Useful Information When Traveling Abroad

October 30, 2008

San Diego is home to many retirees and others who love to travel. The U.S. Dept. of State has useful information about traveling abroad. At their website you can access information about passports, registering your travel abroad, taking medicines on your trip, customs and import information, and immunizations required for various areas.

You can also check the website for what travel warning and alerts are in effect for a specific country. A Travel Warning is a warning against travel to certain countries where a condition may make the country dangerous or unstable. Currently, some of the countries listed with Travel Warnings are Pakistan, Iran, Iraq, Afghanistan, Yemen, Colombia, Nepal, and Somalia.

Travel Alerts are issued for usually short term conditions such as a natural disaster, a coup, or acts of terrorism. Countries under a Travel Alert at this time are Mexico, China, Comoros, and the Arabian Peninsula.

Before you take a trip abroad it is also a good idea to make sure your estate planning documents are up to date. If you need a will or a trust or want to make changes to your existing documents, don’t wait until the last minute to contact a lawyer. If you need assistance, contact us at Law Office of Scott C. Soady, A Professional Corporation for a complimentary consultation.

Deadline Approaches for Property Tax Relief

October 27, 2008

San Diego is 5th on a list of cities with the biggest decline in home values, behind Las Vegas, Miami, Phoenix, and Los Angeles. The median price of a home in San Diego this month is $380,000 down 20% from a year ago. Hit hard by the increase in foreclosures are the neighborhoods of City Heights, Chula Vista, Encanto, Oceanside, Spring Valley, and Escondido.

If you believe the value of your property has fallen below its assessed value, you can file an Application for Changed Assessment with the Clerk of the Board of Supervisors for San Diego County. There are many companies sending mailers to homeowners offering to do this for a fee, often as much as $300. You can of course use these services if you choose, but it costs nothing to do it yourself.

Download the application and file it as soon as possible but no later than December 1, 2008. You should include with the application supporting documentation such as an appraisal, comparable sales in your neighborhood, or other information to help determine the value of your property. Under California law, Prop 8 passed in 1978, a temporary reduction in asssessed value can be made whenever the market value falls below the assessed value. The assessor's office will re-evaluate the reduction yearly.

Sarah Palin's Son Trig Raises Public Awareness about Special Needs Children

October 23, 2008

Vice Presidential candidate Sarah Palin’s 5 month old son who has Down Syndrome has caused an increase in public awareness about children with special needs. Special needs children are those that need extra care whether because of a developmental disability, autism, cerebral palsy, mental retardation, or other physical or mental condition. Many parents in San Diego County have children with special needs and know all too well about the extra care they require, the government benefits they rely on, and the financial challenges they face.

Many families with special needs children need to rely on Medi-Cal or Social Security to help with the high cost of health care. This financial support can continue throughout the child’s life. Parents and grandparents of special needs children and adults may want to provide for their disabled loved ones in their will or trust but they do not want to jeopardize the individual’s eligibility for public benefits. A Supplemental Needs Trust is the answer.

A Supplemental Needs Trust (often called a Special Needs Trust) enable a person with a physical or mental disability to have assets held in a trust and those assets will not be considered countable assets for purposes of qualifying for certain government benefits. Supplemental needs that can be paid for by the trust may be such items as special medical equipment, dental needs, eyeglasses, recreation, entertainment, transporation, computer equipment, or special dietary needs.

Parents or other family members of disabled individuals who want to provide for a disabled beneficiary can establish a supplemental needs trust as part of their own estate plan and the trust will be established upon their death.

For more information on special needs trusts, read the article on our website. The law firm of Law Office of Scott C. Soady, A Professional Corporation can incorporate a special needs trust into your estate plan or prepare a “stand alone” special needs trust, tailored to fit your concerns about your special needs beneficiaries. Call us or e mail us if we can help.

Why Can't You Draft Your Own Estate Planning Documents?

October 20, 2008

The simple answer is "you can" but why would you want to? You may have seen the commercial on TV where a man is on the phone with his doctor who is telling him how to operate on himself and the man says “shouldn’t you be doing this?”

There are many web sites today that offer inexpensive estate planning documents you can download. There is also software available to write your own will or trust. The problem with doing it yourself is that you don’t have the experience, training, and knowledge to know whether you have done a good job and the effect of not doing a good job can be devastating. Many “boilerplate” trusts and other documents contain language that is inappropriate for your situation. Estate planning is not "one size fits all."

