The KRASA LAW, Inc. Estate Planning Blog

Friday, May 7, 2010

Will Everybody Need Advanced Estate Planning?

The bad news is that the Estate Tax, or "Death Tax," is a confiscatory tax on inheritance with rates as high as 55%.  The good news is that everyone is entitled to an exemption from the Estate Tax.  Over the last decade, the exemption has rapidly risen from $675,000 in 2001 to $3.5 million in 2009.  As a result of these rules, most clients over the last decade have not had to do more than Basic Estate Planning such as setting up an A/B Trust.  However, beginning in 2011, many clients may have to engage in Advanced Estate Planning, once only reserved for extremely wealthy individuals.

Currently in 2010, there is no Estate Tax.  However, in 2011, the Estate Tax comes back and the Estate Tax Exemption is scheduled to drop to $1 million.  This means that if you add up the fair market value of everything you own, any amount over $1 million will be subject to a 55% Estate Tax.  Advanced Estate Planning may be the answer.

One Advanced Estate Planning technique is to make annual gifts to relatives.  Each person may gift up to $13,000 per person per year without any Gift Tax or Estate Tax ramifications.  Many clients make it an annual habit to gift $13,000 to children, grandchildren, and other loved ones.  Some clients take it a step further by forming Family Limited Partnerships or Family LLC's and giving away fractional interests in such entities.  By doing so, they can take advantage of "fractional discounts" - the principal that a minority interest in an entity is worth something less than the proportional fair market value of the interest since there is no control over the entity.  This technique allows you to give more away at a lower Gift Tax "cost."

Another Advanced technique is to gift an asset that is expected to appreciate.  If you give away more than $13,000 to a single person in a single year, you start using up your Estate Tax Exemption.  However, if you think a particular asset will dramatically appreciate in value in the future, you may want to gift that asset now, while the value is low, and allow the appreciation to occur in your beneficiary's Estate rather than in your Estate.  This technique is known as an "Estate Freeze."

A sophisticated "Estate Freeze" technique is a special kind of irrevocable trust known as a Qualified Personal Residence Trust, or a "QPRT" (pronounced “cue-pert”).  Our homes are often our most valuable assets and hence one of the largest components of our taxable estate.  A QPRT allows you to give away your house or vacation home at a great discount, freeze its value for estate tax purposes, and still continue to live in it.  Here is how it works: You transfer the title to your house to the QPRT (usually for the benefit of your family members), reserving the right to live in the house for a specified number of years. If you live to the end of the specified period, the house (as well as any appreciation in its value since the transfer) passes to your children or other beneficiaries free of any additional estate or gift taxes.  After the end of the specified period, you may continue to live in the home but you must pay rent to your family or designated beneficiary in order to avoid inclusion of the residence in your estate.  This may be an added benefit as it serves to further reduce the value of your taxable estate, though the rent income does have income tax consequences for your family.  If you die before the end of the period, the full value of the house will be included in your estate for estate tax purposes, though in most cases you are no worse off than you would have been had you not established a QPRT.  An added benefit of the QPRT is that it also serves as an excellent asset/creditor protection vehicle since you no longer technically own the property once the trust is established and your residence is transferred to the QPRT.

In addition, there are other Advanced techniques that may be worth discussing with an attorney in anticipation of the scheduled 2011 Estate Tax Exemption.

Wednesday, April 14, 2010

Don't Fall Into a Property Tax Trap

Thanks to Proposition 13, if you’ve owned real property in California for several years, it is likely that your property taxes are relatively low.  Proposition 13 essentially freezes the assessed value of your California real property for property tax purposes until either there is (1) new construction or (2) a change in ownership.  The idea is to give homeowners predictability with regard to their annual property tax liability, especially in a state where real property values have soared over the past 30 years while many homeowners’ incomes have not necessarily increased.  Many homeowners have become accustomed to their property tax rates and hope that their heirs can enjoy the same benefits.

Under Proposition 58, a transfer of the principal residence between a parent and a child is completely exempt from a property tax reassessment despite the change of ownership.  In addition, a transfer of real property other than a principal residence between a parent and a child is exempt up to $1,000,000 of assessed value.  In order to preserve this exemption, proper estate planning and estate / trust administration is essential.  For example, if multiple children are the beneficiaries of an estate but only one child wants to keep certain real property, the trustee or executor should determine whether the trust or will allows non-pro rata distributions of property.  If this is the case, the trustee or executor should refrain from distributing all of the inheritance in equal shares to the children and instead transfer 100% of the real property to the child who wants to keep the real property and transfer other assets of equal value to the other children. 

