Okay, so it seems like there's a big hiccup in the proposed extention of the estate tax law. Basically congress failed to finalize any changes in that tax law. It is expected that they will resume after the holidays but until then, we are all in planning limbo.
What is also at issue is if/when they do enact a new tax law, will it be applied retroactively. The court have upheld a retroactive application of income tax laws, but the issues as it pertains to estate tax has not yet been faced.
Here's the rub: See, typical tax issues are "regulations" and not "statutes". They are handled differently. Courts can can "interpret" statutes to tell us how they apply. On the otherhand, the IRS can simply issue a formal "Notice" explaining that the tax consequences of a certain type of transaction that is under review and then later apply a "regulation" to apply.
Now with respect to the Federal Estate Tax issue, it is NOT a "regulation", but rather an actual "statute" so some elected officials see it as importants (like a statute) where others are much more casual about it like they are with "regulations".
For example, on December 4th, the House of Representatives passed an Estate Tax Bill which provides that the current law would remain in effect. The House did not including it in any bills to be passed by the senate by the end of the year. (Senate is busy with health care, go figure)
So, maybe people think no estate tax is a great thing if you die in 2010. The grass is not always greener though and kids, don't think that this is the perfect opportunity to wait until Jan 1 to pull the plug on the heart and lung machine.
As it stands today, we are back where we started.... no estate tax for 2010 and in 2011 it will revert back to the old rate of 55% for estates over $1 mill (all the more reason to rejoice in this horrible houseing market, no?)
For two more days at least, married couples (with proper trust planning) can shelter up to $7 million ($3.5 million for individuals). Anything over that is subject to 45% estate tax. So when heirs sell inherited property, little or no capital gains tax is due on the increase in value that occurred during the lifetime of the original owner because the inherited asset is "stepped-up" in value based on the value at the date of death.
So what does this mean if there is a new estate tax law passed later in 2010 and it is applied retroactively. Say mom and dad pass in January, you file to estate tax return, but then the law is enacted in June, now you have to go back and refile and pay taxes. What if all the money has since been dispersed, invested, spents, etc. The trustee alone may be personally liable to pay for any owed estate taxes.
So it may be a good time to plan properly to protect your heirs during this time of tax limbo.
Wednesday, December 30, 2009
Friday, October 23, 2009
THE FUTURE OF THE ESTATE TAX EXEMPTION
I just finished reading a a Wall Street Journal article by Laura Saunders on the issue of what will happen to the Estate Tax next year the and consequences thereof. The current Federal Estate Tax exemption ($3.5 million) is set to "disappear" next year. (The current law is expiring). Most people would say "Great! So it doesn't matter how much I own, if I die next year there will be no estate tax due for my kids." Unfortunately, there may be much bigger problems to consider.
The current estate tax law was enacted by Congress back in 2000. It increaed every year and it is currently at $3.5 million per person ($7 million per couple). In otherwords, if you and your spouse own $7 million in assets and died in 2009, you can pass all the assets to your heirs and they wont owe any estate tax - which is at 45%.
Under the current law, the will be no federal estate tax at all for 2010 and in 2011 it will follow the current lifetime gift tax exemption of $1 million per individual ($2 million for a couple). In the above situation, if the above couple died in 2011 with an estate of $7 million, $5 million would be taxed - if the rates stays at 45% - then the heirs would owe $2.25 million on their inheritance.
It is believed among most in the industry that Congress will step in very soon and extend the current exemption because of the collateral tax damage this "lapse" can cause. It is really an issue of what is called a "step-up in cost basis". This means that when someone inherits an asset, the value of that asset is "stepped up" to the current value at the time of inheritance (date of death). Without a "step-up", the asset would retain the original value from when the original owner acquired it. If the estate tax goes away, so will this "step-up in cost basis".
Here's an example:
Let's say your mother leaves your son a stock that she bought in 1970. She paid $5 for the stock but tody it is valued at $75. Under the current tax law, if mom died today, when your son inherits the stock, the value is $75. So if next year your son sells the stock and it sells for $80, he will only have to pay capital gains tax on the $5 profit. Without the "step up", the original cost of $5 for the stock would transfer to your son (called a "carry-over basis"), so when he sold the stock at $80, he would now have to pay capital gains tax on $75 profit. Now if you apply that same principal to something larger, like a home purchased for $50k in 1970 and is valued at $750k today, it is clear how much of a tax burden this will place on your son. This is also why gifting an asset versus allowing it to pass through inheritance is not always the best option.
There are many possible solutions being proposed in congress right now. Something may be passed by the end of the year, something may happen later and be applied retroactively, it is definately an area to be aware of and if you haven't developed your estate plan, yet, it is definately a time to get things done and protect your estate not only from probate, but also to attempt to minimize the tax burdens on your heirs while we still have the ability to do so.
Disclaimer: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.
Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication, including attachments, was not written to be used and cannot be used for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein. If you would like a written opinion upon which you can rely for the purposes of avoiding penalties, please contact us.
The current estate tax law was enacted by Congress back in 2000. It increaed every year and it is currently at $3.5 million per person ($7 million per couple). In otherwords, if you and your spouse own $7 million in assets and died in 2009, you can pass all the assets to your heirs and they wont owe any estate tax - which is at 45%.