When you hire an experienced estate planning lawyer you are not only paying for the document itself but the training and experience that goes into a properly drafted document. The attorney knows what questions to ask to assist you with decisions such as whether you want clauses about distributions to minors and at what intervals, duty to provide accounts and reports, how to distribute assets if a beneficiary predeceases the trustor, and what clauses are necessary to protect the estate from estate taxes. Deeds need to be prepared to record your real property with the County Recorder and a Preliminary Change of Ownership form needs to be filled out correctly to avoid reappraisal.

At Law Office of Scott C. Soady, A Professional Corporation we offer a complimentary consultation to find out what your goals are and make sure the appropriate clauses are in your revocable living trust. We also record deeds to put your real property into your trust and assist you with funding your trust. Read more about what is included in our revocable living trust package and give us a call.

Estate Taxes and the Presidential Election

October 17, 2008

When someone dies, estate taxes have to be paid if the estate is large enough. Under the current law, the federal estate tax exemption is $2 million. This means that no estate taxes will have to be paid on estates under $2 million and for couples, assets of less than $4 million would be exempt from estate taxes.

The exemption is set to increase to $3.5 million in 2009, disappear entirely in 2010, and revert back to $1 million in 2011.

Now that the Presidential candidates have been narrowed to McCain and Obama, where do they stand on this issue? John McCain is in favor of raising the exemption to $5 million. Senator Obama proposes a $3.5 million exemption. The other difference is that McCain would cut the tax rate from 45% to 15%. Obama is in favor of keeping the tax rate at 45%.

So it does appear that no matter which candidate is elected, the country will continue to see a federal estate tax exemption which will keep the majority of Americans from having to pay estate taxes upon their deaths. It has been estimated that in 2009, only 1 in 600 estates will owe estate taxes.

For couples to both take advantage of the exemption for estate taxes, they need a revocable living trust with appropriate language. There are many other advantages of a trust even if you are not concerned about estate taxes. If you need a trust and corollary documents prepared, contact us at Law Office of Scott C. Soady, A Professional Corporation to schedule a free in-house consultation.

Update on the Estate of Heath Ledger

October 14, 2008

Nine months after the death of Heath Ledger, his estate is being given to his 2 year old daughter Matilda. Ledger had a will he signed in 2003 before the birth of his daughter, leaving everything to his family in Australia. The family has decided to give the estimated 16 million estate to his daughter.

Attorneys for Matilda have also filed a lawsuit against ReliaStar Insurance Co. for bad faith for not paying out on a $10 million life insurance policy Ledger took out in June 2007. He died in January 2008 from an overdose of prescription drugs. The insurance company claims they won’t pay the money until they are satisfied that the death was not a suicide. Insurance policies frequently contain clauses which prevent a pay out if the insured commits suicide. It may be an uphill battle for the insurance company since the New York medical examiner ruled the death accidental.

The case of Heath Ledger illustrates the necessity for updating your estate planning documents after major changes in your life, such as the birth of children. Other events that may dictate a review are divorce, death of beneficiaries, trustees, or executors or a major change in your assets such as from an inheritance or a business venture. If you need a review of your estate plan, call us or e mail us at Law Office of Scott C. Soady, A Professional Corporation for a complimentary consultation.

New Changes in Medi-Cal on the Horizon

October 11, 2008

The Governor recently signed California Senate bill 483 which will bring some major changes to the Medi-Cal Long Term Care program. This bill was designed to put California in conformance with the Federal Deficit Reduction Act of 2005 which requires states to place limitations on Medi-Cal eligibility or risk loss of federal funding. The bill will go into effect January 1, 2009 and will have an impact on hundreds of thousands of seniors and individuals with disabilities or mental health issues.

The bill will change the look back period in California from 30 months to 60 months and makes the penalty period start when an applicant is in a nursing home and applies for benefits. (The look back period is the time within which Medi-Cal can review transfers of assets.)

The bill also limits the equity in the exempt home to $750,000 and defines “equity interest” as the assessed value or appraised value, whichever is lower, minus encumbrances. The home equity limits do not apply however in certain circumstances.

