WILLS & TRUSTS & POWERS.... OH MY!

Choosing Trustees for Irrevocable Trust

2011-11-17T10:48:00.000-08:00

Irrevocable trusts are created in two ways:

1. A revocable trust becomes irrevocable after the grantor has died.

2. An irrevocable trust is established while the grantor is living to save estate taxes (by removing assets from the grantor's estate) and/or for asset protection or Medicaid planning.

While a grantor may technically be allowed to serve as the trustee of an irrevocable trust he/she creates, it is not a good idea at best. That is because if the grantor has any discretion with trust asset distributions, it could lead to inclusion of the trust assets in his estate for tax, Medicaid and other purposes, which could frustrate the trust's objectives.

Often there is someone the grantor knows who the grantor suggests to be the trustee. Typical choices are the grantor's spouse, sibling, child, or friend. Any of these may be an acceptable choice from a legal perspective, but may be a poor choice for other reasons. Client trustee appointments will frequently be made with little consideration of the qualifications the trustee should have. Likewise, those who agree to be trustees typically have no idea what they are getting into. Non-professional trustees often are overworked, underpaid, unappreciated, find they are dealing with unhappy and unappreciative beneficiaries, and may even wind up being sued by the beneficiaries.

Non-Tax Considerations for Selecting a Trustee

· Judgment: Clients typically want their trustee to make the same decisions they would. Someone who shares the grantor's values, virtues, spending habits and faith is more likely to do this. Also, consider whether the trustee candidate will be aware of his own capabilities and weaknesses. If the trustee candidate does not have accounting or investment experience, would he/she have the judgment to admit this and engage an appropriate qualified professional?

· Availability/Location: Does this trustee candidate have the time required to be a trustee? Will he/she be available when needed or will work and/or family demands leave too little time for trust responsibilities? Where does the candidate live? If the trustee lives in a place different than the trust situs, different laws may apply. Is living near the beneficiary important?

· Longevity: How long will the trustee be needed? Many grantors are most comfortable with friends who share their values and have gained wisdom from life experiences, but someone near the grantor's age may not live long enough to fulfill the job. A trust established for the grantor's child will likely need a trustee for many years to come. Thus, for trusts that may last a long time, a corporate trustee is often the preferred choice.

· Impartiality: The trustee must be capable of being impartial among the beneficiaries. This is especially difficult to do if the trustee is one of several beneficiaries. Corporate trustees, because they can be impartial, are often chosen to prevent a sibling or relative from being placed in an uncomfortable (and often unfair) position.

· Interpersonal Skills: The trustee needs to be able to communicate well and effectively to the beneficiaries and to professionals who may be involved with the trust. Some people may be good record keepers or investors, but lousy at diplomacy or feel intimidated or even be offended if a beneficiary gets an attorney. A good trustee will need to be able to work calmly and well with all involved.

· Attention to Detail: Does the trustee understand the serious duties that come with the job and is he/she willing to be accountable for his/her actions? Fiduciaries are often thought by the beneficiaries to be guilty until proven innocent. While it may not happen, the trustee should assume he/she will be sued at some point and keep meticulous records as a ready defense. A trustee who expects to be sued will be much better prepared than one who doesn't think it will happen and, as a result, does not take the record keeping requirement seriously.

· Investment Experience: While it is helpful to have investment experience, the trustee can certainly get by without it, as long as he/she recognizes this is an area for which to secure professional help. Also, if the trustee lives in a place different than the trust situs, different investment laws may apply, making it especially prudent or even essential to seek professional assistance.

· Fees: The non-professional trustee rarely discusses fees with the beneficiaries. Often, family members and friends will not charge a fee for their services out of a sense of family duty or respect for the grantor. But trustees should be paid and, more often than not, an unpaid trustee will eventually come to that conclusion or fail to diligently carry out his duties. From the outset, a trustee should keep close track of time and expenses so that a reasonable fee can be substantiated. Generally, a reasonable fee is what a corporate trustee would charge, so thinking that a non-corporate trustee will do the same necessary work for less is false economy.

· Insurance: Anyone serving as a trustee needs to have plenty of insurance (errors and omissions or liability). Some of the laws that govern trustees are absolute standards, so a trustee needs to have adequate insurance for protection in the event of a mistake or an innocent error. The amount of insurance needed can depend on the degree to which a trustee is indemnified. However, legal defense costs in trustee litigation can be very large and are typically borne by the insurer.

