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LONICH PATTON EHRLICH POLICASTRI
1871 The Alameda, Suite 400, San Jose, CA 95126
Phone: (408) 553-0801 | Fax: (408) 553-0807 | Email: contact@lpeplaw.com
LONICH PATTON EHRLICH POLICASTRI
Phone: (408) 553-0801
Fax: (408) 553-0807
Email: contact@lpeplaw.com
1871 The Alameda, Suite 400
San Jose, CA 95126
Located in San Jose, Lonich Patton Ehrlich Policastri handles matters for clients in northern California, specifically San Jose and Silicon Valley. Our services are available to anyone within the following counties: Santa Clara, San Mateo, Contra Costa, Santa Cruz, Monterey, San Benito, and San Francisco. For a full listing of areas where we practice, please click here.
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The Role of Life Insurance Trusts in Estate Planning: Maximizing Your Benefits
/in Estate Planning /by Michael LonichYou probably already know that estate planning is one of the best ways you can provide for your loved ones in the future, protect your assets, and assure your legacy continues. What you might not know is that a life insurance trust can be an effective tool to provide liquidity, reduce estate taxes, and preserve wealth and assets for future generations. Learning more about the role that life insurance trusts can play in your estate planning can help maximize your benefits for your loved ones.
What is a Life Insurance Trusts?
When you buy a life insurance policy, it is a contract to provide benefits to your loved ones at the time of your death. A life insurance trust is a legal entity created to own and manage that life insurance policy on your behalf. When you create a life insurance trust and fund it, the trust becomes the official owner of the policy, rather than you, the insured individual.
Key Benefits of a Life Insurance Trust
There are several benefits to choosing a life insurance trust, including:
Estate Tax Reduction
If you have a life insurance policy in your own name, death benefits would usually be included in your estate, which could increase the estate tax liability for your beneficiaries. By setting up a life insurance trust, however, you effectively exempt the proceeds from the life insurance from your taxable estate. Beneficiaries can then receive the full payout from your life insurance tax-free.
Liquidity for Estate Expenses
In many cases, your loved ones will be faced with funeral expenses, outstanding debts, and estate taxes, which they will need to pay quickly. With a life insurance trust, benefits can provide immediate cash to help cover these expenses. Having access to these funds could protect your family from having to sell off family assets like your home or business to raise the needed money.
Control Over How Proceeds are Distributed
Some individuals choose a life insurance trust because it allows them to set specific terms for how and when the proceeds get distributed to beneficiaries. For instance, you might choose to delay access to the funds until your beneficiaries reach a certain age or set up regular disbursement periods. This capability might be especially important if you have minor children or a child or other beneficiary with special needs and want to make sure they have ongoing financial support instead of one, lump-sum payout.
Protection from Creditors and Lawsuits
As mentioned earlier, assets held in a life insurance trust are protected from estate taxes, but they are also generally protected from creditors that might pursue your beneficiaries. Especially if they are involved in divorce proceedings, lawsuits, or have personal business liabilities.
Talk to an Estate Planning Expert about a Life Insurance Trust
It’s important to talk with an estate planning attorney about how to set up a life insurance trust and how it fits in with the rest of your estate planning. The estate planning group at Lonich Patton Ehrlich Policastri (LPEP Law) have a wealth of expertise in the full range of estate planning legal services, including setting up trusts. Schedule your free, no-obligation consultation to speak with us at LPEP Law about how you want to protect and provide for your family in the future.
Disclaimer: this article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.
What Would an End of No-Fault Divorce Look Like?
/in Family Law /by Mitchell EhrlichCurrently, all 50 states recognize no-fault divorce as a viable option for couples to dissolve their marriages. However, several states and legislators have proposed changes that would limit or prohibit no-fault divorces, moving toward a system that would require a spouse to prove fault or wrongdoing as a basis for divorce. What would an end of no-fault divorce look like?
What is No-Fault Divorce?
First, it’s important to understand what we mean when we talk about “no-fault” divorce. As the name suggests, no-fault divorce means that neither spouse needs to prove any sort of fault or misconduct, such as adultery, cruelty, abandonment, abuse, etc., as a basis for seeking divorce and can instead cite “irreconcilable differences.” The advantages of no-fault divorce usually include reduced conflict and strain between former spouses, which leads to quicker resolution and greater opportunities for cooperative co-parenting. In addition, both parties are better able to maintain their privacy and dignity throughout a stressful and emotional legal process.
Legal Implications of Ending No-Fault Divorce
To understand the legal implications of ending no-fault divorce, we can look at the legal landscape prior to the establishment of no-fault divorce laws. Generally speaking, obtaining a divorce was significantly more challenging, especially for women.
As in the past, courts would likely require one spouse to prove fault, such as:
The requirement to prove fault often led to contentious, drawn-out legal battles that were time-consuming, costly, and potentially embarrassing for both sides. Some couples even resorted to making up evidence in order to meet the legal requirements of proof.