Under the current law, the will be no federal estate tax at all for 2010 and in 2011 it will follow the current lifetime gift tax exemption of $1 million per individual ($2 million for a couple). In the above situation, if the above couple died in 2011 with an estate of $7 million, $5 million would be taxed - if the rates stays at 45% - then the heirs would owe $2.25 million on their inheritance.
It is believed among most in the industry that Congress will step in very soon and extend the current exemption because of the collateral tax damage this "lapse" can cause. It is really an issue of what is called a "step-up in cost basis". This means that when someone inherits an asset, the value of that asset is "stepped up" to the current value at the time of inheritance (date of death). Without a "step-up", the asset would retain the original value from when the original owner acquired it. If the estate tax goes away, so will this "step-up in cost basis".
Here's an example:
Let's say your mother leaves your son a stock that she bought in 1970. She paid $5 for the stock but tody it is valued at $75. Under the current tax law, if mom died today, when your son inherits the stock, the value is $75. So if next year your son sells the stock and it sells for $80, he will only have to pay capital gains tax on the $5 profit. Without the "step up", the original cost of $5 for the stock would transfer to your son (called a "carry-over basis"), so when he sold the stock at $80, he would now have to pay capital gains tax on $75 profit. Now if you apply that same principal to something larger, like a home purchased for $50k in 1970 and is valued at $750k today, it is clear how much of a tax burden this will place on your son. This is also why gifting an asset versus allowing it to pass through inheritance is not always the best option.
There are many possible solutions being proposed in congress right now. Something may be passed by the end of the year, something may happen later and be applied retroactively, it is definately an area to be aware of and if you haven't developed your estate plan, yet, it is definately a time to get things done and protect your estate not only from probate, but also to attempt to minimize the tax burdens on your heirs while we still have the ability to do so.
Disclaimer: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.
Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication, including attachments, was not written to be used and cannot be used for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein. If you would like a written opinion upon which you can rely for the purposes of avoiding penalties, please contact us.
Saturday, October 17, 2009
Mediation: What is it & what Is It good for?
I spent 40 hours last week in a training program, the Essentials of Mediation & Divoce Mediation in Novato, CA and came away with some amazing tools to branch out into the field of Mediation. Now this is not to be confused with Meditation at all, but I realize that meditation prior to a mediation is probably not such a bad idea.
As a Mediator, it is imperative to maintain neutrality throughout the process in order to effectively facilitate a collaborative dispute resolution (i.o. help people come up with a solution to conflict).
Mediation has been defined as "a cooperative dispute resolution process in which an impartial third person facilitates communication between the parties to help them reach a mutually accceptable resolution that is better than their alternatives"
Mediation is an alternative form of dispute resolution. It is alternative to:
Mediation is:
As a Mediator, it is imperative to maintain neutrality throughout the process in order to effectively facilitate a collaborative dispute resolution (i.o. help people come up with a solution to conflict).
Mediation has been defined as "a cooperative dispute resolution process in which an impartial third person facilitates communication between the parties to help them reach a mutually accceptable resolution that is better than their alternatives"
Mediation is an alternative form of dispute resolution. It is alternative to:
- Litigation
- Arbritration
- Direct negotional between two parties alone
- Settlement conferences with attorneys
- Special Masters
- Private Adjudication
- Self-help
- Doing nothing.
Mediation is:
- Voluntary
- Informal
- Private
- Confidential
- Decision making is done by the parties (not the mediator)
- Focus is on the parties needs and interests (not necessarily the law)
- Emphasized mutual problem solving
- Tends to be more efficient and less costly than litigation
- Parties work towards a mutual gain rather than a win/lose (as in litigation)
When is Mediaton appropriate:
- When there are multiple issues
- When the parties want to control the outcome (not a court or arbitrator)
- When the conflict involves communication problems
- When the parties have or had a relationship
- When the parties want to save time, money and stress (avoid litigation)
- When resolution is possible without necessarily assigning "fault" or "liability"
- When personal/emotional issues exist
- When the parties perceive the facts differently
- When there are creativve possibilities for resolution
When may Mediation not be appropriate:
- When one or more parties want a definite ruling on the issues in a conflict - vindication.
- When one or more parties will only be satisfied if the other parties suffer - revenge.
- When the parties have "nothing to lose" by going forward to litigation or some other process - or "little to gain" by going to mediation.
- When one or more parties is not participating in the process in good faith
- When distrust is so hight that the parties have no faith in the viability of a potential agreement.
- When a significant power imbalance exists and connot be addressed constructively
- When a party is unable to effectively participate in the process due to physical, mental or emotional incapacity.
Here are just a few types of matters that mediation can help resolve conflicts:
- Divorce (property, custody, visitation, support, etc.)
- Probate
- Trust administration conflicts
- Employment
- Discrimination
- Community issues (neighbor disputes, etc.)
- Business transactions
- Business/Partnership dissolutions
- Real Estate transactions
- Administrative agency conflicts
To find out more visit http://www.eastcountymediation.com/ or call the Law Office of Amy L. Alvis at 925-478-6435
Sunday, September 20, 2009
Chosing Guardians
During one of my recent client consultations we discussed the difficulty for them to chose their guardian(s) for their children. Whether or not to include a spouse, who should be alternates, what if one of the couples chosen get's divorced, etc. Choosing guardians is probably the hardest decision for parents to make in the estate planning process.