· Indemnification: This often comes up when family members or friends are serving as trustee. Grantors want to indemnify family members and their friends; they do not want them to be sued. It is possible to reduce or eliminate the prudent investor rule for such trustees. However, indemnification is a two-edged sword because it may result in the non-professional trustee not taking the job seriously.

Tax Considerations

· Estate Tax: If a purpose of the trust is to remove assets from the grantor's estate, the grantor cannot have any role in determining who gets distributions or when they occur. However, the grantor can have the power to remove and replace the trustee or to control the investments of the trust. Neither of those will cause estate tax inclusion providing the grantor cannot appoint a trustee who is related or subordinate to the grantor (as would be a brother, employee or someone else who will capitulate to the grantor's wishes). Interestingly, there is no problem appointing, at the inception of the trust, an initial or successor trustee who is related or subordinate to the grantor.

· Income Tax: A non-adverse trustee having certain powers may trigger grantor trust rules and cause the grantor to be taxed on the trust's income. In some instances the client may not want the tax to come back to the grantor and instead want a trust that is a separate tax-paying entity for which the income that is distributed to the beneficiaries is to be taxed to the beneficiaries. Because the trustee’s identity may affect state income tax as well, you may be able to shift the trust situs to a state with a lower income tax rate. Depending on the trust assets, this could be important as some investments (such as oil and gas) may be taxed significantly higher in some states than in others.

Beneficiary Removal and Replacement of Trustee

This is an area that is customizable for each trust and can help maintain some downstream flexibility. Some grantors may not want the beneficiaries to be able to remove the trustee, especially if the grantor is aware of family quarreling. But if the corporate or individual trustee knows it cannot be replaced there is little need for responsiveness or careful attention to investments. Because there does need to be a way to have the trustee removed if things should deteriorate, the document can include that the trustee can only be removed for cause as determined by the court. On the other end, spendthrifts may want to "trustee shop" until they find one that will do whatever they want, so there will need to be some restraints on when a trustee can be replaced.

Team Approach

There are times when a team can do a better job than a single trustee. Having more than one trustee, even with different duties and responsibilities, can work well for many situations. The trust can benefit from assigning the trustees specific duties based on their strengths and experience. Of course, the fewer people who are involved, the less complicated the administration. Also, disagreements will have to be worked out. If there are two trustees or any even number, deadlocks are possible. With an odd number, a simple majority would be needed. If an agreement cannot be reached, the court can be allowed to intervene as a last resort.

Also, family member trustees can work with professionals as paid advisors instead of as trustees. This would allow the advisors to provide valuable input and insight into both the grantor's desires and the personalities of the beneficiaries, without being so exposed to possible lawsuits.

Conclusion

A competent trustee is as important to the success of a trust as its being well-drafted. Naming a favorite family member as trustee may not be the smartest (or kindest) thing the grantor can do. As experienced professionals who have seen the consequences of unwise choices for trustee, we must counsel our clients with their and their beneficiaries' best interests in mind.

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.

This information on this site is designed to provide a general overview with regard to the subject matter covered and may not be state specific. The authors, publisher and host are not providing legal, accounting, tax or other specific advice to your situation.

The Holidays are Approaching: What are your Estate Planning Resolutions?

2011-11-14T08:32:00.000-08:00

Maybe you’ve been thinking about getting your affairs in order for a while or maybe you’re just starting to look into it. Perhaps you recently experienced a milestone event such as a new marriage, home purchase, or child birth, and are realizing you want to protect what is dearest to you. Or perhaps you recently lost a loved one and are feeling some perspective. In any case, procrastination should not get in the way of securing your family’s future by creating an estate plan.

Make this holiday season the time you resolve to do something!

1. If you have young children it is imperative that you have a will in place that provides them with suitable guardians should a worst case scenario come to pass. You might also want to set up a trust for them to handle any assets you would want to support them and so that you can control how their inheritance is managed even after they turn 18. Parents: don’t let another day go by without having a solid backup plan for your children’s future!

2. If you have an older estate plan but have since gotten married, divorced, or had a child, you should revisit your plan with an estate planning attorney. A new marriage or birth of a child may make your old plan invalid and subject to contest. Additionally, the old any previously existing wills and a new addition to your family is not necessarily covered under an old plan.

