts from a U.S. spouse above that amount will chip away at their unified exclusion amount. After that unified exclusion amount is fully consumed, all additional gifts are taxable and of course a gift tax return is required.  With proper planning gifts may be made through a qualified domestic trust and thereby delay when tax is levied until after the non-citizen spouse passes away.  

The biggest surprise tax challenge for non-resident non-citizens is often how to pass their U.S. property onto their children without being walloped with taxes – I will talk about that in a future post.

Buy a Blanket 

In spite of the fact that the Calendar says that it is winter; in Southern California we seldom feel too cold. We forget about the bite of winter experienced in other parts of the country. Last week’s cold bite was a bit of a surprise, a shock to many who scrambled to get out extra blankets, seldom used jackets and turn on the heat. For many others, since this cold wave hit San Diego between Christmas and New Year’s, it became an excuse to celebrate and take a trip up from San Diego to Julian or Idyllwild.

In San Diego it can be easy to treat aging like the seasons. We go on with our lives as if it was endless spring, summer, or autumn and just don’t think about winter. But, sometimes we have to think about it. Based on the calls to my office since Thanksgiving, more and more families are thinking about it after visiting with their parents and grandparents.

Elder Care and Estate Planning are Hard to Think About

Part of thinking about aging and thinking about the hazards and expenses of aging is thinking about hiring an elder law attorney. For Seniors and their families living in San Diego, the choice about whether or not to hire a lawyer for estate and elder law planning is not one to be taken lightly. Unfortunately, going to an attorney for a will or trust, for Veteran’s in home care benefits planning, or to protect a family’s nest-egg against possible future nursing home expenses, is a topic that can cause a lot of anxiety both for the senior and for his or her adult children. There are a number of reasons that it’s an uncomfortable topic. 

Of course, the most obvious is that the need for an elder lawyer brings up the topic of the senior’s mortality. An attorney can be brought in for many reasons, one of which is estate planning. And with estate planning comes the reality that each of our lives will come to an end. This can be especially distressing to an elderly person, but can be even more disturbing for their family members and friends.

Facing a Change in Seasons

Another reason that seniors and their families in San Diego find themselves wanting to work with an elder lawyer is because the senior is beginning to make decisions that are not in his or her best interest. No one wants to tell Mom or Dad that it might be time to stop driving, that they shouldn’t have control over their finances, or that it’s time to consider moving to a nursing home. When an elder lawyer comes into play, it’s often to address these exact topics.

We all need to Prepare for Winter 

The conversation can be softened a bit with different approaches. One common one is for the adult child to talk about others who have had a hard time because they, their spouse or their parents didn’t have proper powers of attorney or healthcare advance directives in place. The best way for anyone to make certain that their wishes are followed if they are incapacitated is to take control ahead of time. Each of us can take control ahead of time only by choosing who will be our voice and what they will say for us, by giving them specific written instructions.

One of the things that often brings people to an elder law lawyer is the realization that a senior is starting to decline in health. This could be physically, mentally, or both. Sometimes this realization comes about when family members see that one of their parents is exhausted from taking care of the other. This often opens the door to talking about getting help and paying for help. Elder law attorneys are experienced in helping families find and afford care while protecting their assets.

Of course, it is always better to work on a long-term plan before ill health becomes an issue, but if your family has waited, there are still a lot of options available. Most Seniors want to make plans and not merely have plans made for them. Once the issue of planning has been brought up, many Seniors can be motivated to move forward and plan - so that the plan for them, is their own plan, – not their children’s plan or anything else. The better a senior’s health, the more say that he or she can have in devising a plan. Planning earlier, while in better health, makes available more options.

Plan to Prevent Conflict

Planning to protect against the challenges of aging is often a full family affair. It is usually, but not always, a good idea for adult children and sometimes siblings to be included in the planning process. Seniors who have included their families in their attorney client planning meetings are more likely to follow through. Follow through usually gives the best results. More importantly, keeping family members in the loop can help to reduce friction later because everyone is aware of the plan and knows how it will be enacted. If there are concerned parties that aren’t available, I strongly recommend that they are communicated with for the same reason.

If there is disagreement among a senior’s adult children, it may be in everyone’s best interest to bring in a third party. In addition to using a San Diego elder law attorney to address these issues, there are geriatric care managers and mediators who are trained in how to refocus everyone on the true goals of the plan, rather than letting things break down and become a grudge match rehashing wrongs and perceived wrongs which may be decades old.
Just as we talk about spring as the time for cleaning, January is a time for putting things in order and making plans.

New Year's Resolution 

Like northerners clearing snow in winter, as long as it falls, you keep shoveling until the driveway is cleared and stays cleared. Spending a little time with a San Diego elder law lawyer now, making a plan, and putting your affairs in order, can make a world of difference down the road. 

 Estate Planning is About You, but Not Just About You!

Like Elder law where getting the care you need is balanced against preserving assets for your family, every San Diego estate planning attorney’s goals are split when doing estate planning.  Although estate planning lawyers must first and primarily focus on estate planning to satisfy their clients and help them maintain control during their lifetimes, in the long run, a lot of estate planning is focused on those who are left behind.  In creating an estate plan that disperses your assets in the way you want, you are creating a legacy and supporting your family, friends, or favorite causes for their own futures.  It’s a noble and wonderful thing to do.  It can also be kind of complicated for those who are left behind.  Properly using an experienced estate planning attorney can reduce these complications - but you need help them make it easier for your survivors.

It’s likely that when you pass away, your family will be dealing with their own grief, in addition to the legal aspects of inheritance.  It’s a difficult time.  One of the ways that estate planning lawyers know of limiting confusion and difficulties is to create an organized plan for getting everyone the information they need.