In addition, Proposition 193 excludes from reassessment transfers of real property from grandparents to grandchildren, providing that all the parents of the grandchildren who qualify as children of the grandparents are deceased as of the date of transfer.

In order to claim either the parent/child exclusion or the grandparent/grandchild exclusion, be sure to file the proper forms upon the death of a real property owner.  These forms include the Death of Real Property Ownership Report, the Preliminary Change of Ownership Report, and the Parent/Child or Grandparent/Grandchild Exclusion forms.

Friday, April 2, 2010

Is Your Well-Meaning Friend Out of Luck?

Establishing your estate plan is a very personal and sensitive task.  More important than the actual money or property that you leave to a loved one is the acknowledgment of appreciation that mentioning someone in your estate plan conveys.  However, without careful planning, sometimes the best intentions can accidentally create a legal mess.

In 1992, the L.A. Times ran a series of articles about estate planning attorney James D. Gunderson who had an office within Leisure World, a Southern California gated retirement community.  Mr. Gunderson had a habit of inserting himself in his clients' estate plans.  Over the years, his clients "left" him millions of dollars in cash and other property.  Many observers questioned the propriety of the estate plans Mr. Gunderson drafted.  In response, the California legislature passed Probate Code Section 21350 which disqualified estate planning gifts made to the drafting attorney, the law partners of the drafting attorney, and employees of the drafting attorney with narrow exceptions.

Five years later, in 1997, the California legislature added a new sub-section to Probate Code Section 21350 which also made "a care custodian of a dependent adult" disqualified from receiving gifts through estate plans.  The concern was that in-home caregivers might unduly influence vulnerable seniors and manipulate them into handing over their estates.  Originally, California courts held that only professional or paid caregivers fell into the disqualified category within the meaning of the statute.  However, in 2006, the California Supreme Court case of Bernard v. Foley held that "care custodian" included unpaid caregivers, even friends who simply shopped, did banking, and cooked for the senior.  This expansive interpretation of the law results in disqualifying gifts to well-meaning friends of the senior.

Fortunately, there is a saving grace.  If you intend to leave part of your estate to a friend who occasionally runs errands for you, the best practice is to have a second attorney sign a "Certificate of Independent Review" which states that the second attorney has explained the estate plan to you and believes that you are not under undue influence or fraud.  If your estate plan creates a gift for a friend, you may want an attorney review it to make sure the "Certificate of Independent Review" procedure is not necessary.  Your estate plan may have been created prior to the 2006 case.  Furthermore, what was a friend at the time you signed your estate plan may have since turned into a "care custodian."

Tuesday, March 9, 2010

Destroying the Incentive to Litigate

Many people are increasingly concerned about becoming the targets of lawsuits and other creditors.  We live in a litigious society and there is no greater tragedy than losing everything that one has worked hard over a lifetime to attain due to an aggressive plaintiff's attorney and a persuaded jury.  It seems that there are no limits as to why someone is sued.  Recently the Associated Press reported that actress Lindsay Lohan filed a lawsuit against E-Trade claiming that an advertisement featuring babies referring to a "milkaholic" named Lindsay is modeled after her and is damaging her reputation.  With endless possible ways to be on the wrong end of a subpoena, proper Asset Protection Planning is generating more interest. 

Perhaps the most common form of Asset Protection involves creating entities such as corporations or Limited Liability Companies ("LLC's") to hold business or investment property.  If you run a business or own rental property, holding such assets in a corporation or an LLC will provide you with a degree of creditor protection.  "Inside creditors" - those individuals who claim they have been harmed by the business or on the rental property - generally will be limited in their recourse to the assets that are held in the corporation or LLC and will not be able to go after your personal assets.  If the LLC is structured in a certain way and is governed under an Asset Protection friendly state such as Nevada, "outside creditors" - those individuals who claim they have been harmed personally by the defendant - generally will be limited in their recourse to personal assets and not the business assets.

Protecting personal assets is more difficult.  Historically, it was not possible to create an entity in the United States that shielded your own assets from your own creditors.  However, years ago foreign jurisdictions such as the Cook Islands allowed so called "Asset Protection Trusts."  The idea was to create a trust in a foreign jurisdiction, hire a foreign trustee, and rely upon the foreign jurisdiction's laws to protect your personal assets.