3. If you have a loved one who is getting on in years and may one day be a candidate for assisted living, don’t wait to act until your options are limited. Medicaid has a five-year look back period on asset transfers. The best time to plan for the high cost of elder services is well before they are actually needed. This year, make the elders in your life a priority!

4. If you have lost a spouse during this past year, having an attorney review your estate plan and ensure that the trust administration procedures have been properly followed is very important.

The upcoming Holidays and New Year is a great time to think about the people who are important in your life. Contact Amy Alvis at Alvis Frantz and Associates today to discuss how you can best provide for them

though many new years.

The information provided is for informational purposes only and not for the purpose of providing

legal advice. You should contact an attorney to obtain advice with respect to your particular issue

or problem.

(925) 516-1617
WWW.ALVISFRANTZLAW.COM

WHAT DOES YOUR TITLE SAY ABOUT YOU?

2011-08-02T10:20:00.000-07:00

Question: My husband and I hold title to our home as husband and wife as community property. Does that mean if he dies, I will automatically own that property?

Answer: The answer is not always an absolute “yes” to this question.

There are various ways people can hold title to assets. Often, how people hold title on their property, such as real estate and bank accounts, may be the only estate planning they have done. Unfortunately, it may NOT always be what their estate planning wishes are. Additionally, if people have done a trust and/or a will, how they hold title to some of their assets may completely conflict and sometime even override what their trust or will provides.

For example, let’s say you and your husband bought your home last year and took title as “husband and wife, as community property”. It was your mutual intent that when one of you dies, the other will own the home 100% and without any court involvement. Now, if you and your husband have no will or trust or if your will or trust provides that all your community property shall pass to the surviving spouse, then the answer to the question would be “yes”.

But now let’s say your husband has a will which provides that upon his death, all of his estate (this includes his separate property and his 50% interest in the community property) is to be shared equally between you and his two children from his first marriage. In this scenario, when your husband dies, you would NOT inherit his entire share of the home, but would have to split it (along with the rest of his estate) with his two children. The reason is that in 2001, California adopted a new form of title “community property with right of survivorship”. This is different than the form of title “community property”. When someone holds title as “community property” it provides a person the ability to bequeath their ownership interest in their community property assets to someone other than a surviving spouse through wills or trust. When you hold title as “community property with right of survivorship”, you cannot. The surviving spouse becomes the sole surviving owner of all community property under this form of title, regardless of what wills or trusts may provide. This is similar to joint tenancy where the surviving joint tenant becomes sole owner upon death.

So what does the form of title say about you and your estate plan? To find out more and call 925-516-1617 to schedule a consultation at ALVIS FRANTZ AND ASSOCIATES, where your legal challenges just got easier!

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.

When a spouse dies

2011-07-19T07:06:00.000-07:00

So today I have to go to court for a hearing to appoint my client as administrator of his wife's estate. Why? Because they had no plannin other than joint tenancy and the wife had received a large inheritance before death that was never deposited into thei joint account. This was therefore her separate property and therefore does not just pass outright to her husband. Now we need to open a probate and the money will be shared by husband and their two kids.

What are you waiting for?

2011-06-17T09:53:00.000-07:00

When I meet with a client for the first times, one of the very first questions I ask them is why they wanted to meet with me and why are they coming in for estate planning now. I constantly hear people tell me they have been putting it off and putting it off and putting it off. But what is it that finally brings them in. It's typically one of four reasons:

• Travel.
• Hospitalization or terminal medical diagnosis
• Change in family status (marriage, divorce, death, birth of a child)
Many of the reasons that cause people to stop procrastinating and get things in order is when they are forced to face their own mortality. For many, once we begin to come to terms with the inevitable, we begin taking those steps to prepare and protect our loved ones.

Without some "push" we can easily find an excuse to put this on the "to do" list but never get it done. Here are some common excuses:

I/We don't have time
I/We can't get all the paperwork together
I/We don't have the money
I/We need help from a family member and that person is just too busy
I/We don't have much and therefore don't need anything
Don't know anyone who I would want to have raise my kids if something happens to us
Don't have the money, and for many superstitious people....
If we do it (write a will, buy life insurance, etc.) something bad will happen to us

What I always find though is that once people do get it done, they always feel so much more secure and confident. The answer to many of these questions lies in one of a few answers....