For most people, important information is kept in a variety of places.  Some might be on your computer, some in the filing cabinet, and still more in a safe deposit box.  Any estate planning lawyer you use in San Diego should also be retaining information that beneficiaries will need to access.  At the Weissler Law Group, and a small number of other experienced law firms, your information is also preserved electronically for easier and quicker access.

With all that in mind, would your family know where to find everything?   There’s a pretty good chance they would not.  I’ve recently been involved in the administration of the estate of a brilliant and wonderful man.  It is amazing, the hundreds of hours that have been required to track things down.  After more than a year, we are still looking.  He never took the time to put in place a map for his family. 

You can help take away worry and frustration by getting things organized, and your lawyer can help you figure out how.

Make a List

A fairly easy approach is to start creating an inventory of your important documents.  Make a list of the important things your family, friends, or lawyer would need to know—not just in case of death, but also if you were to become medically incapacitated.  In addition to listing these items, you should also make sure to note where they are located and include any contact information needed to access them.  For example, include information for your estate planning lawyer, doctors, insurance agents, etc.  Some of the things your list should detail might be:

 

• Will

• Living trust

• Health care documents

• Powers of attorney

• Medications you take

• Accountant

• Insurance agents

• Financial planner

• Insurance policies

• Bank statements

• Stocks, bonds, and other investments

• Deeds and titles to property

• Information on safe deposit boxes (and keys to them)

• Storage facilities

• List of assets

• Debts

• Information on money owed to you

• Benefits

• Tax returns

Additionally, it’s helpful to create a list of all of your online accounts—whether social media or financial—along with your login information and passwords.

None of this information will be useful if no one knows it exists, so be sure that you have told a trusted person how and where to find the inventory.  Most estate planning attorneys in San Diego will advise you to keep originals in a safe deposit box or fireproof safe with copies or even just notes in a binder that can be accessed by the person you’ve designated in case of emergency.  Committed and caring estate planning attorneys will accept a copy of your list and inventory and preserve this critical information for your family.

While there’s no doubt that creating this inventory is a time consuming process, keep in mind that if it’s hard for you, it will be considerably harder for someone who is not you!  Once it’s all together, though, your estate planning lawyer can tell you that it becomes much easier to simply update it when changes are needed.

I hope that the information I have shared here, helps you, and those your care about.

 

The words “wills”, “trusts,” “estates,” and “health care directives” mean to you? Do you envision useful tools which help you protect your family and your wishes if death or incapacity strikes? Or do you brush off these terms believing they are only important for the super-rich or elderly? October 19th-25th marks National Estate Planning Awareness Week, which is a key reminder of just how important estate planning is for everyone. Whether you are a 20-something new parent just starting out, a wealthy entrepreneur or a senior citizen relying on others for long-term care, estate planning provides a solid legal foundation for protecting your family, your financial security, your wishes and your independence through all of life’s transitions. 
Let’s take a look at:

Your Family: If you have minor children, estate planning allows you to appoint the people you want to raise them in the event of your unexpected death or incapacity. Using trusts, you can protect minor children, and even adult children, who may not be prepared to receive a large sum of money after you die. Tools such as health care directives and powers of attorney can make it easier for your family to manage your medical and financial affairs during a health care crisis. Not to mention, estate planning can help shield your loved ones from unnecessary court/legal fees, taxes, strife and family feuds during an emotional time of crisis or loss.
Your Finances- Whether you have a billion-dollar estate or a simple home and a modest savings account, estate planning can help ensure more of your money goes to your family and not the government after your passing. Proper estate planning can also help senior citizens and baby boomers qualify for Medicaid and additional VA Pension Benefits for health care without becoming impoverished or “spending down” everything they own. Many professionals such as physicians and contractors also look to estate planning to shield their personal assets from lawsuits, creditors and other risks associated with their occupations.
Your wishes- Do you have assets you wish to leave to certain people? Are you in a non-traditional relationship or blended family and want to ensure your loved ones are taken care of and share in your inheritance after you are gone? Is there someone you trust to make important medical or financial decisions on your behalf if you are unable to do so? Without an estate plan in place, all of these personal decisions will be made by the courts if the unthinkable happens. This is why estate planning is such an important strategy in making sure your wishes are known and honored if tragedy strikes.

Your Independence- With a solid estate plan in place, you no longer have to fear aging and whether or not you’ll become a burden to your kids during the golden years. Instead, tools such as living trusts, powers of attorneys, insurance policies and health care directives can help you fund your future care needs and carefully design the life and independence you wish to enjoy during your later years.  Advanced estate planning techniques to protect assets from long term care costs are also available - if you act in time.

Be More Than Aware—Take ACTION!

While National Estate Planning Awareness Week is a wonderful observance to help more people become aware of estate planning and its role in helping you protect your financial future and the people you love— the information is useless if you don’t take action!

Estate planning is one of those time-sensitive and critical tasks which must be taken care of as soon as possible. If an unexpected illness or accident happens, you may find many of the planning options once available to you are suddenly gone and your hard-earned money will be exposed to the government, creditors and medical facilities during a crisis. 

Instead, be proactive and get your affairs in order while you are still healthy, of sound mind and have the opportunity to make your wishes known.  There's no greater peace of mind knowing that your assets and loved ones will be protected, no matter what happens. 

For anyone who sets an appointment to either create a new plan or update an old one, mentions this posting and has us do legal work on their estate plan for them, we will donate $50 to either the Alzheimer's Association's San Diego Chapter or Meals on Wheels..