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Sacramento Estate Planning Attorney

Sacramento Estate Planning Blog

Transfer on death accounts can help avoid probate

Most, if not all, Californians want to avoid the probate process. After all, having an estate subjected to probate can make the matter public, and it is usually lengthy and costly. For these reasons, many people who engage in estate planning do so, at least in part, to avoid probate. In order to do this successfully, though, Californians need to understand the estate planning options available to them, choose those legal avenues that are right for them, and create legally valid documents that will withstand any challenges.

One action that can be helpful in one's pursuit to avoid probate is to utilize transfer on death accounts. Accounts that contain a transfer on death provision remain held by the account's creator until the time of his or her death. At that time, the assets subjected to the transfer on death provision are diverted to named beneficiaries. This completely bypasses the probate process.

What is a blind trust?

There are a variety of trusts that can be utilized to fulfill the needs of an estate planner. Previous posts here have discussed a number of options, including irrevocable trusts in general, charitable trusts and generation-skipping trusts. There is another option: a blind trust.

This type of trust allows trustees to possess full discretion in the handling of trust assets. The beneficiaries of the trust, as well as the trust's creator, have no knowledge about how those assets are handled. The trust's creator can terminate the trust, but he or she will receive no reports from the trust and its investments, if any.

Considering trusts? Get the right information first

A recent post here discussed the generation-skipping trust and how it may be beneficial to those engaging in the estate planning process. This is just one of the many trust types available to those who create estate plans. Each trust type has its own benefit, and one or a combination of a number of trusts can help bring a vision for an estate plan into reality.

With that being said, trusts and other estate planning documents need to be crafted with attention to detail and an eye for clarity. Estate planning vehicles that are ambiguous, vague or fail to address all assets can leave the matters open for interpretation. This is the death knell for an estate plan. It can cause familial strife and, in some instances, litigation. It can be costly and lead to outcomes that are counter to an estate planner's wishes.

What are the duties of the executor of a will?

Our readers who are familiar with the estate planning process know that there are many decisions that must be made. An individual must determine to whom assets will be left and what restrictions, if any, will be placed on the distribution of those assets. Even long-term care and powers of attorney may be important considerations during the estate planning process. Another important consideration, especially when creating a will, is who will serve as the will's executor.

The executor of a will has many duties. When looking at the broader picture, an executor assumes the legal responsibility of a deceased individual's financial affairs. The purpose of doing this is to wind down an estate. Therefore, an executor will be tasked with paying off debts, including outstanding bills and taxes, as well as distributing assets in accordance with the terms of a will. A will executor is also required to appear in court to inform a judge about the progress being made in winding down an estate.

What is the generation-skipping trust?

As we have discussed previously on this blog, there are many estate planning vehicles that can be utilized to dictate how an individual's assets will be distributed upon his or her death. While wills are quite common, trusts can, in some instances, be much more effective when used in combination with a will. There are a wide variety of trust types available to estate planners, each serving its own purposes and carrying its own benefits. Knowing the ins and outs of each trust is critical to developing a holistic and effective estate plan.

One type of trust that an individual may consider is the generation-skipping trust. Here, as its name implies, assets are placed into a trust for the purpose of passing them down to an individual's grandchildren, rather than his or her children. With that being said, the generation-skipping trust does not have to name a blood relative as the beneficiary. Instead, the beneficiary only needs to be 37 1/2 years younger than the individual who created the trust.

Estate planning and the qualified disclaimer

The recent passing of former President, George H. W. Bush, has left many Californians heartbroken. One reason is because he appeared to suffer from what some call the "broken heart syndrome." This is because former President Bush passed away just a mere eight months after his wife Barbara Bush. As sad as these types of events can be, it can also be informative, especially when looking at estate planning. After all, many families find themselves in a position where a couple, or two parents, pass away in relatively quick succession.

So, how should assets be handled in these situations? It depends on the facts at hand. However, one option is for spouses to create a qualified disclaimer as part of their estate plan. A qualified disclaimer is a written and signed statement whereby an individual essentially refuses to accept any gift from another, including an inheritance. So, if one spouse passes away and leaves assets to his or her spouse, and that spouse has a qualified disclaimer, then the assets will not pass to the second spouse. Instead, they will proceed down the succession chain to the couple's children or other qualified beneficiaries.

Stan Lee's estate planning issues

By engaging in California estate planning, individuals can ensure that they retain control over their assets for a significant period of time after their passing. This requires the utilization of many legal documents, but failing to do so can result in unwanted consequences. Although many believe that estate planning is only for the rich and famous, this is not the case. In fact, just about anyone can benefit from competent estate planning. Yet, looking at estate planning issues that affect celebrities can be illustrative for even common folk.

Just take the case of Stan Lee. Lee, the creator of much of the Marvel universe, recently passed away at the age of 95. The months leading up to his death were riddled with scandal. Reports indicated that his 68-year-old daughter had been trying to take advantage of him. There were even some allegations that a significant amount of money went missing from his estate during this time and that he was being abused.

Will contests and no-contest clauses

Devising a will can either be relatively simple or it can be extraordinarily difficult depending on the circumstances at hand. This can include the number of assets and debts involved, the number of identified heirs and the complexities involved in the way that an individual intends to leave his or her estate via a will. Regardless of how in-depth a will needs to be though, an individual needs to ensure that it is crafted with clarity and thoroughness. Failing to do so could lead to a contested will.

A contested will can be costly to an estate and it can create an enormous amount of familial tension. Generally speaking, an individual named in a will or someone who would have received assets if the individual in question had passed away without a will can seek to contest a will. This usually means that close family members and named heirs can challenge a provision of a will, or even its entirety. Such a contest can threaten to undermine the way in which one's estate is passed down.

Abatement, ademption and other estate planning lingo

Like a lot of areas of the law, estate planning to some extent has developed its own lingo to describe various rules and concepts quickly and efficiently.

It is important for those who are in the midst of estate planning to understand what some of these terms mean and how the concepts they signify can affect one's estate plan. If a Sacramento resident does not fully understand a term he hears, he should ask an estate planning attorney.

California firm can assist with comprehensive estate planning

Last week on this blog, we talked about estate planning as it relates to hard assets, such as family heirlooms. Finding a satisfactory way to deal with this issue can be challenging, especially when multiple family members are hoping to inherit a specific piece of property. Yet, dealing with hard assets is just a small piece of the estate planning puzzle.

There are multiple considerations that must be made to complete a holistic and effective estate plan. While one must of course deal with the future distribution of liquid assets like cash, stocks and bonds, he or she must also think about his or her potential need for long-term care, assistance with handling healthcare and financial decisions in the event of incapacitation and the restrictions he or she wants to place on the distribution of assets.

My Sacramento law practice, Michael A. Sawamura, Attorney at Law, focuses on wills, trusts and estate planning law in addition to business law and corporate defense services. My clients include professionals, government employees, small businesses, blue-collar workers and national corporations.

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