Have You Ever Heard of an Ethical Will?

May 31, 2010

At Scott C. Soady, A Professional Corporation, we encourage families or individuals to create an estate plan, consisting of a will or a revocable living trust so your loved ones know how you want your assets distributed. An interesting off shoot from traditional estate planning is an ethical will. Have you ever heard of one?

An ethical will (also called a "legacy letter") is a document designed to pass ethical values or life lessons from one generation to the next. They have been around for centuries and come from the Judeo-Christian tradition. Rabbis and Jewish laypeople wrote ethical wills during the 19th and 20th centuries.

Today, Dr. Andrew Weil, a noted author and doctor of integrative medicine who has written books on health and aging, promotes ethical wills as a gift of spiritual health to your family. Leaving such a document explains to your loved ones their family and cultural background, ethical and spiritual values, life lessons and experiences, and your hopes for future generations.They are becoming more prevalent. Even President Obama has written a legacy letter to his daughters.

There are a number of sources to help you write an ethical will, which could be in the form of a letter, an audio CD, or a DVD. Common themes are personal values and beliefs, spiritual values, wisdom to be passed on, love, forgiveness, and the legacy you leave for the next generation. You also may want to explain why you did certain things in your life, why you chose a certain charity, why you chose certain beneficiaries or made certain distributions, history your family may not know about you, or how your life experiences shaped your life.

An ethical letter is of course personal. We can assist you with estate planning documents to specify your wishes regarding your personal assets but creating an ethical will or legacy letter is something only you can do. It could become the most cherished asset you leave your loved ones.

How Can a Trustee Resign?

May 27, 2010

A trustee is the person who handles the distributions to the beneficiaries according to the terms of the trust document. Some trusts can go on for years if there are distributions to be made for the benefit of minors or for other reasons. There may be some circumstances where a trustee may wish to resign from his duties as a trustee of a trust before the trust is completely administered. There are basically 4 ways.

1. As Provided in the Instrument. Most trusts by their express provisions allow a current trustee to resign with written notice and an accounting. For example, suppose you are the successor trustee of your parent's trust and find that you must take a job abroad. If the trust names an alternate successor trustee and specifies that a currently serving trustee may resign by giving written notice to the beneficiaries, it is easy for you to resign. Some trusts also provide that when trustees resign, the resigning trustee must account for the transactions and dispursements he made while acting as Trustee.

2. With a Revocable Living Trust With the Consent of the Trustor. Suppose you are the
Co-Trustee of your father's trust and you want to resign. If your father consents, you can resign and your father can appoint another Co-Trustee if he wishes. It is a good idea to put the consent and resignation in writing. There is no requirement that you give notice to the beneficiaries.

3. With an Irrevocable Trust, With the Consent of All Beneficiaries. If you are the Trustee of an Irrevocable Trust, you need the consent of all adult beneficiaries who (1) are receiving income; (2) are entitled to receive income; or (3) are entitled to receive a distribution of principal if the trust were terminated.

4. A Court Order. If there is no provision in the trust and there is no successor Trustee able or willing to serve, you may have to petition the Court to appoint a Trustee. Nominations of the beneficiaries will be given consideration.

For issues with Trust Administration or questions about your duties as the Trustee, contact us at Roy M. Dopppelt & Associates.

What is a Limited Conservatorship?

May 23, 2010

There are several types of conservatorships, one of which is a limited conservatorship. These types of conservatorships are set up for an individual who is developmentally disabled and unable to provide for his or her personal needs and/or financial affairs. Developmental disabilities include such conditions as autism, cerebral palsy, and mental retardation that was diagnosed before the individual's 18th birthday.

Many disabled people can do certain things on their own and do not need a regular conservatorship. With a limited conservatorship, the Court has the authority to give the conservator some or all of the following limited powers: determining where the conservatee will live, giving or withholding of medical treatment, determining the ability of the conservatee to contract, controlling social and sexual relationships, giving or withholding of consent to marry, and making decisions about education. The limited conservator also can be granted the authority to see the conservatee's private papers and records and manage their finances.

Limited conservators are usually the parents or siblings of the conservatee but the Court can appoint other interested persons who petition the Court. Once a conservator is appointed, he or she will take care of the conservatee's food, shelter, clothing, and medical treatment and if appointed conservator of the estate of the conservatee, will also manage that person's assets, collect income, and pay the bills.

