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Estate Planning

Friday, September 15, 2017

Death and the DMV


The Department of Motor Vehicles (“DMV”) has a reputation for layers of bureaucracy.  Indeed, many people might consider waiting in line at the DMV without an appointment as a “fate worse than death.”  As challenging as it can be to deal with certain aspects of the DMV, handling the transfer of a decedent’s vehicles in California can be surprisingly efficient.

If the decedent did not have a living trust and had other assets necessitating a probate, then the decedent’s vehicles will be subject to probate which will generally be a time-consuming and costly process.  However, if the decedent had a living trust, then the process of dealing with the DMV to transfer the vehicles to the beneficiaries can be painless.
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Friday, September 1, 2017

Incapacity Planning



Often estate planning focuses upon the settlement of one’s estate upon death and the subsequent transfer of assets to the beneficiaries.  However, an often overlooked - and perhaps more important - aspect of estate planning centers upon incapacity.  In the event that you have a medical emergency that makes it impossible for you to make financial or personal decisions, does your estate plan provide an effective system for allowing a trusted individual to manage your assets?  Below is a summary of the options for addressing incapacity planning.

Choosing an Agent

The first consideration is choosing an agent to make decisions for you in the event of incapacity.  Choosing carefully is key to ensuring that your assets are managed for your benefit in an prudent and efficient manner.
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Monday, August 21, 2017

Estate Planning for your Car Collection




This week on the Monterey Peninsula is commonly referred to as “Car Week.” What started in the early 1950’s with the Pebble Beach Concours d’Elegance and the Pebble Beach Sports Car Road Race has blossomed into perhaps the largest concentration of car events in the world. Locals who are not car enthusiasts often understandably do not look forward to the additional traffic. However, for self-proclaimed “car nuts” like my dad and me, it’s one of the most enjoyable weeks of the year. Car shows, car rallies, car displays, car discussions, car auctions, car test-drives, and historic car races have kept us busy and entertained for years.
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Monday, August 21, 2017

Detail Makes Everything Easier



When contemplating the creation of an estate plan, it is a common desire for clients to want “simple” documents.  The thought of too much complexity and the fear that long and complicated “legal jargon” will be difficult to understand makes a lot of people uneasy.  This feeling is understandable, especially since the overall goal of an estate plan is to make things as simple and as efficient as possible for loved ones who acting as “fiduciaries” and are tasked with administering an incapacitated or deceased person’s estate.  

However, once a person becomes incapacitated or passes away, all that is left to rely upon is the four corners of the estate planning documents.  “Simple” documents that do not provide precise detail can actually create problems for fiduciaries in their attempt to establish authority and administer an estate.
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Friday, July 21, 2017

Taking Control of your Health Care



You probably take for granted the fact that you have the basic civil rights to make personal and health care decisions for yourself: where you are going to living, with whom to associate, what kind of health care you will receive, and what courses of medical treatment you will endure.  What happens when you are no longer able to have direct control of these decisions due to mental incapacity?  How do you maintain a degree of control over your wishes?  The following documents can help ensure that your health care wishes and preferences are carried out by trusted individuals in the event of your incapacity.

Advance Health Care Directive

Sometimes also referred to as a “health care power of attorney,” an Advance Health Care Directive (“AHCD”) serves two main purposes.  First, an AHCD allows you to designate an agent to make health care decisions for you in the event of your incapacity.  It is prudent to name at least two or three alternate health care agents in the event that the first person you name is for any reason unable or unwilling to serve in that role.
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Friday, July 7, 2017

Court Review of Trusts



Most people choose to utilize a revocable living trust in order to allow their beneficiaries to avoid court.  Court actions can often be time-consuming and expensive and avoiding the formal adjudication of the law is often preferable.  A properly titled trust can avoid the court procedure of conservatorship in the event of incapacity as well as the court procedure of probate upon death.  However, there are times when a trust ends up in court.  