Time: It may take a few hours now, but it will take your loved one years later if you don't
A small investment now will same your estates tens of thousands later
Everyone need some planning - unless you want someone else to make your decisions for you.... like the State and a Judge.
If you don't pick someone to raise your children if you can't, the State and a Judge will decide for you.
If you do it or don't do it.... we are all going to die someday. Being prepared will only make it easier for your loved ones to grieve since there will be a lot less hassle.

If you can't focus on estate planning right now, set a timeline. Don't wait until you are rushed, scarred or after it's too late. Create a savings plan for it if money is your issue (don't skimp though... you get what you pay for). The next time something gives you that big "push", jump on it, call us, I am sure you will feel so much better when it's done.

2011-06-16T10:30:00.001-07:00

It's always a good feeling when a big probate matter finally finishes

4 Tips to Reduce the Potential for Will and Trust Disputes:

2011-04-22T12:07:00.000-07:00

Advise your beneficiaries of your distribution plans, especially when children are being treated unequally. Will contests and litigation arise from disappointed feelings of entitlement. Telling the children ahead of time what their shares will be may avoid a later dispute. (Although it could cause family problems now though so be careful. Sometime writing a “family love letter” to your children to be read after your death, explaining why you set up the distribution plan the way you did may help as well. This will vary from family to family.

Use a Trust - not just a Will. Since trusts can be funded and operate during lifetime, it is difficult to contest on the grounds that the individual was unaware of its terms. When the Trustor of the trust dies, there is no need to begin a court proceeding to "prove" the validity of the trust, like there is for a will.

Use Disinheritance Or No Contest Clause. The goal here is to prevent beneficiaries from causing a legal dispute after someone dies. A lot of trust and estate litigation is not about the validity of the document, but about how it is to be interpreted or how it is being managed. In order to reduce this type of litigation, a disinheritance clause can cause a forfeiture of a beneficiary's interest if such a challenge is made. The entire estate plan must be consistent with this clause.

Use Mediation or Arbitration Provisions in your plan. Arbitration or mediation cannot be used with respect to the challenge of a document's validity unless the parties agree to it. Using a disinheritance clause to cause forfeiture if the parties will not participate can be used. This could stop claims that are filed only to harass other beneficiaries or to delay distributions to others. Another approach would be having the parties enter into a contract agreeing to arbitration before the transfer.

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 ALVIS FRANTZ AND ASSOCIATES. 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.

DIY Trusts and Wills - Why they are not the best option

2011-04-19T12:07:00.000-07:00

One of the risks inherent in opting for a do-it-yourself estate plan is that, without the help of an experienced attorney, you can’t spot any missing pieces of the puzzle.

One such puzzle piece is what is called the residuary clause, which is an extremely important part of any will or trust and may be missing in a do it yourself estate plan. A residuary clause gives instructions as to what should happen to property that is not specifically left to someone in other clauses of your will or trust.

For example, if your will or trust states that your home, furniture and cars will go to your spouse, and that your jewelry will go to your daughter, but there is no specific mention as to who will get your boat, your holdhold items, your collectibles and even a bank account, then your residuary clause will control what happens to that property.

In addition, the residuary clause will control what happens to property that you leave to someone but that person dies before you and before you update your will or trust. For instance, if you left your art collection to your niece but she dies before you, then your residuary clause would control who would ultimately inherit the property.

So what happens if you don't have a residuary clause? Any property not left to a specific person or charity would have to be probated and then divided among your heirs at law in the manner provided by the Probate Code of California. The drawbacks to this obviously is the time and expense added to the probate process, and of course, the fact that you and the state of California might not have the same ideas about who should ultimately receive your property.

Working with an experienced estate planning attorney can help ensure that your property makes its way into the hands of its intended recipients. Call us at 925-516-1617 to see if you are property protected.

Unmarried Couples – What they need to know to protect themselves and their estates:

2011-03-01T15:36:00.000-08:00

There are many unique issues facing unmarried couples. Just because two people chose not to marry, or may not have the legal right to marry, does not mean they are without options to protect each other with their estate planning.

As California does not recognize common law marriage nor same sex marriages, these couples do not have the same protections as legally married couples. Their partner is not considered a “next of kin” when it comes to health care, they are not a legal “heir” under the probate code, and there could be issues regarding child custody rights. Therefore, it is very important for couples to understand what their legal status as a couple is and what legal implications that may have on them.

