San Diego Estate Planning Lawyer Blog

Many younger Americans, even though they have managed to buy a home and acquire a number of other assets, remain unfamiliar with estate planning issues. A survey conducted by Fidelity Investments reveals that many Americans between the ages of 30 - 49 do not know some of the key issues and strategies for managing their assets.

61% did not know the maximum amount you can give annually in gifts without having to pay federal gift tax. Do you know that the amount for 2009 is $13,000 per person to each individual?

80% did not know what the maximum value of your estate can be to avoid federal estate taxes. Correct answer - $3.5 million in 2009.

78% were not familiar with the benefits of a living trust. If you are a regular reader of this blog, you probably know that a properly drafted trust will avoid probate, minimize estate taxes, set up trusts and guardians for your minor children, and even take care of your pets.

Other issues that many people do not know about are the purpose for an Advance Health Care Directive and even who inherits their property if they die without an estate plan. Can you answer these questions?

Younger Americans today are acquiring wealth at a faster pace than their parents or grandparents making it more important that they have a better understanding of estate planning. If you need help in understanding estate planning issues or would like to learn how an estate plan can benefit your family, calll us at Pinkerton, Doppelt, & Associates, LLP.

In our last blog, we talked about the timeline for probate in San Diego. Another question we are asked frequently is who is going to be appointed the executor or administrator of the estate? If there is a will created by the decedent, the will usually names the "executor." If that individual is unable or unwilling to serve and there are no successor executors named in the will, then the court may be asked to appoint an administrator with will annexed also known as an administrator CTA. If a person dies without a will, the person who handles the estate is called the "administrator." All administrators and executors have the same function which is to oversee the decedent's estate, including evaluating assets, paying bills, and distributing the estate to the beneficiaries.

Any interested party can petition the court to become the administrator. An interested party could be a family member or even a friend. There is however an order or priority which is set forth in the Probate Code. The following list shows the persons who have priority if they choose to be appointed:

1. Surviving spouse or domestic partner
2. Children
3. Grandchildren
4. Other issue ("Issue" means one's descendants)
5. Parents
6. Brothers and sisters
7. Issue of brothers and sisters (nieces and nephews of the decedent)
8. Grandparents
9. Issue of grandparents
10. Children of a predeceased spouse or domestic partner
11. Other issue of a predeceased spouse or domestic partner
12. Other next of kin.

Last in the priority list are other interested persons which could be friends of the deceased or even a creditor.

If you have any questions about probate or the appointment of administrators and executors, or want to petition the court to become one, contact us. at Pinkerton, Doppelt, & Associates. Your initial appointment with us is always free of charge.

If your loved one who resided in San Diego has passed away with a will or no estate plan, there will have to be a probate proceeding in the Superior Court. Probate can be a lengthy and complicated process with deadlines that have to be followed. Most people want to know “how long is this going to take?” Every probate is different. There are no simple answers to that question. The time depends on what assets are in the estate, how easily they can be liquidated, whether you own property in other states, and other issues.

The following guideline gives you a basic idea as to what has to be done and when it is usually accomplished, assuming you contact us at Pinkerton, Doppelt, & Associates, LLP or another experienced probate lawyer soon after the death.

Filing the will with the Superior Court - Within 30 days of death

File a Petition for Probate; Publication of Notice in local newspaper - Within 1 - 2 months

Hearing on Petition; Appointment of Executor or Administrator; Bond issued if necessary - 2 - 3 months

Notice to Creditors - Within 2 - 4 months

Inventory of Assets; Appraisal of all assets; Obtain a tax ID number, Pay bills - Within 4 - 8 months, depending on number and type of assets

Filing of an Estate Tax Return if required - Within 9 months of death

Filing of Federal/State Tax Returns - Within 6 - 12 months

Filing of an Accounting if necessary; File Petition for Final Distribution and Distribute Assets - Within 8 - 18 months

The above timeline is a general one. These are most of the steps which will occur but there may be other steps in your situation. Your probate may be longer or shorter depending on your loved one's estate and the court’s calendar. Litigation could also cause delays. If we can help with probate in your situation, contact us to schedule a complimentary appointment.