In my research about a way to help "simplify" this process for my clients, I found a great article written by an attorney in Thousand Oaks, CA. I don't want to improperly reproduce her article without her permission, but I would like to recap some of her wise and helpful ideas.
First, she wanted to remind parents that when naming guardians, we are not just choosing who will take care of your children when you die, but who will take care of your children if you become incapacitated or incompetent.
It was noted that parents should really provide as much detail as they desire about not just who will raise their children, but how. Basically what this will allow for example, is if college education is very important to you then you can express that the guardians strive to ensure that your children go to college. If your family religion is very important to you, you can express that your child continue to be exposed to and participate in their religion. You can be as detailed as you want to ensure that your children continue to be raised with the same morals and values you would instill in them if you were still there to raise them.
She went out to list out four basic steps for parents to chose a guardian.
The first step was to "Make a List"
It was recommended that the list be long, including anyone who you think might be a good guardian. This would mean, people you would chose over the foster system basically. In doing this, also list those you would absolutely NEVER want to raise your children. You can specifically exclude someone if you want. If you are having trouble making a long list, be sure to come up with at least 3-4 though. This list can include family members, friends, colleagues, etc. especially if they have similar values to you. Remember, the person(s) who takes over as guardian for your children does NOT need to be the same person who acts as trustee over their money, so don't limit your list because of financial considerations.
The article also discussed the difference between Temporary & Permanent Guardians and your ability to chose both if that feels better for you.
Temporary guardians are basically for a certain defined time period. They may be appointed to care for your children if you become temporarily disabled or even for a short time to finish the school year out before having to move to a new city, state or country even.
Permanent guardians would be the ones to care for your children until the age of majority when you pass away. (You don't need to have separate Temporary and Permanent Guardians named, but in some situations, you may feel it would be best)
A new concept she discussed was a "Guardianship Panel" which is basically a collection of people you name (friends, family, maybe even a doctor) who will decide who would be the best caretaker for your children. Personally, I don't think this is the best "first" option as it can lead to a lot of disagreements. I think as a last resort if all named guardians are not able to serve or chose not to serve, it might be okay.
The second step was to write down "What Matters Most". Factors she states to consider about a prospective guardian are:
• maturity
• patience
• stamina
• age
• child-rearing philosophy
• presence of children in the home already
• interest in and relationship with your children
• stability
• ability to meet the physical demands of child care
• presence of enough "free" time to raise children
• religion or spirituality
• integrity pets
• potential conflicts of interest with your children
• willingness to serve
• social and moral habits and values
• marital or family status
• willingness to adopt your children
I would write these in order of importance, then see how each potential guardian measures up.
Once again, don't let money issues guide you. For example, let's say you have been a stay-at-home mom and want to be certain your children continue to haven a parent at home full time if you should die. But what if your top choice for a guardian works full-time and her children are in day care? What you can do is properly prepare financially with life insurance and investments to be able to provide adequate financial support so that the guardian you want to raise your children is able to stay at home and raise your children.
The third step was to "Match People to Priorities"
After you measured everyone up based on the above factors, narrow your list down to 3-4. Rank those in order, and there you go!
Now that you have your list, as I would ask my clients, ask yourself: what if that couple you name first should get divorced, what if one of them dies? Are you willing for either of the two to raise them on their own, or would you rather move down the list to your next choice of guardian? In some cases, it may be best to only name one person than that person and their spouse.
The final/fourth step "Make it Positive"
This will be an opportunity for parents to really share their thoughts, hopes, and fears with each other. Hopefully the two of you can grow from the process. Remember as well, when you make your wishes know, and detail them out, and share them with your intended guardians for your children:
• The relationship between all parties may increase
• As parents, you have a mutually focused idea of what you want for your children and can share this with your named guardians.
• You will know what you want to achieve with your children while you are still there for them.
So once it is all said and done, you will have "secured your peace of mind" and will rest easier at night knowing your children will be cared for according to YOUR wishes, whatever may come your way.
Disclaimer: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.
In my research about a way to help "simplify" this process for my clients, I found a great article written by an attorney in Thousand Oaks, CA. I don't want to improperly reproduce her article without her permission, but I would like to recap some of her wise and helpful ideas.
First, she wanted to remind parents that when naming guardians, we are not just choosing who will take care of your children when you die, but who will take care of your children if you become incapacitated or incompetent.
It was noted that parents should really provide as much detail as they desire about not just who will raise their children, but how. Basically what this will allow for example, is if college education is very important to you then you can express that the guardians strive to ensure that your children go to college. If your family religion is very important to you, you can express that your child continue to be exposed to and participate in their religion. You can be as detailed as you want to ensure that your children continue to be raised with the same morals and values you would instill in them if you were still there to raise them.
She went out to list out four basic steps for parents to chose a guardian.
