San Diego Estate Planning Lawyer Blog

Newspapers and magazines are already commenting that Michael Jackson’s estate will be a real nightmare. No one seems to know at this point whether Jackson had a will or a trust. Some people think there is no way he would have failed to provide for his children. In the absence of a will or a trust, his children would inherit the estate equally.

Whether Jackson created an estate plan or not, his estate will have to be settled, either in the probate court, or through trust administration. There are many creditors already lining up to be included. Although Jackson sold millions of records, he reportedly was in serious debt, perhaps as much as $400 million.

One of the assets in his estate that is going to be fascinating is the publishing rights Jackson had to millions of songs. Jackson outbid Sir Paul McCartney for a 50% interest in a music publishing catalog that includes rights to the Beatles hits as well as publishing rights to other hits by major artists, Jackson apparently paid $48 million for the rights, now estimated to be worth $500 million.

Interestingly, since Jackson died in 2009, his estate will have less estate taxes to pay than had he died last year. In 2008, the federal estate tax level for a single person was $2 million. In 2009, it is $3.5 million. However in 2010, the estate tax is scheduled to disappear entirely. For most Americans, it doesn’t matter a great deal, but think of the savings for the rich and famous by dying in 2010!

Part of our estate planning caseload at Pinkerton, Doppelt, & Associates, LLP are cases in which a will or a trust is being questioned or challenged. Typical factual scenarios are where an heir or a beneficiary has been disinherited or their share reduced because of "death bed" changes which may have resulted from undue influence, fraud, or duress. Most wills or trusts contain a clause known as a "no contest clause." "No contest" clauses are commonly found in wills and trusts to discourage someone from challenging the will or trust. Typically, the language is that if anyone contests the will or trust, that individual will take nothing.

Existing law however, allows a beneficiary or other individual to file a petition with the court (called a Safe Harbor petition) asking the court to determine whether a particular challenge fits within the definition of a "contest." If the court rules that it doesn't constitute a contest, then the will or trust can be challenged in spite of the "no contest" clause.

Last Year the California legislature passed a bill which was signed by Governor Schwarzenegger that will change the law regarding "no contest" clauses. Under the new law which will take effect in January 2010, the applicability of the "no contest" clauses will be limited to specific circumstances. The new law will eliminate Safe Harbor petitions and will also provide that a "no contest" clause will only be enforceable to defeat a will or a trust contest if brought without probable cause.

The purpose of the legislation was to permit the free access to justice by allowing such clauses to thwart litigation only in limited circumstances. It remains to be seen whether the new legislation will increase or decrease will contests and trust litigation. If we can assist you with your litigation matter in the probate or trusts area or if you have questions about no contest clauses, please contact us for a complimentary consultation.

What is financial Health? Financial health is the state of your finances. If you have good financial health, you are managing your assets, paying your debts, and saving for retirement. You also are planning for your spouse and children should something happen to you. CNN Money.com. has a nine step approach to test your financial health to see if you are on track to reach your retirement goals despite this economy. The nine steps have to do with saving for retirement, diversifying your investments, staying out of debt, maintaining an emergency fund, etc. Several of the steps involve estate planning.

The fifth step for example asks whether your estate plan is in order. Do you have a document to designate a guardian for your minor children? Have you named beneficiaries for your 401(k)s, IRAs, and insurance policies, and are they up to date? Do you have a durable power of attorney for health care? Have you set up a trust so that your children will not receive an inheritance upon turning 18? These are all important issues that are part of being financially healthy.

The seventh step asks whether you have or will be receiving an inheritance. This is important because inheriting from your parents or others can affect your own estate and require the drafting of a different kind of trust than the one you have. Inheriting a retirement account such as a 401(k) or an IRA can be tricky so you should seek professional advice if you are the beneficiary of one of these. Tax concerns may be another area that should be addressed.

If we can help with getting your estate plan drafted, reviewed, or amended, call us at Pinkerton, Doppelt, & Associates, LLP. We can assist with any of these or other estate planning issues.

Many parents and grandparents don't realize that a child, grandchild, or other beneficiary with a disability complicates an estate plan. If you have such a loved one you want to provide for in your estate plan, you need an appropriate trust even more so than someone without a disabled beneficiary in the picture. Here are some of the points often overlooked in planning for a special needs beneficiary:

Outright distributions to a special needs child or adult will likely make the beneficiary ineligible for continued SSI or Medi-Cal benefits. On the other hand, leaving such a beneficiary out of your will or trust may not be something you feel comfortable with and disinheriting that person could leave the beneficiary with total reliance on such benefits. Sometimes people think they will leave property or assets to another family member with the understanding that he or she will provide for the disabled beneficiary. This approach is unwise as the family member could not follow through ( it happens), die, or run into financial difficulty.

The way around the issue is to create a third party special needs trust as part of your estate plan. If you already have a trust, a stand-alone special needs trust can be drafted. If you haven't created a trust yet, a special needs trust can be incorporated into yours. The trust can provide distributions for the beneficiary's special needs, such as medical care not covered by public benefits, computers, TV, vacations, and other items or activities to enhance the beneficiary's life. With such a trust, the beneficiary is able to continue eligibility for government benefits and use his or her inheritance to supplement those benefits.

The other aspect of estate planning to consider when you have a special needs family member is to be sure that beneficiary designations and life insurance beneficiaries do not include the disabled person. A beneficiary who receives a pay out from an insurance policy, annuity, or pension plan is also subject to losing public benefits.

For questions about special needs trusts or any other estate planning issue, call us or email us at Pinkerton, Doppelt, & Associates, LLP,

Wouldn't it be nice for your heirs to conintue to receive money from your estate long after you are gone? A recent article in Forbes Magazine listed the top celebrities whose estates continue to make money long after their death.

Not surprisingly, Evis Presley comes out on top, with income of $52 million in 2008. Some stars that are alive don't make that much in a year. It is not known exactly how much of that flows into his estate because various entities own interests in the income stream.

Second on the list is Charles Schultz, of "Peanuts" fame whose estate gets a big chunk of the syndicatication and merchandise fees generated by the comic strip.

Also on the list was Australian actor Heath Ledger whose estate made $20 million, mostly from his film The Dark Knight and merchandise based on the movie.

Paul Newman also made the list this year with $5 million. Celebrities who have made the list for many years include Marilyn Monroe, Johnny Cash, James Dean, Beatle George Harrison, and Marlon Brando.

At Pinkerton, Doppelt, & Associates, LLP, we don't handle any celebrity's estates, but we do help ordinary people create estate plans that will achieve their goals for distribution to beneficiaries after their death. If we can help you create an estate plan to fit your needs, call us for a complimentary consultation.

We frequently get calls from prospective clients wanting to know if creating a trust will protect their assets from creditors or lawsuits. Unfortunately, they do not.

A revocable living trust is a legal arrangement whereby you hold your assets in trust to be used and managed until your death when they will be distributed to someone else. You can add assets or remove assets from your trust at any time, even revoke the trust completely and put them back into your name individually. Since you have control of your assets, creditors can reach those assets to collect on a debt.

There are some irrevocable trusts that can remove assets from your control but these cannot be revoked, hence they should be created with advice from an experienced estate planning attorney and possibly your financial advisor.

Although protection from creditors is not a benefit you can derive from a trust, there are many other benefits that make the creation of a trust something many people should consider. Such benefits include:

1. Avoidance of probate, passing assets to your beneficiaries more quickly and inexpensively.
2. Ability to dictate the terms of distributioin to include such things as charitable gifts, children's trusts, Special Needs Trusts, etc.
3. Privacy (probate is public).
4. Can be used to manage your estate if you become temporarily or permanently incapacitated.
5. Utilization of federal estate tax exemptions for both husband and wife, reducing or eliminating estate taxes.

If you worry about your creditors being able to access your children's inheritance once you pass away, that is a different issue. You can incorporate into your trust certain provisions whereby money would be distributed to them in increments, thereby leaving only small amounts available for creditors to try to reach and leaving the bulk of the inheritance in a trust. To discuss these or other issues about trusts or any other estate planning concerns, contact us at Pinkerton, Doppelt, & Associates. Your first visit is always free.

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.

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.

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.

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.

We know that many Americans procrastinate about getting a will or a trust done. Especially in this economy where people have a lot of challenges, an estate plan, even if desired, sometimes doesn’t work itself up to the top of one’s To Do List. What happens if you procrastinate about getting an estate plan?

Probate - Without a trust or a will, your estate will wind up in the probate court. Statutory fees will have to be paid to the probate attorney and the administrator of your estate. Probate is not private - anyone can view probate records - and the distributions to your heirs can be delayed for as much as a year and in some cases, longer.

Without a will or a trust, your surviving spouse may not inherit your entire estate. Your spouse will inherit all the community property but will only get 1/2 to 1/3 of your separate property. The remaining property will go to the children.

Minor children will not have guardians appointed. Without a designation of guardians for your minor children, the Court will have to appoint a guardian without any guidance from you as to your preference for the guardian or guidelines for raising the children.

Children may receive money outright and not be equipped to handle it. Without a trust setting forth increments for the distribution at various ages, children who are 18 will receive their money outright, all at once, which may not be a good idea for some young beneficiaries.

Special Needs Beneficiaries may lose their public assistance. If you have a child or other beneficiary who is on public assistance, inheriting money outright rather than into a special needs trust, may cause them to be disqualified from receiving those benefits.

Higher Estate Taxes - For those high net worth individuals, not having a trust can result in your heirs having to pay more estate taxes than necessary. Estate planning strategies like an A/B or A/B/C trust, irrevocable life insurance trusts, or other advanced techniques can avoid or reduce estate taxes.

Don't procrastinate any longer. Contact us at Pinkerton, Doppelt, & Associates, LLP for a complimentary consultation to discuss your will or trust.

Sometimes we get calls within a day or two of a loved one’s passing away by family members who wonder what they should do. The first thing that should be done is to handle the bereavement process. Spend time with family and friends and begin the grieving process before anything else.

There are many resources on line and in San Diego for information on the grieving process.
The National Hospice and Palliative Care Organization is the largest nonprofit organization representing hospice and palliative care programs. In San Diego we have the Elizabeth Hospice, San Diego Hospice, and Hospice by the Sea to name just a few. For people dealing with the death of a child there is the Empty Cradle and the Jenna Druck Foundation.

Coping with the loss of a loved one is a process. In addition to the grief and bereavement resources listed here, there are many grief support groups at local churches or through professional counselors. Most support groups also can recommend books and articles on the subject.

We always tell our clients and potential clients that the first thing to do is to begin the healing process. In most cases, contacting us in several weeks will be fine to determine what needs to be done as far as estate and trust issues are concerned. Sometimes there are immediate issues that have to be addressed and the experienced estate planning attorneys at Pinkerton, Doppelt, & Associates, LLP would be happy to assist with those if necessary. Feel free to contact us by phone or email if you have questions.

Accidental disinheritance is a growing problem, not only in San Diego, but across the country. We have seen it in the cases of Anna Nicole Smith and Heath Ledger. Failure to update estate planning documents or beneficiary designations can cause unintended disinheritance or unequal distributions that may not have been intended.

One of the ways people accidentally cause a disinheritance is in a stepparent situation. As an example, suppose a man has a will he created when married to the mother of his children. After she dies, he remarries and writes a new will leaving everything to his new wife. When he dies, the new wife inherits everything and then leaves her estate to her own children. The husband’s children (her stepchildren) are disinherited, which was probably not the father’s intent. The way to avoid this was to have a trust set up with the new wife which could have provided that his wife had the use of the assets during her lifetime but upon her death, the husband’s children participated in the distributions. This is a situation where an experienced estate planning lawyer would have been worth the expense to draft an appropriate will or trust to take into consideration possible future scenarios.

Another way that a failure to update can cause difficulties is where a child is born after the estate plan is created and the child has special needs. A trust, if drafted correctly, usually will provide for after born children without the necessity to update the trust, however, if a child born after the trust is created has special needs and is on public assistance, a special needs trust needs to be prepared so if the parents die, the child does not receive his inheritance outright and lose his public assistance.

Another potential unintended result can occur when upon death, there are outdated beneficiary designations. Suppose a wife has made her husband the beneficiary of her life insurance policy. They divorce but she fails to remove him as a beneficiary. When she dies, the ex-husband gets the proceeds which may not have been what the wife wanted. Also if someone names a beneficiary on their life insurance policy and the beneficiary dies before the insured, the life insurance proceeds will have to be distributed through probate as there are no alternate beneficiaries listed.

There are countless other ways that failure to update your will, trust, or beneficiary designation can thwart your wishes upon your death. It is always a good idea to review your estate planning documents periodically to make sure they are up to date. If you need assistance, contact us for a complimentary consultation.

Many elderly people in San Diego are cared for at the end of their lives by caregivers and friends rather than family members. Sometimes they want to provide for those caregivers or friends in their will or trust. Such bequests however can be challenged by family members and other beneficiaries after a death.

The California Probate Code lists seven categories of people who are presumptively unable to inherit under a will or a trust. The list includes the person who drafted the will or trust, the law firm, attorneys or employees of the law firm that are asssociated with the drafting and “care custodians.” A care custodian is defined to include a number of agencies and any "individual providing health care services or social services to elders or dependent adults.”

Those persons mentioned in Probate Code section 21350 who are left an inheritance are subject to higher scrutiny before they can inherit. They can inherit only if they can prove by “clear and convincing evidence” that the bequest to them “was not the product of fraud, menace, duress, or undue influence.” This can be difficult to prove after the death of the individual making the will or trust.

The Probate Code section arose out of a case, Bernard v. Foley, where a 97 year old woman changed her trust three days before she died to leave all of her assets to two individuals, old friends, who had taken care of her after she was diagnosed with lung cancer. Although the two caregivers won at the trial level, the California Supreme Court ruled that a “care custodian” does not necessarily mean a paid caregiver; it could be a personal friend and in fact personal friends would be uniquely in a position to influence the elderly person they care for. The two friends were disqualified from inheriting anything under the trust.

There is a means by which a person wanting to leave assets to a caregiver can do so without risking the possibility that the gift will be invalidated. The Probate Code provides that an individual wanting to make a bequest to caregivers can obtain a Certificate of Independent Review by a second attorney who interviews the testator and determinines whether the testator has been unduly influenced or coerced. We can help with these and any other estate planning issues at Pinkerton, Doppelt, & Associates, LLP.

The simple answer to this question is “before you need it” however knowing when that is can often be difficult. Most of us know to plan for retirement but sometimes we don’t recognize the need to plan for when we or our parents can no longer take care of ourselves.

People are living longer and more people will need long term care than in past generations. Some people do not realize that often what strikes the elderly is not a physical ailment but a mental condition which Medicare will not cover. Medicare typically covers such things as skilled nursing but it usually does not cover custodial care. Paid caregivers at home or home health aides, a nursing home, or other assisted living facilities will not usually be paid for by Medicare.

The time to consider the expenses of long term care is before it is needed so that you can explore such options as long term health care insurance, a spend down of assets to qualify for Medi-Cal, or community services that may be available. Taking the time now to plan, before there is a need, will give you peace of mind to deal with the difficult decisions that arise when the time comes.

The San Diego based estate planning lawyers at Pinkerton, Doppelt, & Associates, LLP can assist with making sure you or your parents have up to date health care and asset powers of attorney and answer questions you have about Medi-Cal. Feel free to contact us if we can help.

Those of us who live here in San Diego know what a great place San Diego is to live and work. Besides the wonderful weather and the proximity to the beautiful beaches of La Jolla, Del Mar, and other coastal areas, there is another benefit you might not realize. California is one state that does not have an inheritance tax.

17 states and the District of Columbia assess an inheritance tax on the portion of an estate received by an individual. This is in addition to the federal estate tax levied on the estate before it is distributed. As we reported in earlier blogs, a federal estate tax will have to be paid on estates over $3.5 million in 2009. States which have an inheritance tax assess it separately against each beneficiary and each beneficiary is responsible for paying the tax to the state, although there may be a lower tax rate for spouses and children of the deceased as opposed to a distant cousin.

A revocable living trust can help reduce estate taxes for couples in California as can other advanced estate planning techniques. If you need to set up a trust or want to know your options for reducing estate taxes, contact us. The experienced estate planning attorneys at Pinkerton, Doppelt, & Associates, LLP would be happy to meet with you at no charge for your first consultation.

Are you following in the footsteps of past Americans utilizing trusts?

If you have a revocable living trust, you are in good company. Many famous people from the past utilized trusts as part of their estate plan.

When the 13 colonies declared independence in 1776, the richest man was a Senator from Pennsylvania named William Bingham. He created a trust in 1804 for his vast estate in Maine.

Joseph Kennedy, father of President John F. Kennedy established many trusts. One was to own the famous Chicago Merchandise Mart. He also created a family trust and many tax shelter trusts. His son, John F. Kennedy, had a trust. So did his son, John F. Kennedy Jr. who died in a plane crash.

William Waldorf Astor created a trust in 1991 saving his heirs millions of dollars which, without a trust, would have gone for probate fees and taxes.

The Rockefellers used various types of trusts to reduce their estate taxes. It has been estimated that they created well over 100 trusts. Likewise, H.L. Hunt, a Texas billionaire, used about 25 trusts, many for his children.

Linda Mc Cartney, wife of Beatle Paul McCartney, had a trust.

Diana, Princess of Wales, left her $35 million estate in trust for her sons William and Harry.

Baseball great Joe DiMaggio created trusts for his great grandchildren.

Ronald Reagan established a trust.

Sir Edmund Hillary, the famous mountain climber who climbed Mt. Everest set up a charitable trust for sherpas in the Himalayas.

You don't need to be rich or famous to set up a trust. Ordinary people can benefit from a trust as the main component of their estate plan. If you still need to set up a living trust for your estate, contact the San Diego estate planning lawyers at Pinkerton, Doppelt, & Associates, LLP for a free consultation.

There are some interesting statistics about women in this country. We all know that women live longer than women and many outlive their husbands. But did you know that 75% of women will become widows at some point in their life? Unbelievably, the average age of a woman when she becomes a widow is 55 years of age! Some agencies compiling statistics suggest that the odds of needing long term care at some point is 50%. Can you guess who the caregivers will be? Women. Women are three times more likely than men to be a caretaker for their spouse. In addition women often wind up being the caregiver for one or both parents.

