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Sacramento Estate Planning Attorney

Sacramento Estate Planning Blog

We help Californians with wills, estate plans and modifications

Last week on the blog we discussed the tragic passing of Anthony Bourdain and some of the more particular issues he addressed through his will. It highlights an important concept: estate plans can be custom-tailored to meet an individual's desires. This means that if an individual wants to leave assets to particular people or in a particular way, he or she can do so in a way that is legally enforceable. Also, by being clear and thorough in one's estate plan, he or she can avoid confusion and the costly process of probate and probate litigation.

Of course, the only way you can ensure that you utilize the estate planning tools necessary to meet your needs is to fully understand those options. Most Californians have a basic understanding of the most elementary estate planning tools, but even these can be fraught with unexpected complexities. Dealing with other documents, like trusts and powers of attorney can be even more detail-oriented.

Anthony Bourdain's estate plan addressed flyer rewards

Many people were shocked to hear the news that celebrity travel guru and chef Anthony Bourdain passed away recently. The man, who was open and honest about having to live paycheck-to-paycheck well into his 40s, became famous by exposing the secrets of the kitchen and cultures, thereby allowing many to expand their cultural literacy. While there are certainly lessons to be learned from Bourdain's passing and his legacy, one interesting aspect of his life is the way in which he drafted his estate plan.

On its face, Bourdain's will seems pretty simple. The vast majority of his $1.2 million dollar estate will go to his daughter. Yet, even this provision is missed by some, as up to 60 percent of Americans don't have an estate plan at all. Nearly 80 percent of millennials don't have a plan for how their assets will be distributed upon their passing, which could put them at risk of unintended outcomes.

The two types of conservatorships

Previously on this blog we discussed the role of a conservator in California and how he or she can play an important role in estate planning matters. As a quick recap, a conservator is an individual who is appointed by the court to care for an individual's daily care and health needs or the individual's financial matters when that individual is incapable of handling such matters on his or her own.

There are two types of conservatorships. The first is conservatorship over an individual, where an appointed conservator provides personal care for an individual who is incapacitated. This means that a conservator in this situation will be responsible for ensuring that the incapacitated individual has adequate food, health care, clothing and shelter. This type of conservatorship can carry great responsibilities, including making medical decisions that can have a profound impact on the incapacitated individual's life.

Health care directives as a part of estate planning

When most Californians think about estate planning, they think about how money is going to be passed down to their family and friends upon their death. While this is true to a certain extent, estate planning has a much broader reach. For example, estate planning can include how important financial and health care decisions will be made in the event that an individual becomes incapacitated and, as a result, unable to make those decisions on their own.

This is why one important estate planning tool is the health care directive. This document can spell out how one wants his or health to be treated when he or she becomes unable to make those decisions. But they can raise an important question: to what extent do medical professionals have to follow a health care directive?

Stan Lee's health may be affecting his estate plan

Estate planning and the various issues that can arise from it can affect people of all walks of life. Although many in California may think that estate planning is mainly meant for the rich, this simply isn't the case. It can be beneficial, however, to look at how estate planning issues affect the wealthy, as it can have direct correlations with the average person.

As an example, let us look at Stan Lee, the co-creator of many popular comic book characters, including Spider Man and the Hulk. The 95-year-old, whose estate may be worth as much as $50 million, currently suffers from a multitude of health problems, including hearing, vision and memory issues. These issues may be putting his estate at risk. How? According to some individuals, Lee's health problems make him susceptible to undue influence.

The interplay of estate planning and prenuptial agreements

Those in California who engage in estate planning usually do so for the sole purpose of ensuring that their hard-earned assets are protected and preserved for those who they identify as their heirs and beneficiaries. As we have discussed at length on this blog, there are a number of ways to ensure that one's estate plan is thorough, legally valid and created in a way that allows for distribution of assets in accordance with one's wishes.

However, there are certain circumstances that can threaten an estate plan as initially drafted. One of these scenarios is when an adult child decides to get married. While a marriage may be something to celebrate, it does mean that divorce could loom in the future. Therefore, some parents try to talk their children into entering into prenuptial agreements.

Sacramento attorney with decades of experience handling trusts

Recently on the blog we discussed the blind trust. This type of trust is just one of the many trust options available to those who engage in estate planning. Fully understanding the benefits of each type of trust is critical to allowing an individual to make fully informed decisions with regard to what is best for them, their estate and their heirs.

Unfortunately, most people do not possess the knowledge or skills to adequately create the trusts they need to further their interests. Those who try to do so on their own may unintentionally leave gaps in their estate plan, which could lead to unwanted consequences including the loss of assets and a prolonged distribution process on account of the estate needing to go through probate.

The challenges associated with trust administration

When an individual in Sacramento passes away, the directions that he or she laid out in his or her estate plan kick into effect. Whether a will, trust or some combination of both is used in an estate plan, the administration of the estate and its trusts can be challenging. After all, trusts and other estate matters that are mishandled can result in the imposition of personal liability.

One key area to pay attention to is the payment of debts and distribution of trust assets. Generally speaking, an estate's debts should be paid before any money is paid out of the trust. This is because a trust administrator may have to personally pay for debts that the estate is unable to cover if beneficiaries and heirs have already received assets from the estate. Also, trusts typically allow for the payment of income, which is money earned through the investment of trust assets, to be paid at one time, while the principal of a trust is to be paid at another time with, perhaps, strict qualifications in place. This means that a trust administrator needs to be careful about how and when to pay out assets, as well as how to invest those assets.

Estate planning and the blind trust

We've spent a considerable amount of time on this blog discussing the various trust options available to Californians. Deciding on trust options that are right for you can be critical to the success of your estate plan, including the financial well-being of your heirs and the trust beneficiaries. This usually means that you and your heirs want to keep a close eye on how these trusts are managed, but sometimes that's not in your best interests. Sometimes, in fact, it might be wise to have absolutely no idea about how a trust is being managed.

In these instances, a blind trust may be worth consideration. As its name implies, a blind trust keeps the management of trust assets out of view of the trust's beneficiary. The main reason to do this is to avoid impressions of impropriety and self-dealing. Usually this comes up when people in power, including politicians and corporate executives, have the ability to implement changes that could would financially benefit themselves, but perhaps not the people or businesses they represent. These trusts can also be utilized by those who want to remain anonymous, such as lottery winners.

Steps to take to ensure an estate plan is effective

No one likes to think about their inevitable mortality. Therefore, it can take a lot of will power and bravery to create an estate plan. Those in California who are able to successfully create a plan may feel like they have achieved something major, which they have, at least to a certain extent. However, estate planning is never truly done. The legal documents through which an estate plan takes shape need revisiting from time-to-time, but even the process through which the plan is discussed with beneficiaries and heirs can have a significant impact on the plan's success.

Many individuals fail to discuss their estate plan with their heirs. In fact, one study found that nearly half of all parents fail to bring up the subject with their children, and only 28 percent of adults reported that they were aware of their parents' estate plan details. Another 40 percent reported that they felt that their parents' estate plans were unfair. By failing to discuss estate planning with their children and heirs, individuals risk that expectations may be dashed and feeling of unfairness may give rise to legal disputes.

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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