The first step was to "Make a List"
It was recommended that the list be long, including anyone who you think might be a good guardian. This would mean, people you would chose over the foster system basically. In doing this, also list those you would absolutely NEVER want to raise your children. You can specifically exclude someone if you want. If you are having trouble making a long list, be sure to come up with at least 3-4 though. This list can include family members, friends, colleagues, etc. especially if they have similar values to you. Remember, the person(s) who takes over as guardian for your children does NOT need to be the same person who acts as trustee over their money, so don't limit your list because of financial considerations.
The article also discussed the difference between Temporary & Permanent Guardians and your ability to chose both if that feels better for you.
Temporary guardians are basically for a certain defined time period. They may be appointed to care for your children if you become temporarily disabled or even for a short time to finish the school year out before having to move to a new city, state or country even.
Permanent guardians would be the ones to care for your children until the age of majority when you pass away. (You don't need to have separate Temporary and Permanent Guardians named, but in some situations, you may feel it would be best)
A new concept she discussed was a "Guardianship Panel" which is basically a collection of people you name (friends, family, maybe even a doctor) who will decide who would be the best caretaker for your children. Personally, I don't think this is the best "first" option as it can lead to a lot of disagreements. I think as a last resort if all named guardians are not able to serve or chose not to serve, it might be okay.
The second step was to write down "What Matters Most". Factors she states to consider about a prospective guardian are:
• maturity
• patience
• stamina
• age
• child-rearing philosophy
• presence of children in the home already
• interest in and relationship with your children
• stability
• ability to meet the physical demands of child care
• presence of enough "free" time to raise children
• religion or spirituality
• integrity pets
• potential conflicts of interest with your children
• willingness to serve
• social and moral habits and values
• marital or family status
• willingness to adopt your children
I would write these in order of importance, then see how each potential guardian measures up.
Once again, don't let money issues guide you. For example, let's say you have been a stay-at-home mom and want to be certain your children continue to haven a parent at home full time if you should die. But what if your top choice for a guardian works full-time and her children are in day care? What you can do is properly prepare financially with life insurance and investments to be able to provide adequate financial support so that the guardian you want to raise your children is able to stay at home and raise your children.
The third step was to "Match People to Priorities"
After you measured everyone up based on the above factors, narrow your list down to 3-4. Rank those in order, and there you go!
Now that you have your list, as I would ask my clients, ask yourself: what if that couple you name first should get divorced, what if one of them dies? Are you willing for either of the two to raise them on their own, or would you rather move down the list to your next choice of guardian? In some cases, it may be best to only name one person than that person and their spouse.
The final/fourth step "Make it Positive"
This will be an opportunity for parents to really share their thoughts, hopes, and fears with each other. Hopefully the two of you can grow from the process. Remember as well, when you make your wishes know, and detail them out, and share them with your intended guardians for your children:
• The relationship between all parties may increase
• As parents, you have a mutually focused idea of what you want for your children and can share this with your named guardians.
• You will know what you want to achieve with your children while you are still there for them.
So once it is all said and done, you will have "secured your peace of mind" and will rest easier at night knowing your children will be cared for according to YOUR wishes, whatever may come your way.
Disclaimer: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.
Thursday, September 10, 2009
So what is "Estate Planning"?
Estate planning involves people and your assets. It addresses your future needs in case you ever become unable to care for yourself as well as when you pass away.
Estate planning is actually very broad and does not just include preparing a trust and/or a will. It is really part of comprehensive financial life planning which should include: investment and retirement planning, mortgage planning, long-term care and other related medical planning, tax planning, and insurance planning.
When planning your estate it is highly recommended that you work with a network of professionals (legal, financial, insurance, tax) that will work together on you behalf so that your plan is cohesive.
Through estate planning, some things you can determine are:
- How and by whom your assets will be managed for your benefit during your lifetime if you ever become unable to manage them yourself.
- When and under what circumstances it makes sense to distribute your assets during your lifetime.
- How and to whom your assets will be distributed after your death.
- How and by whom your personal care will be managed and how health care decisions will be made during your lifetime if you become unable to care for yourself.
- How will care for your minor children and who will manage their finances.
- How to reduce or eliminate estate taxes.
- How to provide financial support for your family after your death.
- How to protect your assets from liability during your lifetime.
So yes, your Trust and/or Will is part of the planning process, but you will need other documents as well to fully address your estate planning needs.
Working with Amy Alvis and Living Trusts by Amy, you will work hand in hand with professionals to help identify your specific estate planning needs, the goals and values that are important to you, and work those together to create a customized estate plan that in specific to you.
Disclaimer: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.
Thursday, August 27, 2009
I'll DO IT TOMORROW
Don't we all just love thinking about making our legal plans and thinking about our own mortality? I mean, really, there is just nothing more exciting, right? Okay really, we'd much rather spend our time watching water boil than think about who will take care of our kids if we should die or who will be the one to tell the doctor to pull the plug if all hope is lost.
Did you know that it is estimated that only about 1/3 of all adult Americans have actually taking the time to prepare the life and estate plans? So what about the other 2/3 of the population? Are they just simply irresponsible. Not likely. So maybe it is just a matter of procrastination. I mean, if we're young, healthy, etc, thinking about our death seems years away.
So what causes people to procrastinate with this very important task people must handle.