Because women are having to pick up the pieces after a spouse’s death or incapacity and deal with financial issues, women own a majority of the publicly traded stock in this country. Women own 70% of the wealth and inherit 75% of all the estates. What all these statistics show is that it is essential for women to participate in the estate planning process and understand basic estate planning just as it is advisable for women to become educated about financial issues.

Basic estate planning documents that are recommended for a married couple are a revocable living trust, pour over wills, durable powers of attorney for finances, and advance health care directives. Without such documents, what happens when a husband becomes incapacitated and is unable to sign necessary documents to sell a house, obtain a refinance, or create a trust? The wife has to go to court to have her husband declared incompetent and have herself appointed as his conservator, a costly, stressful, and sometimes lengthy process.

At Pinkerton, Doppelt, & Associates, LLP we have been helping couples for years with planning for the future to assure that whichever spouse is the last to pass away, the transition and financial issues which result are planned for. Call us or e mail us for a complimentary appointment.

Last year we posted a blog about cats living it up in a retirement home in Spring Valley thanks to a pet trust. Wherever you are in San Diego County, do you consider your pets part of the family? You are not alone if you do. 87% of Americans consider their pet a family member. Do you need estate planning for this family member? If you have a number of family members or friends that will step in to care for your pet, then maybe not. If any of the following are true, however, you might consider having a pet trust.

1. You have pets with a long life expectancy. Some pets are almost sure to outlive you. Birds and reptiles have exceptionally long lives. Some turtles can live almost 100 years. A macaw for example can live to be 80. Horses have a life expectancy of twenty to thirty years.

2. You live alone. If you live alone with your pet, you need to consider who would step in and care for your pet if something happened unexpectantly to you.

3. You have a chronic illness or your life expectancy is shorter than your pet. If you pet is likely to outlive you for some reason, you may need to consider making arrangements for care after you pass away.

4. Your pet is one that not just anyone can care for. Horses for example have to be cared for by someone that has experience with horses. An expensive show horse requires someone who can manage the training, feeding, and showing of the horse. A dog that is a Great Dane cannot be taken in by just anyone. Perhaps your grandson or daughter live in a apartment or have a new baby.

5. You have multiple pets. If you have a bird aviary, a stable of horses, a petting zoo perhaps, it may be difficult to find a family member or friend that can care for them. To keep your pets together, you may want to consider a pet trust.

6. Family members would not be good pet caretakers. There are many reasons why a family member may not be a good choice to care for your pet. Maybe they are allergic to cats, hate dogs, or maybe they just don’t have the time to give your pet the love and attention it is used to.

7. You have a guardian for your pet but the guardian needs assets for the pet’s care. Maybe you have a wonderful pet lover in mind to care for your pet, but that individual doesn’t have the resources to take care of the pet for the pet’s lifetime. In that case, a pet trust can solve the problem by setting aside assets in trust for the care and maintenance of your pet.

Read more about pet trusts and contact us at Pinkerton, Doppelt, & Associates, LLP for a free consultation. We can help you estimate how much should be set aside for your pet and decide who will be the human trustee to manage the trust.

As the population of people over 65 increases, so does the incidence of elder abuse and neglect. Elder abuse can be physical, emotional, or financial. The San Diego Police Dept. reports that San Diego has over 300,000 seniors. One out of every 20 elders will be a victim of elder abuse sometime in their lifetime however many incidents go unreported.

Financial abuse is the taking or using of an elder’s money or assets contrary to the elder’s wishes or needs. It can be as simple as taking money from someone’s wallet or using an elder’s credit card to identity theft or telemarketing scams. In the area of estate planning, financial elder abuse may be misusing a power of attorney or using undue influence to cause an elder to change a will or a trust or a beneficiary designation. Financial abuse is particularly devastating to an older person as it can drain the victim of their life savings and cause them to feel helpless and worried about their future.

What are some of the warning signs that someone you know may be the victim of financial elder abuse?

1. Unusual bank withdrawals from an ATM or unusual checks written to strangers or containing signatures that do not look like the elder’s signature.

2. Missing checks or credit cards or unusual activity on a credit card.

3. The sudden appearance of a stranger who becomes close to the elder and seems to want to take over the elder’s financial affairs.

4. Home improvements or items purchased which seem unnecessary.

5. Changes in account beneficiaries or new signers on an account.

6. Execution of a new power of attorney.

7. Changes in property title, deeds, or new mortgages.

8. Changes in wills or trusts if the elder seems incompetent.

9. The elder seems confused about his or her financial affairs.

The experienced estate planning attorneys at Pinkerton, Doppelt, & Associates handle elder abuse cases and can advise you about issues of elder abuse. Contact us for a complimentary consultation. Also look for later blog posts on steps to make the elder less vulnerable and remedies for elder abuse.

When people give particular assets to someone upon their death, what happens when that asset is no longer in the estate at the time of death? "Ademption" is the term used in the area of wills and trusts to describe a situation where property left to a beneficiary is no longer in the estate when the decedent dies. In that case, the property is "adeemed", i.e. the gift "fails" and the beneficiary does not receive it.

As a example, a father leaves a condominium to his daughter- maybe because she lives in the state where it is located or he wants to keep it in the family and she would be most suited to inherit. He provides in his will or trust that his other two children divide the rest of his estate. Years later he decides to sell the condo but forgets to update his will or trust. When he dies, the condo is not part of his estate and since the daughter isn't mentioned anywhere else in the estate plan, she is accidentally disinherited.

Another example is where a woman provides in her trust that she wants her 1000 shares of XYZ stock to go to her grandson. The rest of her estate is to be divided between her two children. She decides to sell the stock (or the company dissolves) but she forgets to update her trust to leave her grandson some other asset or cash bequest. When she later dies, the stock is not in her estate and the grandson gets nothing.

These are examples of unintended results caused by failing to update a will or a trust. Accidental disinheritance can occur in other ways too. Look for a later post on not coordinating your beneficiary designations with your will or trust. If you need your will or trust updated, contact us to set up a complimentary consultation.

Last week the Wall Street Journal reported that President Obama wants to freeze the current estate tax level to $3.5 million which is the estate tax exemption amount for 2009. Currently only estates with more than $3.5 million ($7 million for couples) have to pay estate tax. Obama intends to set forth his estate tax proposal in his budget next week. If the legislation is passed by Congress it will mean that the estate tax which was set to expire in 2010 would remain at $3.5 million.

The estate tax was enacted in the early twentieth century as a levy on wealth and inherited assets. It was later modified to provide that one spouse could leave an estate of any amount to the other spouse without any tax. In 2001 under President George W. Bush, Congress approved a gradual increase in the amount of the estate tax exemption with a total repeal in 2010, only to have the estate tax return in 2011 with an exemption amount of $1 million.

With the estate tax level set a $3.5 level, it is estimated that less than 2% of all deaths in this country will result in the payment of estate taxes. The vast majority of us do not have to worry about our heirs and beneficiaries having to pay estate taxes. That does not mean however that we don’t need estate planning. Even if taxes are not an issue, most people need to create a revocable living trust to avoid probate and insure that their estate is distributed to their beneficiaries on the terms they specify. If we can help with your estate plan, call us or email us at Pinkerton, Doppelt, & Associates, LLP.

People with little assets other than their home many times need a living trust more than individuals with more assets. Why? Picture this scenario: With the high cost of housing in the San Diego area, many couples both work to pay the mortgage on their home. They don’t have a will or a trust but own their home in joint tenancy. Husband is involved in a serious accident and has a brain injury which makes him unable to work and incompetent. They need to sell their home because of the loss of husband’s income. How is the wife going to sell the property?

Since the title is held in both their names, the wife cannot sell the home because the husband is incapacitated. The joint tenancy with right of survivorship only applies if the other joint tenant is dead. The husband is not dead and they both need to sign the escrow documents. Even if they had wills, a will would not be of any assistance because the husband is still alive. The wife’s only alternative is to have her husband declared incompetent and become his conservator. Conservatorship is costly and takes time. With mounting medical bills and loss of husband’s income, there is no money to pay for a conservatorship. Also a prospective sale may be lost during the time it takes the court to appoint the wife as conservator.

A revocable living trust would have avoided this problem. With a revocable living trust, there are incapacity clauses contained in the trust. Both spouses are usually trustees but one can serve as sole trustee in the event of a incapacity. There are also durable powers of attorney which enable you as your spouse’s agent to take over the finances and sell the house. In addition, powers of attorney for health care are included in our revocable living trust package that allow you to make decisions about your spouses’s health care including life support and other measures. Contact us at Pinkerton, Doppelt, & Associates,LLP to set up a free consultation about living trusts.

You would think that people who have practiced law would know the benefits of a well drafted estate plan. I guess it is like the old adage that “the cobbler’s son has no shoes.”

Who knows how many lawyers in this country do not have a will or a trust. Abraham Lincoln, a lawyer before he became President, died intestate (without a will). Maybe like most of us he wasn’t anticipating dying at the age of 56.

Some judges have died without an effective estate plan. In 1910 a Judge of the New Jersey Court of Appeals left no will with an estate of between $100,000 and $500,000.

Supreme Court Justice Warren Berger, a former Chief Justice, left a short one page will which did not have any specific powers granted to his executor and didn’t say anything about debts, expenses, or taxes. He was a lawyer who had practiced law and taught law school. He served as an assistant Attorney General in the Justice Department before becoming a Supreme Court Justice.

So you are not alone if you don’t have a will or a trust, but nonetheless it can be a costly omission for your heirs. Furthermore, the Probate Court, which writes your estate plan for you in the event you don’t, may not have the same ideas you do about where your money should go. See our prior blog post (August 2008) about all the things you can’t do without a will or a trust.

Contact us at Pinkerton, Doppelt, & Associates, LLP if you would like a free consultation about an estate plan.

If you create a will or a trust, you can make any kind of gift you want to whomever you want. You can also make stipulations that a certain event must occur for the beneficiary to receive the inheritance. Some people, for example, provide for distributions to children or grandchildren if they graduate from college or they stay off drugs.

Some more outrageous bequests or conditions have been:

A Finnish business man left 780 shares of a rubber boot company to the residents of a nursing home in Finland. That company later became Nokia, which makes cell phones, making all the nursing home residents millionaires.

George Bernard Shaw, the Irish playwright, left his fortune to the person who could create a new English alphabet. The money was ultimately shared between 5 people who created phonetic alphabets.

You’ve probably heard of Leona Helmsley, the Queen of Mean, who left $12 million in trust for her dog excluding two of her grandchildren.

Comic book writer Mark Gruenwald provided in his will that his cremated ashes be mixed with ink and used in a comic book.

In 1862 Henry Budd bequeathed money to his two sons on condition they never grow mustaches. (How would that be enforced?)

Star Trek creator Gene Roddenberry’s ashes were flown into space and shot out as the satellite orbited the earth.

But strangest of all - Juan Potomachi left over $50,000 to the Teatro Dramatico in Buenos Aires, on the condition that his skull be preserved and used in the production of Hamlet.

We can help you with whatever bequests you want in your will or trust although carrying out similar ones to those here might be difficult. Call us or e mail us at Pinkerton, Doppelt, & Associates, LLP if you need a will or a trust drafted or updated.

Most people don’t like to think about their death but it is inevitable and directions to your loved ones about your wishes can ease the burden on them, and give you peace of mind knowing that your wishes have been stated and will be carried out. As part of your estate planning, you should prepare some guidelines for your successor trustee or executor - such things as where all your important documents are, names and addresses of persons to notify of your death, your wishes concerning burial, cremation, funeral services, etc. These are often placed with your will or trust so loved ones can begin planning soon after your death.

An innovative and free on line website service, MyWonderfulLife.com can help you plan your memorial service before you pass away. You can record your wishes about your funeral, choose music to be played at your service, leave letters for loved ones, or choose quotations or biblical verses to be read. You can even write your own obituary and design your own headstone. 6 “Angels” are chosen by you who will be notified upon your death of your wishes.

If you don’t have an estate plan yet, it would be a good idea to think about that too. Pinkerton, Doppelt, & Associates, LLP offers revocable living trust packages which include the trust, pour over will, durable powers of attorney for finances and health care, deeds and other pertinent estate planning documents. Contact us if we can help.
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Many of us in the San Diego area start the New Year by resolving to lose weight, quit smoking, or spend more time with family. The top New Years’s Resolutions are:

• Stop smoking or drinking
• Increase physical fitness
• Lose weight
• Reduce stress at home or on the job
• Spend more time with family/enjoy life more
• Get out of debt or save more for the future

A good guide to following through with your New Year’s resolutions comes from Selfhelp Magazine which outlines the 10 keys to achieving results. The author stresses such things as making your resolutions realistic, setting a timetable for your goals, and not giving up.

While you are working on these resolutions, add a resolution to get your finances and your estate plan in order. A Disney family parenting magazine has 9 steps to get off on the right financial foot in the New Year, including creating or updating your estate plan and updating your beneficiary designations of retirement accounts, life insurance policies, annuities, etc. You should also make sure all your assets that should be in your trust are in fact properly titled.

At Pinkerton, Doppelt, & Associates, LLP we can help you achieve your resolution to create or update your estate plan. Call or us or e mail us to set up a complimentary appointment to create or update your will, trust, or beneficiary designations.

Earlier this month we posted a blog about identity theft during the hollidays. Malls in North County, South Bay, Carlsbad, and Mission Valley are targets for pick pockets and thieves who look to steal purses. But did you know that even deceased persons can be victims of identity theft? The deceased are easy targets because sometimes it takes weeks or months and in some cases years for financial institutions to find out about a death. The identity of a deceased person can be stolen in a variety of ways. Some identity thieves watch the obituaries, look up death certificates, or obtain private information from health care providers, unknowing relatives, or internet genealogy web sites.

Back in 2006 in Kentucky a financial planner used the confidential data of 160 deceased persons to acquire 700 credit cards from financial institutions and scammed nearly $2 million over a three year period

Although the deceased person doesn’t have to be concerned with his or her credit rating, identity theft can cause emotional distress for the family. Identity Theft Resource Center has valuable information about how to protect yourself and your deceased loved one from identity theft. They also have an information sheet with steps to take to decrease the risk of identity theft such as notifying the credit bureaus to put a “deceased” notation in their file, obtaining a copy of the decedent’s credit report, and a list of agencies and companies to notify of the death. Sample letters can be found at the California Office of Privacy Protection.

You can also stop the junk mail by contacting the Direct Marketing Assn. There you can register to take the deceased’s name off mailing lists with their Deceased Do Not Contact List.

If your loved one had a will which needs to be probated or a trust which needs to be administered after death, Pinkerton, Doppelt, & Associates, LLP handles many of the above steps as part of their representation. Contact us if we can help with trust administration or probate.

We, at Pinkerton, Doppelt, & Associates extend to all of you, our clients, friends, and visitors to our web site, our best wishes for a wonderful and joyous holiday season and a happy and prosperous New Year.

Thank you to all our past and present clients for your patronage. We look forward to assisting you, as well as our new clients, in achieving your legal goals and objectives in the New Year. We hope you continue to enjoy this estate planning blog and our articles about various topics in estate planning and family law.

Again, Happy Holidays from all of us!

Whether yours is a small business or a larger closely held corporation, have you thought about what will happen to it when you have passed away? Many people work years to build up a successful business or practice. Sometimes the family business is the most valuable asset in an estate. Business succession planning is a critical part of an estate plan for someone with a business.

If the business is to stay in the family, you need to decide which family member or members are going to own it and who is going to run it. If you have no family members capable of running the business, is it to be sold to a stranger or run by a non family member with the family retaining ownership? These are all decisions you need to make before it is too late to plan. Some business owners don’t plan ahead because they don’t want to give up control or they want to avoid family conflicts.

If you don’t plan for the succession of your business however and you become disabled, it is too late to decide who steps in and runs your business. You need a business succession plan in place before you become incapacitated. This may include buy-sell agreements or other methods to buy out a partner or shareholder or it could include LLC corporations or LLP partnerships. It may involve transferring some ownership or control to children or other family members before you retire. Income tax or estate tax issues may be other considerations. Read the full article about the points to consider in business succession planning.

If you have concerns about how your business or practice will be handled upon your retirement, disability or death, contact us at Pinkerton, Doppelt, & Associates, LLP. We can help you understand the options and alternatives available to you in business succession planning.

Many people in San Diego make revocable living trusts the primary feature of their estate plan. You may wonder where the idea of a trust came from. Trusts haven’t just been popular in the last century. Trusts are quite old. Plato back in 400 B.C. used a trust to finance his university in Greece. The Romans also used trusts. In England they were popular beginning in the 11th century in order to protect property from abusive noblemen and the King. A trust was used to vest title to real property in a trustee who would then give it to the wife, son, or daughter upon the husband’s death. Without such a trust, the property would go the lord or the King leaving the family poor and with no land to earn a living.

Trusts came to this country with the colonists. One of the first trusts was that of Governor Robert Morris of the Virginia colony. The trust was drafted in 1765 by Patrick Henry. Thereafter, William Bingham, a Senator from Pennsylvania, said to be the richest American when the colonies gained their independence, created a trust for his vast fortune.

Trusts are popular today as a way of avoiding not the King, but probate. With a living trust, you can avoid the cost of probate, the time of probate, and the lack of privacy of probate. You also can save on estate taxes if you have a sizeable estate by having the appropriate type of trust. If you are thinking about creating an estate plan, consult the experienced estate planning lawyers at Pinkerton, Doppelt, & Associates, LLP to determine if a trust is right for you. The initial consultation is always free.

Several years ago researchers felt that by mid century there would be a big inheritance boom, somewhere between 41 trillion and 136 trillion dollars handed down from parents to children. Now things are different and not solely because of the economy. Here are some reasons why you may receive a smaller than expected inheritance:

1. Your parents are spending it all. Not intentionally maybe, but with the high cost of living, medical care, and long term care, their nest eggs may not be what they used to be. Nursing home costs can run as high as $60,000 a year or higher in some areas and long term health care may be too expensive.

2. Seniors are living longer. The National Center for Health Statistics said in 2004 that males who are 65 could live to be 82, females to 85. As seniors live longer, they consume more of their wealth.

3. Bigger families. Baby boomers come from families that were larger than today’s families. Parents of children born between 1946 - 1964 had an average of 3.5 children, thus leaving a smaller piece of the pie to be inherited by each child.

