San Diego Estate Planning Lawyer Blog

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.

If you are loaning money to a family member, it should be supported by written documentation such as the amount loaned, the terms of repayment, interest charged, etc. You may want to include a provision as to how problems with repayment will be resolved. Also remember that there are tax implications for certain intra-family loans so you should check with your tax consultant if the loan is over $10,000.

Some people also consider including a provision in their trust that a loan that has not been repaid before their death shall be deducted from that beneficiary’s share during distribution so that other beneficiaries are not slighted. Also for example, if you have given a child $100,000 to start a business or obtain an advanced degree, you may want to note in your trust that the amount should be deducted from that child’s share so that your children will still share equally in your estate at your death.

If you need help with intra-family loans or deciding whether to gift or loan and whether you should put a provision in your trust, contact us at Pinkerton, Doppelt, & Associates LLP for a complimentary consultation.

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.

An innovative service called Legacy Locker has a new service to manage your list of online accounts and passwords. Customers choose a beneficiary who is entrusted with the digital assets, whether they are photos, emails, cash in Pay Pal, etc. Legacy Locker allows a customer to choose who should be notified of their death. After receiving verification of a customer’s death, Legacy Locker releases the information.

Similar services are VitalLock.com and AssetLock.net which serve as an “electronic safety deposit box” where registered users can store private documents plus passwords, lock combinations, and other private information

These online services of course charge for their services. It is a good idea whether you pay for such a service or keep the information in your safety deposit box to have someone know the passwords and assets you may have in your computer. What’s not a good idea is to leave the information written down on a pad in your desk drawer or worse yet, in your computer.

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.

E- Experiences. One way to break the ice is to talk about your own experiences and feelings about estate planning, end of life issues, etc. Get an estate plan done yourself or if you already have one, talk about your experience and reasons for getting it done.

M - Motivation. Make sure you are clear about your motives in having the discussion. Some parents may be reluctant to discuss such issues if they feel you are trying to influence them rather than just being concerned. Emphasize that you are not having the discussion because you don't think they will have a long life but just to be sure plans are in place before any emergency occurs.

P - Place. A public place or at a family reunion would not be an ideal place to discuss such issues. They should be discussed in a private, comfortable setting.

O-Outcome. The outcome should be the culmination of your goals in having the discussion, ie. opening up a safe, honest dialogue about potential issues they may have to face and seeing that those issues are addressed.

Once you have had the discussion to help your parents focus on what needs to be done as far as estate planning is concerned, feel free to contact us at Pinkerton, Doppelt, & Associates if we can help. Our first consultation is always free.

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 Pinkerton, Doppelt, & Associates, LLP 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.

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.

Advance Health Care Directives are recognized in every state. They have no time limit; they remain in effect until revoked and they can be amended or revoked at any time.

What happens if you do not have an Advance Health Care Directive? Sometimes hospitals will have a policy setting forth who should make medical decisions especially if there are no family disagreements. The California Probate Code also has a procedure to petition the court to assist with medical decisions in the absence of a health care directive. A conservator could also be set up over the person of someone incapable of making health care decisions on their own. Having a health care directive however saves time and money and makes it easier on loved ones knowing that decisions that are made are what you would have wanted.

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 Pinkerton, Doppelt, & Associates, LLP 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.

The language which is necessary refers to HIPAA and CMIA and gives your agent the authority to obtain, use and disclose your health information and medical record so that your agent can deal with health care providers who are providing health care services to you. If you need help determining if your documents have the appropriate language, call us or email us for assistance.

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.

This is the first in a series of blog articles about HIPAA. Next we will discuss the Advance Health Care Directive - what it is, why HIPAA releases should be in them, and who needs them.

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.

Mary Jo Quinn, director of the San Francisco Probate Department has said she has never heard of siblings squabbling in the probate court while the parent is still alive and capable. “Anybody can sue anybody,”she said, “but the trick is they have to prove it.”

Stay tuned.

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.

To order a copy in English or Spanish, you can email the California State Bar at seniors@calbar.ca.gov. Orders will be shipped in May.