The other major change is the way Medi-Cal will treat annuities. The new bill will require applicants to disclose whether they or their spouses have an annuity. The bill will also require the State to specify whether an annuity is the type where the State may become a remainder beneficiary. There are some types of exempt annuities such as work-related pension annuities and irrevocable annuities which are actuarially sound with no deferral or balloon payments. For additional information or to receive a copy of Senate Bill 483, read the article on this subject on this website.

If you need help with Medi-Cal qualification or other Medi-Cal issues, contact us by phone or e mail us at Law Office of Scott C. Soady, A Professional Corporation.

San Diego and Fire Preparedness

October 9, 2008

In San Diego we are familiar with Santa Ana conditions and a lengthy fire season from May through October. The communities of Rancho Bernardo, Poway, Rancho Santa Fe, Ramona, and Escondido still have not completely recovered from last year’s Witch Fire. Are you more educated now than you were a year ago about fire and fire readiness?

Here are some useful links:

1. Cal Fire (California Dept. of Forestry and Fire Prevention) has information about fire prevention and current California fires and trouble spots.

2. Firewise has interesting interactive quizzes you can take to see if your home is protected from a fire and test how firewise you are.

3. California Fire Weather is a site that shows information on a daily basis about red flag areas and fire weather watches in California.

4. FEMA (Federal Emergency Management Agency) handles fires and other kinds of emergencies and disasters. Secifically as to fires, there is information on what to do before, during, and after a fire.

In addition to getting your home as fire-safe as possible, you should be sure your estate planning documents are in a safe area. Some people put their documents in a safety deposit box at the bank or in a safe in their home. If you keep your documents in your home you may want to invest in a fireproof safe or fireproof box which are reasonably priced and will give you peace of mind.

Can Children Born After Their Parent's Death Inherit?

October 8, 2008

San Diego, like many other large cities is on the cutting edge of technology and has a number of sperm banks, egg banks, and cryopreservation companies for storage of reproductive material. With the advent of techniques such as invitro fertilization and cryopreservation of sperm, eggs, and embryos, children may be born many years after the death of a parent raising a variety of legal issues.

A child that is born after the death of one or both parents is referred to as a “posthumous” child. The law in California recognizes children born posthumously by specifically providing in the California Probate Code Section 248 - 249.8 that such children have the same inheritance rights as children born before the death of their parent.

The new reproductive technologies can potentially create a number of other problems. An example is whether a child born from frozen sperm or embryos can qualify for social security benefits. A U.S. Court of Appeals for the Ninth District has said they do get social security benefits. As modern technology evolves, the law is going to have to address these and undoubtedly other issues.

If you have genetic material stored such as sperm or eggs for posthumous reproduction, you should mention this to your estate planning lawyer. The Probate Code requires that the decedent specify that his or her genetic material can be used after death for conception. Issues could also arise later as to whether some assets held in a trust for example, would have to be held back for distributions to posthumous children. If you have any questions about posthumous children or any other estate planning issue, call us or e mail us at Law Office of Scott C. Soady, A Professional Corporation.

San Diego County: Bicycle Safety

October 7, 2008

In San Diego, the San Diego County Bicycle Coalition has many different tips and advice to help riders. There is also a You Tube website which has information from the NHTSA on bicycle safety. At our law firm of Law Office of Scott C. Soady, A Professional Corporation, LLP we advocate bicycle safety. If you are injured in a bicycle accident in San Diego County, please e mail or call our firm for a complimentary consultation.

When a car or truck has a collision with a bicycle, the bicycle rider usually loses, no matter who legally had the right of way. Bicycle riders should take extra care to obey the following safety tips:

Remember: Bikes Are Vehicles, Too

Legally, bicycles traveling on a road are required to be treated in the same way as any other vehicle traveling on the road would be. This means that, as a bicyclist, you must obey the same laws as other drivers do. Do not run red lights, change lanes without signaling, or commit other infractions. If you would not do it in a car, don't do it on a bike.

Wear a Helmet

The easiest way to protect yourself is to always wear a helmet when you ride. Some jurisdictions require all riders to wear helmets, but even where it is not required, wearing an approved helmet can significantly reduce the chance of serious head injuries in the event of an accident.