4. Some of the wealth of seniors today comes from sources that terminate upon death- pensions, social security, and some annuities.

5. Reverse mortgages and the economy now make it easier to drain a home’s equity. Today with the popularity of reverse mortgages, homeowners can tap into the equity in their homes and the pace is picking up with the problems in the economy.

6. The “Warren Buffet” philosophy. Warren Buffett, the world’s second richest man, believes that kids should get “just enough money to feel they could do anything but not enough to do nothing.” He intends to give most of his money to charity including the Melinda and William Gates Foundation.

7. Charitable giving seems to be on the rise in the last 50 years, particularly among the rich. As an example, last year billionaire Barron Hilton announced he was giving 97% of his estimated $2.3 billion estate to charity.

Even if you are not going to be receiving much of an inheritance, you should still talk to your parents or grandparents about their estate and be sure they have planned ahead by creating a living trust with powers of attorney and health care directives. Probate can be expensive and without a trust, an estate of more than $100,000 will have to be probated. For assistance with an estate plan, contact us at Pinkerton, Doppelt, & Associates, LLP.

The San Diego County Courts hear many cases where a conservatorship is sought of an individual’s estate or person. When an individual cannot take care of his or her financial or personal affairs, it may be necessary to have the probate court appoint a conservator of the estate or of the person. A conservator of the estate is responsible for handling the finances of the conservatee. The individual appointed has broad powers to manage assets, write checks, make investments, etc. A conservator of the person is an individual appointed to make decisions about the conservatee’s personal needs such as health care, residence, food, clothing, etc.

A conservatorship can be an expensive process and may not always be necessary. Before the court appoints a conservator for an individual, it must be shown that no other alternatives are available to the proposed conservatee. These alternatives are durable powers of attorney, trusts, or the voluntary acceptance of assistance.

1. A power of attorney is a written document whereby one person (the principal) appoints another ( the agent) to act on his behalf upon incapacity. Powers of attorney for finances and for health care may provide a viable alternative to a conservatorship.

2. If the individual had a properly prepared revocable living trust, the successor trustee can step in and manage that individual’s affairs if the trustor becomes incapacitated. This needs to be done in advance of the incapacity however. Once the proposed conservatee lacks capacity, a trust cannot be created.

3. If the person who needs help with personal decisions will accept the help of relatives or friends about such things as medical care, food, clothing, and shelter, a conservatorship of the person may be avoided.

For more information about setting up a conservatorship or avoiding one by the preparation of a revocable living trust, contact us at Pinketon, Doppelt, & Associates LLP.

This summer Governor Schwarzenegger signed a bill which will protect pet trusts. The bill (SB 685) makes pet trusts enforceable. The bill was supported by the SPCA (Society for the Prevention of Cruelty to Animals) which estimates that over half of American families have at least one pet. The bill removes the discretion of the trustee in carrying out the trust and allows the court to appoint a caregiver if the trustee doesn’t want to act. The bill actually repeals a section of the Probate Code ( Section 15212) which made pet trusts honorary and not enforceable by law.

You may ask what types of pets are affected by this bill? The new legislation provides that for purposes of this code section, an “animal” means a domestic or pet animal for the benefit of which a trust has been established. Cats, dogs, birds, and horses would be covered. If an owner wanted to establish a trust for some other domestic pet such as a python snake (which can live 40 years) or a pot bellied pig, presumably they would be covered also. It is hoped that the new law which goes into effect in January 2009 will reduce the burden on pet shelters, protect defenseless animals, and guarantee that the wishes of pet owners are carried out.

To incorporate pet trust provisions into your estate plan, call us or e mail us at Pinkerton, Doppelt, & Associates, LLP to schedule a complimentary consultation. We can also amend existing trusts or create a revocable living trust with “pet” provisions.

A big mistake some people make is to name their minor children the beneficiary of a life insurance policy or other account with a beneficiary designation. If you die and your children are not 18, the minor won't have the authority to take control of the proceeds. The probate court will have to appoint someone as a guardian of the estate. (This is different from the guardian of the person who is the individual who physically cares for the child.) Setting up a guardianship of the estate will take time and money and probably require the services of an attorney. The Court will apppoint an adult to take over the management and control of the minor's inheritance until the minor becomes an adult. The Court has no authority however to spread the inheritance out over a number of years so this may result in a child receiving substantial money at an earlier age than the parents may have wanted.

If you have minor children and want to make them beneficiaries of life insurance policies, you should have a revocable living trust set up and make the trust the beneficiary of the proceeds. With a trust, the insurance company can transfer the proceeds directly into a trust account to be distributed to your minor children according to the terms of your trust. In this way you can insure that your minor beneficiaries will not have to have a guardian of the estate appointed and you can spread the distributions out over whatever intervals you want.

Also review your life insurance designations every few years to be sure you have the primary and secondary beneficiaries up to date. Changed circumstances in your life such as marriage, divorce, deaths, etc. may require that you make a change in beneficiaries.

If we can help you set up a revocable living trust or review your beneficiary designations, please call us or e mail us at Pinkerton, Doppelt, & Associates, LLP for a complimentary consultation.

If you have substantial assets, you may want to consider making a gift before the end of the year. The annual gift exclusion does not carry over into the next year, so you will lose your annual exclusion if you don’t use it before the end of 2008.

In 2008 you can make gifts up to $12,000 per person to as many people as you want with no gift tax. A single person could make a $12,000 gift to as many individuals as he or she wants. A married couple together could give $24,000 to any one individual. So for example, a married couple could each give gifts of $12,000 to their 3 children ($72,000 in total) or to their 2 grandchildren ($48,000 total), etc. You can give cash, stocks, bonds, real property, partnership interests; just make sure the gift is of a “present interest”, i.e. one they can use now as opposed to sometime in the future.

In addition to the annual gift tax exclusion, you can make tax-free gifts by paying the tuition and medical expenses for relatives or even friends. Gifts such as these have no monetary limitation. Send the money for tuition directly to the school. Payments for books or room and board do not qualify nor does giving the money directly to the student to pass on to the school.

You can also pay unlimited medical bills if you make the payments directly to the health care provider and the medical expense is one that would qualify for an income tax deduction. You can also pay medical insurance premiums for another person.

Lastly, remember that gifts to charity are never subject to gift or estate tax. If you need help with any end of year gift strategies, contact us at Pinkerton, Doppelt, & Associates, LLP for a free in-house consultation.

The San Diego Probate Court has many cases involving will and trust litigation. Wills and trusts can become the subject of litigation even when prepared by an experienced estate planning attorney. Issues which can become the subject of a will contest or trust litigation can be issues relating to the successor trustee or executor, codicils or amendments, the distribution provisions, or the management of the estate assets.

Here are some red flags which tend to trigger litigation that should be addressed at the time you draft your will or trust:

1. An "unnatural" disposition of an estate. Clients obviously have the right to leave their assets to anyone they wish however an unusual or unnatural disposition is more likely to be challenged. A “natural” disposition would be leaving your estate to your wife and then to your children. What is not “natural” is disinheriting a child, leaving substantial assets to a non-family member or to someone who has provided care to you, or leaving your entire estate to a new spouse, charity, or a pet to the exclusion of other heirs.

2. The timing of the estate planning document. Wills or trusts done just prior to death may simply be because the decedent realized the necessity for an estate plan, however changes to wills or trusts on the individual’s “deathbed” may raise questions of competency. There may be challenges as to whether the decedent had capacity, was unduly influenced, or under duress.

3. Drafting your will or trust at the insistence or with the assistance of an individual who gets more than other beneficiaries may raise similar concerns.

4. Favoring one child over another or a new spouse over your children from a former relationship. This may be a “natural” disposition of your estate but if someone feels slighted or omitted from a will or a trust, there is a potential for litigation.

The best way to avoid litigation over a will or a trust is to make sure your documents are prepared by an experienced estate planning lawyer. A properly drafted document should have a no contest clause although even that clause may not prevent a contest. You may want to consider rather than disinheriting an heir outright, giving that person a nominal gift to discourage a will or trust contest. Lastly, if you are creating an estate plan with an “unnatural disposition” you may want to consider having the signing of the document videotaped.

Will and trust litigation is costly and can be emotionally draining for everyone involved. For help creating your estate plan to avoid future litigation, contact us at Pinkerton, Doppelt, & Associates, LLP. We can also assist with representation in any will or trust litigation.

The holiday season in San Diego has many people going to the local malls and retail stores. Identity theft is on the rise and occurs more frequently over the holidays. Identity theft occurs when someone uses your name, social security number or other personal information to commit fraud. It is estimated by the Federal Trade Commission that as many as 9 million Americans have their identity stolen each year. The San Diego based Identity Theft Resource Center estimates 15 million Americans have their identity stolen each year and California is one of the top states for identity theft. Identity theft is committed in a variety of ways such as stealing your purse or wallet, going through your trash, phishing, skimming, or using false pretenses to obtain your personal information.

Here are some signs that you might be at risk to have your identity stolen:

1. You carry your social security card in your purse or wallet.
2. You carry all your credit cards in your purse or wallet, even ones you don’t regularly use.
3. You throw away banking statements, credit card statements, or offers for credit cards without shredding them.
4. You have your social security number written down in your checkbook or it is on a health care insurance card you carry with you.
5. If people ask you for your social security number, you always provide it without protest or inquiry.
6. You have an unlocked unsecure mailbox.
7. You give out personal information over the phone.
8. You haven’t reviewed your credit report recently.

Identity theft can cost you time and money and destroy your credit. If your will or trust or other estate planning documents are easily accessible to strangers, you also may be vulnerable as they often contain social security numbers, bank account information, etc. You may want to invest in a shredder to destroy personal information. Also consider buying a safe or locked box to keep your important documents in, however make sure your loved ones know where the key is so that they can easily access powers of attorneys if you become incapacitated.

If you are reading this, you came to our Pinkerton, Doppelt & Associates, LLP website and clicked on “BLOG” at the top of the home page or you searched for information on a topic that was featured on our blog. You can subscribe to our blog by clicking the orange “subscribe” button on the left side of this page or the blue “Go” button to subscribe by email. Subscribing allows you to get a live “feed” and read all of our blog posts as they are published.

Blogging is becoming more and more popular every day. A blog, for those of you that don’t know, is a nickname for Web Log, and allows individuals, businesses, law firms, and anybody else to publish information, comments, or opinions about any topic they may be interested in. Here are some interesting statistics on blogging:

∙ Currently there are 15.5 million active blogs on the internet.
∙ There are over a million blog posts each day.
∙ Japanese language blogs are more prevalent than any other language (37%)
∙ More men than women blog.
∙ The majority of bloggers are over the age of 35 and are college educated.

At Pinkerton, Doppelt, & Associates, LLP we have blogs dating back to 2002 on estate planning issues such as wills, trusts, powers of attorney, probate, conservatorships, guardianships, and long term planning. Please contact us if we can assist you with any of these issues and if you haven’t already done so, take the time to subscribe to our blog. It’s free and has current information on legal topics and other matters important to your life.

According to the Alzheimer’s Association, there are an estimated 5 million Americans suffering from Alzheimer’s disease. Fortunately, San Diego has a lot of resources for families living with the disease. The George G. Glenner Alzheimer’s Family Centers is one resource that helps families with adult day care, respite programs, and support groups. The Southern California Caregiver Resource Cener also provides assistance in the form of support groups, seminars, respite care, etc. Information on geriatric care managers is available through the National Association of Professional Geriatric Care Manager’s Association.

Alzeimer’s eventually results in disorientation, memory loss, cognitive dysfunction, and inability to take care of oneself and one’s finances. Planning ahead can be vital for family members caring for the Alzheimer patient. Once the individual loses the capacity to make financial decisions, it is too late to execute important documents like powers of attorney and wills or trusts. All such documents require that a person have the ability to understand what they are signing and the legal effect of signing the document. If a person becomes incapacitated before someone can be named to make important decisions, the only alternative may be a conservatorship which is costly, requires court approval, and takes time.

If you are coping with a person who has Alzheimer’s or any other type of dementia, take advantage of all the resources available. Contact us at Pinkerton, Doppelt, & Associates, LLP if we can help with powers of attorney or other legal documents to enable other individuals to take over health care and financial decisions when the person becomes unable to do it personally.

If you live in San Diego, there is a lot of free information available to you on a variety of legal issues. Here are some “clicks’ that may answer many questions you have:

1. Our website at Pinkerton, Doppelt, & Associates, LLP has many articles in the area of estate planning and divorce. Our estate planning blog has current postings as well as archived postings going back to 2002.

2. The San Diego County Clerk/Recorder's office has information on its website about recording documents and you can also download samples of commonly used forms such as affidavits of death, grant deeds, quitclaim deeds, property tax exemption forms, and preliminary change of ownership forms. You can access information about your property tax bill or download an application to lower your propery taxes. You can also check the Grantor/Grantee index online for deeds and other recorded documents and order copies on line or pick them up at one of the offices in Kearney Mesa, San Marcos, downtown, Chula Vista, or El Cajon.

3. The California Courts Self-Help Center has information about how to find lawyer referral services, where all the courts are located and their calendars, and frequently asked questions about a variety of topics. There is information about small claims court, conservatorships, elder abuse, landlord/tenant issues, divorce, and traffic tickets. You can even download the Judicial Council legal forms and get information on how to fill them out.

4. At the California State Bar website you can find a lawyer, look up a specific lawyer’s disciplinary record, and get basic information about a number of legal topics. Consumer pamphlets are available on all sorts of topics such as estate planning, probate, small claims court, getting arrested, minors and the law, seniors and the law, and divorce and child custody.

If you need information on estate planning issues, remember Pinkerton, Doppelt, & Associates, LLP offers a free in-house consultation. E mail us or call us with a question or to set an appointment.

There are many different types of trusts which San Diego couples may create as the cornerstone of their estate plan. Prior to 2000 when the exemption for estate taxes was $650,000 many couples had A/B trusts prepared. These were also called Bypass Trusts, Marital Trusts, or Exemption Trusts. These types of trusts call for the initial trust to split into two or more trusts after the death of the first spouse in order to reduce or eliminate the federal estate tax. Today many couples still have this type of trust. Couples with children from prior relationships also may have this type of trust which requires a split or division in trust assets after the first death.

Couples may also have a disclaimer trust which requires the surviving spouse to disclaim assets within nine months of death in order to take advantage of the federal estate tax exemption for couples. There are also so-called option trusts which place a duty on the surviving spouse to value the estate after the first death and only split the trust into sub trusts if necessary to take advantage of the federal estate tax exemption. All of these types of trusts require that after the first death, some steps be taken to comply with California law, preserve the federal estate tax exemption, and change title to assets. This is called trust administration.

If the trust is one which requires a division into two or more sub trusts, the assets in the estate need to be valued as of the date of the first death, then the assets allocated between two or more trusts, and new deeds prepared for real property. If the original trust is not divided at all after the first death or the assets allocated improperly, tax benefits can be lost. Also there may be financial losses to the children of the couple or other beneficiaries. Sometimes in the aftermath of a spouse passing away, these details may understandably be overlooked.

If you need help figuring out what to do after your spouse dies, we can help. The experienced estate planning lawyers at Pinkerton, Doppelt, & Associates, LLP can review your trust and do whatever trust administration your trust requires. Our initial consultation is complimentary.

Most counties in California including San Diego have suspended the issuance of marriage licenses for same sex couples after California voters passed Proposition 8 on Tuesday. Proposition 8 amends the California constitution to limit marriage to a union between a man and a woman.

Back in May of this year, the California Supreme Court ruled that such a ban was unconstitutional. Approximately 18,000 marriages have taken place between June when the decision became final through November 4. What happens to the validity of those marriages? California Attorney General Jerry Brown has said that since the amendment will not be retroactive, those marriages will be valid. He also has indicated the State will defend the validity of those marriages in court if they are challenged.

Expect there to be legal challenges to the Proposition. Attorney Gloria Allred, who filed the original suit that resulted in the Supreme Court ruling, has in fact already filed a lawsuit on the basis that the amendment authorized by the passage of Prop 8 is unconstitutional. A coalition of gay rights advocacy groups and the American Civil Liberties Union have also petitioned the California Supreme Court. Some pundits believe the issue may go all the way to the U.S. Supreme Court.

Regardless of the legal wrangling which will continue, same sex couples should continue to make estate planning a priority so that if they become disabled or pass away, their wishes will be honored. There also may be some potential issues that arise in the interim if a same sex spouse passes away and either has no will or has a will or trust leaving assets to their spouse.

No doubt family law issues will also develop as the courts sort out the legal ramifications of the passage of Prop 8. Same sex couples can continue to register as domestic partners to receive some benefits but there are a lot of protections granted to heterosexual couples under federal law that remain in question for same sex couples.

If you are a same sex couple needing more information on estate planning or family law issues, contact us at Pinkerton, Doppelt, & Associates, LLP for a free confidential consultation.

Pinkerton, Doppelt & Associates, LLP has been a member of the San Diego Better Business Bureau since 2001. Our practice is in the areas of estate planning (trusts, wills, probate, trust administration, conservatorships, guardianships, and Medi-Cal planning) and family law (divorce, adoptions, child custody, child support, and pre-nuptial agreements). Our firm has been assisting San Diego families for over 10 years.

Recently the BBB revised the rating system to use a scale of A+ to F to rate businesses. We are pleased that our firm was given an A+ rating as of October 29, 2008.

16 Factors went into the A+ rating, using objective information that is obtained, verified, and evaluated by the BBB. Some of the important factors the BBB considers are:

• the length of time in business
• required licensing
• the number and nature of complaints
• whether the business responded to the complaint and whether it was resolved in a timely and good faith manner

You can view the other factors and the entire report on Pinkerton, Doppelt, & Associates, LLP at the BBB website.

Contact us by phone or e mail with your estate planning or family law questions.

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 Pinkerton, Doppelt, & Associates, LLP for a complimentary consultation.

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 Pinkerton, Doppelt, & Associates, LLP 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.

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 Pinkerton, Doppelt, & Associates, LLP 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.

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 Pinkerton, Doppelt, & Associates, LLP to schedule a free in-house consultation.

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 Pinkerton, Doppelt, & Associates, LLP.

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."