Failure to establish fault could lead to the denial of the divorce.
Social Implications of Ending No-Fault Divorce
Given the stricter legal requirements noted above, the end of no-fault divorce would also likely have a significant social impact. Women’s groups in particular worry that returning to a fault-based divorce system will force many people to stay in abusive marriages because they will be unable, or reluctant, to produce evidence of abuse.
Other people might choose to stay in unhappy marriages rather than publicly air their private issues. In these cases, the mental and emotional wellbeing of both parties, as well as any children involved, would be negatively affected.
Even successful divorces would probably carry an increased social stigma, since the “fault” established would be equated with moral wrongdoing.
Practical Implications
The requirement to establish fault would necessarily have practical implications, including more expensive divorces and a slower, more congested legal system. Spouses would need to gather evidence that could be presented in court, which could be costly as well as emotionally draining. An increased financial burden of hiring lawyers would make divorce difficult for lower-income families. “Fault” could unduly influence child custody or visitation rights as well as division of assets since the “at-fault” spouse might be denied custody or visitation or receive reduced spousal support or marital assets.
Need Help With Your Divorce?
If you are considering divorce for any reason, it helps to have experienced legal professionals on your side. The family law firm group at Lonich Patton Ehrlich Policastri (LPEP Law) has over 100 years of combined litigation experience to walk you through the process and seek out the best possible outcome. Call us today to schedule a free, no-obligation consultation to discuss your case and go over all your options.
Disclaimer: this article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.
Estate Planning for Unmarried Couples: Understanding Your Options
/in Estate Planning /by Michael LonichWhen people think about estate planning, they often picture married couples creating wills, trusts, and powers of attorney together. But what about couples who aren’t married? In California, unmarried couples don’t have the same automatic rights and protections as married spouses.
That means estate planning is not just recommended, it’s essential. Without proper planning, state law may dictate who receives your assets, who makes decisions for you if you’re incapacitated, and who is recognized as your partner.
Below, we’ll explore the key estate planning tools available for unmarried couples and how they can help protect your relationship and future.
Why Estate Planning Matters for Unmarried Couples
California’s intestacy laws (the rules that determine who inherits when someone dies without a will) favor legally recognized family members such as spouses, children, and parents. Unmarried partners are not included. This means that if you pass away without a plan, your partner may receive nothing, regardless of how long you’ve been together.
Plus, without proper documentation, your partner may have no legal right to make medical or financial decisions on your behalf in the event of incapacity. Estate planning ensures that your wishes (and your partner) are protected.
Key Estate Planning Tools for Unmarried Couples
Wills and Trusts for Unmarried Couples
A will allows you to name beneficiaries for your assets and appoint an executor. For unmarried couples, this ensures your partner inherits as you intended. However, wills must go through probate in California, which can be lengthy and public.
A revocable living trust is often a stronger option. Trusts bypass probate, allowing your partner to access assets more quickly and privately. They also allow you to name alternate beneficiaries and outline specific terms for asset distribution.
Powers of Attorney
If you become incapacitated, a financial power of attorney allows your partner to manage your financial affairs, such as paying bills, handling investments, and accessing accounts. Without this document, your partner may need to go to court to gain authority, which can be stressful and time-consuming.
Advance Health Care Directive
In California, an advance health care directive lets you name your partner as the person to make medical decisions if you can’t speak for yourself. It also allows you to state your wishes regarding life support, organ donation, and end-of-life care. Without this directive, medical providers may turn to family members instead of your partner.
Beneficiary Designations for Unmarried Couples
Some assets, like retirement accounts, life insurance policies, and payable-on-death bank accounts, pass directly to named beneficiaries. Be sure to update these designations to include your partner if that’s your intent.
Taking the Next Step
Estate planning for unmarried couples in California requires proactive steps to ensure your wishes are honored and your partner is protected. Wills, trusts, powers of attorney, and healthcare directives work together to give you peace of mind and safeguard your relationship.
Work With an Experienced Estate Planning Attorney in the Bay Area
If you and your partner are ready to protect your future, it’s important to work with an experienced estate planning attorney who understands California law. A trusted attorney can help you create a personalized plan that ensures your wishes are respected and your partner is secure.
Contact Lonich Patton Ehrlich Policastri today to schedule your free consultation and start building the protection you both deserve.
Disclaimer: This article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.
The Importance of Prenuptial Agreements in Second Marriages: Safeguarding Personal Assets
/in Family Law /by Michael LonichPrenuptial agreements often receive a bad rap, mainly due to misconceptions about them. They’re frequently portrayed in movies and television shows as a safeguard, protecting an older, wealthy person from a gold digger’s devious plans.