With the aging baby boomers now becoming seniors and people living longer in general, one of the issues seniors face, especially in this economy, is the possibility of needing long term care. The cost of nursing home care has risen tremendously in the last decade. A survey done by Metlife in October 2008 listed the average cost of a private room in San Diego as $240 per day. Assisted living facilities can run anywhere from $2500 - $5000 per month, even more for specialized care such as for Alzheimer’s patients.

You can read more about long term care planning in an article here on our website. One option to pay for nursing home care is Medi-Cal, the California state-funded needs based program. Medi-Cal provides health and long term coverage to over 10 million Californians. To qualify for Medi-Cal for 24 hour care in a skilled nursing home,an applicant must pass the Income Test and the Asset Test. Medi-Cal has certain income limitations and also only pays for the cost of nursing home care if the "countable" or "non-exempt" assets of the person needing care and their spouse are below certain limits.

There are some assets that are “exempt” meaning they do not count in figuring your assets. Some of these “exempt assets” are a home, car, personal property, $1500 in life insurance, and prepaid funeral plans. You can also convert some of your countable assets into exempt assets before entering a nursing home.

If there is any chance that you or a family member will need Medi-Cal assistance, contact us at Pinkerton, Doppelt, & Associates, LLP for a complimentary consultation. There are strategies we can advise you about such as spending down your assets, converting nonexempt assets to exempt assets, and other techniques to enable you to qualify for Medi-Cal. We can assist you in determining if you qualify for Medi-Cal and act as your representative in completing and submitting the application.

Medi-Cal considers the amounts they pay to you in the nature of a loan that has to be paid back from your estate after you die. There are some legal steps that can be taken to minimize or eliminate the collection attempts but they need to be handled properly to be effective.

A will that is written in one's own hand is called a holographic will and is valid in California. The basic requirements are:
1. The document must be completely written in the handwriting of the Testator (the individual creating the will).
2. The will must be dated and signed.
3. The will must be legible.
4. The will must clearly state what assets are being left to whom.
Although not a requirement, it is helpful if the will is witnessed by two witnesses or even better, notarized.

Most often holographic wills are written on stationery, notepads, paper, or even envelopes, however there are some interesting cases where people used ingenious substances in the absence of paper. In Canada, there was the famous case of a farmer trapped under his tractor so he carved a will into the tractor's fender. The fender was actually probated and held to be a valid will. The fender is on display at a law school in Canada.

Another unusual case was the so-called "petticoat will" in California. A man was in a Los Angeles hospital and fearing his imminent demise, wanted to write his will but could not find a piece of paper. A nurse tore off a piece of her "petticoat" on which he wrote his will.

One of the shortest "wills" on record was one which said "All to wife" written on a bedroom wall. Another individual carved a "will" on a wooden plank from his rocking chair. One deceased tried to carve her will on a watermelon.

The problems with these informal wills is that they often result in a legal battle over their validity. Often people don't realize there are some requirements for them to be valid. True, holographic wills are simple to create and may be necessary in an emergency, but often can turn out to cause problems never anticpated by the Testator. If you need a well written will or better yet, a trust, the experienced estate planners at Pinkerton, Doppelt, & Associates, LLP are a call or a click away.

At Pinkerton, Doppelt, & Associates, LLP we see trusts everyday that are drafted by other estate planning lawyers in San Diego or even by our own firm that cause some concern. Once your trust is drafted, it is intended to be reviewed periodically and also there are some things you need to aware of.