In San Diego, the San Diego Regional Center is notifed of the petition for limited conservatorship and will conduct an interview and prepare a report for the Court. In addition, the court appoints an attorney for the proposed conservatee to protect his or her interest.

Once the limited conservatorship is established, it is supervised by the Court, within one year of the appointment and thereafter, every two years. Limited conservatorships can be terminated if the conservatee dies or the conservatee becomes able to take care of himself.

For more information or to schedule an appointment for a limited conservatorship, please contact us. Your intitial consultation is complimentary.

Considerations When Choosing a Guardian for Your Children

May 19, 2010

As you prepare your estate plan, many of the decisions you have to make relate to your children. You may not have thought about how you would want your estate distributed to your minor children if something should happen to you. Would it go to your children equally? Should it be distributed outright or in trust? Should your estate be held in trust with distributions for health, education, and support and then distributed at various age intervals? Who would be an appropriate choice to be the trustee that manages your children’s assets

Another consideration is the choice of who will be the guardian for your minor children. Here are some questions to ask yourself as you think about who to nominate as the guardian of the person, ie. the individual or couple who will physically take care of your children: feed them, clothe them, educate them, etc.

1. Is the person you’ve chosen young enough to take on the responsibility? Often young couples will want to name the maternal or paternal grandparents. Raising children is a tough job and as much as you may want to name your parents, they may not be physically capable of raising your children to adulthood or they may not survive you. If you do choose individuals who are older than you, always name back up guardians.

2. If you’ve named a couple to take care of your children, what should happen if the couple divorce?

3. Is the proposed guardian physically well, emotionally stable, and financially secure? Does he or she have a healthy lifestyle and no addictions? Do they have a job that could take them out of the state or necessitate a deployment out of the country?

4. Does the individual have parenting skills similar to your own and the traits necessary to raise your children? Patience and a sense of humor come to mind. Are your religious beliefs an important consideration?

As with all the issues involved in creating an estate plan, we can help you through the process of making these and other important decisions. Call us or email us if we can help.

Is Hiring an Estate Planning Lawyer Worth It?

May 15, 2010

It is true that in todays society, you can prepare your own will or trust using the internet or a book on estate planning. The question is whether you should!

Kiplinger magazine has a quiz to test your knowledge of what makes money savings sense and what doesn't. Such questions as whether it is cost effective to join a warehouse club, change your oil every 3000 miles, and invest in "load" mutual funds. Question 4 asks whether it is worth it to hire a lawyer to prepare your will or trust. The answer is "yes". Kiplinger says it makes sense to pay a competent lawyer a reasonable fee to prepare a will or a trust. In the long run, it is cheaper than a costly legal battle later.

At Scott C. Soady, A Professional Corporation, we offer a complete revocable trust package for a reasonable flat fee. If you mention that you located our office through the internet, you also get a 25% discount. The documents you will receive with your trust package are a revocable living trust, pour over will,durable power of attorney for assets, advance health care directive, certificate of trust, assigments of personal property, and deeds recording your San Diego property. Our experiened estate planning lawyers will meet with you and advise you of the various types of trusts provisions that may be incorporated into your estate plan and help you make decisions on the choice of a trustee, guardian for your minor children, how to give to charities, and what assets to title in the name of your trust.

Call us for a complimentary consultation. In addition to trusts, we also do wills, guardianships, conservatorships, probate, and will and trust litigation.

Is There a Will or a Trust? How Hard Should We Look?

May 11, 2010

When a person dies in San Diego, the Probate Court will determine to whom the assets of the decedent will be distributed based on the laws of "intestate" succession. "Intestate" means that the decedent died without a will or a trust. Before you decide to file a probate proceeding without a will, make sure that it is indeed the case that no will or trust can be found. It can make a difference.

Look for a will or a trust in the decedent's home and business files, safety deposit box, or safe. Ask other family members if they recall the decedent mentioning that he or she executed a will or a trust. Find out if the decedent had a family lawyer who may have drafted an estate plan or referred the decedent to an estate planning lawyer. Often estate planning attorneys will keep the originals of clients' estate plans in their fire proof safes. Look through the decedent's collection of business cards to see if a lawyer is among them.

If no will or trust can be found, the steps in the probate process will be the same as for a probate with a will. The difference is in the distribution of the assets. A couple of examples will illustrate the difference:

1. Tom dies with a will or trust leaving all his property, community and separate, to his wife Karen. Tom also has a son. All of the property is distributed to Karen. If Tom dies wihout a will or trust, Karen gets all the community property but only half of the separate property. The child gets the other half.

