ESTATE PLANNING

Published on: March 11, 2017

Can a Special Needs Trust Help My Disabled Child?

There are many kinds of trusts used in estate planning. One you may not have heard about before is a special needs trust. This is a trust designed to provide for a person who is receiving certain types of government benefits, such as Medi-Cal or Supplemental Security Income.

Because these programs are means-tested, a beneficiary can lose his or her eligibility if he or she suddenly receives a large amount of cash, say from an inheritance or a lawsuit judgment. But by creating a special needs trust, that money can be placed in the hands of a trustee, who retains legal ownership. The trustee can then use trust funds to purchase goods and services for the beneficiary without compromising government benefits.

Trustee Removed After Questionable Property Deal

Published on: March 10, 2017

Who Has the Right to Plan My Funeral?

by Scott C. Soady

Many people do not bother to plan for their own funerals. They just assume their family will take care of the arrangements when the time comes. If there is disagreement among family members, however, a funeral can quickly turn into a financial and legal battleground. This is why it is a good idea to consider who should plan your funeral as part of your overall estate planning.

Disinheritance Does Not Apply to Funeral Arrangements

Recently, a court in New Jersey had to deal with the fallout from a contested funeral plan. A woman with three adult children passed away. Her will left nothing to the children. The will further stated her estate should pay any “just debts and funeral expenses,” but made no other provision regarding the planning of the funeral itself.

Published on: March 4, 2017

Using a Trust to Manage Property in Different States

by Scott C. Soady

One of the main benefits of a living trust is that it can make it easier to administer property you own in multiple states. Probate is handled at the state level, so if you own a house in California and a rental property in Arizona, your probate estate would need to open a separate proceeding in each state after your death. However, if you have a properly funded trust, your successor trustee can administer both properties without having to go through probate at all.

New Hampshire Defers to California in Trust Dispute

Even if you have a trust, you still need a will. Typically you sign what is known as a “pour-over will,” a document that basically transfers any remaining probate property at death to the successor trustee of your trust. This is important because it confirms your intent to distribute all of your property through the trust.

Published on: March 3, 2017

Will My Business Continue After My Death?

by Scott C. Soady

Many Californians are self-employed or own their own small business. If you are among this group, it is important to make appropriate provisions in your estate planning, especially if you have partners, employees, or family members who need to continue the business after your death. The type of planning required will depend on the specific legal structure of your business.

Sole Proprietorships

A sole proprietor is anyone who is self-employed and does not incorporate his or her business. This can include anything from a work-at-home consultant to someone who operates a retail store with multiple employees. Basically, if you file a Schedule C with your federal tax return and you do not have any partners, you are a sole proprietor.

Published on: February 25, 2017

Do I Need to Amend My Trust Following a Divorce?

by Scott C. Soady

Following a divorce there are a number of collateral issues you need to deal with. Among other matters, you may need to reconsider your estate planning situation. For example, if you and your former spouse created a living trust, you will probably want to revoke that trust and create a new separate trust.

Ex-Wife May Seek Removal of Ex-Husband From Children’s Trust

Of course, unwinding an estate plan is not always so simple, as a recent case from Los Angeles illustrates. This case involves a divorced couple who created an irrevocable trust during their marriage. While most estate planning trusts are revocable, irrevocable trusts are frequently used for legal and tax planning reasons.

Published on: February 24, 2017

The Importance of Properly Funding a Living Trust

by Scott C. Soady

As any estate planning lawyer can tell you, a living trust can help you avoid probate, as assets in a trust do not pass under your will, which can save your heirs time and money. However, an improperly executed trust can lead to unnecessary confusion and even litigation.

Courts Sort Out Conflicting Trusts

Trusts do not fund themselves. Once you create a trust you must legally transfer title of your assets to the trustee (which is usually yourself). If you later decide to revoke the trust, you must similarly transfer title from the trustee back to yourself as an individual.

Published on: February 22, 2017

The Significance of Separate and Community Property in California Estate Planning

by Scott C. Soady

California is a community-property state. This means that assets acquired during the course of a marriage are considered the equal property of both spouses. For estate planning purposes, one spouse may only dispose of his or her 50% share of community property by will or trust; the other 50% remains with the surviving spouse. Of course, one spouse may always leave his or her share of community property to the other.

Drafting Mistake Leads to Dispute Over Status of Marital Home

It is important when making your estate plan to clearly delineate between community and separate property. This is not always a simple matter, especially if one or both spouses have remarried and retain separate property from prior relationships. While California law allows couples to freely decide whether to convert property’s status from separate to community and vice-versa, a process known as “transmutation,”it is important that a will or trust is consistent on this point.

Published on: February 12, 2017

How Does a Joint Tenancy for Cars Work?

by Scott C. Soady

Joint tenancy is a common estate planning tool used to avoid probate. The basic idea is that two (or more) people hold property as “joint tenants.” This means they own the entire property together, and when one co-owner dies the survivor automatically owns 100% of the property outright without having to go through the deceased co-owner’s estate.

Court Rules DMV Title Insufficient to Create Joint Tenancy

Although joint tenancy is most often associated with real property, it can be applied to personal property as well, such as motor vehicles. For instance, spouses may choose to register their car as joint tenants. It is important to register a joint tenancy because a probate court will not assume that was your intention. By default, the law assumes two or more people hold property as “tenants in common,” meaning they each own a separate interest.

Published on: February 10, 2017

Father’s Trust Not Liable for Failing to Help Daughter Keep House

by Scott C. Soady

Parents often create a trust as part of their estate planning to ensure their children have ongoing access to financial resources. When you create a trust, the trustee has certain legal and fiduciary obligations to the beneficiary. But how far does that duty actually extend?

“Opportunities Lost” Not Grounds for Breach of Duty Lawsuit

A California appeals court recently looked at this issue. The question was whether or not an adult child could sue the former trustees of a trust created by her father because of “opportunities lost” due to the trustees’ alleged neglect. Specifically, the child said she lost her house because she was never informed that she had access to the financial assets in the trust.

Published on: January 21, 2017

What Happens to My Dog After I Die?

by Scott C. Soady

Carrie Fisher, the writer and actress remembered by millions of fans as Princess Leia in the “Star Wars” films, passed away in late 2016. A number of stories published after Fisher’s death mentioned her French bulldog, Gary, a service animal who helped her cope with bipolar disorder. To the relief of many fans, Fisher’s daughter took custody of Gary.

Creating a Pet Trust

Unfortunately, many pets are simply abandoned or forgotten after their owners die. Some people just assume a family member will assume responsibility for a pet, but that is often not the case. This is why it is important to include your pet in your estate planning.