One way cohabitating couples can protect themselves is through agreements such as Domestic Partnership or Cohabitation Agreements which act like a Prenuptial Agreement (but without the “nuptial” part). These documents clarify ownership of co-owned property, use of property, handling of debts, etc. Additionally, Wills, Trusts, Powers of Attorney, and Advance Directives are other extremely important estate planning documents that will allow couples to name who will manage their financial affairs and health care when they are no longer able to, and how their estate will be distributed after death. Children bring up a whole set of other issues, since custody and parenting rights can’t be contracted. As a result, nominations of guardianship in Wills are incredibly important.

Remember, estate plans aren’t for you; they’re for the people who depend on you. So if the law doesn’t provide you protection for each other, you need to create it through agreements and estate planning documents.

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.

A Gift Isn't Always A Gift

2011-01-26T11:56:00.000-08:00

If you as a parent give a substantial amount of money to one of your children, it is important for the parents to decide how they want to treat that money. First, if you decide it is a loan, it is important to have a proper promissory note drawn up and terms of payment. It is also important to determine what will happen if the loan is not repaid. For example, do you want the loan to be forgiven if you die, or should the unpaid balance be deducted from that child's inheritance.

But what if you decide to treat the amount as a gift. If you have more than one child, it is very important to understand and document how you want to address this gift. If the other siblings discover a gift was made to one of them but not all of them, it could create some resentment or fighting after both of the parents have passed away.

When making a gift to a child, you need to decide if this is an outright gift with no bearing on future inheritance, or rather, do you want the gift to be considered an "advance" of future inheritance. In this case, the gifted amount would be deducted from that child's share of their inheritance at the time they are to receive their inheritance.

So in simple terms, if you chose to treat the amount given as a "gift", you will need to do one of the following (depending on your wishes):
1) Intend to provide disproportionate amounts to your children through gift and inheritance
2) Gift equalizing amounts to all siblings (be sure to understand any tax implication of your gifting)
3) Consider the gift an advance on inheritance.

Whichever option you choose, you should be sure to document, document, document - either with an update to your will and/or trust, in other writing, or through documented action. If you don't, there will most likely be a a great deal of fighting and frustration among your children after you have passed away.

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. 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.

Happy New Year! Happy New Tax Law?

2011-01-03T15:50:00.001-08:00

Well, the year of waiting to find out what would become of the Estate Tax is finally answered, or is it? A better statement would be that the answer will be temporarily postponed for another two years but in the meantime… here’s a tax law to hold you over and to even cause you additional planning questions.

Last year was there was no federal estate tax law in effect. Now, the new tax law (effective 1.1.11) provides two options to the surviving heirs of individuals who died last year. They can either follow the 2010 rules – no federal estate tax, or follow the new 2011 tax rules which provide individuals with a $5 Million dollar exemption.

If you chose the new 2011 rules you can pay estate tax (35%) of a taxable estate over the $5 million exemption and your heirs get a “stepped up basis” of all such inherited property. “Stepped up” means that the cost basis of any property you inherit is determined by the value of that property at the date of death of the previous owner. This is important for capital gains tax savings when the property is later sold.

Alternatively, if chose to follow the 2010 tax rules, you will not pay any estate tax regardless of the size of your estate and the estate will be subject to a modified “carryover basis” rules. When you inherit property under this option, the cost basis of the property stays the same as it was for the previous owner. (Typically the price they paid plus capital improvements). When you sell the inherited property, your capital gains tax will be based on the older and typically lower cost basis.

The carryover however, is modified in that an heir can still step up the first $1.3 million of an inheritance, and a surviving spouse can take another $3 million. Anything in excess of these amounts would be fully carried over at the original cost basis.

So for anyone administering a large estate for a 2010 death, many options are available and careful consideration needs to be made with your tax advisor to determine which tax rules will be more beneficial to your estate. And the lingering question, what will happen if you die in 2013 when we may potentially be facing another period of uncertainty

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.

If I set up a living trust, does this guarantee that my estate will not have to go through a probate?