It really is normal behavior to avoid things that are unpleasant. How many look forward to doing our taxes... even if we know we will get a refund... it is just the "hassle" of gathering all the paperwork. We all know that death is unavoidable and that we should get our affairs in order to prepare for it and to ensure our families are protected. But since most adults under the age of 60 do no see their death as being in the near future, they don't see the urgency to plan now.
I mean, people are living longer these days so even if you live to a ripe old age, however, the downside is that, the longer you live, the greater your chances of wearing out physically and mentally before you pass on. Have you visited a nursing home lately?
So part of the "unpleasant-ness" of estate planning is people's age (or lack of old age for some), for some it may be the "hassle" of paperwork, for others it may be avoiding interpersonal relationships. For example, maybe you are not on good terms with family members and therefore, deciding who will take care of your children and/or who should inherit your assets, is some you have no idea what to do about. Whatever the reason, is really is just another excuse.
Excuses, Excuses - we all have them and I am sure we all can justify and rationalize a "reason" why we procrastinate on something. It is an amazing talent we, as humans, have mastered to a tee.
Take these rational excuses as examples to why someone has not set up their estate plan yet:
"We don’t have time, because we are getting ready to do some traveling."
Ironically, most people spend more time packing their luggage, than they do making proper estate plans. And in the the worse case scenario... what if something happens during the flight?
"My son can’t get away from work to come with me for an initial consultation."
Well, if you wait until you are incapacitated or dead, your son can take off work to sort through your assets, squabble with his siblings, hire an attorney and develop an almost first-name relationship with the probate judge.
"Since my children all get along, there’s no need to bother with any planning."
That may be true, but will they know your specific wishes for your home, your bank accounts and your investments, not to mention your heirlooms like the kind over which you and your siblings fought after your parents died.
"We don’t have an estate tax problem." or "Why, my business has no value without me."
Perhaps, but the IRS may not agree with you, especially given your inventory, equipment, real estate, loyal customer base and goodwill.
"It’s too expensive."
You have spent a lifetime working hard to build your estate. A small investment now will save potentially tens to hundreds of thousands of dollars in unnecessary probate costs and taxes. What price tag can you put on that kind of peace of mind?
SO WHAT ARE YOU STILL WAITING FOR?
Don't we all know someone or a friend of someone who has gone through the devastating emotional and financial hardship when a loved one has passed away without proper planning. Wouldn't you sleep better at night knowing you wont have to place your family in that predicament when you overcome your estate planning procrastination.
Schedule an estate planning consultation today... it's free... so what are you still waiting for? Call 925-301-7195 or visit www.LivingTrustsbyAmy.com for more information.
Did you know that it is estimated that only about 1/3 of all adult Americans have actually taking the time to prepare the life and estate plans? So what about the other 2/3 of the population? Are they just simply irresponsible. Not likely. So maybe it is just a matter of procrastination. I mean, if we're young, healthy, etc, thinking about our death seems years away.
So what causes people to procrastinate with this very important task people must handle.
It really is normal behavior to avoid things that are unpleasant. How many look forward to doing our taxes... even if we know we will get a refund... it is just the "hassle" of gathering all the paperwork. We all know that death is unavoidable and that we should get our affairs in order to prepare for it and to ensure our families are protected. But since most adults under the age of 60 do no see their death as being in the near future, they don't see the urgency to plan now.
I mean, people are living longer these days so even if you live to a ripe old age, however, the downside is that, the longer you live, the greater your chances of wearing out physically and mentally before you pass on. Have you visited a nursing home lately?
So part of the "unpleasant-ness" of estate planning is people's age (or lack of old age for some), for some it may be the "hassle" of paperwork, for others it may be avoiding interpersonal relationships. For example, maybe you are not on good terms with family members and therefore, deciding who will take care of your children and/or who should inherit your assets, is some you have no idea what to do about. Whatever the reason, is really is just another excuse.
Excuses, Excuses - we all have them and I am sure we all can justify and rationalize a "reason" why we procrastinate on something. It is an amazing talent we, as humans, have mastered to a tee.
Take these rational excuses as examples to why someone has not set up their estate plan yet:
"We don’t have time, because we are getting ready to do some traveling."
Ironically, most people spend more time packing their luggage, than they do making proper estate plans. And in the the worse case scenario... what if something happens during the flight?
"My son can’t get away from work to come with me for an initial consultation."
Well, if you wait until you are incapacitated or dead, your son can take off work to sort through your assets, squabble with his siblings, hire an attorney and develop an almost first-name relationship with the probate judge.
"Since my children all get along, there’s no need to bother with any planning."
That may be true, but will they know your specific wishes for your home, your bank accounts and your investments, not to mention your heirlooms like the kind over which you and your siblings fought after your parents died.
"We don’t have an estate tax problem." or "Why, my business has no value without me."
Perhaps, but the IRS may not agree with you, especially given your inventory, equipment, real estate, loyal customer base and goodwill.
"It’s too expensive."
You have spent a lifetime working hard to build your estate. A small investment now will save potentially tens to hundreds of thousands of dollars in unnecessary probate costs and taxes. What price tag can you put on that kind of peace of mind?
SO WHAT ARE YOU STILL WAITING FOR?