Be Visible

Because bicycles are so much smaller than cars and trucks, it is important to make sure that others using the road can see you. Make sure that your bicycle has reflectors on the front and back and even on the wheels. When riding at night, wear light-colored clothing and use a light.
Be Aware

The best safety advice is to be aware of the conditions around you and be careful when riding. Always look both ways when entering a street and stay on the correct side of the street when riding. Keep a lookout for drivers who may not be looking out for you. Like other drivers, bike riders should ride defensively.

How do you hold title to Real Property?

October 6, 2008

When you purchase property in San Diego County, you will have to specify how you are going to hold title. Title is the evidence that you are the owner. The form of ownership is called “vesting”. The escrow company will ask you how you want to hold title so the deed to your new property can be prepared. Here are some of the more common forms of holding title.

Sole Ownership
When you hold title as the sole owner, you own the entire interest. Usually sole ownership is for single individuals. A man or woman who has not been married may hold title as “John Doe, a single man.” A man or woman who was previously married but legally divorced might hold title as “Jane Doe, an unmarried woman.” If you are married and want to take title in your name alone, your spouse must relinquish all interest in the property since real property conveyed to a married couple in California is presumed to be community unless otherwise stated. Title in that case might read “John Doe, a married man, as his sole and separate property."


Joint Tenancy
This form of ownership occurs when two or more individuals, who may or may not be married, want to own property together in equal interests. With joint tenancy with right of survivorship, when one joint tenant dies, the other joint tenant becomes the owner of the property by operation of law rather than the property passing to the deceased joint tenant’s heirs. As an example, title could read "John Doe and Jane Doe, husband and wife, as joint tenants.” Many couples who purchased property years ago may be holding their property in joint tenancy.

Tenancy in Common
Tenants in common are two or more owners who own an undivided fractional interest. As an example, one owner may have a 1/3 interest and the other a 2/3 interest in the property. Two owners may each own ½. Each owner can use and enjoy the entire property and each owner may sell or give his interest away or leave it to someone else upon their death. An example is “John Doe, an unmarried man, as to an undivided 1/3 interest and Jane Doe, a single woman, as to an undivided 2/3 interest, as tenants in common.”

Community Property
If you are a married couple, you may hold title as community property. In California real property conveyed to a married man or woman is presumed to be community property unless otherwise stated. Each spouse has a ½ interest in the property and may leave that interest to the other spouse or anyone else. Title would be held as “John Doe and Jane Doe, husband and wife, as community property.”

How you hold title can have important legal consequences. When you create a living trust, you should put your home and any other real property in the name of the trust. If you have any questions about how to hold title in your situation, you may call us or e mail us with questions. At Law Office of Scott C. Soady, A Professional Corporation we can also assist you with the preparation of a living trust package, including trust transfer deeds.

Children's Trusts for San Diego Children

October 2, 2008

If you die with a will or intestate (without a will), the probate court has no discretion to withhold money from your legal heirs if they are 18. There are many 18 year olds who are not capable of managing significant amounts of money at that age. One way to insure that your children do not receive distributions from your estate at such a young age is to create a children’s trust or build one into your own revocable living trust. In either case you can be creative as to when your children receive distributions and for what purposes.

A trust can structure your child’s inheritance by making specific provisions for the use of trust assets. As an example you may provide that upon your death, a family member will be the successor trustee who will use the trust assets for the “health, education, maintenance, and welfare” of the child. Will that include money for vocational training or starting a business? Will the trustee have the discretion to buy a car for the child to go to work or school? These are some issues your trust provisions can address.

What about distributions when the child becomes an adult? You can specify in the trust that distributions be made at age 25, 30, or 35 or any other intervals you wish. You can specify that a distribution be made upon graduation from college, or that there is to be no distribution at all until the child turns 35 or 40.

You also have to decide what happens if the child dies before all distributions are made. Do the trust assets pass to their children or to the other beneficiaries or perhaps to charity? Another decision is whether the trustee of the trust should make a yearly accounting of the trust assets. Some people put spendthrift provisions into the trust ( preventing the child from borrowing from the trust) or provisions about substance abuse.

A trust for your children can put your mind at ease about the financial future of your children. If you would like a children’s trust set up or one incorporated into your own living trust, call us or e mail us at Law Office of Scott C. Soady, A Professional Corporation to set up a complimentary appointment