More recently, states such as Nevada and Delaware have amended their laws to allow domestic Asset Protection Trusts.  The idea is similar to a foreign Asset Protection Trust but instead of moving title to your assets off-shore, you only need to move title to your assets to another state.  This method is generally less expensive and it is less worrisome for most clients to hold title in another state rather than in another country.

Both foreign and domestic Asset Protection trusts are not foolproof but the idea is to make it harder and more expensive for a potential plaintiff to go after your assets.  The concept is to put as many obstacles between the potential plaintiff and your assets in order to destroy the economic incentive to litigate.

For more information, I am hosting two seminars on Asset Protection Planning with special guest, nationally-known Asset Protection attorney Jeffrey R. Matsen.  Both seminars will be held on Thursday, March 25, 2010.  Please call Marilyn Beans at 831-920-0205 to RSVP.

Thursday, February 25, 2010

Seminar Advertisement: What Everybody Should Know About Asset Protection

The Pacific Grove law firm of KRASA LAW presents two seminars on "What Everybody Should Know About Asset Protection," with special guest, Jeffrey R. Matsen, Esq. 

Never before has the subject of Asset Protection been more important and topical!  More and more people are using the legal system to deprive others of their life's work.   Numerous lawsuits are filed in the United States every year, many of which are frivolous or settled for sums greater than the actual liability. 
Business owners, professionals such as doctors, dentists, lawyers and accountants, and property owners in particular should be aware of the risk associated with conducting their business, practicing in their respective fields, and taking responsibility for others.
Asset Protection is about assisting clients in arranging their finances, real property and other assets in a manner that minimizes their exposure to potential creditors.
KRASA LAW presents two informative seminars on "What Everybody Should Know About Asset Protection," co-presented by Jeffrey R. Matsen, Esq.
 1.  For Advisors / Professionals:
     Thursday, March 25, 2010, 12:00 to 1:15 pm
      Bay Park Hotel
      1425 Munras Avenue, Monterey, California
      Lunch Provided
  2.  For Clients / Consumers: 
       Thursday, March 25, 2010, 6:00 to 7:15 pm
       700 Jewell Avenue, Pacific Grove, California 
       Refreshments Provided
Host Kyle A. Krasa, Esq. of KRASA LAW in Pacific Grove, California is a native of the Monterey Peninsula and a local Estate Planning attorney.  He is well known for his personal, client-centered approach to his practice. 
Special guest Jeffrey R. Matsen, Esq. of Bohm, Matsen, Kegel & Aguilera, LLP in Costa Mesa, California has been recognized by Worth Magazine as one of the "Top 100 Attorneys" in the country and is well known nationally as a leading and cutting edge lawyer in Asset Protection.  
Please RSVP to Marilyn Beans at 831-920-0205.  Seating is limited.

Tuesday, February 23, 2010

On Schedule

Most Estate Plans utilize a Revocable Living Trust as the primary legal document that governs the management and distribution of one's assets in the event of incapacity and upon death.  One of the main reasons that Revocable Living Trusts are so popular is the fact that they allow the avoidance of Probate.  Rather than subjecting your loved ones to an expensive, time-consuming, public, court-supervised process, a Revocable Living Trust allows your representative to take inventory of your estate, pay your taxes and creditors, and distribute your assets to your loved ones privately, without court-supervision.  Although there is still a process involved, Trust Administration is faster and less expensive than a probate.

The key to effectively avoiding probate with a Revocable Living Trust is to make sure that assets are titled to the Trust.  This means that the financial institutions need to change the owner of record from the individual client to the Trust.  Stocks held in certificate form showing the individual as the owner should be swapped for stock certificates showing the Trust as the owner.  Real property such as houses, condominiums, commercial real estate, and vacant land should be re-deeded to the Trust.  Mobile homes should be re-registered to the name of the Trust.  Even timeshares should be re-titled to the Trust.

It can be very complicated and time-consuming in order to re-title one's assets to a Trust.  However, failing to do so may cause an unintentional probate - the very scenario most clients attempt to avoid by taking the time and effort to create a Revocable Living Trust.  Furthermore, it takes time to re-title one's assets to a Trust and something could happen in between the time a Trust is created and the time that assets are re-titled to a Trust.  Fortunately, California offers a saving grace, known as a Heggstad Petition.