Don't we all know someone or a friend of someone who has gone through the devastating emotional and financial hardship when a loved one has passed away without proper planning. Wouldn't you sleep better at night knowing you wont have to place your family in that predicament when you overcome your estate planning procrastination.
Schedule an estate planning consultation today... it's free... so what are you still waiting for? Call 925-301-7195 or visit www.LivingTrustsbyAmy.com for more information.
Wednesday, August 19, 2009
Conservatorships...What, why, who, and how to prevent them
WHAT:
A conservatorship is when someone is legally appointed to be responsible for the financial affairs of another person who has been legally deemed to be unable to manage their financial affairs for him or herself. (Also known as guardianship of the “estate” – typically as it may relate to minor children vs. guardianship of the “person”)
WHY/WHO:
In many situations, a person may still be physically or mental able to care for themselves on a day to day basis, yet due to decreasing health, disability, judgment, etc, they may need help managing their finances. Examples may include, but are not limited to:
Persons with physical or mental condtions that prevent them from managing their own
financial affairs;
Persons who have legal authority to take over responsibility for them; and
When other forms of help with financial management will not adequately protect them.
HOW:
A conservator is typically appointed through probate court proceedings. A petition must be filed with the probate court by anyone who has a concern for an individual's financial well-being.
The petitioner has a buden to prove the individual is unable to manage their financial affairs on their own supported by medical and/or other sworn statements with any other supporting evidence. There is generally a court hearing, and if there is a contest by the allegedly incompetent individual and/or as to who hould be appointed as the conservator, the case will typically go to trail.
Once appointed, a conservator assumes financial management for the conservatee and generally receives compensation for performing these duties. This compensation is overseen by the court and is paid from the assets of the incompetent individual. The conservator will be also be responsible to account for all expenditures, and for the assets of the estate, typically on an annual basis or more frequently if ordered by the court.
If the legally incapacitated person is capable of participating in financial decisions, the conservator is ordinarily required to permit the legally incapacitated person to participate to the extent he or she is able. In some circumstances, a court may appoint a conservator to perform a certain set of tasks which are beyond the ability of the legally incapacitated person, while permitting that person to manage his or her own affairs for other financial tasks which remain within his or her ability.
CHECKS AND BALANCES:
The court supervises the conservator's actions by requiring that permission be obtained in advance of certain major transactions (i.e. home sales, withdrawal of retirement investments, etc), and through annual accountings, in order to ensure that the legally incapacitated person's assets are being properly managed, bills are being paid, nobody is misappropriating funds, and the estate is not being wasted.
ENDING:
A conservatorship can be terminated by the court which created it. This ordinarily happens if the legally incapacitated person recovers from the incapacity that necessitated the conservatorship. A particular conservator's role may be terminated by the court or by resignation, in which case the court will ordinarily appoint a successor conservator to take over management of the legally incapacitated person's assets. A conservatorship also ends upon the death of the legally incapacitated person.
HOW TO PREVENT THEM - OR AT LEAST CHOOSE YOUR CONSERVATOR IN ADVANCE:
Through proper estate planning, a general or springing durable power of attorney will allow you to appoint someone you trust (as well as some alternates) to manage your financial affairs in the event of your incapacity or incompetency. These powers may be broad or limited in scope. For example, you may name one person to manage all of your personal financial affairs and another person to manage business affairs on your behalf if the need arises. You may also leave some powers to be controlled by a court for additional protection if you so desire. With a properly executed power of attorney with nominated agents and conservators, those persons nominated by you may not have to seek appointment by the court in the event of your incapacity or incompetency.
Additionally, when assets are placed in a living trust, the sucessor trustee also has power to manage your affairs in the event of incapacity, for which a will alone does not provide.
Disclaimer:The information provided is for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to your particular issue or problem. Use of this information or any related information does not create an attorney-client relationship between Amy Alvis and/or Living Trusts by Amy. The opinions expressed at or through this site are the opinions of the individual authors and does not reflect the opinions of any firm or attorney.
A conservatorship is when someone is legally appointed to be responsible for the financial affairs of another person who has been legally deemed to be unable to manage their financial affairs for him or herself. (Also known as guardianship of the “estate” – typically as it may relate to minor children vs. guardianship of the “person”)
WHY/WHO:
In many situations, a person may still be physically or mental able to care for themselves on a day to day basis, yet due to decreasing health, disability, judgment, etc, they may need help managing their finances. Examples may include, but are not limited to:
Persons with physical or mental condtions that prevent them from managing their own
financial affairs;
Persons who have legal authority to take over responsibility for them; and
When other forms of help with financial management will not adequately protect them.
HOW:
A conservator is typically appointed through probate court proceedings. A petition must be filed with the probate court by anyone who has a concern for an individual's financial well-being.
The petitioner has a buden to prove the individual is unable to manage their financial affairs on their own supported by medical and/or other sworn statements with any other supporting evidence. There is generally a court hearing, and if there is a contest by the allegedly incompetent individual and/or as to who hould be appointed as the conservator, the case will typically go to trail.
Once appointed, a conservator assumes financial management for the conservatee and generally receives compensation for performing these duties. This compensation is overseen by the court and is paid from the assets of the incompetent individual. The conservator will be also be responsible to account for all expenditures, and for the assets of the estate, typically on an annual basis or more frequently if ordered by the court.
