Estate Planning Archives - Page 18 of 22 - Lonich Patton Ehrlich Policastri

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.

Estate Planning Bucket List: Managing Important Documents in Case of Death

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

The last thing surviving relatives want to think about when a loved one passes away is managing the affairs of the deceased’s estate. Amid the grief and sorrow, a comprehensive estate plan can help to eliminate these uncertainties and confusion over the probate administration and assist surviving relatives in handling their painful loss.

It is also imperative that family members are aware of where to find an estate plan and other important documents. The Wall Street Journal’s “25 Documents You Need Before You Die” highlights the ramifications of unorganized estate planning documents and notes the most important documents to keep handy. It provides a thorough guide on the steps to take to ensure your estate plan is carried out.

If you are interested in learning more about individual estate planning documents 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.

Planning Ahead for the Costs of Nursing Homes

July 13, 2011/in Estate Planning /by Michael Lonich

Nursing homes have become an important part of the way we care for our elders. With the population of those who are 65 and older rising, nursing homes will continue to play an integral role in our society. Assisted living, in any form, however, is a very expensive venture and many elders will not have the funds needed to afford this level of care.

“The average [] cost of a nursing home today is $6917 per month, and a typical Alzheimer’s patient will spend $395,000 for their nursing home care after diagnosis,” said Heiser, author of How to Protect Your Family’s Assets from Devastating Nursing Home Costs: Medicaid Secrets (www.MedicaidSecrets.com). That cost is only expected to rise as demand rises so it’s important that preparations begin early. Medicaid—a federal health program, managed by states, for people with low income—is a valuable resource; however, many people assume they cannot qualify for it.

It is important to understand the asset limits for those applying to Medicaid. In California, an individual may have up to $2000 in assets; a couple may have up to $3000. Moreover, some personal assets are not considered in determining Medi-Cal coverage. These include: your primary home, one vehicle, household goods and personal belongings, life-insurance policy with a face value of $1500/person, and prepaid burial plan and plots. The key to protecting your family’s assets from costly nursing homes is planning early and effectively.

If you are interested in learning how to plan for future costs of care, 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

Predatory Unions: Protect yourself and Protect Your Family

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

The elderly are a vulnerable population. The wealthy elderly, however, are even more at risk. It is not uncommon to hear horror stories of an elderly parent who marries their caretaker only to have their life savings steadily funneled to unknown sources, discovered only by family members after the death of the elderly. As baby boomers head into retirement, these “predatory unions” are on the rise, as highlighted recently in the Wall Street Journal.

Financial abuse is the theft or embezzlement of money or any other property from an elder. It can be as simple as taking money from a wallet and as complex as manipulating a victim into turning over property to an abuser. In the blink of an eye, an elderly parent may be left unable to provide for their own needs while children and family members may be left without an inheritance.

The most difficult challenge for the children of these elderly is objecting to the property consequences of a parent getting married once that parent dies. In most states, the inheritance rights of widows and widowers trump any estate plan—even if the new spouse wasn’t named in the will, and even if the marriage took place shortly before the death of someone unable to recall the union a few days later. In California, the inheritance rights of widows and widowers are substantial but not as extreme as those previously mentioned. The surviving spouse may receive up to one-half of the decedent’s community property, quasi-community property and separate property.

Estate planning, however, can still be a strong deterrent to elder financial abuse if drafted properly. Estate planning devices may include wills, trusts, powers of attorney, advance health care directives and joint tenancies. Children whose parents put their assets in a trust have a stronger line of defense when the parent marries late in life. Irrevocable trusts cannot be unwound during the parent’s life time, however, if a revocable trust is in place, the paid caregiver should not know about it.

If you are interested in learning how to better protect your own or loved one’s assets, 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.

Estate and Tax Planning for Married Couples

May 6, 2011/in Estate Planning /by Michael Lonich

With the recent changes to the tax law for 2011, there is now a $5M unified tax exemption for individuals who pass away in 2011 or 2012. This has created an opportunity to avoid the payment of Federal estate taxes over the next few years.

If you and your spouse are U.S. citizens, you can leave each other any amount with no Federal estate tax exposure. This is referred to as the unlimited marital deduction privilege and provides a significant Federal estate tax shelter. It is especially advantageous with the current high unified credit over the next two years.

However, if you have a large estate, leaving everything to your spouse may result in your spouse having an estate that exceeds the Federal estate tax exemption when he or she dies. In that case, there are a number of other estate tax saving strategies you should consider, some of which are set forth below.

Giving money to charities is always an approach to lower or reduce your taxable estate.

A frequently used approach is to utilize the annual Federal gift tax exclusion ($13,000 per person) by making yearly gifts up to the exclusion amount which will reduce the taxable value of your estate without reducing your lifetime Federal gift tax exemption. Both you and your spouse can make an annual gift of $13,000 per person.

You can contribute to the education of your children or grandchildren by making payments directly to a school as a method to reduce your estate. Direct payments to the school will not impact your unified estate and gift tax exemption.

Appreciating assets are always a little tricky but with the relatively significant unified estate and gift tax exemption, you can give away up to $5M worth of appreciating assets (stocks, real estate, etc.) without triggering any Federal gift tax. Your spouse can do likewise. Although this reduces your unified exemption and is taken against your lifetime exemption, the gifts are valued on the date of the gift and if they continue to appreciate for years while you are still alive you have avoided that additional appreciation being captured in your estate for estate tax purposes. There are other important considerations when contemplating gifting versus passing assets on your death such as utilizing stepped up basis.

An irrevocable life insurance trust (ILIT) can be an important estate planning tool and assist in paying estate taxes. An ILIT is not in your control and thus not a part of your estate and thus is not taxable upon your death. With a typical life insurance policy, although perhaps income tax free, the proceeds are included in your estate for Federal estate tax purposes.

If you have questions regarding estate and tax planning, 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