On October 20, 1990, Halvard L. Heggstad died.  He had executed a Revocable Living Trust a year earlier and re-titled all of his assets to his Trust except for an interest in real property located in Menlo Park.  At the same time, he listed all of his assets - including his interest in the Menlo Park real property - on a "Schedule A" attached to his Trust.  The Trust referred to the "Schedule A" and stated that it was Mr. Heggstad's intent to transfer all of the assets listed on "Schedule A" to his Trust.   In a 1993 case, the Court ruled that because he demonstrated his intent to transfer his interest in the Menlo Park real property to his trust by listing it on the "Schedule A," the property was in the Trust and thus a probate was not necessary.

Subsequently, there have been numerous cases with the same facts: a person died with assets titled to the individual's name but there was a "Schedule A" or other written document that expressed the person's intent to transfer that asset into the Trust.  This kind of case is known as a "Heggstad Petition."  If you can demonstrate some written intent to transfer the property into the Trust, courts will typically rule that such property is in fact in the Trust and that a probate is not necessary.  As a result, a simple stopgap measure for avoiding a probate is to take the time to make a list of assets you intend to transfer into the Trust by completing a "Schedule A."  I usually have my clients sign their "Schedule A" for added protection though it is not necessary.  While it is still best to make sure assets are re-titled to the Trust, executing a "Schedule A" contemporaneously with executing a Trust is an easy way to ensure that the Trust carries out its objectives in avoiding probate.

Tuesday, February 2, 2010

Updating Your Estate Plan

Many years ago, you finally fulfilled your long-time resolution and had your Estate Planning completed by signing a Living Trust, a Will, a Power of Attorney, an Advance Health Care Directive, and other related documents.  It was so long ago that you don’t remember the exact choices you made with respect to the plan.  When you look at it, you’re not sure what it says because of the complex “legalese” that lawyers like to use.  How do you know if it needs to be updated?

If it has been several years since you completed your Estate Plan, it is a good idea to have an attorney review it to makes sure that it is up-to-date.  One of the first issues I address when clients bring in existing Estate Plans is whether or not their Trusts are fully funded.  A Trust will only control those assets that are titled to it.  Your Trust can have the most beautiful, detailed language possible but if your assets are not properly titled to your Trust, it’s as if you never did Estate Planning in the first place.

Another key factor in reviewing existing Estate Plans is to make sure that you are still happy with your nominations for Successor Trustees, Power of Attorney Agents, and Advance Health Care Directive Agents.  What seemed like a good nomination years ago might not be a good nomination today.

You also want to think about whether your family circumstances have changed.  Has there been a birth or a death in the family?  Have any of your beneficiaries developed special needs?  Do any of your beneficiaries have creditor problems or are they facing a divorce?  Amended provisions can address these issues.

Tax laws – such as the 2010 Estate Tax and Capital Gains Tax laws – and other laws may have altered since you signed your Estate Plan.

If your changes are relatively small, you can update your Trust by executing an Amendment, a 1-3 page document changing only specific paragraphs.  This is analogous to changing spark plugs in a car.  If more than a few paragraphs need to be changed or if you already have several Amendments, then a “full body restoration” might be in order and you might want to sign a Restatement.  A Restatement amends your Trust in its entirety but keeps the same name and date so that your existing funding doesn’t have to change.

Tuesday, January 26, 2010

Now What?

In my last blog, I discussed the fact that the federal Estate Tax under current law has expired for one year only in 2010.  I outlined how your Estate Planning might be affected in light of these changes.  These new rules that took effect on January 1, 2010 also impact Trust Administration and Probate.

Many married couple's Estate Plans divide the estate into a Bypass Trust and a QTIP Trust upon the death of the first spouse.  It is common for an Estate Plan to include a mathematical formula based on the Estate Tax in order to allocate part of the estate to the Bypass Trust and part of the estate to the QTIP Trust.  In a year such as 2010 where there is no Estate Tax, Successor Trustees will not be sure how to properly interpret such a formula. 

The 2010 rules also abolish old reporting requirements for Trustees/Executors and introduce new reporting requirements.  For estates of decedents dying before and after 2010, the law requires the Trustees/Executors to obtain date of death values for all assets.  If the value of the decedent's estate exceeds the Estate Tax exemption, there is a requirement to file an Estate Tax Return (IRS Form 706).  Under the current rules for decedents dying in 2010, there is no need to file a 706.  However, Trustees/Executors are required to report transfers at death of noncash assets in excess of $1.3 million and certain appreciated property that the decedent had acquired within three years of death. 