Co-Ownership

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 Pinkerton, Doppelt, & Associates, LLP we can also assist you with the preparation of a living trust package, including trust transfer deeds.

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 Pinkerton, Doppelt, & Associates, LLP to set up a complimentary appointment

Are you the Executor or the Successor Trustee of a will or trust in San Diego? Are you faced with the dilemma of how to divide up personal effects of the deceased? How to divide personal property (furniture, collectibles, jewelry, cars) upon someone’s death can be a harder problem than distributing the rest of the estate. Many wills and trusts provide for distribution to heirs in equal amounts or equal shares, but how do you determine who gets what? What if more than one heir wants a particular item? How is the property valued, especially if its real worth is more sentimental than anything else?

There is an interesting alternative being offered by an auction company called eDivvyUp. This is an online auction site which can assist executors or beneficiaries deal with distribution of personal property. This company will inventory the items of personal property, photograph them, and then the beneficiaries are invited to participate in the auction with “points” they are assigned. At the end of the auction the property is distributed to the highest bidder.

At Pinkerton, Doppelt, & Associates, LLP we can assist you with the division of personal property and any other matter relating to probate or trust administration. You may call or e mail us to set up a complimentary consultation.

Do San Diegans fit the national statistics on Estate Planning?

Alhough there are no statistics specifically for San Diego County, a study done nationally in 2007 found that over half (55% ) of all adult Americans do not have a will or other estate plan. Of non-whites, the lack of a will is even more pronounced:

Only 32% of African American adults have wills
Only 25% of Hispanic American adults have wills compared to
52% of white American adults.

The study also found that 41% of American adults have health care directives. This is up from several years ago perhaps because of news coverage about such cases as the Terry Schiavo case in Florida.

Reasons for not doing an estate plan:
1. Ignorance is bliss. 10% say they don’t want to think about dying or becoming incapacitated.
2. Where to begin? 9% say they don’t know who to consult about an estate plan
3. No Assets to worry about. 24% say they don’t think they have enough assets
Possible other reasons are procrastination: I know I should do it but don’t seem to get around to it.

If you fall within these categories and do not have a will or a living trust, contact us at Pinkerton, Doppelt, & Associates. We offer a complimentary consultation in the office, contact us by e mail.

After your revocable living trust is prepared, there often arises the need to amend your trust. It could be that you want to change your successor trustee, change beneficiaries, or that new changes in the tax laws require some new or revised provisions. Some people think they can cross out information on their trust and make changes on the original trust document. This should never be done as the changes are not notarized and it may be difficult to prove that you were the one making the changes. An amendment to your trust should be prepared and notarized with the same formalities as your original trust.

You may also want to have an estate planning attorney review your trust to see if an amendment is appropriate. Some trusts become irrevocable after the death of the first spouse and depending on the trust language, may not be amended.

At Pinkerton, Doppelt, & Associates, LLP, we can advise you as to whether your trust may be amended and with the preparation of amendments. We offer a complimentary consultation and you may call or e mail us for an appointment.

You don’t have to be rich to need a trust. If you own your home in San Diego where the cost of the average home is high, you need a trust to avoid probate. Even without a home, if you have total assets over $100,000 you need a trust to avoid probate.

You don’t have to be rich to afford a trust. Even with this economy, a trust is so important that it may warrant cutting back on other things to afford it.

1. Painless Savings Techniques: One technique for savings is to put every $5 bill you receive into a jar or tucked away in a drawer. You would be surprised how many $5 bills you receive in a month. You can easily save several hundred dollars a month if you faithfully make this a habit. Some people deposit the change they find in their pocket or wallet into a jar. Taking those jars to the bank and converting them into money to set aside for a trust is a way to save painlessly. The Keep the Change Program at Bank of America rounds up every purchase to the nearest dollar amount and transfers the difference into your savings account. The bank will even match your savings for the first 3 months.

2. Cut back on your mocha frappachino or carmel machiato you have been drinking everyday. It has been estimated that a person consuming a designer coffee drink once a day spends over $100 a month. If you can’t give up your coffee, how about bringing your lunch to work for a while. You can easily spend $10 or more on lunch eating out. These amounts may seem insignificant but they add up!

3. How much do you spend annually on Christmas presents for your family? Some families spend $50 to $100 per person. What if you bought something a little less expensive and spent the money on a trust. After all, the creation of a living trust is really a gift for your heirs. Such a gift will later be appreciated more than a video game or sweater they probably won’t like anyway.

4. Cut back on dining out or other monthly outing. A trip to your favorite sushi bar or nice restaurant can easily cost $100 - $200 per couple. A trip to the ball game for the whole family can cost more than that. What if you cut back on some of these outings for 6 months?

5. Have a garage sale and put aside the proceeds to help fund a trust. Many people have a garage full of garage sale items and once you have a sale, what do you do with the money? Earmark the proceeds for something that will last a lifetime (literally)!

A revocable living trust can be affordable for most people even if you have to get creative. At Pinkerton, Doppelt, & Associates, LLP, we can’t assist you with the garage sale but we can help you create an estate plan. Call us or e mail us for a complimentary consultation.

Do you have a piece of property in San Diego County that you want someone to reside in as long as they live and then pass the property to someone else? A life estate is typically an ownership interest where the owner of real property gives a “life estate” to another so that person has the right to live in a home for his or her life. It might happen in a situation where two people marry late in life. The husband sells his home and they move into the wife’s home. When the wife passes away, she wants the family home to go to her children but she also wants her husband to be able to live in the home if he outlives her. The wife can give a life estate to her husband so that the husband can live in the home until his death. Upon his death, the house goes to the wife’s children.

A life estate can be a valuable estate planning tool to keep assets in the family, such as the family home, but there can also be problems if they are not prepared correctly. The document creating a life estate needs to be drafted carefully to avoid issues later such as who is responsible for property taxes, insurance, maintenance, and repairs. What if the costs of repairing the home are high and the husband does not want to spend the money on a house that will be going to his wife’s children? Does the life estate include furniture and other household items? What if the husband remarries?

If you want to give someone a life estate in a piece of property you own, we can assist you with the proper documents to accomplish that at Pinkerton, Doppelt, & Associates, LLP. Please feel free to call us or e mail us about this or any other estate planning issue. An in-house consultation up to 30 minutes is free.

San Diego County is home to many members of the military stationed at Camp Pendleton, MCRD, MCAS Miramar, and the various Navy facilities such as 32nd Street Naval Station, Navy Submarine Support Facilities and Naval Base Coronado.

When a member of the military gets orders to deploy out of the area, they often need to get their estate planning and financial affairs in order. Some of the things to think about are a power of attorney for finances, a will or a trust, a designation of guardians for your minor children. If you are a single parent or both parents are deployed, you may want to execute a document naming a temporary guardian for your children. This may also include authorizations to permit the guardian to obtain medical care for your children in your absence.

JAG attorneys on the base often provide some of these documents for military personnel but if you have a unique situation, it may be worthwhile to consult a private attorney. Situations that may make this advisable are children with special needs such as autism, mental retardation, cerebral palsy, or any other physical or mental disability that would require special provisions in your estate plan. Real property in more than one state or an estate in general that is over $100,000 may warrant a revocable living trust. Also if you have a trust prepared in California, it is valid in any other state you might subsequently live.

If you need assistance with an estate planning matter, call us or email us at Pinkerton, Doppelt, & Associates, LLP for a complimentary in-house consultation. Also if a family member dies who is in the military and there is an estate to settle, we would be pleased to meet with you about what to do next.

Many San Diegans have timeshare properties out of state in Hawaii, Colorado, and Florida as well as right here in San Diego in the beachfront communities of Coronado, La Jolla, Mission Beach, Carlsbad, and Oceanside. If you plan to leave your timeshare properties to your heirs you need to understand several things.

There are two types of timeshare properties - deeded and non deeded. With the non deeded form of ownership you usually are buying a license to use the property or a lease or membership interest that allows use of the property for a number of years. You may or may not be able to pass this on to your heirs. With a deeded timeshare you actually have an ownership interest in the property and have a deed showing that interest.

If you have a revocable living trust, a timeshare, like any other piece of property, has to be transferred into your trust. If it is a deeded timeshare, this will be done with a trust transfer deed. Many trust administrations or trust distributions are delayed because individuals forget to transfer their timeshare properties into their trust.

With a will as your estate plan, your entire estate will have to go through the probate procedure with its accompanying time and expense. If the timeshare property is out of state, a second probate called an “ancillary probate” will have to be established, resulting in additional probate fees. Ownership of out of state property is a good reason to have a trust rather than a will.

With either a will or a trust, if you think your children will be fighting over the use of the timeshare, consider leaving it to only one beneficiary so that the timeshare does not have to be sold to distribute it.

If you have questions about your vacation properties and whether they are properly transferred into your revocable living trust, we can assist you at Pinkerton, Doppelt, & Associates, LLP You can also call us or e mail about any other estate planning issue.

There are many reasons why people delay creating an estate plan. One of the primary reasons is that it just doesn’t rise to the top of their “To Do” list. It is something they know they should do but they think they have plenty of time to do it. How much time do you have to procrastinate?

A fun life expectancy calculator lets you plug in information about your family history, accidents, cholesterol, use of alcohol, diet, lifestyle etc. to come up with a your life expectancy. Hoever, don't let the fact that you have another 30 or 40 years to go prevent you from creating an estate plan now.

At Pinkerton, Doppelt, & Associates, LLP we can help you create an estate plan now and it will be one less thing to take care of on your "To Do" list. Call us or e mail us for a free in-house consultation.

Reverse mortgages have become extremely popular in California and especially in San Diego communities with a large senior population such as Rancho Bernardo, Poway, Ramona, and Oceanside.

If you have a reverse mortgage already or are thinking about getting one, useful information about reverse mortgages is available fromthe U.S. Dept. of Housing and Urban Development (HUD). AARP also has information and a list of questions to ask yourself before making the decision to apply for one.

Remember from an estate planning perspective, the lender may ask you to take your home out of your living trust to accomplish the reverse mortgage. Make sure your home is put back into the trust after the mortgage is in place. This means that there is a grant deed or quitclaim deed showing the property titled in your name as Trustee. When the deed has been recorded with the County Recorder, you home is then “put back” into your trust. This process may be done by whoever handled the mortgage paperwork but it is a good idea to verify that it has in fact been done since your home is often the major asset of your estate. You do not want to pass away with a major asset left out of your trust.

If you need help transferring property back into your trust and recording the necessary deed, contact us at Pinkerton, Doppelt, & Associates, LLP. Feel free to call us or e mail us for a complimentary in-house consultation about this or any other estate planning issue.

In San Diego many people are going “green” - trying to conserve our planet’s resources and natural environment for the next generation. Now there is growing trend toward “green burials” where the body is returned to the earth to decompose. No chemicals are used to embalm the body and it is laid to rest in a shroud or biodegradable casket. The first “green cemetery” in California is in Mill Valley in northern California. At Fernwood Cemetery they use no embalming fluids, only biodegradable caskets, and trees and scrubs as markers. In San Diego county, the funeral services company, Thresholds, in Lakeside, provides in home funerals and ecologically friendly burials.

According to Wikipedia, U. S. cemeteries deposit into the ground 827,00 gallons of embalming fluid, 30 million feet of hardwood, 90,000 tons of steel, 2700 tons of copper and bronze and over 1 million tons of concrete each year. Even cremation, although better for the earth than burial, leaves carbon ash that doesn’t decompose. The “green burial” movement is trying to alleviate this impact on our environment by encouraging burials without embalming, caskets that will disintegrate, and even cemeteries with no marble markers, metal vaults, or lawns that require fertilizer and pesticides.

For more information on “green burials” you can visit the Green Burial Council website. If you need to incorporate “green” provisions into your will or trust, call or e mail us at Pinkerton, Doppelt & Associates, LLP. Our initial in-house consultation is complementary.

New facilities are springing up all over the county for seniors in such areas as Escondido, Encinitas, San Marcos, and Vista. Some facilities have a resort type atmosphere and some even specialize in dementia and Alzheimer care. You can obtain a directory of senior facilities for assisted living, independent, and convalescent care from Alternatives for Seniors.

Moving a loved one to an assisted living, nursing home or convalescent home is not an easy decision. Particularly troublesome is how to pay for such care when one spouse needs to be cared for in a facility and the other wants to remain at home. Such specialized care can be expensive and impossible for many people to pay for out of pocket. It is estimated that long term care can cost $40,000 - $60,000 per year in some areas. Medicare typically will not pay for long term care. Some people have policies of long term health care which may partially cover such costs but if the insurance was not purchased when the individual was healthy, it is not going to be possible to obtain insurance once it seems evident that long term care will be necessary.

Medi-Cal is the California Medicaid system for people 65 or older with limited income and financial resources. Medi-Cal may pay for long term care however its rules and regulations are constantly changing and often confusing for the average person. At Pinkerton, Doppelt, & Associates we can help you with Medi-Cal planning, which is the process of qualifying for benefits while still protecting assets that have taken you a lifetime to accumulate. Call or e mail us to set up a complimentary consultation.

At our web site, you can read about the various ways to accomplish charitable giving. You can use a bequest in your will or trust or one of the various types of charitable trusts such as a charitable remainder trust or a charitable lead trust. At Pinkerton, Doppelt, & Associates, LLP we can incorporate your charitable wishes into a will or a revocable living trust. If you are considering leaving part of your estate to charity, you may wonder how do you choose one and how do you know whether that charity will use your gift wisely?

There is a way to find out such things as how efficient a charity is, how much of the donated dollars goes to administrative purposes, and how much to the actual programs. Charity Navigator rates charities using a standard of “no stars” to “4 stars” to rate charities in the areas of organizational efficiency and organizational capacity. The site also has useful information about what questions to ask before choosing a charity such as what are the charity’s goals, is it meeting those goals with its programs, is the charity well-managed, and is it a confirmed 501(c)charity (this means the charity has filed with the IRS as a tax-exempt non-profit organization).

4 Star charities in San Diego include the San Diego Zoological Society, San Diego Symphony, Autism Research Institute, Father Joe’s Village, Rady Children’s Hospital Foundation, San Diego Humane Society, and the Jewish Community Foundation of San Diego. There are many other San Diego and International charities that earn the 4 star reputation. If you need more information on how to implement charitable giving in your estate plan, contact us at Pinkerton & Doppelt, & Associates LLP. You may call us or e mail us for a complimentary in-house consultation.

If you die in San Diego without a will or a trust, you are deemed to have died “intestate”. To die “intestate” means to die without a “testament” (a will) or a trust and your estate will have to go through the probate process where the Probate Court will determine where your estate will go. This can result in unintended results for some people and not what they would have wanted.

As an example, most people believe that if they are married and they die without a will or a trust, all their property will go to their surviving spouse. That is not the case in California. If you are married with children, your community property(essentially property acquired during the marriage) will go to your spouse, but only one-half of the separate property (property acquired before marriage or inherited during the marriage) will go to your spouse if there is one child of the marriage. If you have 2 or more children, your spouse will only receive one-third of the separate property. This can be an unintended result if the estate is small and the surviving spouse needs all the assets in the estate to live on. Furthermore, California inheritance laws only recognize relatives of the intestate decedent, so the Probate Court can never distribute any of the estate to charities or non relatives.

Here are 10 example of things you cannot do if you die intestate:

1. Leave any part of your estate to a friend.
2. Provide for a disabled child or other disabled beneficiary so as not to impact their public assistance.
3. Designate a guardian for your minor children.
4. Prevent a minor beneficiary from receiving all of his or her inheritance at age 18.
5. Leave any gifts to charity.
6. Disinherit someone who is your heir.
7. Designate who will receive your personal property such as jewelry, artwork, coins, etc.
8. Provide a life estate so that someone can live in your home after your death.
9. Leave any part of your estate to a non-adopted step-child or foster child.
10. Designate the ages and the terms under which your children or grandchildren will receive their inheritance.

To avoid unintended results upon your death and provide for your loved ones in any of the ways listed above, it is important to have a will or a trust. A will allows you to accomplish these objectives but a will has to go through the probate process which can be costly and time consuming. A living trust is a better way to specify who you want to inherit your estate without the time and expense of probate. The experienced estate planning lawyers at Pinkerton, Doppelt, & Associates, LLP can assist you with implementing your wishes in the appropriate estate planning documents. Call us or e mail us for a complimentary in-house consultation.

More and more families in San Diego county are “blended families” (families that include children from previous marriages or relationships). It is estimated that 50% of first marriages end in divorce and that there are now more “blended families” in the county than traditional families.

Blended families face a number of challenges, not the least of which is estate planning. Many couples each have children from previous marriages and may have children of their marriage together. How is a trust created that will provide sufficient income for the surviving spouse and then after the second death, distribute the estate to the children of both spouses and their children together? What if the surviving spouse remarries and wants to leave assets to a new spouse or has additional children?

Another issue that can arise is if you have divorced and remarried but have no estate plan when you pass away. Your minor children may receive a portion of your estate through probate, but who will manage the children’s inheritance? Probably your ex-wife which may or may not be your preference.

These and other issues make it vital that blended families have an estate plan tailored to fit their unique situation. A QTIP trust is a type of revocable living trust that may be appropriate for blended families. It can provide income to a surviving spouse and also insure that the remainder of the estate will be distributed or held in trust for the decedent’s children.

At Pinkerton, Doppelt, & Associates, LLP we can assist San Diegans with these and other issues affecting blended families. Please feel free to contact us by phone or e mail us for a complimentary in-house consultation.

Once you create a revocable living trust your job as the creator (often called the Trustor or Settlor of the trust) is to properly fund the trust initially and thereafter see that all the assets that should be placed in your trust are properly titled.

Once you pass away, the job of administering the trust is in the hands of your successor trustee. Your trust continues in existence and certain actions are necessary to carry out the purpose of the trust. These duties are done by your successor trustee. If you are the successor trustee of a trust, it is important to understand you have certain duties. These duties are called Trust Administration and may involve some or all of the following : paying the decedent’s debts, making an inventory of the trust’s assets, creating sub trusts if called for by the trust agreement, filing tax returns, transferring ownership of real property, notifying certain parties of the death (such as the Social Security Administration, Medi-Cal, and named beneficiaries), paying estate taxes within 9 months, paying property taxes on real property, selling certain assets, and making other decisions about investments if the trust is to continue.

