Estate Planning Archives - Page 16 of 20 - Lonich Patton Ehrlich Policastri

Executing an Estate: A Blessing or a Curse?

October 5, 2011/in Estate Planning /by Michael Lonich

Friends or family come into the role as the executor of an estate in different ways. Some are asked by a friend or family member and are honored to have been considered. Some find out they were designated as the executor only after that person’s passing. Some step up to the plate amidst grief and sorrow while other surviving relatives mourn their painful loss. Regardless, executing an estate is not an easy task; there are legal, and often times personal, repercussions if something goes wrong.

According to a recent Wall Street Journal article, “executorships gone bad” are rising. There are a number of possible reasons for this increase but tough economic times may be the driving force. As families struggle economically, disagreements over shares of inheritances or interpretations of wills are occurring more often. This adds to the heavy burden already placed on executors of an estate.

An executor administers a will through the probate court process which can take years (if the decedent created a trust during their lifetime, this significantly simplifies the process for an executor). The probate process includes accounting for assets, paying outstanding bills, and distributing property as indicated by the decedent’s will. Depending on a number of factors, the probate process can take as long as three years for larger, more complex or contested estates. While not impossible for a nonprofessional to handle, it is generally worthwhile for complex wills to be handled by a professional to avoid mistakes and contentious dealings between the executor and other family members.

If you are interested in learning more about the probate process or creating a plan to ensure your family members are well-prepared to handle your estate, please contact the experienced estate planning attorneys at Lonich Patton Erlich Policastri for further information. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship

Despite Mandated Reporting Laws, Financial Institutions are not Subject to Civil Liability

September 28, 2011/in Estate Planning /by Michael Lonich

The elderly population in the United States has steadily been on the rise. Between 1900 and 1996, the population of elders grew from 3 million to 34 million. As the “baby boomer” generation begins to retire, our society will need to make several adjustments. While the first thing that comes to mind when discussing the elderly may be programs such as social security or healthcare, the laws applicable to elders deserve some attention as well.

The California Welfare Code includes sections on who is required to report signs of physical or financial elder abuse to Adult Protective Services or the local law enforcement agency. Included in that law are nursing home workers, healthcare practitioners, ombudsmen, and members of the clergy. The law also deems all officers and employees of financial institutions mandated reporters of suspected financial elder abuse. Recently, a California Appellate Court decided whether the mandated reporting requirement for financial institutions could serve as a legal basis for civil liability.

In Das v. Bank of America, N.A., 186 Cal. App. 4th 727 (2010), Mr. Das’ (the deceased) daughter filed several suits against Bank of America for allowing her father—who suffered from strokes, brain tumors, and dementia—to make a series of transfers overseas totaling over $300,000. She claimed her father’s lack of capacity was readily apparent to casual observers and that bank employees even “wondered” about his state of mind, but did not report Mr. Das’ strange behavior despite the suspicious nature of his transactions. The Second Appellate District, however, found that the legislative intent of the section on mandated reporting for financial institutions was explicitly limited to the government and negates any intent to enlarge the legal basis for a private civil action. Accordingly, they were unable to expand the application of the law despite the egregious circumstances.

There are many ways to protected loved ones from financial elder abuse including conservatorships and financial powers of attorney. If you are interested in learning about how you might be able to protect a loved one from financial abuse, contact the San Jose estate planning attorneys at Lonich Patton Erlich Policastri, LLP. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

Testamentary versus Inter Vivos Trusts

September 23, 2011/1 Comment/in Estate Planning /by Michael Lonich

A trust is an arrangement where property is transferred with the intent that it be held and administered by the person to whom the benefit is for. There is a large assortment of trust types, however, the two main types of trusts are (1) the inter vivos trust and (2) the testamentary trust. The inter vivos trust, often referred to as a living trust, refers to a trust transfer made during one’s lifetime. The testamentary trust, on the other hand, only arises upon one’s death—typically specified in one’s will.

An inter vivos trust is created by a settlor and signed by the settlor and any named trustees. It is created and funded during one’s life time and may be revocable or irrevocable. A testamentary trust is usually created in the will of a settlor and must be probated. Testamentary trusts are irrevocable as they are created after one’s death and, therefore, cannot be amended or revoked. Inter vivos trusts generally do not have to go through probate and are created primarily to provide an economic benefit to specific people or institutions. Payments to the beneficiaries can begin immediately during one’s lifetime or upon death as specified.

