estate plan Archives - Page 2 of 2 - Lonich Patton Ehrlich Policastri

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

Federal Tax Implications for Same-Sex Couples’ California Estate Plans

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

California same-sex couples deal with many of the same estate planning issues as opposite-sex couples. However, they also face several unique challenges relating to the federal tax system. Therefore, when developing an effective estate plan for a California same-sex couple, the federal tax system should be considered.

One of the most glaring distinctions between married opposite-sex partners and domestic partners under federal tax law is in relation to the federal marital tax deduction. Domestic partners and same-sex couples legally married in California are not eligible for the unlimited federal marital deduction for property passed outright to a surviving domestic partner or same-sex spouse. Under the federal Internal Revenue Code (IRC), this deduction is only permissible between “spouses.” The IRC defines a “spouse” as an opposite-sex married couple. A qualified California estate planning attorney can advise same-sex couples on transferring assets in a way that minimizes federal taxation.

It is not uncommon for same-sex couples’ estate plans to be challenged by family members. If there is concern that someone will contest the estate plan, it is best for each party to have their own attorney to avoid an invalidation of the estate plan on grounds of duress or conflict of interest. Because of many legal uncertainties in characterizing same-sex couples’ income and tax consequences, California domestic partners are best represented by attorneys who have a strong background in family law as well as estate planning law.

For more information about estate planning, please visit the Lonich Patton Erlich Policastri website. 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.

Unmarried Couples Living Together May Need a Cohabitation Agreement to Implement an Effective Estate Plan

February 2, 2011/in Estate Planning /by Michael Lonich

Cohabiting unmarried couples, who are not registered domestic partners, may be left financially vulnerable if they do not have an enforceable estate plan in place. A “cohabitation agreement” can help unmarried couples effectively plan for the distribution of their property upon death. A cohabitation agreement is a formal contract entered into by both of the cohabiting parties. Specifically, a cohabitation agreement addresses issues relating to rights and ownership of assets, support and maintenance, and division of property upon the dissolution of the relationship or death of one of the parties. These agreements are usually enforceable unless they are explicitly founded on meretricious sexual services.

The division of the couple’s assets at death is governed by California contract law and not community property law. This means that property acquired during the relationship of non-married couples is not considered “community property.” Therefore, upon the death of one party, the surviving partner is not necessarily guaranteed a portion of the assets the couple acquired during their relationship. Moreover, because California community property law does not apply in this situation, the names on the title of property often determine how assets are divided upon the death of one of the partners. A cohabitation agreement serves to ensure that both parties’ wishes are honored upon their passing.

For more information on cohabitation agreements or how to protect your partner after you pass, please talk to Silicon Valley estate planning attorneys at Lonich Patton Erlich Policastri. 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.

“Do It Yourself” Estate Plans Can Be Problematic

December 20, 2010/in Estate Planning /by Michael Lonich

Are you a person who is intrigued by a deal? If so, you should understand that a “bargain-priced” estate plan may really not suit your needs nor save you money in the end. While there are many online templates for wills, you need to be very careful when creating an estate plan without an attorney. Each state has different rules and regulations on what makes a will valid and enforceable. In addition, the differing financial and personal goals of individuals call for unique estate plans.

The need for caution when looking for a “bargain” estate plan was expressed in an article by the Morgan Law Group that wrote that regardless of whom you designate as a beneficiary to your IRA in your estate plan, the proceeds of your IRA will actually pass to whomever the beneficiary is on your IRA beneficiary designation document. Although you may be able to create a trust online, in order for it to be effective, you must follow very specific steps to fund your trust.

For more information about estate plans tailored to your specific needs, please contact us. 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.

Lifetime Gifts May Have Significant Tax Advantages

November 30, 2010/in Estate Planning /by Michael Lonich

An estate planning attorney can help you develop a plan that maximizes your assets and helps you take advantage of the estate and gift tax system. If you are considering leaving an asset to someone upon your death, you may be interested in learning about the tax benefits of an “inter vivos” gift. An inter vivos gift is a gift that is transferred during the giver’s lifetime.

Lifetime gifts have several tax advantages. These advantages are particularly helpful to individuals whose estate will likely be subject to federal estate taxation. Also, lifetime gift plans are particularly important for people whose estates will exceed the applicable estate tax exclusion ($3.5 million for decedents dying in 2009).

The main advantage of an inter vivos gift is that some, or all, of the gift may not be subject to transfer tax. The Internal Revenue Code provides that individuals may make gifts of $13,000 per year per donee without incurring gift tax liability and without having to file a gift tax return.

In addition, interspousal gifts provide the donee spouse with an adequate estate and also allow the donee spouse to use his or her annual exclusions and estate and gift tax exclusion amounts. The gift tax marital deduction is unlimited for a donee spouse who is a United States citizen. For non-citizen spouses, there is an inflation adjusted annual gift tax exclusion that totaled $128,000 in 2008.

For more information about lifetime gifts, please contact us. 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.

The Proper Estate Plan May Help You Avoid the Expense and Hassle of Probate

November 23, 2010/in Estate Planning /by Michael Lonich

If you are trying to decide what estate planning instruments you need in order to meet your goals and to avoid the cost of probate, you might want to look into the revocable trust. A revocable trust is the primary testamentary transfer device used by professional estate planners in California. A revocable trust can be used not only to manage your property during your lifetime, but it also serves to distribute your assets upon your passing.

There are several key advantages of a trust. First, it avoids probate. Probate is the court-supervised process of distributing a deceased person’s assets according to their will or California intestacy law. This process can sometimes take over 6 months to complete and can be expensive. For example, the estate of a person with only a will operating to distribute their assets after death would have to carry the costs associated with providing and preparing the initial petition, petitions for instructions, and the petition for final distribution. In addition, costly court hearings to discuss creditor (and other) issues may be required.

Second, a trust can help to maintain confidentiality regarding your assets. Probate proceedings are a part of the public record. This means that anyone is able to access the information in the record regarding your assets and their distribution. If privacy is important to you, a trust can help you achieve greater (but not necessarily complete) confidentiality.

Third, a trust also serves property management functions during your lifetime. With a trust in place, there is no need to incur the costs and inefficiency associated with a formal conservatorship in the event of your lifetime disability or incapacity. In addition, a trust is useful as it provides for long-term continuity for handling your assets.

For more information about wills and trusts, please contact our San Jose estate planning lawyers at Lonich Patton Erlich Policastri for more 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.

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