If the legally incapacitated person is capable of participating in financial decisions, the conservator is ordinarily required to permit the legally incapacitated person to participate to the extent he or she is able. In some circumstances, a court may appoint a conservator to perform a certain set of tasks which are beyond the ability of the legally incapacitated person, while permitting that person to manage his or her own affairs for other financial tasks which remain within his or her ability.
CHECKS AND BALANCES:
The court supervises the conservator's actions by requiring that permission be obtained in advance of certain major transactions (i.e. home sales, withdrawal of retirement investments, etc), and through annual accountings, in order to ensure that the legally incapacitated person's assets are being properly managed, bills are being paid, nobody is misappropriating funds, and the estate is not being wasted.
ENDING:
A conservatorship can be terminated by the court which created it. This ordinarily happens if the legally incapacitated person recovers from the incapacity that necessitated the conservatorship. A particular conservator's role may be terminated by the court or by resignation, in which case the court will ordinarily appoint a successor conservator to take over management of the legally incapacitated person's assets. A conservatorship also ends upon the death of the legally incapacitated person.
HOW TO PREVENT THEM - OR AT LEAST CHOOSE YOUR CONSERVATOR IN ADVANCE:
Through proper estate planning, a general or springing durable power of attorney will allow you to appoint someone you trust (as well as some alternates) to manage your financial affairs in the event of your incapacity or incompetency. These powers may be broad or limited in scope. For example, you may name one person to manage all of your personal financial affairs and another person to manage business affairs on your behalf if the need arises. You may also leave some powers to be controlled by a court for additional protection if you so desire. With a properly executed power of attorney with nominated agents and conservators, those persons nominated by you may not have to seek appointment by the court in the event of your incapacity or incompetency.
Additionally, when assets are placed in a living trust, the sucessor trustee also has power to manage your affairs in the event of incapacity, for which a will alone does not provide.
Disclaimer:The information provided is for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to your particular issue or problem. Use of this information or any related information does not create an attorney-client relationship between Amy Alvis and/or Living Trusts by Amy. The opinions expressed at or through this site are the opinions of the individual authors and does not reflect the opinions of any firm or attorney.
Friday, August 14, 2009
Fraudulent Transfers - BEWARE
Did you know that when someone tries to do something to remove an asset to avoid creditors after a lawsuit has been filed, is is most likely a "fraudulent conveyance". If has been recommended that individuals in high risk professions must keep some assets available to creditors so that the courts don't look to seize assets that may have been transferred to relatives or into protected entities (S Corps, LLC, Irrevocable Trusts, etc.)
If you tried to establish and irrevocable trust as a way to protect family assets from future lawsuits, make sure you discuss the laws against defrauding creditors (present and future) that may be relevant to any asset transfers into said trust as a way to keep those assets out of the reach of creditors.
In essence, a fraudulent conveyance requires that someone transfer an asset with the INTENTION of hindering, delaying or defrauding creditors.
Disclaimer: The information provided is for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to your particular issue or problem. Use of this information or any related information does not create an attorney-client relationship between Amy Alvis and/or Living Trusts by Amy. The opinions expressed at or through this site are the opinions of the individual authors and does not reflect the opinions of any firm or attorney.
If you tried to establish and irrevocable trust as a way to protect family assets from future lawsuits, make sure you discuss the laws against defrauding creditors (present and future) that may be relevant to any asset transfers into said trust as a way to keep those assets out of the reach of creditors.
In essence, a fraudulent conveyance requires that someone transfer an asset with the INTENTION of hindering, delaying or defrauding creditors.
Disclaimer: The information provided is for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to your particular issue or problem. Use of this information or any related information does not create an attorney-client relationship between Amy Alvis and/or Living Trusts by Amy. The opinions expressed at or through this site are the opinions of the individual authors and does not reflect the opinions of any firm or attorney.
Friday, August 7, 2009
Friday, March 6, 2009
HELP FOR FAMILIES WITH NON MEDICAL SUPPORT
FAMILY
You call your sister to find out how she is doing
You find out her mother-in-law fell the other night
Your sister is very concerned and upset
Her mother-in-law lives an hour from her
She tells you she will be having surgery tomorrow
She will need some time in a rehabilitation facility after the surgery
If you recall her mother-in-law lives by herself
You start thinking about many things…
How do I help my sister?
She has to work, so does her husband
She has three kids, how will they get to school each day?
You know Johnny plays baseball, Julie swims everyday and Tommy just made the lacrosse team; how will she get them there?
Who will watch the kids when they get home if your sister isn’t home?
You know her husband is always traveling for work
Will she be able to manage meals for the kids and what about homework?
You want to help but you live 45 minutes from your sister and you have 2 kids of your own
There is help
A GOLDENHAND
WE HELP YOU MANAGE LIFE WHEN CRISIS STRIKES
Call us
We understand these issues because we’ve been there.
Richard Wexler
President and CEO
A GoldenHand LLC
16 Crow Canyon Ct. Suite 110
San Ramon, Ca. 94583
Ph: 925-820-1190 ext 111
Fax: 925-820-1390
Toll Free: 877-465-4265
rwexler@agoldenhand.com
www.agoldenhand.com
You call your sister to find out how she is doing
You find out her mother-in-law fell the other night
Your sister is very concerned and upset
Her mother-in-law lives an hour from her
She tells you she will be having surgery tomorrow
She will need some time in a rehabilitation facility after the surgery
If you recall her mother-in-law lives by herself
You start thinking about many things…
How do I help my sister?