Not transferring into your trust all of your assets that should be in the trust. Depending on your attorney and what arrangements you make concerning transfer of assets into the trust, some transfers of assets require an affirmative action on your part. For example, to transfer your accounts into the name of your trust, you often have to visit the bank and fill out new signature cards. If you forget to do this, the bank account will not be in the trust at the time of your death, causing problems for your heirs. As you acquire new assets or change the form of the ones you have, you need to remember to title those new or changed assets into your trust. Assets that are left out, with some exceptions, will require probate and that is what you were trying to avoid in creating the trust in the first place.

Writing on your trust, crossing out words, or writing in the margins. We often have clients come into the office for a review of their trust or for some other service and find that their trust document has words crossed out or writings in the margins or highlighting. Please remember that a trust is a notarized document and it can only be changed by another document that is notarized. You cannot change your trust by crossing out language and adding the changes with your signature; it has to be formally amended. Also if we are going to petition the Court for some reason concerning your trust, a clean copy of the original trust will have to be filed.

Not amending your trust when important events happen in your life. We always try in our office to draft a trust that will take into consideration later children born or other events which may occur, however there are some events that require you to amend your trust. An example is a child born to you after the trust is drafted that is born with a disability or special needs, or later in life becomes disabled and receives SSI or Medi-Cal. Your existing trust may call for your estate to be divided equally to your children with no mention of special needs, causing your disabled child to lose his or her public assistance. A special needs trust for a beneficiary has to be set up as part of your estate plan so such an event will necessitate an amendment or a separate Special Needs Trust. There are other events that might happen in your life that also will cause your trust to become outdated such as an inheritance, death of a successor trustee, or deaths of beneficiaries.

Not keeping the original of your trust in a safe location. People differ in their opinions as to where a trust should be kept. Some people feel more comfortable keeping it in a safe deposit box. A trust can be quite lengthy however and some people feel that the cost of a box big enough to hold the trust is a factor plus the inability to have access to it. Other people purchase a safe or a fire proof box. The fires of 2007 made the point that just keeping your trust in a file cabinet at home without a copy anywhere else can be a problem. The estate planning attorney who drafted the trust should keep a copy but sometimes years later it may be difficult to locate the attorney or the document.

For these or other estate planning issues, we can help at Pinkerton, Doppelt, & Associates, LLP. Call us or email us to set your complimentary consultation.

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:
1. The individual does not have sufficient mental capacity to be able to (A) understand the nature of the testamentary act, (B) understand and recollect the nature and situation of the individual's property, or (C) remember and understand the individual's relations to living descendants, spouse, and parents, and those whose interests are affected by the will. OR
2. The individual suffers from a mental disorder with symptoms including delusions or hallucinations which delusions or hallucinations result in the individual's devising property in a way which, except for the existence of the delusions or hallucinations, the individual would not have done.

The California Probate also provides that someone does not have "mental capacity" if at the time they are making a will or a trust they lack the ability to communicate verbally or by any other means and to understand and appreciate (a) the rights, duties, and responsibilities created by, or affected by the decision, (b) the probable consequences for the decisionmaker and, where appropriate, the persons affected by the decision, and (c) the significant risks, benefits, and reasonable alternatives involved in the decision.

Stated simply, capacity is the ability to make decisions for yourself. It includes memory, attention, logic, information processing, verbal comprehension, and the ability to concentrate and stay on task. In the area of estate planning, it means that you can make your own decisions about your estate plan by understanding what assets you have, who you want to leave your estate to, who you want to make financial and health care decisions for you if you are unable to make those yourself, and what the various provisions in a will or trust mean.

A person may lack capacity due to dementia, brain injury, mental illness, or a progressive medical condition or disease. A person may lack capacity permanently or temporarily such as when someone has been injured in an accident but then recovers. Sometimes a medical assessment is necessary to evaluate a person’s level of memory, cognition, and judgment before important legal decisions are made.

The reason this is important is that once a person has lost his or her mental capacity, they are no longer able to execute such documents as wills, trusts, or powers of attorney. If you need assistance with estate planning documents, we offer a free consultation. Call us at Pinkerton, Doppelt, & Associates LLP for an appointment.