Trust administration does take some time and attention to details. It often requires the assistance of an attorney to advise the successor trustee and assist him or her with the duties the job involves. If you need an experienced attorney to assist you as a trustee (or as a named beneficiary), call us or e mail us at Pinkerton, Doppelt, & Associates, LLP and we will be pleased to offer you a complimentary consultation.

The movie The Bucket List recently came out in San Diego on DVD. This movie shows an unlikely pair of cancer patients (Morgan Freeman and Jack Nicholson) who compose a list of things they want to do before they die (places to visit, things they want to accomplish before they “kick the bucket.” ) In the movie, they sky dive, drive racing cars, get tatoos, and visit the Pyramids. You may have things you want to do which are a little less adventurous. Perhaps you have your own Bucket List of things you want to see and do in your lifetime. There are countless places in the world that would be fun to visit. There may even be some places you still haven’t seen in San Diego such as the beautiful beaches in La Jolla, Del Mar, or Solana Beach. Maybe you haven't seen the beautiful view of the city from the Point Loma Lighthouse. There may be countless things you still need to say to the people you love.

While you are composing your own Bucket List, perhaps you should also consider creating an estate plan and setting forth what you want to happen upon your death. Although it may not be as much fun consulting an estate planning lawyer as it is to visit the Taj Mahal or Moonlight Beach, getting an estate plan will give you piece of mind. You can complete the rest of your Bucket List, knowing your affairs are in order and your estate will be distributed according to your wishes.

At Pinkerton, Doppelt, & Associates LLP, we can help you cross off “Create an Estate Plan” from your personal Bucket List. Call us or e mail us for a complimentary consultation.

In the South Bay communities of Chula Vista, National City, and San Ysidro, as well as elsewhere in San Diego County, there are many individuals who have spouses that are not U.S. citizens. Such couples have different estate planning concerns than those where both spouses are citizens.

In California when a spouse dies, the surviving spouse is entitled to an federal estate tax marital deduction. This permits the deceased spouse to leave unlimited assets to a surviving spouse, either outright or in a trust, with no estate tax liability. This only applies however if the surviving spouse is a U. S. citizen.

There is a solution to this problem. If you are a married couple and one spouse is not a U.S. citizen, the way to protect your assets is a with a special type of revocable living trust called a QDOT (Qualified Domestic Trust). A QDOT is a special type of marital trust that allows a non U.S. citizen spouse to inherit without being immediately obligated to pay estate taxes. These types of trusts are subject to strict requirements by the IRS and must be properly drafted to achieve this result.

To see if a QDOT trust is appropriate for you, contact us at Pinkerton, Doppelt, & Associates LLP for a free in-house consultation. You may call or e mail us with this or any other estate planning issue.

Recently the San Diego Union reported the story of a cat named Teila living out her days on the grounds of the National Cat Protection Society in Spring Valley. This shelter opened in Spring Valley in 1975 but in 2000 a “retirement center” was built complete with a playroom, bedroom and shaded patio. They expect to continue to expand with places for cats to climb and explore in a tropical island atmosphere. The owner Gerri Calore, reports that one woman came in to view the center as a home for her 8 cats after her death. She is going to set up a pet trust which will include a lifetime care plan at the center. The owner says that the retirement center, while the first of its kind in San Diego, is a growing trend among pet owners.

A growing trend is also providing for pets in your will or trust. You can read about the various ways to handle estate planning for pets in an article about the subject on our website. If you would like to incorporate such ideas into your own estate plan, call us or e mail us. At Pinkerton, Doppelt, & Associates, LLP we can assist with this or any other estate planning issue and offer a complimentary consultation..

Now that the California Supreme Court has validated same sex marriages in California, we may see an increase in such couples having children or adopting them.

The Gay Lesbian Times reports that more than half of gay men and 41 percent of lesbians want to have children and an estimated two million gay or lesbian people are interested in adoption. More than 16,000 adopted children are living with lesbian and gay parents in California, the highest number in the country according to a study done by the Williams Institute on Sexual Orientation and Public Policy at UCLA.

If you are a gay or lesbian couple contemplating adoption, Human Rights Campaign Family Project has information on the various types of adoption such as open adoption, private adoption, or international adoption. At the law firm of Pinkerton, Doppelt, & Associates, LLP we can assist you with completing the adoption process. Call us or e mail us for a complimentary consultation about adoption or any family law or estate planning issue.

Many individuals in San Diego are considering purchasing life insurance. Most people do not know that a properly drafted irrevocable life insurance trust, known as an ILIT, can be used to reduce estate taxes or to provide substantial money for your heirs. They also bypass the probate process. For some, they can be an important part of your estate plan.

One of the ways you can create an ILIT is by transferring a life insurance policy already in existence into your newly created ILIT. Another way is to create an ILIT and have the trustee of the ILIT apply for a new policy and transfer money to the trust annually to pay the insurance premiums. You also may be able to finance the insurance premiums with no out of pocket expense to you through a premium financed life insurance program.

The purpose of an irrevocable life insurance trust is to remove life insurance proceeds from one’s taxable estate. The trust must be irrevocable meaning that you cannot have any control or ownership of the policy. Someone other than yourself will be the trustee. Since you are not the owner of the insurance policy nor do you have any control over it, the proceeds at your death are not part of your taxable estate. The life insurance proceeds go to your beneficiaries according to the terms of your trust.

The experienced estate planning attorneys at Pinkerton, Doppelt, & Associates, LLP can assist you in determining whether an irrevocable life insurance trust is appropriate in your situation and drafting the necessary documents. Please call or e mail us for a personal and complimentary consultation.

There are many people in San Diego that want to support the charities and causes they care about. If you want to leave a legacy after you pass away and want to give money, property, or other assets to charitable organizations, you need to have an estate plan which includes charitable giving.

A recent example in San Diego occurred when a woman died without a will or trust. She was very active in the community and handicapped herself, always intended to leave her handicapped accessible home to an appropriate charity that would see that the home was utilized by persons with disabilities. She never got around to consulting an estate planning lawyer to make a will or trust. Having died without an estate plan, her home will have to go through probate with the rest of her assets and her heirs will sell the home and distribute the proceeds. Her dream to leave her home to charity will not be realized.

The lessons of this example are twofold: 1. Don’t postpone making an estate plan, especially if you wish to give something to charity. 2. If you do want to leave assets to a charitable organization, specify your wishes in a will or trust. You can make a specific charitable bequest of cash or property. You can also create a charitable remainder trust, or a charitable lead trust. You can read about the various ways you can accomplish charitable giving on our website. At Pinkerton, Doppelt, & Associates, LLP, we can assist you with an estate plan that will include the charities and causes that are important to you. Call us or e mail us for a personal, confidential, and complimentary consultation.

In San Diego the cost of housing is one of the highest in the nation. For many of us, our home is the primary asset in our estate. One of the issues in the upcoming presidential campaign is the repeal or modification of the federal estate tax exemption. The outcome of the election may have an effect on whether your estate will be subject to estate taxes. As discussed below however, regardless of the election, you should not postpone creating an estate plan, the central document of which would be a revocable living trust.

The Estate Tax, often called the death tax, is a tax on the estates of the deceased in the United States. Tax-cut legislation enacted in 2001 provided for 10 years of increasing exemptions. Current law is that those with taxable estates over $2 million will be subject to estate taxes. If the estate is more then $2 million, the remainder is taxed at 45%. In 2009 an estate over $3.5 million will be taxed. Unless Congress acts to repeal or change the current law, the tax will be completely eliminated in 2010 but will be reinstated in 2011 to tax estates over $1 million with a top rate of 55%.

The repeal or elimination of this tax entirely has been suggested by many fiscal conservatives, primarily Republicans. Where do the Presidential candidates in the upcoming election stand?

Democrats argue that a total repeal would benefit the wealthy. Senator Obama has publically opposed doing away with the estate tax entirely. He voted against a repeal of the estate tax in June 2006. Recently he hasn’t mentioned any idea short of a repeal but most people think he would freeze the estate tax exemption at 2009 levels which imposes estate taxes on estates over $3.5 million.

John McCain voted in favor of repealing the federal estate tax when a bill was introduced in Congress in June of 2006. ( HR 8 ) He has been quoted as saying that he favors an exemption of estates under 5 million.

Don’t postpone a decision on your estate planning until after the election. Regardless of who wins the election, it appears we may have federal estate taxes in some form. If we return to the exemption threshold of $1 million, there will be many Americans, and particularly Californians who will potentially have estate tax issues. In San Diego where the average price of a home is still close to $600,000 most people who own a home and additional assets such as IRAs, 401(k)s, mutual funds, or other assets may easily have an estate valued at $1 million. At Pinkerton, Doppelt, & Associates, LLP we can assist you with an estate plan to address whatever the federal estate tax level may be at the time of your death. With a revocable living trust as the key element of your estate plan, you may be able to reduce the amount of estate taxes which have to be paid. Contact us by e mail or phone for a complimentary consultation on this or any other estate planning issue.

Estates are comprised of many different assets including homes, bank accounts [Bank of America, Union Bank and others], life insurance [Farmers, State Farm and others], and personal property such as jewelry, artwork, cars, and boats. Sometimes what causes the most squabbles among family members after a death is not the real property or cash but such things as jewelry, collectibles, or other items of strictly sentimental value such as grandma’s ring or grandpa’s gun.

Unless you have left specific instructions as to your personal property in your will or trust, usually it will be divided equally among your beneficiaries. But what is equally? How do you value a family heirloom? As an example, Rosa Parks (who you may remember started the civil rights movement in 1955 when she refused to surrender her seat on a bus to a white rider) had in her estate china that was used when she dined with then President Clinton. How does one determine the value of that particular piece of Wedgwood china? What about Grandma's ring? Something that may be priceless to a beneficiary because of its sentimental value may be worthless in terms of its appraised value. What if two or more beneficiaries want the same item and won’t budge?

If you have specific items of personal property that you want to give to particular people upon your death, you can make specific bequests in your will or trust. Usually however, people have too many items of personal property to list them all in their will or trust. Or they may acquire other personal property after they execute their will or trust or want to change their mind at some point about certain gifts.

To minimize any potential family squabbles, consider making specific bequests of valuable property in your will or trust. You also can include in your estate planning documents a Personal Property Memorandum which lists the intended recipients of your various items of personal property and should be a part of any trust package. At Pinkerton, Doppelt, & Associates, LLP, our estate planning attorneys can assist you with issues relating to disposition of personal property upon your death or with any other estate planning issue. Call or e mail us for a complimentary consultation.

If your child is now 18, there is valuable information for you and your now “adult” child available for free. There is a publication entitled “When You Become 18: A Survival guide for Teenagers" published by The State Bar of California. This pamphlet can be ordered in print form or downloaded from the bar website and answers such questions as what happens if my 18 year old commits a crime? As parents, are we responsible if our 18 year old injures someone with the family car?

One document every adult child should have is an Advance Health Care Directive to appoint someone to make health care decisions in the event of an incapacity. Once a child turns 18, the parents can't make medical decisions for their child. If the parents are divorced or separated and disagree on medical treatment, how is it resolved?

Similar to the Terry Schiavo case, there recently was reported the story of a 25 year old single woman who was brain damaged as a result of a dirt bike accident. She had no living will or power of attorney for heath care. Her divorced parents are arguing over a DNR order (do not resusitate order) signed by her mother and whether the mother or the father should be appointed her temporary guardian to make those end of live decisions.

An Advance Health Care Directive is a document that would have avoided this conflict by naming an agent to make health care decisions and setting forth the young woman's wishes about life support and end of life issues. At Pinkerton, Doppelt, & Associates, LLP we can help you with an Advance Health Care Directive or any other estate planning issue. Please call or email with any questions in this area or to set up a free in-house consultation.

In San Diego, the law changed on June 16, 2008 in regards to marriage ceremony and the issuing of State of California marriage licenses to same sex couples. The law which applied to opposite sex couples is unchanged. In San Diego, both same sex and opposite sex couples will go to the San Diego Superior Court for their marriage.

A recent California Supreme Court Case has taken effect and issues a Writ of Mandamus for all California State officials to perform marriages in accordance with the new ruling which does not define marriage as between a "man and woman".

As such, our law firm of Pinkerton, Doppelt & Associates, LLP is offering the same estate planning services for same sex spouses as for opposite sex spouses. No attorney can guarantee that the state of the law will remain the same. In fact, already there is the proposal for an amendment to the California State Constitution to make same sex marriages unconstitutional.

For decades, opposite sex spouses have enjoyed the benefits of a revocable living trust. Our office would be pleased to offer opposite sex spouses and same sex spouses the same estate planning services in conformity with the new In Re Marriage cases. Please feel free to call or e mail us.

In San Diego, we have many senior citizens. One article explains that talking frequently improves memory. An estate plan includes provisions for a conservatorship if necessary and our firm's hope is that you never need this and that by good health [both mental and physical] a conservatorship will never be necessary. However, if it ever is, please e mail our firm.

An article at SeniorJournal reports a study done at the University of Michigan Institute for Social Research. One of the researchers was a psychologist at University of California in San Diego. This study tested people as old as 96 and found that a ten minute conversation was just as effective as crossword puzzles or other “solo” intellectual activities for preventing loss of memory. So instead of sitting home alone doing puzzles to keep your brain sharp, invite someone over for a conversation.

As we grow older, we face not only issues of memory loss but also issues relating to estate planning, long term health care, planning for incapacity and other issues in the area of elder law.

If you are a senior with concerns over aging, contact us at the law firm of Pinkerton, Doppelt, & Associates, LLP for a free and confidential consultation. We can help you with documents to appoint someone to take care of your finances if you become unable to do that for yourself or a health care directive to appoint someone to make health care decisions for you in the event you are unable to do for yourself. If you don’t already have a living trust, the creation of one can be an incredible gift to your loved ones who will have to settle your affairs when you are gone.

In San Diego, many residents will pass away. When they do, their husbands, wives, sons, daughters, grandchildren and other relatives will receive their property either through the probate process or through trust administration or other legal procedures for distribution of assets post death of the trustor. In San Diego, there are two court houses which hear probate cases. One court house is in San Diego and the other court house is in Vista.

In a recent article in the Sacramento Bee, the issue of the importance of naming beneficiaries is discussed as part of the estate plan. The article discusses the distribution to contingent beneficiaries of a life insurance policy rather than the living trust as the beneficiaries.

Our law firm of Pinkerton, Doppelt & Associates, LLP would be pleased to give you advice on the advantages and disadvantages of all estate planning strategies. This is complimentary and confidential. Please feel free to e mail or call our firm.

In San Diego, California, we are governed by the laws of the United States and these are interpreted at the highest level by the California Supreme Court and the United States Supreme Court. In San Diego, for the State Courts, the law is interpreted by the San Diego Superior Court.

Estate planning has long utilized the marital status as part of the estate plan. Our office has prepared thousands of revocable living trusts and many of these are for married couples. Until last week, this was only for men and women and was controlled by Family Law Code 308.5 which is entitled California Defense of Marriage Act and was approved under Proposition 22 on March 7, 2000. The recent Supreme Court decision has ordered that this Code is no longer the law and this will have a significant effect on estate planning for the future if this law is not overturned by the United States Supreme Court.

Our law firm of Pinkerton, Doppelt & Associates, LLP can assist in analyzing your unique and individual estate planning needs. Please e mail or call us for your complimentary consultation.

In San Diego, California [as well as across the United States], April 16 is National Healthcare Decisions Day. In San Diego, with over 1,000,000 residents alone, this is a very important topic. In California, the Advance Health Care Directive is a form which is included in a living trust to insure that your wishes are carried out if you cannot make them for yourself due to incapacity or other factors.

A recent article in the San Diego North County Times highlights this issue. In this article, George Chamblin writes that a "new survey finds that most families, willing to hold meaningful discussions on other issues, are still hesitant to deal with death". In our law firm of Pinkerton, Doppelt & Associates, LLP, we assist families in beginning the discussion on this topic. In addition, you can feel free to e mail to our firm for assistance in this discussion.

In San Diego, many residents have no estate plan. In our firm of Pinkerton, Doppelt & Associates, LLP, we offer a complimentary and confidential consultation to determine which estate plan is right for you. You can also feel free to e mail us. In San Diego, in the Probate Courts, the legal fee is 4% of the first $100,000, 3% of the second $100,000 and then 2% of the remaining $100,000's in incremental units. For example, if your house is valued at $500,000 and your debt on the house is $400,000, the legal fee is calculated from the gross fair market value and not the net.

A recent article highlights the problems with estate planning. This is not a problem unique to San Diego. In San Diego, a revocable living trust can have the effect of avoiding probate fees and costs if properly set up and properly funded. The article addresses persons who procrastinate due to their fear of facing their own death, do not properly fund the trust with property which causes the estate to be placed into probate or try and do it themselves with out of date forms and documents.

Do not let this happen to you and your family. Our firm can assist with an estate plan which is within your budget and will save your family money and legal fees in the future. Failure to have an estate plan or failure to properly fund your estate plan can have the same effect of having the estate in probate court.

In San Diego, many residents are in the military. Also, in San Diego, many residents travel for business. There are many articles on this subject and they are easily searched in Google, Yahoo, MSN and other search engines with the key search terms for your own education. The AARP is a good source of information for seniors and non seniors alike and has an article regarding powers of attorney.

At our law firm of Pinkerton, Doppelt & Associates, LLP, we prepare individual estate plans based on individual needs. These can include a revocable living trust, durable power of attorney for finances, advanced health care directive and also other advanced estate planning strategies. Please feel free to e mail or call our office for any legal advice you need in this area.

In San Diego, a large number of residents have multiple retirement accounts which may include deferred compensation, deferred benefit or other compensation plan for retirement. These can take the form or an IRA; KEOGH; 403 plan or many others. Many parents also have a 529 plan for education for their children. Our firm does not give financial advice and are not financial planners or CPA's. Our firm of Pinkerton, Doppelt & Associates LLP can assist in advanced estate planning strategies to protect your legal rights and to obtain your legal goals of eliminating probate fees and costs and to protect your privacy in the distribution.

A recent article in the San Diego Union Tribune on April 20, 2008 focused on the Fleischman family. The husband is 53 and wants to retire from his job as a high school teacher in 7 years when he is 60. At that time, his now 12 year old son will be entering college as a freshman and his daughter, now 15, may be graduating early from high school and graduating college at the same time. The wife is a registered ER nurse and plans to work another 10 to 15 years.