Adding to the confusion is the strong belief among many commentators that Congress will pass a new law within the next few weeks or months that will return the pre-2010 Estate Tax rules and have it apply to decedents dying in 2010.  As a result, Trustees/Executors do not know whether to conduct Trust Administrations and Probates based upon the "old" rules or the "new" rules and may not know for some time.   

Because there is so much confusion in this area and we are experiencing an unprecedented uncertainty, I am holding a Free Seminar on February 18, 2010 from 6 to 7:15 pm at 700 Jewell Avenue, Pacific Grove, California.  Please call 831-920-0205 to RSVP.

Monday, January 25, 2010

Did the Death Tax Really Die?

The Estate Tax, or “Death Tax,” is a federal tax on inheritance.  Over the last ten years, the Death Tax rate has ranged from 45% to 55%.  However, there is also a “Death Tax Exemption,” meaning that if the total value of your Estate at death is below the Exemption, your heirs do not have to pay any Death Tax; if the total value of your Estate at death is above the Exemption, your heirs only have to pay Death Tax on the amount over the Exemption.  In 2009 the Exemption was $3.5M.  In 2010, the Death Tax – under current rules – is completely eliminated: Bill Gates could die in 2010 and there would be no Estate Tax.  But in 2011, the Estate Tax returns with only a $1M Exemption and a top tax rate of 55%.

Although it sounds like good news that the Death Tax vanishes in 2010, along with the elimination of the Death Tax is a dramatic limitation of the “Step-Up” in Basis which prevented many heirs from having to pay Capital Gains Taxes on the sale of certain inherited assets.  While the Death Tax applied to roughly 6,000 taxpayers per year, the limitation on the “Step-Up” in Basis is estimated to affect approximately 70,000 taxpayers per year.

You may wonder whether these changes will affect your Estate Plan as currently written.  Married couples should check to see whether their Trusts divide the estate of the first spouse to die into a Bypass Trust (sometimes called a “Family Trust,” an “Exemption Trust,” a “Credit Shelter Trust,” or a “B Trust”) and a QTIP Trust (sometimes called a “Marital Trust,” or a “C Trust).  If the terms of the Bypass Trust and QTIP Trust differ – such as different beneficiaries, different trustees, or different distribution standards – it would be a good idea to have an attorney review your Trust as the elimination of the Death Tax in 2010 might affect the allocation of assets to such Trusts and thus adversely affect your intent.

Furthermore, if you have highly appreciated assets, you may want to discuss with an attorney the possible need to amend the formula that allocates assets between the Bypass Trust and the QTIP Trust to take advantage of a limited additional “Step-Up” in Basis for spousal property.

In addition, the 2010 law brings new reporting requirements for estates of individuals dying in 2010.  Whereas in the past you only needed to file an Estate Tax return if the decedent’s estate exceeded the Estate Tax Exemption, now you need to report non-cash transfers at death of assets in excess of $1.3 million and certain appreciated assets received by the decedent within three years of death. 

Although this 2010 elimination of the Estate Tax combined with the limitation in the “Step-Up” in Basis was written into the Internal Revenue Code in 2002, no observer believed that Congress would actually let this happen.  Over the years, Congress has attempted to make a permanent change to the Estate Tax law but never was able to get enough votes to do so.  In December 2009, the House passed a law to keep the Estate Tax Exemption permanent at $3.5 million but the Senate never even got it out of committee.  When Congress went on holiday break, most observers fully expected Congress to “repeal the repeal” in January by reinstating the Death Tax with a $3.5M Exemption and having in retroactively apply to January 1, 2010.  However, it is already the end of January and there has been no sign that Congress is even thinking about the Estate Tax issue.  As a result, there are three likely possibilities: (1) Congress “repeals the repeal” by passing a temporary or permanent Exemption of $3.5 million and applying it retroactively to January 1, 2010; (2) Congress “repeals the repeal” by passing a temporary or permanent Exemption of $3.5 million and applying to prospectively to the date the bill passes; (3) Congress doesn’t do anything, allowing these unique rules for 2010 and returning to the old rules with a $1 million Exemption in 2011.

As a result of this uncertainty, it may be wise to amend your Estate Plan to make it flexible.  Furthermore, for decedents dying in 2010, it is not clear whether Trustees and Executors should follow the reporting requirements under the old rules or follow the reporting requirements under the new rules, making Trust Administration and Probate very tricky this year.

This is a messy situation that nobody thought would actually happen and makes planning difficult for clients, attorneys, and accountants.  Hopefully, Congress will give us some guidance soon though hope is diminishing with every passing day.  

