Articles Posted in ESTATE PLANNING

Today many people are choosing cremation over a traditional burial. Many of our clients at Scott C. Soady, A Professional Corporation ask that we include in their advance health care directive provisions that they prefer cremation and want their ashes scattered at a designated location or at the discretion of their agent.

San Diego has a lot of wonderful options because of our beautiful setting near the ocean. Many people prefer their ashes scattered in the ocean. California law requires that cremated remains must be scattered at least 500 yards from the shore. There are many boats for hire in San Diego from boats as small as rowboats to speedboats to 65 foot private luxury yachts complete with refreshments. You can choose to view a scattering from shore or conduct a ceremony out in the water, with video or digital pictures.

Also popular in San Diego is the paddle-out for surfers. The paddle-out came from the Polynesian tradition of paddling out into the ocean, forming a circle, and remembering the loved one with flowers or leis.

The use of special needs trusts in estate planning is becoming more common than in generations gone by. A Special Needs Trust, also known as a Protective Trust, Medicaid Trust, or Supplemental Needs Trust is one created specifically for a disabled beneficiary. Often disabled children and adults are receiving government benefits such as social security and Medi-Cal. If a family member leaves money to the disabled beneficiary outright, the beneficiary could be disqualified from receiving those benefits. Anyone receiving social security disability benefits, for example, cannot have more than $2,000 in his or her name without losing their benefits.

In the past, families with disabled children would disinherit the child and leave assets to another family member who promises to use the inheritance to take care of the disabled child. The problem with that approach is that those inherited assets could be subject to creditor’s claims, lawsuits, bankruptcy, divorce settlements, and tax liens of the individual who inherited the assets. That individual could also change their mind or predecease the special needs beneficiary.

With some 5 million children in American today who have physical, emotional, and mental impairment, parents and other family members are planning ahead to create a special needs trust that will supplement, not replace, the benefits the child is already receiving. Such supplemental needs can include such things as computers, books, music lessons, camp, concert and sporting event tickets, and vacations. Assets can also be used to remodel a home or purchase a handcapped equipped vehicle.

Have you thought about what happens to your “digital assets” when you are gone? What happens to your email, your Facebook page, your blog, your website? What about online banking and investment accounts? What about all the photos you have stored on your computer and personal information that needs to be removed?

This can all be very challenging for a trustee or loved one to figure out upon your death. Most people plan for the distribution of their physical assets but may overlook digital assets. Also the person you choose to be your executor or successor trustee may not be sufficiently computer savy to deal with digital assets,

The American Bar Association has a website with an excellent article on how to incorporate digital assets into your estate plan. The author Dennis Kennedy has a great 5 step approach to managing such assets, including inventorying your assets, finding someone that has expertise with computers and digital assets, leaving instructions for what should happen upon your death, and giving such individuals the authority to do such things as closing you online accounts, taking down websties or blogs, and getting valuable data off your computer.

Some clients ask whether they need to change their will or trust when they move into California from another state. Usually wills and trusts created in one state are valid in others as long as they were validly executed in the state where they were created. However there may be rules in the state you moved from that are different from the rules in California and this could effect your estate planning, especially in the area of marital property ownership. Here are some examples that may cause you to consdier having your trust reviewed once you have moved to California.

1. If you are married and moving into California, property you acquired in another state during your marriage may become ‘quasi-community” property so that now it is owed by both spouses.

This may necessitate amending some of the provisions in your living trust to be sure your trust document relects your wishes as to distributions of real property.

Whether you need an estate plan depends in part of what stage of life you are in, your financial situation, and other factors unique to you. If you are young and just starting out with no home and few assets, a Durable Power of Attorney and an Advance Health Care Directive may be all you need. If you own a home, are married and have children, your situation changes drasticlly and you need to consider a trust. Here are some situations that make an estate plan something you need to consider:

1. You have minor children. If you have minor children, you need to think about who would care for them and manage the assets they inherit from you if you and your wife suddenly pass away. Who should be their guardian and how would you want the assets held and distributed to them as they grow up.

2. You have a disabled child or a disabled adult beneficiary. If you have a child or an adult beneficiary that is on public assistance, you need a special type of trust called a Special Needs Trust or Supplemental Needs Trust so that they can receive assets as an inheritance and not lose their eligibility for public assistance such as SSI and Medi-Cal.