The article does not state whether the Fleishman's have a revocable living trust or estate plan in any form. If both of them were to pass away without a revocable lliving trust or other estate plan, their estate would need to be probated prior to distribution. Given the assets in the article, the probate fees and costs would be significant and would deplete the resources of the family which could have better been used for the children's education.

Feel free to e mail our law firm and we can discus with you the appropriate estate plan for your individual needs.

In San Diego, California there are thousands of attorneys. Some attorneys in San Diego are in solo practice and some in partnerships or other business formations. It is, of course, not unusual for an attorney to pass away while representing current clients or having documents of former clients. Many clients do not know that there is a system in place for assisting client's to have their original estate planning documents transferred. In addition, if the attorney lacks capacity to continue to represent clients or is no longer a member of the State Bar of California, then this system will also apply.

In this procedure, the original estate planning documents in the control of the attorney may be transferred to another attorney of to the Superior Court Clerk of the County in which the client's last residence is. For ease of use, clients can contact the State Bar of California or the San Diego Superior Court Clerk's Office.

Estate planning documents which are included in this are a signed original will, declaration of trust, trust amendment or other document modifying a will or trust, a signed original power of attorney, a signed nomination of conservatorship and some other writings.

If your attorney has passed away and you are seeking legal representation, please do not hesitate to contact our firm of Pinkerton, Doppelt & Associates, LLP either by phone or e mail.

Rancho Bernardo is in the City of San Diego even though it is far north. Our law firm of Pinkerton, Doppelt & Associates, LLP is located in Rancho Bernardo off the I-15 at Bernardo Center Drive. We offer a complimentary consultation for you to obtain information if the legal strategy of what estate plan is appropriate for your individual factual and family situation. Please feel free to e mail or call our firm.

Federal estate tax law provides a method by which families can reduce the tax consequences of transferring the family home to the younger generation. The device for accomplishing this is called a qualified personal residence trust (QPRT).

An individual may create a QPRT by transferring his or her residence to a trust (usually for the benefit of family members), while retaining for a particular period of time the right to live in the residence for free. The tax laws treat the transaction as a gift of the remainder interest in the trust, rather than as an outright gift of the residence itself. There is a tax on that gift, but there is no later tax on the value of the whole residence at the time of the grantor's death, as there otherwise could be but for the use of the QPRT. As a rule, the more that a home can be expected to appreciate over the term of a trust, the more beneficial is the use of a QPRT.

A QPRT results in tax savings only if the grantor outlives the period of the retained interest. Even if the grantor does not survive the period established for the trust, the worst that could happen is that the full value of the residence would be taxed. The result is the same as if there had been no QPRT in the first place.

The QPRT has two generally recognized drawbacks. While the grantor, usually a father or mother of a family, can continue to occupy the residence after the period of retained interest has run, he or she must pay rent to avoid inclusion of the residence in his or her estate. Some individuals may not like the prospect of being their children's rent-paying tenants. Second, the QPRT does not provide a "step-up" in the cost basis of the residence as there normally would be if a residence is inherited. If a QPRT is used, the gain on the sale of the residence is measured against the price that the grantor paid for the property originally, rather than against the value of the residence at the time of the grantor's death. The result could be higher income tax liability when the residence is sold.

As with most estate planning issues, the advice and guidance of a qualified professional is recommended before establishing a QPRT.

In Mira Mesa, many people hold their real property in a revocable living trust. This is to protect their beneficiaries from probate fees and costs and to try and insure privacy in the distribution of their estate. In the below case [not from Mira Mesa] homes were taken from people without their consent and this affected their estate plan. Our firm of Pinkerton, Doppelt & Associates, LLP would be pleased to offer you a complimentary and confidential consultation either by phone, in person or e mail.

In one of the most controversial eminent domain decisions ever, the United States Supreme Court ruled in 2005 that a city's exercise of its eminent domain powers to take private property in furtherance of an economic development plan satisfied the constitutional requirement that such power be used only for a "public use," even though private developers stood to profit handsomely from the city's actions. In reaction to that ruling, some state legislatures have been busy crafting legislation to limit the use of condemnation powers in such circumstances. For their part, the owners of property targeted for condemnation have considered how they still might fend off the taking, or, failing that, how to maximize the compensation that the government must pay.

In a recent case, a landowner was not able to defeat a condemnation initiated by a city so that a new hotel could be built on the property, but he did receive maximum compensation from an obviously sympathetic jury. The landowner was an immigrant who had spent two years and a lot of money renovating a warehouse and building a mail-order cigar business. When two private developers were unsuccessful in negotiations to buy the property as a site for a hotel, they instead reached an agreement with the city whereby the city would condemn the property for their desired use and the developers would pay the costs and fees associated with the condemnation.

When the city was first attempting to buy the property, it sent the landowner a toxic waste notice requiring him to investigate whether any toxins existed in the ground. The landowner tried to comply, but after spending many thousands of dollars he found no toxins. The city would later admit in the litigation that such an investigation was not really feasible so long as a building remained on the property. The toxic waste notice, and especially its suspicious timing, came to be seen as a tactic to put pressure on the landowner during the negotiations leading up to the condemnation.

Continue reading "Mira Mesa: Eminent Domain Update" »

In Poway, many persons have a revocable living trust. This is an excellent estate planning strategy and the goals are to avoid probate fees and costs and also for privacy. A revocable living trust, however, is "tax neutral" and is not an advanced estate planning strategy. Our law firm of Pinkerton, Doppelt & Associates, LLP offers a complimentary consultation on advanced planning strategies and techniques in person, over the phone or by e mail. Our law firm works with Certified Public Accountants in the area of tax advice.

Upon the death of the owner of stock in a closely held corporation, the fair market value ("FMV") of the stock must be determined before an estate tax return can be filed. For gifts of such stock, it is also necessary to ascertain the value of the stock for gift tax purposes. Unlike publicly traded stock, the value of which can be determined easily on the Internet or in a newspaper, stock in a closely held business has a value that is more difficult to nail down. By definition, the shares are held by a much smaller number of people and are not widely traded.

Fair market value means the price at which property would change hands between a willing buyer and a willing seller when neither party is under any compulsion to buy or sell and both parties have a reasonable knowledge of relevant facts. Calculating the FMV of closely held stock generally starts with an estimate of the total value of the closely held company itself. Application of discounts (or premiums) to account for the specific circumstances of the company then reduces (or increases) the FMV of the stock.

Continue reading "Poway: Valuation Discounts For Estate And Gift Taxes" »

In Chula Vista, there are many corporations. These are licensed, in the state of California, by the Department of Corporations. Our law office of Pinkerton, Doppelt & Associates, LLP can handle the incorporation of your business from start to finish. Please feel free to e mail our firm or call us for a complimentary consultation. A corporation can be part of an estate plan.

As a separate entity in the eyes of the law, a corporation does not go out of existence if one or more of its owners dies. Instead, a corporation stays alive until its owners decide otherwise. Transfer of the ownership of the corporation is accomplished by selling its stock. New owners are added either when existing owners sell some of their stock or the corporation itself sells more shares of stock. The smaller the enterprise, the more likely it is that the owners, for whom the corporation may be both their property and their employer, may agree to restrict the sale of the stock in order to maintain control.

The particular circumstances of each new business and the differences in the governing laws of the states make generalities difficult. That said, the factors on the debit side of the ledger for corporations include the costs of setting up the corporate entity, the need for a separate tax return, and the burden of "double taxation." Double taxation means that the corporation is taxed on its profits, and the shareholders are then taxed on their dividends. On the credit side are limited liability for the owners and easy transfer of ownership.

Making the appropriate choice for a business form is one of the first, and one of the most important, decisions a new business will make. Whether choosing a corporate structure or some other form, make sure to consult with a qualified attorney.

In National City, there are many business entities which are not incorporated. Our law firm of Pinkerton, Doppelt & Associates, LLP can handle the incorporation of your business and also assist with the legal requirements for your corporation to remain in good standing. A corporation can be part of an estate plan. Please feel free to e mail us or come in for an appointment to discuss your business succession planning as well as incorporating your business.

At or near the top of the list of characteristics favoring the corporate structure is the fact that, since the corporation is treated as a legal "person" separate from the people who own and run it, the shareholders as a rule are not personally liable for the corporation's debts. Instead, their risk is confined to their investment in the company. To every rule there is an exception, however, and here the exception has the colorful legal name of "piercing the corporate veil." If the owners do not comply with the statutory requirements for running a corporation, or if they blur the lines too much between corporate and personal finances, the legal fiction of the corporation as a separate entity is ignored and the owners are on the hook for the corporation's losses.

In El Cajon, there are many corporations. These are regulated by the California Department of Corporations. Our law firm of Pinkerton, Doppelt & Associates, LLP can incorporate your existing business or a new business. Please feel free to e mail or contact us for a free appointment. A corporation can also be part of your estate plan.

Following fast on the heels of a decision to go into a particular kind of business is the decision about what kind of legal form it should take. The most common options are a sole proprietorship, a partnership, or a corporation. You may lean toward the corporate route because you like the sound of having "Inc." after the company's name, but there are some more practical, business-like considerations to take into account.

More so than with some of the other structures for a business, starting a corporation means complying with formalities required by state laws. Once the shareholders (owners) of the business agree on some basic matters, such items are embodied in articles of incorporation that must be filed with the appropriate state agency. These essentials usually include:

* a corporate name;

* the number of shares that can be issued;

* the number of shares each owner will buy and for what contribution of cash or property;

* the nature of the corporation's business; and

* the identity of the directors and officers of the corporation who will handle day-to-day operations.

The fledgling corporation will also need bylaws, which constitute a procedural rule book for the company.

In Rancho Penasquitos, many persons have investments. Our law firm of Pinkerton, Doppelt & Associates, LLP does not endorse or recommend any individual investments. We refer you to licensed professionals in that area such as Certified Financial Planners. Always make sure to independently verify license status and credentials. Many accounts, such as a 401K, may be part of an estate plan. Please feel free to e mail or call our office for any legal questions regarding your revocable living trust or other estate plan.

As of January 1, 2006, employers are able to offer a new retirement savings option, the Roth 401(k). The new account allows the features of a Roth IRA to be incorporated into the setting of a 401(k) account, but without the income restrictions that limit a Roth IRA. Contributions will be made with after-tax dollars, but the account will grow tax-free, and withdrawals taken in retirement will also be tax-free, assuming an individual is at least 59-1/2 years old and has held the account for at least 5 years.

Roth 401(k) accounts will be subject to the same contribution limits as regular 401(k)s. In 2006, this means a contribution limit of $15,000, or $20,000 for individuals 50 and over. The contribution limits apply to regular and Roth 401(k) plans combined, so, for example, an individual could not put $15,000 in a regular 401(k) and $15,000 in a Roth 401(k). Still, the opportunity to put more money into a retirement account that will have tax-free withdrawals will be enhanced, given that in 2006 the contribution limits for a regular Roth IRA will be $4,000, or $5,000 for those 50 or older. If an employer matches the employee's contributions to a Roth 401(k), the matches will be made with pre-tax dollars in a regular 401(k) account that will be taxed as ordinary income at withdrawal.

Although it is only now becoming available, the Roth 401(k) originated in a big piece of tax legislation that was enacted in 2001, with a sunset provision to take effect in 2010. Thus, it remains to be seen whether over the long run the Roth 401(k) will be seen as an option that was available in a small window of time, or a permanent fixture in retirement planning.

Some residents of Rancho Santa Fe have more than one residence. Our law firm of Pinkerton, Doppelt & Associates, LLP can assist with insuring all of your properties are in your trust. The goal of a revocable living trust is to avoid probate fees and costs as well as insure privacy in the distribution. For tax planning issues, we recommend consulting a Licensed Certified Public Accountant. If you have any questions regarding estate planning or advanced estate planning strategies, please contact our law office for a complimentary consultation by e mail, phone or in person.

If you spend time in any given year in residences in different states, somewhere in your travels you also may want to schedule an appointment with your professional tax advisor. One topic for discussion would be the legal concept of domicile.

In simplest terms, a person's domicile is the place where he or she intends to return after leaving another location. The special significance of where a domicile is established is in tax planning. An individual's domicile determines which state's income, gift, and estate tax laws apply, and in which state or states a person, trust, or estate is taxable. The rules that will govern the administration of an estate also depend on the state of domicile. Inadequate attention to establishing and documenting an intended state of domicile could mean that even the best-laid estate plan might go awry because the laws of a different state could apply. The end result could be an unexpected tax burden that otherwise could have been avoided.

Although the basic definition of "domicile" is simple enough, many different criteria may be taken into account in pinpointing a state of domicile. No one factor is controlling, and the states differ in the criteria that they use. The address included in a person's will may be a good indicator of the person's domicile. A nonexhaustive list of other factors would take into account in what state a person votes, registers an automobile, has a driver's license, keeps important personal property, pays state and local income and personal property taxes, last applied for a passport, and keeps the bulk of his or her money. Contrary to the old saying, you can go home again, and it is a good idea to make sure that you and the government agree on where that home is.

In La Jolla, many families have children attending local colleges such as the University of San Diego, San Diego State University, University of California San Diego and many others. The costs of these colleges can be very expensive. Estate planning can assist in parents discussing college and other expenses for their children in the event they are deceased at the time the children enter college. Revocable living trusts can be used for funding college educations. Our law firm of Pinkerton, Doppelt & Associates, LLP would be pleased to offer you a complimentary and confidential consultation. Please e mail or call us. Our firm does not recommend or endorse any 529 plan or other financial instrument.

The steady rise in the cost of attending college may have become one of those few absolute certainties in life, along with death and taxes. Tuition and fees for public and private institutions alike can seem overwhelming, especially if parents have done little financial preparation ahead of time. Some solace can be taken in the fact that there is a wide variety of approaches for saving for college. For parents who have some foresight, the use of a plan that is tailored to their circumstances can at least soften the blow of financing a college education.

With mutual funds as the primary investment option, state 529 plans are best for those looking to contribute substantial amounts to a college fund. Earnings are tax-free, as are later withdrawals for qualified education costs. These plans generally are in the parents' names, which means that the plans have minimal effects on the family's eligibility for financial aid. The drawbacks are limited investment options and relatively high fees.

A prepaid tuition plan makes the most sense for families that are reasonably certain that their child will attend one of the schools in a state's plan, and that are satisfied with a rate of return that equals the inflation rate for the costs of schools in the plan. Under prepaid tuition plans, you are buying future tuition at a state's public colleges at today's prices. On the downside, payouts from these plans reduce eligibility for financial aid on a dollar-for-dollar basis. In addition, states dealing with especially tight budgets have been raising the costs of participating, and in some cases have been temporarily closing off enrollment.

For a group of approximately 250 private colleges, there are independent 529 plans. They work like state prepaid plans, including the dollar-for-dollar reduction in financial aid eligibility when funds are distributed. Money from such a plan can be rolled over to a state 529 savings plan or a state prepaid plan without penalty.

Continue reading "La Jolla: An Introduction To College Savings Plans" »

In Encinitas, many residents have as their greatest asset their house. Our law firm of Pinkerton, Doppelt & Associates, LLP urges you to have a revocable living trust and/or other estate plan to avoid probate fees and costs upon death. It is crucial to have title insurance since, if the land did not have clear title or had liens or other encumbrances, the value of your most treasured asset may not be what you think. In San Diego there are many title companies including Ticor Title Insurance, California Title Company and others. Our firm does not endorse or recommend any of these and they are used for illustrative purposes only. If you have a question about your estate plan or title insurance coverage issues, please e mail or call our office for a complimentary consultation.

When someone buys a home, in addition to the land, bricks, and wood, the buyer receives the legal title to the property. If the title is defective, it could interfere with enjoyment of the property and result in financial loss. When title insurance is purchased by a property owner, the insurer guarantees that the owner has clear title to the property, free of claims or encumbrances.

Title insurance begins with a search of land records tracing the property's "chain of title" back in time through previous owners. A title search should reveal any legal documents that do not clearly pass title, such as where incorrect names or notary acknowledgments appear, as well as outstanding mortgages, judgments, or tax liens. Even a thorough search by an experienced title examiner cannot be absolutely certain to detect every problem, however. Title insurance protects against the unseen hazards that may not surface until long after property is purchased. Some of the risks against which title insurance gives protection include: a forged deed that transfers no title to the property; previously undisclosed heirs with claims against the property; and a legal document executed under an invalid or expired power of attorney.

A title insurance policy protects the insured party, such as the home buyer or the buyer's mortgage lender, against losses suffered if the title is found to be defective, even after a search of land records suggests no problems. Lenders' title insurance decreases and eventually is discontinued as the loan is paid off. Owners' title insurance, issued in the amount of the purchase price, lasts as long as the insured has an interest in the property.

As with any other insurance policy, the fine print in a title insurance policy must be examined with care. Typically, there are exclusions or exceptions from coverage. For example, the effects of governmental laws, ordinances, and regulations are generally excluded. You also should be aware of two other common policy provisions. The first is a standard arbitration clause, requiring binding arbitration to resolve any dispute under a specified dollar limit. The second provision, a "co-insurance" clause, states that the owner must obtain increased coverage if the insured property is improved in order to furnish the same level of protection.

Title insurance protection takes various forms. The insurer will negotiate with third parties about their claims against the insured property, pay for defending against an attack on the title, and pay claims if necessary. Title insurance also helps to make sure that a dream home will not become a legal nightmare for the home buyer.

In San Diego, there are many families which have a need for a family limited partnership. It is important to use a law firm which is experienced in these partnerships. Our firm of Pinkerton, Doppelt & Associates, LLP will be pleased to offer a complimentary and confidential consultation and please feel free to e mail or call us.

A family limited partnership (FLP), like other limited partnerships, is a form of business consisting of one general partner and one or more limited partners. In an FLP, however, the individuals involved usually are members of different generations of the same family. One of the advantages of a well-executed FLP is a reduction in federal estate and gift taxes. Instead of transferring assets directly to beneficiaries, an individual may transfer interests in a limited partnership. Since interest in an FLP is not marketable and since a limited partner does not control management of the enterprise, the value of interests in an FLP usually can be discounted by anywhere from 25% to 50%, with a corresponding reduction in tax liability.

