San Diego Estate Planning Lawyer Blog

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.

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Posted In: ESTATE PLANNING , LIVING TRUSTS

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Unfortunately, it occasionally happens that both parents of a minor child die in a common event or accident. If both parents die without an estate plan, a probate judge will have to appoint a guardian. A guardian is responsible for taking care of their “ward” until the child turns 18. This includes such things as housing, food, medical bills, clothing, education, and other incidental expenses. Having the Probate Court choose a guardian for your children may not always result in a guardian that you would have selected.

If the parents have a will or trust designating a legal guardian for their children, the children will be taken care of. A will or a trust allows you to have a say in who takes care of your child upon your death. You are in the best position to know who that individual is. Who is best able to provide a stable and nurturing home for your child - your brother, sister, grandparent, a close friend?

Factors you should consider are:
1. The age of the proposed guardian. Is the proposed guardian young enough to be able to care for the children until they reach adulthood?
2. Ages of your children. Any special needs?
3. Family structure of the proposed guardian. Is the guardian married, single, already have 6 children to raise?
4. Health issues, financial situation, religious views, living arrangements of the proposed guardian. For example would the guardian be able to raise your children in his or her existing home or would you want to provide that they could live in the family home? Does the proposed guardian have the same religious and other philosophical views as you? Does the guardian have any health issues that would have an impact on his or her ability to take care of your children?
5. Willingness to serve. Consult with the proposed guardian to be sure they are willing and comfortable with taking on the responsibility of guardian.

Nominating a guardian for your children is very important but even more so if you are selecting a non family member as a guardian. If the guardian has to be appointed by the Court, family members are usually given priority over non family members. At Pinkerton, Doppelt, & Associates, LLP we can assist you with the appropriate estate planning documents to nominate guardians for your minor children should something happen to you. This is best accomplished with a revocable living trust which will include nomination of guardians for your children as well as pour-over wills, durable powers of attorney for finances, health care directives, and other accompanying documents. Call us or e mail us for a complimentary consultation to discuss guardians and any other estate planning issues.

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Posted In: GUARDIANSHIP , LIVING TRUSTS

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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.

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Posted In: ESTATE PLANNING , LIVING TRUSTS , WILLS

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San Diegans, have you provided for your pet in your will or trust? Our firm can assist and please feel free to e mail us. Please review our article regarding pets on our website.

You may remember last year when hotel and real estate magnate Leona Hemsley died, leaving 12 million dollars to her dog, a white Maltese named Trouble. You can view the story of her extraordinary gift in the Washington Post Newspaper. She apparently left two of her grandchildren nothing ‘for reasons known to them” but left millions to her beloved pet.

While the amount may have been extraordinary, it is becoming more commonplace for pet owners to provide for their pets in their will or trust. Even people of modest estates may set aside a certain sum of money to see that their pet is taken care of. $500 to $5000 may not be unrealistic for care of a beloved dog, cat, or horse. Horses may require even more money to maintain as they can often outlive their owners. It is not uncommon for horses to live to be 20 - 30 years old. Expenses for caring for a horse can be as much as $ 5000 - 10,000 per year for such items as food, boarding, vet care, and farrier services.

Estate planning for your pet can be done by incorporating provisions in your own trust or setting up a separate pet trust.

At Pinkerton, Doppelt, & Associates LLP, we can add provisions to your existing trust to provide for pets, or incorporate provisions into a new estate plan. Protect not only your pets but even more important, your heirs, by creating a living trust. Contact us for a complimentary consultation about this or any other estate planning issue.

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Posted In: LIVING TRUSTS

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In San Diego, all of the attorneys are licensed by the State Bar of California. This is the professional organization which oversees attorneys. The State Bar of California, along with the Continuing Education of the Bar, offers many services for attorneys. There are also, however, services for the public which many persons in San Diego who are current clients or not current clients do not know about.

One of the sections for the public is in the Trusts and Estates Section of the State Bar website. This gives the public acess to the toll free senior information line of 1-888-460-7364. In addition, the public can view resources which the Speaker Bureau Attorneys can obtain directly from the State Bar. These include a statutory will form, an advance health care directive, estate planning brochures, and additional information including a senior information card.

At our firm of Pinkerton, Doppelt & Associates, LLP we offer a complimentary consultation as the different forms, pleadings and procedures can be very complicated. We also have a page on our website directly relating to living trusts. Please feel free to contact us directly by e mail or at our toll free number in Southern California of 1-877-435-7411 [1-877-HELP411] which is also our website address of www.help411.com.

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In San Diego, we have many FDIC insured banks. These include Washington Mutual, Union Bank, Bank of America and others. Our law firm of Pinkerton, Doppelt & Associates, LLP does not endorse or recommend any bank or other financial institution. We would be pleased to offer you a complimentary consultation on any estate planning issue. Our firm does not recommend or endorse any bank or financial institution. Please feel free to e mail or call us with any questions.

In 2004, the Federal Deposit Insurance Corporation (FDIC) put in place new rules for insurance coverage of living trust accounts in FDIC-insured institutions. A living trust, sometimes called a family trust, is a formal revocable trust. Its owner specifies who will receive the trust assets when the owner dies. During his or her lifetime, the owner, also known as a grantor or settlor, maintains control of the trust assets and has the power to make changes in the trust.

The owner of a living trust account is insured up to $100,000 per beneficiary if each of the following three requirements is met:

(1) The beneficiary must be the owner's spouse, child, grandchild, parent, or sibling. Not every relative qualifies. For example, cousins, nieces, and nephews do not qualify, but stepparents, stepchildren, and adopted children do.

(2) The beneficiary must become entitled to his or her interest in the trust when the owner dies. FDIC insurance coverage would be based on the beneficiaries who satisfy this requirement as of the time when a bank fails.

(3) The title of the account at the bank must indicate, with terms such as "living trust" or "family trust," that the account is held by a trust.

While insurance coverage is based on the actual interests of each beneficiary, the FDIC will assume that the beneficiaries have equal interests in the trust account unless the trust states otherwise. By way of a simple example, if a father has a living trust leaving all of the trust assets equally to his three children, the account would be insured up to $300,000. The total coverage consists of $100,000 for each of the three qualifying beneficiaries, who would become owners of the trust when their father dies.

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Posted In: LIVING TRUSTS

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