Tuesday, December 29, 2009

Sentimental Value

As the credits roll in the Clint Eastwood film, Gran Torino, the young man who befriended Clint's character is seen driving the beloved Ford down a coastal road with the deceased protagonist's dog by his side.  Because the car symbolized an unspoken love and respect, the scene is emotive - even for this Chevy guy (though I think the movie would have been even better if it had been entitled, "Bel Air").

Items of tangible personal property, such as a Ford Gran Torino, a Chevy Bel Air, or smaller things such as jewelry and knickknacks, can have extreme significance for loved ones.  Many clients often want to include specific gifts of tangible personal property to specific persons in their Estate Planning.  However, clients often are not ready to finalize their wishes with regard to tangible personal property when it is time to sign their Estate Plans.  Furthermore, clients frequently change their minds about such sentimental items and thus are hesitant to include specific provisions in their Wills or Trusts, thinking that it would require additional expense and effort to update such provisions.

To accommodate a frequent change-of-heart with regard to tangible personal property, many people create lists after signing their Wills or Trusts designating who receives what tangible item.  This practice was outlawed in California for many years for fear of fraud.  However, the practice was so popular that a few years ago the legislature enacted Probate Code  §6132 which allows the enforcement of designations of tangible personal property in lists created after a Will under limited circumstances.  First, the item must be tangible personal property, not cash or real estate.  Second, each item must have a value of $5,000 or less.  Third, the total value of all assets transferred in this manner must not exceed $25,000.

Although a similar Probate Code section does not exist for Trusts, many Trusts will include a paragraph allowing the distribution of tangible personal property by a separate writing.  I always include a provision in the Trusts that I draft that states if such a list cannot be incorporated by reference, the list shall act as an amendment.  California law allows the amendment or modification of a Revocable Trust by a writing signed by the Trust creator and thus such a list should suffice as a proper Trust amendment under the Probate Code.

By legalizing this method, clients can change their minds about distributions of personal property without having to amend their Wills or Trusts.  However, because of these strict conditions and because values of items can change over time, it is important to be cautious when applying this method as the strict, stagnant rules can inadvertently invalidate constantly updated lists of items with values in flux.  Even if a separate writing designating beneficiaries of tangible personal property violates the strict rules of California Probate Code §6132, the fact that a client took the time and effort to create such a list carries strong moral weight.

Because of the fact that such strict rules can be easily accidentally violated, I normally advise my clients to reserve this method only for small items of sentimental value and to be mindful that if they believe there may be a disagreement over who receives a specific item, it might nevertheless be best to include such a designation in the body of the Will or Trust itself.  Case in point: it appears that Clint Eastwood's character included the gift of the Gran Torino in the body of his Will rather than in a separate writing created after the Will. 

Monday, December 14, 2009

Organizing Your Estate Plan

Most people understand the need to “get their affairs in order” by executing Estate Planning documents which often include a Revocable Living Trust, a Will, a Property Power of Attorney, an Advanced Health Care Directive, and a HIPAA Waiver as well as other documents.  However, simply executing such documents is not necessarily enough to make sure your loved ones have everything they need in order to administer your Estate.

First you want to make sure that all of your Estate Planning documents are organized and easy to find in the case of an emergency.  Often, clients have their Trust in one location, their Health Care documents in another location, and may not be sure if they even have a Power of Attorney.  If you can’t locate all of your own Estate Planning documents, it will be even more difficult for your loved ones to find sort everything out.  I always provide an Estate Planning binder for all of my clients where all Estate Planning documents can be organized into one portfolio that acts as an “owner’s manual.”

If you have executed one or more Amendments to your Trust or Will, be sure that your Amendments are easy to find and located in the same area as your Trust or Will.  A common problem is for your loved ones to find your Trust or Will but fail to locate your Amendment – or your most recent Amendment – and therefore accidentally follow outdated instructions.  I often recommend that my clients keep their Amendments on top of their Trust or Will.  In the case where there are several amendments, it might be wise to simply restate your Trust in its entirety so that your updated instructions are all in one document and easier to follow.

It is also a good idea to keep an accurate inventory of your assets so that your loved ones know the totality of your Estate in the event of your incapacity or death.  There is nothing worse than a beneficiary not collecting on an insurance policy or taking control of a bank account simply because the beneficiary was not aware of the existence of the asset. 

Finally, you want to make sure that your Estate Plan is up-to-date and complete so that the Estate Plan your loved ones find is not only organized but relevant and effective.

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