She has to work, so does her husband
She has three kids, how will they get to school each day?
You know Johnny plays baseball, Julie swims everyday and Tommy just made the lacrosse team; how will she get them there?
Who will watch the kids when they get home if your sister isn’t home?
You know her husband is always traveling for work
Will she be able to manage meals for the kids and what about homework?
You want to help but you live 45 minutes from your sister and you have 2 kids of your own
There is help
A GOLDENHAND
WE HELP YOU MANAGE LIFE WHEN CRISIS STRIKES
Call us
We understand these issues because we’ve been there.
Richard Wexler
President and CEO
A GoldenHand LLC
16 Crow Canyon Ct. Suite 110
San Ramon, Ca. 94583
Ph: 925-820-1190 ext 111
Fax: 925-820-1390
Toll Free: 877-465-4265
rwexler@agoldenhand.com
www.agoldenhand.com
Tuesday, February 17, 2009
Have You Unintentionally Disinherited Your Kids?
Jim formed a close friendship with his widowed neighbor after the death of his wife of 38 years as a way to cope with his loss. After time, this friendship grew and soon after, they were married. Unfortunately, a few years later, Jim died and because he had moved all of his assets into joint tenancy with his new wife, all his assets went directly to his new wife, completly disinheriting his children.
How have you planned your estate? If you have everything left to your spouse, what will happen if you die first. Even if he or she doesn't remarry, as in Jim's case, will he or she be able to manage their assets on their own? Have your planned for the potential for incapacity? With the number of blended families these days, the problem of how to provide for your spouse without disinheriting your children (especially those from a previous marriage) is huge.
So how can we solve these problems? A trust can provide for your surviving spouse while he or she is living, then upon your spouse's death, the remaining assets will go to your children. Depending on the size of your estate, some assets could be segregated out specifically for your children and/or grandchildren. A trust will give you added assurance - it can protect your children's inheritances.
Each family is unique, which is why it takes careful planning with an experienced attorney who can look at various factors and options for your specific needs. CALL LIVING TRUSTS BY AMY 925-301-7195 TODAY to schedule your free consultation.
Disclaimer: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.
How have you planned your estate? If you have everything left to your spouse, what will happen if you die first. Even if he or she doesn't remarry, as in Jim's case, will he or she be able to manage their assets on their own? Have your planned for the potential for incapacity? With the number of blended families these days, the problem of how to provide for your spouse without disinheriting your children (especially those from a previous marriage) is huge.
So how can we solve these problems? A trust can provide for your surviving spouse while he or she is living, then upon your spouse's death, the remaining assets will go to your children. Depending on the size of your estate, some assets could be segregated out specifically for your children and/or grandchildren. A trust will give you added assurance - it can protect your children's inheritances.
Each family is unique, which is why it takes careful planning with an experienced attorney who can look at various factors and options for your specific needs. CALL LIVING TRUSTS BY AMY 925-301-7195 TODAY to schedule your free consultation.
Disclaimer: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.
Wednesday, February 11, 2009
Living Trusts by Amy
Did you know that over 50% of adults have not prepared for their death with a will or trust? Did you know that 100% of adults will die? The problem is that we don't have a crystal ball to tell us when that will happen. So ask yourself, what would today look like for your family, if you had died yesterday? Are they properly taken care of? What will happen to your assets? Will your family have to struggle with the time and expense of probate? Will there be an estate tax bill left for your heirs to resolve? What will happen to your children? Worse yet, what if you and your spouse both die and you leave minor children behind, who will take care of them?
If you answered, "I don't know" to any one of these questions, then you MUST start figuring out the answers to these, and many other questions. That is where I can help. By sitting down and discussing what is important to you and your family, I can help you identify your estate planning needs and start you on your way to PRESERVING YOUR ASSETS and PROTECTING YOUR FAMILY.
Disclaimer: Information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.
So give me a call at 925-301-7195 to schedule your FREE CONSULTATION TODAY! There is no obligation and my goal for my clients is to "SECURE PEACE OF MIND, ONE TRUST AT A TIME".
FOR MORE INFORMATION OF SERVICES PROVIDED BY LIVING TRUST BY AMY VISIT ME AT http://www.livingtrustsbyamy.com/
If you answered, "I don't know" to any one of these questions, then you MUST start figuring out the answers to these, and many other questions. That is where I can help. By sitting down and discussing what is important to you and your family, I can help you identify your estate planning needs and start you on your way to PRESERVING YOUR ASSETS and PROTECTING YOUR FAMILY.
Disclaimer: Information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.
So give me a call at 925-301-7195 to schedule your FREE CONSULTATION TODAY! There is no obligation and my goal for my clients is to "SECURE PEACE OF MIND, ONE TRUST AT A TIME".
FOR MORE INFORMATION OF SERVICES PROVIDED BY LIVING TRUST BY AMY VISIT ME AT http://www.livingtrustsbyamy.com/
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