Whether an inter vivos trust or a testamentary trust is the better plan depends on the settlors’ objectives. Inter vivos trusts are an effective way to reduce the value of an estate and the subsequent effect of federal and state estate taxes. Testamentary trusts can provide for the care of beneficiaries without the need for a public trustee/guardian upon death.

If you are interested in discussing your estate, creating a trust, or creating a comprehensive estate plan, contact the San Jose estate planning attorneys at Lonich Patton Erlich Policastri, LLP. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

Spendthrift Clauses: Protecting Your Loved Ones’ Inheritances

September 19, 2011/in Estate Planning /by Michael Lonich

Most people consider the protection of their assets from their own creditors when beginning to plan for their estate. However, few consider the prospect of their heirs’ creditors. Adding spendthrift language to a trust may help safeguard their heirs’ assets.

A variety of trusts can be spendthrift trusts as long as a spendthrift clause is included. Despite its name, a spendthrift trust does not simply protect heirs from being recklessly extravagant or wasteful in their use of funds. Spendthrift clauses restrict a beneficiary’s ability to assign or transfer his or her interest in the trust and restrict the rights of creditors to reach the trust assets. If your child gets divorced, it can prevent your child’s spouse from claiming a share of the trust property. If your child predeceases his or her spouse, it can ensure that your children or grandchildren receive their inheritance rather than your spouse. A properly designed spendthrift trust can even protect your heirs’ assets from being attacked by frivolous lawsuits, dishonest business partners, or unscrupulous creditors.

There are, however, some limitations. Government agencies may be able to reach the trust assets, regardless of spendthrift language, to satisfy something like a tax obligation. Further, ex-spouses may be able to reach the trust assets to satisfy child support arrearages. Generally, the more discretion granted to the trustee the greater the protection against creditors’ claims.

If you are interested in learning more about spendthrift trusts or creating an estate plan, contact the San Jose estate planning attorneys at Lonich Patton Erlich Policastri, LLP. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

Tough Times Call for . . . More Estate Taxes?

September 9, 2011/in Estate Planning /by Michael Lonich

It is no secret that, in the present economy, states are looking to increase revenue any way they can. A report published earlier this year showed that total state tax revenue decreased by more than $14 billion from 2009 to 2010, a two-percent drop. So, not surprisingly, while fewer members of the wealthier class will owe an estate tax to the federal government, they may find that they owe it to the state.

Though the trend is not widespread, many states are looking to increase their receipt of estate taxes. Connecticut collects on estates of more than $3.5 million but wants to lower the exemption to $2 million; the state’s legislature is currently taking this proposal into consideration. Illinois reinstated its estate tax in 2011 with a $2 million exemption. And in 2010, Hawaii imposed an estate tax on residents and Hawaiian assets of non-resident, non-U.S. citizens.

Estate tax rules vary greatly across the country. A few states assess an inheritance tax and others an estate tax. Inheritance tax, now uncommon, is levied on assets a beneficiary gets; estate tax is collected based on the whole estate. About half of the states have an estate tax, with rates that range from 1% to 16%. It is worthwhile to note that some states are moving to reduce or eliminate the estate tax where estate taxes are not a huge source of revenue. In California, for example, decedents who passed away after January 1, 2005, are not subject to a California estate tax.

If you are interested in learning more about estate planning, contact the San Jose estate planning attorneys at Lonich Patton Erlich Policastri, LLP. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

Los Gatos Art and Wine Festival Raffle Winners

September 7, 2011/in Estate Planning, In the Community /by Michael Lonich

Congratulations to our raffle winners from the Los Gatos Fiesta de Artes:

Grand Prize Winner of the Lonich Patton Erlich Policastri Estate Plan is Todd G.
First Prize Winner of the Tax Planning Consultation with Chan CPA & Company is Regina R.
Second Prize Winner of the Fitness Package with Mint Condition Fitness is Darrell P.

Thank you to everyone who stopped by the Lonich Patton Erlich Policastri booth at the Los Gatos Fiesta de Artes a few weeks ago. We had a wonderful time visiting with you and enjoyed participating in the community event. We hope to see everyone again next year.

Ensuring the Creation of a Valid Trust

August 15, 2011/in Estate Planning /by Michael Lonich

Many Californians fail to realize that a valid trust is created only if there is trust property. It is, therefore, very important to expressly transfer some piece of property, real or personal to the trust when making estate plans.