California Probate Code Section 17200(b) outlines specific instances when an interested party can petition the court regarding the “internal affairs” of a trust.
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Friday, June 30, 2017

Set in Stone



The most common type of estate planning instrument is a revocable living trust.  Because it is revocable, you can change it at any time.  Your trust might have a provision to give a $10,000 gift to your favorite nephew after your death and next week you can increase that gift, decrease that gift, or completely take it out as if it were never there in the first place by signing a trust amendment.

Most people like the flexibility of revocable trusts because circumstances change over time.  However, there are occasions when establishing an irrevocable trust makes sense.
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Monday, June 26, 2017

No Surprises



One of the most common complaints about lawyers and their billing practices is the unpredictability of their fees.  Nobody wants to be nervous about the lawyer’s bill coming in the mail and having to wonder what the “damage” is for the month.  The traditional law firm model of billing by the hour creates this uncertainty.  The question from the client, “How long do you think it will take?” is really a question of “How much will this cost?”  From the attorney’s perspective, the answer to that question is, “As long as is necessary.”  

That response is not comforting to the client because there appears to be no limit as to what the final cost might be.
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Wednesday, June 21, 2017

Professional, Inc.



Small business owners who become profitable often find it advantageous to incorporate. There are a variety of reasons to form a corporation such as certain tax benefits, the ability to establish substantial retirement plans for business owners and their employees, liability protection, and the establishment of a mechanism to add partners or to transfer the business to third parties upon retirement or death.

Business owners form corporations by filing Articles of Incorporation with the Secretary of State, adopting bylaws, holding organizational meetings, issuing stock certificates, and restructuring payroll procedures to be consistent with corporate law.

Professionals, such as dentists, certified public accountants, doctors, veterinarians, lawyers, optometrists, marriage and family therapists, psychiatrists, and psychologists among others must form a special type of corporation known as a “professional corporation.”  

Professional corporations require additional rules, restrictions, and procedures.
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Friday, April 28, 2017

Trusts as IRA Beneficiaries: Part II



In my last article I discussed the fact that while IRA’s should not be re-titled to your trust during your lifetime, you might want to consider naming a trust as a beneficiary of your IRA upon your death under certain conditions.  I also discussed the paramount importance of making sure that a trust that is to be named as a beneficiary of an IRA is structured in such a way as to qualify as a “Designated Beneficiary” under the IRS rules which will allow the trust beneficiaries to stretch Required Minimum Distributions (“RMDs”) over the oldest trust beneficiary’s life expectancy.  

The rule requiring that the oldest trust beneficiary’s life expectancy be used to calculate RMD’s creates two further issues: (1) How is the “oldest trust beneficiary” determined? (2) Can anything be done to prevent the younger beneficiaries from having to use the oldest trust beneficiary’s life expectancy?

(1)  How is the “Oldest Trust Beneficiary” Determined?

Assume that the Pop Star Trust is named as the 100% beneficiary of an IRA.  The Pop Star Trust names three beneficiaries to inherit the IRA in equal shares: Gwen, Kelly, and Meghan.  Gwen is 47; Kelly is 35; and Meghan is 23.
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Monday, April 24, 2017

Should Your Trust be Named as Beneficiary of your IRA?



With regard to a trust-based estate plan, you should re-title most of your assets to your trust.  This process known as “trust funding” includes transferring your bank accounts, taxable investment accounts, stocks, and real properties such as your residence to your trust. One key exception is your retirement plans: if you make the mistake of transferring title to your IRA or other qualified defined contribution plan such as a 401(k) or 403(b) plan while you are living, the IRS will take the position that you just cashed out your plan. Come April 15 you will have a very unpleasant surprise in the form of a major tax bill.

Instead of transferring title of your IRA to your trust while you are living, you should name specific beneficiaries of your IRA’s through each financial institution where you hold a retirement plan.
Read more . . .


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KRASA LAW assists clients with Estate Planning, Elder Law, Pet Trusts, Asset Protection, Special Needs Planning and Probate / Estate Administration in Pacific Grove, CA(93950), Monterey (93944, 93940, 93943, 93942), Salinas (93901, 93905, 93906, 93907), Hollister (95023,95023) Pebble Beach (93953), Carmel By The Sea (93921), Seaside (93955) and Carmel (93923, 93922) in Monterey County and San Benito California.

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