In reality, prenuptial agreements are an effective legal tool. In marriages where one or both spouses have been previously married, unique financial dynamics are at play. There may be significant personal assets that need protecting, especially if either spouse has children from their previous relationship.
Understanding Prenuptial Agreements
A prenuptial agreement is a legally binding contract that both parties sign before marriage. It outlines how assets, debts, and other financial responsibilities will be handled during the marriage and upon its termination, whether by death or divorce.
While the details will vary, a solid prenuptial plan will include:
Why Second Marriages Need Extra Financial Protection
While many second marriages can last a lifetime, the statistics show a sobering reality. 50% of first marriages end in divorce, compared to a 60-70% divorce rate for second marriages.
When you remarry, it’s usually not just two people joining lives. Almost 40% of American families are blended, meaning there is at least one step-parent relationship. It’s essential to ensure that each spouse’s biological children inherit certain family assets. A prenuptial agreement protects the children’s inheritance while the couple builds their life together.
People getting married for the second time have typically established some wealth, such as:
These assets represent years of hard work. A prenuptial agreement ensures that they remain separate and don’t become subject to California’s community property laws.
Second marriages also involve ongoing commitments from previous relationships, including:
A prenuptial agreement provides clarification regarding these responsibilities so they don’t become a source of conflict during the marriage.
California’s Community Property Laws
California is a community property state, which means most assets acquired during the marriage are owned equally by both spouses. This includes:
Without a prenuptial agreement, your spouse could claim rights to half of everything you received during your marriage. This could be problematic if:
A valid prenuptial agreement can override California’s community property laws. You and your spouse can agree to keep certain assets separate during the marriage, establish your own property division rules if you divorce, and protect business interests from community property claims.
Taking Action to Protect Your Finances and Your Family’s Future
Prenuptial agreements are particularly crucial for second marriages, given California’s community property laws. A well-crafted agreement can provide peace of mind for you, your spouse, and your families. Our attorneys at Lonich Patton Ehrlich Policastri have the experience you need to ensure your prenuptial agreement meets your needs and complies with California’s Uniform Premarital Agreement Act.
Contact us at 408-553-0801 to schedule your free consultation.
Disclaimer: This article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.
Does Moving to Another State Affect Your Estate Planning?
/in Estate Planning /by Michael LonichPreparing to move almost requires a degree in logistics. It involves juggling numerous tasks, such as organizing and packing belongings, coordinating with movers, managing timelines, and ensuring that nothing gets lost or damaged in the process.
Various forms need to be updated, such as the USPS change of address, driver’s license, vehicle registration, and voter registration. Furthermore, each state has its own laws, and what is legal in your current state may be outlawed in your new locale. Does that also include your estate plan?
How State Laws Influence Estate Planning
Your estate plan consists of legal documents that dictate what happens to your assets and healthcare decisions if you become incapacitated or pass away. The core elements include:
Each state has its own rules regarding these documents. What’s valid in California might not meet the requirements in Texas, Florida, or New York. For example, in California, probate can be expensive and time-consuming, taking 12-18 months and costing 3-7% of the estate’s value. Texas and Florida have relatively efficient probate procedures with lower costs, whereas New York has complex rules that can significantly extend the process.
California vs Other States
California is one of nine states that recognize community property. Any assets acquired during the marriage belong to both spouses equally. Other states follow the common law property rules, where the person’s name on the title determines ownership. Moving from California to a common law state requires a review of how assets are titled and potentially an update to your estate plan to reflect the new ownership rules.
California doesn’t impose state estate and inheritance taxes. However, 12 states and the District of Columbia have their own estate taxes, and six states impose inheritance taxes on the beneficiaries. If you move to another state from California, you might need to restructure your estate plan to minimize the tax burden on your beneficiaries. This could potentially save your loved ones a significant amount of money.
If you continue to own property in California and purchase some in your new state, you need to consider that each piece of real estate is subject to the laws of the state where it’s located. You will also need to review your assets that are outside of your will and are passed on through beneficiary designations, such as life insurance policies, bank accounts, and retirement investments like a 401(k).
Your digital assets, including social media accounts and cryptocurrency holdings, also need to be addressed in your estate plan. Some states have adopted the Revised Uniform Fiduciary Access to Digital Assets Act, while others have limited or no specific laws governing digital assets. Complicating matters even more is the issue that tech companies may have their own policies that override state laws. Your estate plan should include provisions for digital estate management that comply with the laws of your new state.
Estate Planning Guidance from LPEP Law
Estate planning is complex, and interstate moves make it even more challenging. Our attorneys at Lonich Patton Ehrlich Policastri specialize in estate planning and are familiar with the differences between states. They can work with you to review and update your existing plan.
Contact us at 408-553-0801 to schedule your free consultation. Remember, estate planning isn’t a one-and-done task. It’s an ongoing process that should evolve with your life circumstances, including where you live.
Disclaimer: This article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.