Whether property is part of the estate (to be administered by the probate court) or part of a valid trust (to be administered by the trustee) is reserved for the court. While written declarations and general assignments may be effective in transferring property to the trust and avoiding probate, this is not a risk that should be taken. A court must consider each case on its merits and this process typically ties family assets up in litigation, delays administration of the trust, and results in substantial attorney and court fees. An estate plan, designed to ensure that family and financial goals are met, can suddenly become a nightmarish burden on grieving loved ones.

Consulting an experienced estate planning attorney when planning for the future will ensure a trust is properly funded and timely administered. If you are interested in learning more about individual estate planning or creating a comprehensive plan so your family members are well-prepared to handle your estate, contact the San Jose estate planning attorneys at Lonich Patton Erlich Policastri, LLP. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

Don’t Forget About Fido: Ensuring Your Estate Plan Provides For All Your Loved Ones

August 8, 2011/in Estate Planning /by Michael Lonich

For most people, estate plans are a second thought. In a last ditch effort to put something down on paper, people often rush the process and overlook smaller, crucial details of the estate plan. The big ticket items, such as indicating an heir to your property, are typically covered; but what about Fido? What about all of your online banking and computer passwords? It is important to start planning your estate early so that the oft-overlooked items are not left in the dust.

In the United States, the Humane Society estimates that about 400,000 pets/year must find new homes because their owners pass away. Many people do not realize that the most effective way to ensure your pet receives proper care is to set up a formal trust. Any other option relies on other people to honor your wishes and spend money to care for your pets.

Another area which people do not consider involves assisted reproductive technology. Imagine that your husband passed away; but prior, he had his sperm frozen and transferred to you upon death. You conceive a child with the frozen sperm. How will the child factor into your estate plan? This very scenario will be considered by the Utah Supreme Court. The Social Security Administration denied children’s and mother’s insurance benefits to the mother and child and argued that her husband never intended to father the child and they should not, therefore, receive any benefits. This case would not be where it is has the husband provided for this scenario in his estate plan. With technology steadily changing how our families are created, it’s important that all these scenarios are addressed in estate planning.

Now is never too early to consult an experienced estate planning attorney. If you are interested in learning more about individual estate planning or creating a comprehensive plan so your family members are well-prepared to handle your estate, contact the San Jose estate planning attorneys at Lonich Patton Erlich Policastri, LLP. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

Lonich Patton Erlich Policastri Co-Sponsors Los Gatos Fiesta de Artes

July 29, 2011/in Estate Planning /by Lonich Patton Ehrlich Policastri

In the past seventeen years, Lonich Patton Erlich Policastri (L&P) has proudly served the needs of thousands of clients and become one of the most respected firms in Northern California. L&P’s commitment, however, extends beyond the needs of its clients and into the South Bay community.

Lonich Patton Erlich Policastri is proud to co-sponsor the fortieth annual Fiesta de Artes at the Los Gatos Civic Center grounds on Saturday and Sunday, August 13-14, 2011. Fiesta de Artes is the town’s one and only art and wine festival and will feature 150 artists, gourmet food wine and beer, and live music. For over thirty years, the Fiesta de Artes has drawn visitors from all over the San Francisco Bay Area and L&P is proud to be part of an event that benefits the community.

Single? Time to Start Your Estate Planning

July 26, 2011/in Estate Planning /by Michael Lonich

When most people think of estate planning, they think of the later stages of life—perhaps when a family is established or in preparing for the end of life in old age. It is probably the last thing on a young, single person’s to-do list; but it should be at the top.

Single people are out on their own and need to understand how important it is to have estate matters squared away in case of death. If not, tragedy may be followed by unnecessary trauma for the person who ends up managing the estate. Singlehood is not reserved just for the young and carefree; it can happen to anyone at any stage in life. According to U.S. Census Bureau data, singles have overtaken married couples as the majority population. In 2010, singles represented fifty-two percent of all households.

There are a number of complex and emotional issues that could be avoided simply by planning ahead. With couples, the law dictates that the spouse takes care of most issues, whereas singles have no option unless they so designate. It gets especially complicated if minor children are involved as they cannot inherit until they turn eighteen. Singles could benefit from establishing a will (to establish what would happen to assets), a durable financial power of attorney (to designate a person to handle financial affairs in case of incapacity), a medical power of attorney (to appoint a person to make medical care decisions), a living will (to specify what measures can be taken to sustain life in case of incapacity).

If you are interested in learning more about individual estate planning or creating a comprehensive plan to ensure that your family members are well-prepared to handle your estate, please contact the experienced estate planning attorneys at Lonich Patton Erlich Policastri for further information. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.