2. Sally, a single woman with no family, dies with a will leaving half of her estate to her best friend Jan and the other half to a number of charities. If Sally had died without a will and no heirs could be found, her property goes to the State.

3. Mary dies with a trust that sets up subtrusts for her minor children and names a guardian to take care of them and a trustee to manage the trust making distributions at intervals of age 21, 30, and 35. If Mary dies with no estate plan, the Probate Court will have to appoint a guardian with no input as to who Mary would have preferred to raise her children and a guardian of the estate to manage their money until they turn 18.

These examples demonstrate that it can be important to make sure that the decedent in fact died without an estate plan. He or she may have had wishes that will not be carried out through intestate succession. Scott C. Soady, A Professional Corporation would be happy to assist you with creating your estate plan or probating the estate of your loved one who did not.

Troubles With Joint Tenancy

May 7, 2010

Joint tenancy is a type of ownership where two or more people share an interest in personal property or real estate, usually with a right of survivorship. Three brothers, for example, may decide to purchase a hunting cabin together and own it in joint tenancy. The last surviving brother will eventually own the cabin. Couples who purchased homes 10 or 20 years ago were often advised to hold the property in joint tenancy with a right of survivorship so that when one spouse died, the other received the property. There are occasions where joint tenancy may be the correct way to hold title, however, there are also many potential problems with joint tenancy which you should realize before holding assets in that manner.

Loss of Control - When you own property with other individuals, you give up unilateral control such as the right to sell, make improvements, or refinance. In the example above, one of the three brothers who own the cabin jointly, wants to sell it. He needs the consent of the other 2 to sell and he cannot sell his interest without their consent.

Problems with Creditors - Creditors of a joint owner can come after the property to satisfy the debts of one of the joint owners. If a joint owner has a judgment rendered against him, the creditor can seek to satisy the judgment by forcing a sale of the property.

Tax Issues - By using joint tenancy over a trust, a husband and wife may be forfeiting certain tax benefits that would be available with a properly drafted trust. Also if you put someone on title with you as a joint tenant, a gift tax return may have to be filed.

Loss of Flexibility - A joint owner receiving an asset as the surviving owner receives the asset outright and cannot spread out the distribution over time. For example, if an 18 year old receives an inheritance from a joint checking account upon the death of the co-owner, he will receive the entire account, unlike with a trust where distributions can be spread out over time.

Possible Loss of Public Benefits - A joint owner who is receiving public benefits such as Medi-Cal can be disqualified from receiving those benefits if he receives an asset in his own name. The way to leave property and other assets to such an individual is to leave it to them in a special needs trust.

Deciding to hold assets in joint tenancy is a decision that you may want to discuss first with an experienced estate planning lawyer.

"Feng Shui" Will of Asia's Richest Woman Declared Invalid

May 3, 2010

Will and trust contests continue to produce interesting stories, whether among the rich or the ordinary. This past February, a judge in Hong Kong ruled that the estate of billionaire Nina Wang will not go to her feng shui consultant but to the charitable foundation she and her husband Teddy created in 1988.

Nina's life and death reads like a soap opera. Nina was born in Shanghai and married her childhood friend Teddy Wang who grew rich owning and operating the Chinachem Group, one of Hong Kong's largest and most powerful companies. Teddy Wang was kidnapped in 1983 and his wife paid a $33 million ransom for his return. He was kidnapped again in 1990 and never found. He was declared dead in 1991 and Nina took over the company. There were numerous court battles over his wills but eventually it was Nina who inherited his estate.

Nina drew up a will in 2002 leaving her multi-billion dollar estate to the Chinachem Foundation she and her husband founded. After her death, another will surfaced, dated 2006 and leaving her estimated $4 - $13 billion estate to her fung shui consultant, reported also to be her lover. "Feng shui" is the ancient Chinese system of aesthetics using laws of Heaven (astronomy) and Earth (geography) to help improve life and create peace and harmony. The court ruled however that the will presented by Tony Chan, the feng shui consultant, had been forged. He was later arrested and charged with forgery.

The Law Office of Scott C. Soady, A Professional Corporation handles numerous will and trust disputes but
usually not with the drama of the rich and famous. Contact us if you have a will or trust dispute or need assistance with any other aspect of estate planning.