As with many transactions among family members, the IRS has a history of casting a skeptical eye on FLPs. Essentially, the IRS is intent on assuring that the tax advantages of any particular FLP are not the be-all and end-all for its existence. If the FLP is deemed to be a sham, the IRS may challenge the valuation discount and perhaps even the very existence of the partnership.

In one recent case, a federal appeals court found an FLP to be legitimate despite some circumstances that had aroused IRS suspicion. A 96-year-old woman put about $2.5 million into an FLP, keeping $450,000 for her personal expenses. She died two months later. The fact that the transfer included interests requiring active management and that no personal assets, such as a house or car, were involved weighed in favor of the FLP. Also, the person making the transfer into the FLP did not manage the FLP. Perhaps most importantly, oil and gas operations provided an essential legitimate business purpose for the FLP.

In another case that was similar in many respects, including the age of the individual transferring the assets to the FLP, the assets were found to be subject to the estate tax because the FLP had not been formed for a valid business purpose. Transactions made by the FLP never went outside the family circle and amounted to financing the needs of individual family members.

Emerging from the cases are a few rules of thumb for setting up and running an FLP so as to realize its tax benefits without attracting the attention of the IRS:

* Articulate real business reasons for the FLP that can be substantiated by persons outside the FLP;

* Do not let the person transferring assets into the FLP transfer all of his or her assets or use the FLP to pay personal expenses;

* Assign control over the FLP to a general partner who is not the same person who funded the FLP. Often the general partner is an entity, such as a limited liability company;

* Have some "actively" managed assets in the FLP; and

* Follow the formalities for setting up and operating the FLP, including separate accounts and scrupulous adherence to formal accounting practices.

In Del Mar, there are many businesses which offer retirement plans for employees. Some of these retirement plans may be included in a revocable living trust and others are not. Our law firm of Pinkerton, Doppelt & Associates, LLP practices in estate planning and family law. We would be pleased to offer you a complimentary consulation on which plans should [or should not] be included in your estate plan. Please e mail or call our office for a free in-house consultation.

The Internal Revenue Service has information that is designed to help small businesses establish and maintain retirement plans for employees. Sections on setting up contributions, investments, and distributions have information not only from the IRS, but also from the Securities and Exchange Commission, the Federal Deposit Insurance Corporation, and the Social Security Administration.

* Rules for traditional and Roth IRAs, as well as other retirement plans;

* Investing your IRA;

* Publications and forms;

* Retirement calculator;

* Video clips on retirement planning;

* Frequently asked questions;

* Research material on IRAs; and

* Links to more retirement information on government websites.

In San Diego County, many residents use credit cards from many different companies including American Express, MasterCard, Visa, Diners Club and many others. Our law firm of Pinkerton, Doppelt & Associates, LLP does not endorse or support any of these companies and these are used for illustrative purposes only. If you have a legal inquiry regarding estate planning or family law, please e mail or call our firm for a complimentary consultation.

In banking as in so many other areas, the trend is clear: We continue to move steadily away from traditional paper transactions toward high-tech means of conducting our business. It will not happen overnight, though, and even the most technophobic among us should be assured that there are some federal laws and regulations in place that will make the transition easier and more secure.

If your credit card is lost or stolen, your loss is limited to $50 per card. That is also the general rule for an EFT card or code, but with the important caveat that procrastination in reporting a lost or stolen EFT card or code can be much more expensive. The exposure limit jumps to $500 for a consumer who does not report the loss or theft within two days of learning of it. Not only that, but failure to report an unauthorized transfer within the 60-day period for doing so creates unlimited exposure to losses from transfers made after the 60-day period

The federal Government provides some EFT protection for old hands and novices alike, but the best approach is to combine that protection with your own safe practices. Keep a low profile for thieves and scam artists by protecting your personal information, such as bank account numbers, passwords, and Social Security numbers. Never respond with such information to unsolicited telephone calls or e-mails. Verify the legitimacy of a website address before providing personal information on the site. It is a good idea to have virus protection and a "firewall" on your computer to keep hackers out. Finally, keep good banking records and review each bank statement promptly so that you can report anything suspicious you see in time for it to do you the most good.

In 4S Ranch, there are many residents who need an estate plan. Our law firm of Pinkerton, Doppelt & Associates, LLP is located in Rancho Bernardo and offers a free in-house consultation. Please feel free to e mail our office or call for an appointment. The laws changed constantly so make sure to contact us for the latest laws regarding gift tax, estate tax and other estate planning issues!

The wisdom of making a will is well settled as sound legal advice, and rightly so. Less talked about, but equally advisable for many people, is the use of gifts during one's lifetime as a method for estate planning. Apart from the intangible benefits that flow from the fact that, as the saying goes, it is more blessed to give than to receive, gifting has favorable down-to-earth, dollars-and-cents ramifications. Our firm recommends a revocable living trust for most clients.

Gifts reduce the size of the donor's estate that will be subject to court administration, thereby cutting probate costs and potential estate tax liability. Less obvious, but equally advantageous, is the way that gifts can provide savings on income taxes. This occurs when income-producing property is given by an individual in a high income tax bracket to someone in a lower tax bracket.

Gifts do not trigger income tax liability for the recipient. However, the original cost, or basis, of the gift remains for the recipient what it was for the donor. As a result, if the recipient later sells the property, he generally will owe capital gains tax on the difference between the donor's basis and the sales price.

As for the gift tax, the starting point to consider is that the federal Government levies the tax on transfers of real or personal property made during the giver's lifetime where something of similar value is not received in return. For tax purposes, the dollar value of a gift is the fair market value of the property when it is given, less the fair market value of anything received in return. The donor is liable for any gift tax that is due, but if the donor does not pay the tax the donee becomes personally liable.

An annual exclusion of up to $11,000 is available for transfers to other persons without payment of the federal gift tax. Rather than pay the gift tax on gifts over $11,000, the donor can choose to exempt as much as $1 million in gifts above this exclusion over his lifetime. The donor does not need to file a federal gift tax return for gift amounts less than $11,000. Because the exclusion amount is per donee, any one donor actually can make gifts in a large total amount, without incurring a gift tax, by giving to many different recipients. For a married couple, the annual exclusion is $22,000 per donee.

There is an unlimited marital deduction provision in the federal gift tax law, so that no gift tax is due, and no return need be filed, for gifts between spouses in any amount. Also excluded from the gift tax are amounts paid by a donor to a qualified educational institution for another's tuition, or to a health-care provider for someone's medical services. Gifts to qualified charitable, religious, and educational entities, government agencies, and many organizations with tax-free status are not subject to the gift tax.

This article merely introduces the subject of the gifting of property. Estate planning techniques and tax laws are complex. You should always consult with a qualified professional to assist you in such matters.

Our firm of Pinkerton, Doppelt & Associates, LLP does not give financial or tax advice. Our estate planning services will include, in many case, the use of a Certified Public Accountant. If you have any questions regarding your estate plan and any potential capital gains, please feel free to contact us for a complimentary estate planning consultation. You can call or e mail our law firm.

The Internal Revenue Service has issued its final rules on the capital gains tax exclusion that is available on the sale of a taxpayer's principal residence. A taxpayer may exclude up to $250,000 from the sale of a principal residence, and the exclusion doubles to $500,000 for married taxpayers. However, the taxpayer must have owned and used the property as a principal residence for a total of at least two of the five years before the residence is sold.

The final rules focus on the part of the Internal Revenue Code that allows a taxpayer who fails to meet the above condition to still have an exclusion in a reduced amount. There are three grounds for claiming a reduced exclusion: change in employment, health, and unforeseen circumstances. For each of these grounds, the regulations provide a general definition and one or more "safe harbors"--specific reasons for the sale of the residence. If the safe harbor for a particular ground applies, a sale (or exchange) is deemed to be "by reason of" that ground. If no safe harbor applies, the taxpayer still can claim one of the grounds on the basis of all of the surrounding facts and circumstances.

For example, the safe harbor for claiming a reduced exclusion because of a change in employment applies when the new place of employment is at least 50 miles farther from the residence that was sold than was the former place of employment. As for health, the safe harbor that smooths the way for the reduced exclusion is a physician's recommendation of a change of residence for reasons of health. A sale or exchange of a residence due to unforeseen circumstances refers to the occurrence of an event that the taxpayer could not reasonably have anticipated before purchasing and occupying the residence. Simply wanting to move to a preferred home or moving due to improved financial circumstances does not qualify. The specific events that make up the safe harbor for this ground include, among other things, such circumstances as death, divorce, natural or man-made disasters affecting the house, and even multiple births from a single pregnancy.

In San Diego, many residents lead a very healthy life style. These life styles lead to longer life. As part of any estate plan, insurance can play a significant component. Our law firm of Pinkerton, Doppelt & Associates, LLP recommends you investigate any business by using the San Diego Better Business Bureau before purchasing any long term care insurance from a company or individual. In addition, you should also contact the California Department of Insurance to make certain of the valid license status and any other information which would be important in making such an essential decision as to the insurance provider.

Our office practices in estate planning and long term care for the elderly. Please feel free to contact our office by phone or e mail and we would be pleased to offer you a complimentary and confidential consultation. We have an excellent article regarding long term care on our website.

Longer life expectancies and the coming surge in the retirement-age population have increased the demand for long-term care, as well as for insurance as one means of paying for that care. Long-term care encompasses a broad range of services for those with a prolonged illness, disability, or mental disorder. Unlike the focus of traditional medical care exclusively on certain medical problems, the goal of long-term care is the maintenance of an individual's level of functioning.

The two main types of care are skilled care, provided by medical personnel for medical conditions according to a treatment plan, and personal care. Personal care, sometimes called custodial care, is assistance with the activities of daily living that can be provided in many settings, including nursing homes, adult day-care centers, or the individual's own home.

Whether the purchase of long-term care insurance makes sense for a particular individual depends on age, health status, overall retirement objectives, and income. As with any type of insurance, it is critical to understand what is and is not covered among the types of long-term care services that are available. Exclusions and limitations are common. Equally important is knowing where services are covered. Some policies cover care in any state-licensed facility, but others may specifically include or exclude particular types of facilities.

Since the amount of coverage is dictated by the type of service, coverage amounts will vary depending on the service. Most policies have a "total lifetime benefit" for the duration of a policy. In addition, benefits are often payable up to maximum amounts per day, week, month, or year.

A provision on when benefits are payable, sometimes called a "benefit trigger," is another key feature that can vary significantly among policies. Some states have legislated benefit-trigger requirements, making it a good idea to check with state insurance departments. Typically, benefits become payable because of the insured's inability to perform a certain number of the activities of daily living. Policy language on mental incapacity also allows for benefits when the insured fails mental functioning tests. Such a benefit trigger is especially important for those afflicted with Alzheimer's, even though most states prohibit the outright exclusion of coverage for that disease.

Although they can add to the cost of a policy, there are optional policy provisions that can help to tailor a policy to individual circumstances. Third-party notification authorizes the insurer to notify a designated third party, such as a relative or friend, if the policy is about to lapse for nonpayment of the premium. A waiver of premium clause allows the insured to stop paying premiums once he or she is in a nursing home and the insurer has begun to pay benefits. Nonforfeiture benefits return some of the investment in the policy if coverage is dropped. If an insured has paid premiums for a certain number of years, some policies allow a death benefit to the estate consisting of a refund of premiums, minus any benefits the company has paid.

Premiums paid for long-term care insurance are deductible as a medical expense, as long as all medical expenses exceed 7.5% of adjusted gross income. Since premiums on average increase more than tenfold between the ages of 40 and 70, this deduction increases substantially with age. The maximum long-term care premium you can add to your other deductible medical expenses is based on your age at the end of each tax year.

Employer contributions to long-term care insurance for their employees are tax deductible for the employer, and premium payments are not taxable income to the employees. Benefits from a long-term care plan are excluded from income up to the lesser of the actual costs incurred or $63,875 per year. The annual limitation will increase with inflation in future years.

In San Diego, many residents do not have an estate plan. No one wants to discuss their death or mortality and this is normal. In San Diego Probate Courts, however, the cost to the beneficiaries of not having an estate plan can cost thousands of dollars which could best be used by the family and not the attorneys and administrators. Our firm of Pinkerton, Doppelt & Associates, LLP will be pleased to offer you a complimentary and confidential consultation in the estate planning area and determine which estate plan is most appropriate for your needs including a revocable living trust which is the most basic estate planning strategy which will avoid probate costs and fees. Please feel free to call us or e mail us to set up an appointment.

Below are some generic comments about estate planning for all to consider.

Even the most detailed and carefully crafted estate plan should be revisited periodically to make sure that it is in line with changing laws and life circumstances.

* Be sure that estate assets are held in such a way as to minimize estate taxes at death and to avoid overfunding or underfunding of post-death trusts;

* Review the powers of attorney for health care and property to confirm that they reflect current wishes;

* Make adjustments to reflect the death or disability of a beneficiary, or a significant change in a beneficiary's needs;

* Update or prepare a living trust, which allows an estate plan to be carried out with minimal court involvement;

* Retitle assets in your name as trustee of your living trust if you want to avoid probate upon disability or death;

* Review how you hold title to assets (i.e., payable on death, joint tenancy, tenancy by the entirety, etc.);

* If you have not already done so, name appropriate guardians for minor children in your will;

* If you have included a marital gift or a marital trust upon the death of one spouse, consider making the provisions more or less restrictive;

* Examine the scope of "powers of appointment" that allow a survivor to redirect where assets will eventually pass;

* Confirm that the timing as to when a beneficiary will receive or have the right to demand principal is compatible with current wishes;

* Make any revisions suggested by changes in the family such as disabilities, births, deaths, or changed marital status;

* Reassess how title to your home is held;

* Consider the different options for designating beneficiaries for IRA accounts, pension plans, and other assets related to retirement;

* Possibly make annual gifts to children and others free of estate and gift taxes (up to $11,000 per person per year in 2002);

* Consider setting up separate trusts or Section 529 education funding plans for children or grandchildren.

In addition to these considerations, there is a broad range of estate planning options, one or more of which may be desirable based on current circumstances. Among these devices are charitable trusts, irrevocable life insurance trusts, family limited partnerships, family foundations, self-canceling installment notes, and qualified personal residence trusts. A qualified professional can help you sort through the possibilities and arrive at an estate plan that keeps up with changing conditions.

In San Diego, many companies are formed as a limited liability company. At our firm of Pinkerton, Doppelt & Associates, LLP, we can form a limited liability company for you as part of your estate plan. Please feel free to e mail our firm with any questions on this or any other estate planning questions.

A limited liability company (LLC) is a business structure that combines some of the best features of sole proprietorship's, partnerships and corporations. LLC owners, like their counterparts for partnerships or sole proprietorship's, report profits or losses on their personal income tax returns. Like a corporation, however, the owners of an LLC have "limited liability," that is, they are shielded from personal liability for debts and claims arising from the business.

Limited Liability

The limited liability for LLC owners is not absolute. Owners still can be held liable if they (1) personally and directly injure someone; (2) personally guarantee a loan or business debt on which the LLC defaults; (3) fail to deposit taxes withheld from employees' wages; (4) intentionally commit a fraudulent or illegal act that harms the company or someone else; or (5) treat the LLC as an extension of their personal affairs rather than as a separate legal entity. The last exception to limited liability is the most significant. It carries the potential for complete removal of the protections for individual owners. If the line between LLC business and personal business becomes too blurred, a court could find that a true LLC does not exist, leaving the owners personally liable for their actions.

Ownership

Most states allow a single individual to be the sole owner of an LLC. An LLC makes the most sense in circumstances where there is a concern about personal exposure to lawsuits stemming from operation of the business. Most laws prohibit establishment of an LLC in the banking, trust, and insurance fields.

Unlike corporations, LLCs can carry on their business without holding regular ownership or management meetings. Of course, formal meetings backed up by written minutes still may be advisable to document important decisions, such as a change in membership or a major expenditure.

Formation

Setting up an LLC is relatively simple. Articles of organization must be filed with the appropriate state office, usually the Secretary of State. The articles of organization include the name and principal office for the LLC, the names and addresses of its owners, and the name and address of the person or company that agrees to accept legal papers on behalf of the LLC.

Even if it is not legally required, the owners should prepare an operating agreement that spells out the owners' rights and responsibilities. The absence of an operating agreement will mean that state statutes will govern the operation of the LLC by default. An operating agreement acts as a guide for resolving common issues that an LLC will face, and thereby helps to avert misunderstandings between the owners. It also underscores the authenticity of the LLC itself, which can be helpful when a judge is deciding whether the owners are protected from personal liability.

A standard operating agreement includes the members' percentage interests in the business; the members' rights and responsibilities; the members' voting power; allocation of profits and losses; how the LLC will be managed; rules for holding meetings and taking votes; and "buy-sell" provisions that control what happens when a member wants to sell his interest, becomes disabled, or dies. Although it is frequently overlooked when an LLC is created, a buy-sell agreement is important as a sort of "premarital agreement" among the owners. The buy-sell provisions can clarify and ease the transition when the inevitable changes come to the members of the LLC.

Taxes

Since an LLC is not considered separate from its owners for tax purposes, the LLC pays no income taxes itself. Like a partnership or sole proprietorship, an LLC is a "pass-through entity." Each owner pays taxes on a share of profits, or deducts a share of losses, on a personal tax return. The IRS regards each member as a self-employed business owner, not an employee of the LLC. There is no tax withholding, and owners must estimate taxes owed for the year, then make quarterly payments to the IRS. Our firm does not give tax advice and we are not accountants and would suggest you consult with a Certified Public Accountant regarding any tax issues. We can assist with a recommendation as well.

Conversion

By converting to the LLC business structure, sole proprietors and partnerships can gain the protection afforded to LLC owners without changing the way their business income is taxed. Conversion usually can be accomplished either by filling out a simple form or filing regular articles of organization. Federal and state employer identification numbers will have to be transferred to the name of the new LLC, as will such items as sales tax permits, business licenses, and professional licenses or permits.

The process for creating an LLC is streamlined and free of highly technical considerations. However, there is an important place for professional advice concerning such matters as choosing an LLC over other business structures, preparing or reviewing the operating agreement, and setting up accounting systems.

In San Diego, many families file married filing joint. In addition to this important tax filing status with the IRS, married couples can also use the marital deduction rule for the surviving spouse. This can result in significant savings in estate tax when the first spouse dies however this is not tax avoidance and tax deferral. Our law firm of Pinkerton, Doppelt & Associates, LLP are not Certified Public Accountants however we can form an estate plan which protects your rights and obtains your goals of avoiding probate and minimizing tax consequences. Always consult your CPA as to the significance of any taxable event.

The federal estate tax marital deduction is one of the most important estate planning tools available to a married couple. The basic marital deduction rule is that, upon the death of the first spouse, the value of any interest in property passing to the surviving spouse is deducted from the decedent spouse's gross estate. This means that the amount passing to the surviving spouse escapes taxation in the decedent spouse's estate.

There is no limitation on the value of property that can qualify for the marital deduction. By transferring sufficient assets to the surviving spouse in the proper manner, estate tax liability upon the first spouse's death can be completely avoided.

At first view, the estate tax marital deduction may seem to be a government giveaway. It is not. The advantage afforded is not the total avoidance of estate tax on the transferred property but, rather, the deferral of such tax. The marital deduction requires that the transfer of assets to the surviving spouse be made in such a way that those assets are exposed to estate tax liability in the surviving spouse's estate.

The obvious advantage of deferring the estate tax liability is that the surviving spouse will have the use of the tax dollars that would otherwise have been paid to satisfy the tax liability of the first spouse's estate. The deferral of tax liability also postpones the possible need to sell off assets that the surviving spouse might wish to preserve in order to obtain funds to satisfy the tax liability.

Transfer by Will

A key decision is the selection of the type of transfer to be made to the surviving spouse. The simplest form of transfer that qualifies is the outright transfer of assets by will. The problem with such a transfer is that it saddles the surviving spouse with the responsibility of managing the assets and also exposes him or her to possible pressures from relatives, creditors, or charities to transfer the property for their benefit.

Transfer by Trust

The marital deduction law permits, with no loss of the deduction, the transfer to the surviving spouse in trust. There are two basic types of trusts that have become the standard means for taking advantage of the deduction without burdening the surviving spouse with the problems of outright ownership of the first spouse's estate.

The first type of trust is known as a "power of appointment trust." The property is placed in trust under the will, giving the surviving spouse a life interest in the income generated by the trust and a power to give the assets in question to anyone, including to himself or herself or to his or her estate. This power can be restricted so as to be exercisable by the surviving spouse only by will and still qualify for the marital deduction.

The second type of trust, rather than giving the surviving spouse the power to ultimately dispose of the assets, permits the decedent spouse to designate the ultimate recipients of the property qualifying for the marital deduction. This trust is known as the Qualified Terminable Interest Property (QTIP) trust. The surviving spouse must receive a lifetime income interest in the property. No one other than the surviving spouse may have any rights in the trust assets during the surviving spouse's lifetime. The decedent spouse's personal representative must elect QTIP treatment on the estate return. The crucial feature of the QTIP trust is that the decedent spouse retains the ability to control the course of ownership of the assets qualifying for the marital deduction.

Coordination with the Lifetime Credit

It has become standard estate planning practice to coordinate the estate tax marital deduction with the unified credit against the estate tax. The unified credit against the federal estate tax allows an individual to pass a certain amount of assets free from estate tax liability regardless of the identity of the recipients. For decedents who have died in 2002 or who die in 2003, that amount is $1 million; for decedents dying in 2004 and 2005, the amount is $1,500,000; for those dying in 2006 to 2008, the amount that can pass tax-free is $2,000,000; and for 2009, the amount is $3,500,000. In a will, the amount allowed to pass tax-free is normally transferred under what is known as a "credit shelter" or "by-pass" trust. Then, the transfer under the marital deduction rules is made so as to prevent the taxation of the remaining assets.

Clearly, in the case of a married couple owning sufficient assets to make estate taxation a possibility, estate planning must take into account the marital deduction rules and the associated tax savings. Given the complex nature of the many rules involved, you should always seek the guidance of a qualified attorney for any estate planning needs.

Please feel free to e mail us with any questions.

In San Diego, many residents have life insurance. There are many companies which provide life insurance services such as Pacific Life, Farmers, Metropolitan Life Insurance Company and many others. Our firm of Pinkerton, Doppelt & Associates, LLP does not endorse or represent any of these companies and these links are provided as a courtesy.

Our firm can prepare an estate plan for you which is tailored to your individual needs. Please e mail us for a complimentary and confidential consultation.

Even if you have a relatively modest estate, life insurance can be an important aspect of estate planning for the obvious reason that it can substantially increase the value of your estate. Where the death of a person is premature and a young family is in need of support, life insurance may be the primary means for the family's financial survival.

Even in larger estates, life insurance can be useful by providing the liquidity necessary to pay estate taxes and expenses without the necessity of selling off assets that a family would prefer to keep intact. Additionally, life insurance, unlike many other assets, does not have to go through a time-consuming administrative process before it becomes available to beneficiaries. Therefore, life insurance can be an immediate source of funds for a surviving family.

Estate Taxes and Life Insurance

As is true of any aspect of estate planning, one objective is to minimize the federal estate tax effect that life insurance can have. The primary tax issue that arises is whether the insurance proceeds are included in the estate for federal estate tax purposes. Including the proceeds would generate additional estate tax liability and reduce the amount of the proceeds that are available to the decedent's heirs.

The fundamental rule is that the gross estate will include the value of life insurance proceeds if (1) the proceeds are payable to the decedent's estate and are thus receivable by the executor, or (2) the proceeds are payable to other beneficiaries, but the decedent possessed at his or her death any of the "incidents of ownership" with respect to any policy.

The term "incidents of ownership" is defined more broadly than to be limited to the legal ownership of the policy. The term includes the power to change the beneficiary, to surrender or cancel the policy, to assign the policy or pledge it for a loan, and to obtain a loan from the insurer against the surrender value of the policy. There are other indirect ways that the decedent can be found to possess incidents of ownership. For instance, if the decedent is the controlling shareholder of a corporation that possesses an incident of ownership, such possession is attributed to the decedent.

Another scenario that will result in the inclusion of life insurance proceeds in the decedent's estate arises under certain circumstances where the decedent was the initial owner of the policy but transferred such ownership to another person or entity within three years of his or her death. Thus, even where the decedent has rid himself or herself of all incidents of ownership in the policy, there is still the possibility of inclusion under this three-year rule.

Keeping Life Insurance Proceeds Out of Your Estate

A common device for handling the life insurance aspect of an estate plan is the life insurance trust. Typically, a person would initiate the life insurance coverage by acquiring the policy. He or she would then transfer all incidents of ownership of the policy to a previously created irrevocable trust, which would be the named beneficiary on the policy. Assuming that the person survived until at least one day more than three years after the transfer of the policy to the trust, there would be no inclusion of the proceeds in the settlor's estate. If a policy is transferred within three years of death, the proceeds are included in the estate.

If the trust itself acquired the policy, the person would never be the owner and the three-year rule would not apply. The problem would be that the person could neither direct nor require the trust's acquisition of the policy without risking the possibility that he or she would be regarded as the original owner of the policy for purposes of applying the three-year rule. Therefore, it is important that the trustee be completely independent of the decedent.

An insurance trust can also have the practical effect of serving as a means of coordinating the collection, investment, and distribution of the proceeds of several policies. An insurance trust can hold other assets that the decedent transferred to it during his or her life. The trust can also receive assets "poured over" to it by the decedent's will.

If life insurance is to be an element of your estate plan, it should be carefully integrated with the other aspects of the plan. Be sure to seek the guidance of a qualified professional to assist you.

In San Diego, there are many owner-only business' which are in operation. The San Diego Chamber of Commerce and San Diego Better Business Bureau have a partial list of these. An estate plan can include not only real property but also retirements and savings accounts. Below is additional information.

As a result of recent tax law changes by the IRS, a new retirement savings account is now available for "owner-only businesses." An "owner-only business" is either a business that employs only the owner and immediate family members or a business that employs only the owner and employees who by law may be excluded from participation in retirement plans. Excludable employees include employees under age 21, employees with less than a year of service or who work less than 1,000 hours per year, certain union employees, and certain nonresident alien employees.

The new plan, sometimes called an Individual (k) plan, can be set up both by incorporated businesses or unincorporated businesses such as sole proprietorships and partnerships. When compared with other types of business retirement plans, an Individual (k) plan allows more flexibility in its funding and larger contribution amounts.

The two components of an Individual (k) plan are a profit-sharing contribution from the employer (up to 25% of compensation) and an employee salary deferral (up to $12,000 in 2003). Combining those two components, the maximum contribution on behalf of any one business owner is a whopping $41,000 in 2003. Contributions are discretionary each year.

The maximum salary deferral amount will increase by $1,000 per year through 2006. In addition, for individuals who are age 50 or older, the Individual (k) plans, like 401(k) plans for larger businesses, allow "catch-up" contributions in amounts that will increase annually through 2006. For 2003, the maximum catch-up contribution is $1,000.

Business owners are eligible to take personal loans from Individual (k) plans, so long as the plan document allows for plan loans. They may borrow as much as $50,000 in cash, or 50% of the balance in their account, whichever is less. Borrowing from an Individual (k) plan carries the same downside as with conventional 401(k) plan borrowing, however, making this move a last resort for many. Aside from undermining the accumulation of a large balance growing tax-free in the account, a loan, if not paid back on time, will be considered a distribution by the IRS, triggering income taxes and a 10% penalty.

Our law firm of Pinkerton, Doppelt & Associates, LLP can assist you with a referral to a licensed Certified Public Accountant as needed. Please e mail or call us with any questions.

San Diego, California has many schools. In San Diego, there are public schools and private schools. The are schools in San Diego in the University of California San Diego system and also in the San Diego State system as well as the University of San Diego and other schools which are private.

As an estate planning tool in San Diego, for individuals who want more control over their investments, a Coverdell Education Savings Account (formerly called an "Education IRA") may be an attractive alternative to a 529 plan. A contributor to a Coverdell account can choose investments and change them, depending on his or her investment strategy. Earnings are tax-free as long as they are used for qualified education expenses. The 2001 tax law also has improved this method of saving for elementary, secondary, and college education costs. Beginning January 1, 2002, the annual limit on contributions will increase from $500 to $2,000.

An increase in the phase-out income range for married taxpayers filing jointly will allow more taxpayers to contribute to a Coverdell account. For beneficiaries with special needs, rules stopping contributions when the beneficiary turns 18 and requiring that the account be emptied when he or she turns 30 have been removed. As with 529 plans, a contributor to a Coverdell account can claim an education tax credit, though not for the same educational expenses for which Coverdell account money was used.

One note of caution: The changes to both 529 plans and Coverdell accounts made by the 2001 tax legislation will expire on December 31, 2010, unless Congress acts before then to continue them. As such, please consult with our firm of Pinkerton, Doppelt & Associates, LLP for a updated status on this law. Also feel free to e mail our firm.

Sa Diego, California has many different schools both public and private. The ever increasing tuition and fees in schools in San Diego, California has made the planning of the costs part of estate planning as many persons use their assets in their estate plan to pay for school for their children.

In San Diego, California, many financial institutions offer these types of 529 plans. Some financial institutions in San Diego which may provide these include the Bank of America, Wells Fargo, Washington Mutual and others.

The ever-rising cost of a college education has led to the creation of college savings plans that have been given various federal tax advantages. Among these are "529 plans," named after the section of the Internal Revenue Code that sets forth requirements for favorable tax treatment of qualified state tuition programs. 529 plans vary from state to state with regard to investment options, contribution maximums, and state income tax treatment. One type of 529 plan allows taxpayers to purchase tuition credits for a designated beneficiary, thereby locking in today's college costs. A second type allows the donor to contribute to an investment account to pay for a beneficiary's higher education expenses, such as tuition and room and board.

Individuals can contribute up to $50,000 to a 529 plan in one year on behalf of a beneficiary ($100,000 for married couples) without being subject to gift tax. In effect, the $50,000 contribution is treated as five separate $10,000 annual exclusion gifts. Gift tax is avoided so long as no other gifts are made to the beneficiary in the same five-year period.

Anyone can contribute to a 529 plan on behalf of the beneficiary. Grandparents, other relatives, or friends of the family can use 529 plans as an effective estate planning tool. The plans are unusual in that donors still can retain control over the account, and even take it back if necessary, while reducing the size of their estates. Under current law, earnings in a 529 plan are tax deferred, but the 2001 tax law provides that, beginning January 1, 2002, earnings taken out to pay college expenses will be tax free.

Other important changes in 529 plans were made by the 2001 federal tax legislation. Whereas plans previously had to be sponsored by a state or state agency, one or more educational institutions, including private schools, can set up prepaid tuition programs. Under the new law, money from one 529 plan can be rolled over into another such plan up to three times for the same beneficiary without having the transaction considered to be a distribution. A penalty of at least 10% of earnings formerly was imposed if the donor took back the money or the money was used for anything other than qualified expenses, but now there is a flat 10% penalty. Lastly, the new law allows a taxpayer to claim a federal tax credit for paying for a child to go to school while excluding from gross income funds distributed from a 529 plan for the same student, as long as they are used for different expenses.

Please contact our law firm of Pinkerton, Doppelt & Associates, LLP if you would like a complimentary consultation on estate planning. Please also feel free to e mail us.

In San Diego, California, there has never been mass public transportation as in other major cities. As such, in San Diego, most commuters rely on theirr automobiles. Given the high number of uninsured drivers in San Diego, it is important to make sure that you have both uninsured and underinsured coverage on your automobile. This has relevance in estate planning as all of your assets can be seized if you owe for medical bills or for other damages and your insurance does not cover. You need to report to the Department of Motor Vehicles if there is a personal injury in an accident or if the property damage meets the reporting requirements. Always make sure that the legal name of the vehicle is in the name of your living trust.

In one case, a woman called the insurance agency she had done business with for 10 years and told the agent she needed "full" automobile coverage. According to her, no one discussed what level of insurance would provide adequate protection. Instead, she was sold a policy that provided only the minimum amounts required by state law for uninsured and underinsured motorist coverage. The woman and her husband sued the insurance agency for negligence after their son was seriously injured when he was struck by an underinsured motorist and their expected damages exceeded their insurance coverage. The insurance agency, whose line of work is more used to criticism for overzealous selling, was instead in the position of being sued for not selling enough of its product. It is always advisable to contact the California Board of Insurance to make sure that the agent is licensed to sell the type of insurance you are purchasing.

Insurance agents are not personal financial counselors or risk managers for their customers. They generally fulfill their duty to the insured simply by providing the coverage requested by their customers, who typically know more about the extent of their assets and their ability to pay premiums. The agents do not have a duty to advise a client to obtain different or additional coverage. In this case, though, the court ruled that an exception to this no-duty rule arose because there was a "special relationship" between the insured and the insurance agent.

Such a relationship can come about in several ways. The theories that applied in this case were the failure of an agent to respond appropriately to an inquiry or request about a particular type or extent of coverage and the failure to clarify an ambiguous request before providing coverage. Although there were factual issues to be resolved, the court ruled that the woman should have a chance to present her case to a jury.

If you have been injured in an automobile accident, please do not hesitate to contact our law firm of Pinkerton, Doppelt & Associates, LLP or e mail us.

In San Diego, California, when a person dies, the time to implement estate planning strategies has passed. It is important to meet with a local attorney in San Diego who can assist with this estate planning process. It is important to consider a revocable living trust when both spouses are competent and able to make decisions.

When an individual dies, there is the possibility that his or her estate will be subject to the federal estate tax. However, only estates exceeding a certain level in value are subject to this tax. That level is now set at $1 million for persons dying in the years 2002 and 2003. The current $1 million exclusion amount is based on what is called the "unified credit against estate tax." In the case of an unmarried person's death, the application of the unified credit is straightforward. In 2002 and 2003, an unmarried person can leave the $1 million exclusion amount tax-free to whomever he or she wishes. Similarly, each spouse of a married couple is entitled to leave the exclusion amount tax-free at his or her death. t

In the case of a married couple, estate planning steps can be taken to insure the maximum use of the unified credit. The typical situation is where each spouse (assuming, for purposes of the example, the death of the first spouse in 2002 or 2003) has an estate worth something less than the $1 million exclusion amount. If the husband's estate is worth $750,000, for instance, and he dies first, his estate will escape the estate tax because its value is below the exclusion level, but the $1 million exclusion amount will not be fully used by his estate. The ideal would be to move assets from the wife's estate to the husband's estate so as to bring his estate to the $1 million level. This would allow the full use of the exclusion in the husband's estate and would reduce the value of the wife's estate so that, given the likely increase in the value of the wife's assets following the husband's death, the wife's estate may be kept below the $1 million exclusion amount at her death.

There is a new estate planning technique that accomplishes that goal without the need for an actual gift from the wife to the husband in order to bring the value of his estate to $1 million. The technique, which utilizes a "credit shelter trust," requires the couple to establish a joint revocable trust that becomes irrevocable upon the first spouse's death and gives that spouse the power to dispose of the trust's assets as he or she chooses by will. At our firm of Pinkerton, Doppelt & Associates, LLP, we can discuss with you this advanced estate planning strategies as well as others which are analyzed for each individual client and their needs.

It is crucial that the spouses grant each other "general powers of appointment" so that property in the trust from the surviving spouse is treated as coming from the deceased spouse. The deceased spouse's will would direct that an amount from the trust needed to bring the value of his or her estate to the $1 million exclusion level is to be placed in a credit shelter trust contained in his or her will for the express purpose of using the entire $1 million exclusion amount. Thus, where the husband dies first and had a gross estate of $750,000, the terms of the joint revocable trust established by both spouses and the husband's will would place $1 million in the husband's credit shelter trust ($750,000 from the husband and $250,000 from the surviving spouse).

It is important to note that this technique was approved by the IRS in a "private letter ruling" and, therefore, general acceptance by the IRS is not guaranteed. Because of the complexity of the technique, the steps outlined above should not be taken without consulting a qualified professional. Please feel free to e mail our firm for a complimentary consultation. We can discuss strategies and techniques to assist in minimizing probate costs, fees and estate taxes.

In San Diego, California many residents are in the military. As we know, deployments are common. In light of the recent call to active duty received by thousands of United States military reservists, employers and employees alike need to know their