2010-11-24T10:01:00.001-08:00

Unfortunately, despite what most people believe, the answer to this question is not always “No”. Yes, a properly drafted living trust is very effective at avoiding probate of your estate at death; however, there are several situations which can arise which will require some, or maybe even all, of your assets to still have to go through probate. In fact, many of the probate cases I handle for my clients are for one or two assets that were just not in the decedent’s living trust.

One primary reason for this is that when people create their living trust, especially when they try one of the “do it yourself” methods, they fail to properly “fund” the trust. What this means is that they do not re-title all of their assets like real estate, bank accounts, and brokerage accounts into their living trust.

Another reason for this is that people simply fail to review their trusts and assets on a regular basis to ensure that they are still funded in their trust. For example, it is extremely common that when you refinance your home, the lender will require you to pull the property out of your living trust to fund the loan. After escrow closes, people often forget to put the property back into their trust and then, when they pass away, they have a piece of real property out of their trust that requires a probate action to put it back in the trust.

Problems like this can be avoided by many easy steps. The most obvious and least expensive way to do this is to be sure all of your assets are funded in your trust and to have an annual trust review. Another important step really goes back to the formation of your estate plan and having the proper contingencies in place. This is in the drafting language in the living trust and all the supporting documentation to your living trust. With proper planning and evidence, there are ways to petition the court to transfer assets back into your living trust, even after your death, without a formal, lengthy, and expensive probate proceeding. To find out more about how you can ensure your living trust will avoid probate, call Amy Alvis at Alvis Frantz and Associates, A PC at (925) 516-1617.

HAVE A LEGA L QUEST ION YOU WANT TO SEE ANSWERED HERE?

Go to our website http://www.alvisfrantzlaw.com/ and “Contact Us”.

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. The opinions expressed are the opinions of the individual authors and does not reflect the opinions of any firm or attorney.

Have you had "the talk" with your PARENTS?

2010-09-02T10:17:00.000-07:00

Reading another blog reminded me how often I am talking with my clients about sharing their estate plan and their health care wishes with their children. But it is easy to overlook the fact that if your parents are still around, you may be the one to have to have that conversation with THEM, as they may not be as open to bringing it us with you.

Your homework for today is to make a date to have this conversation with them. Some of the things you need to find out is:

1. Do they have will, living trust, powers of attorney for financial matters, and health care directives? If the answer is "No" then you need to have them make an appointment with a attorney right away and get something in place" If the answer is "Yes", find out when the last time they have reviewed it and make sure it will still meet their objectives, and if they have a trust, if all of their property is still funded to the trust. If you are not sure, having a trust review by an attorney is a small but very wise investment.

2. If they have them, where are your parents estate plan documents? In the house? In a safe? If so, where the combination? Is it with their attorney? If so, find out who they are and if they still have your parent's documents or have they retired and sold them to another firm? Are they in a safe deposit box? If so - where's the key - is there a power of attorney on hand so that someone will have the ability to access the box to get to their documents?

3. Are you named as the manager of their estate if they become incapacitated? If so, are you okay with that role. If not, do you know who is so that you can contact that person and notify them if/when something happens.

4. Do you know what their health care and end of life wishes are. Having this discussion will alleviate a lot of guilt and uncertainty later.

5. Have they met with a tax planner to identify an estate tax or income tax needs they may have and if so, have they addressed those objectives with that planner.

Spending a bit of time going over these questions with your parents can help identify what needs to be done now to reduce the stress, anxiety and financial burdens of having to manage their estate later from the lack of proper planning and estate plan maintenance.

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.

LIVING TRUSTS AND ESTATE PLANNING: A MUST FOR EVERY BUSINESS OWNER

2010-09-01T17:23:00.000-07:00

Business owners survive many challenges and for family businesses, there are some unique challenges to protect and preserve your business… and your family. A living trust is an estate planning tool business owners can use to help their business continue to run after their death.
LIVING TRUSTS CAN:

• Avoid probate. Probate is the legal process where the court validates your will, sees that your debts are paid, and interprets your will to determine how and to whom your assets are distributed. The major problems with probate are that it is expensive, lengthy, public, and it places all the control in the hands of the probate courts.

Having a living trust will ensure that your estate will be settled quickly, privately, and inexpensively as it keeps your estate out of probate and allows you to maintain full control over the distribution of your assets and your business.
• Minimize or Eliminate Estate Taxes. A living trust can provide a means to reduce, or even eliminate estate taxes. With fewer tax burdens, there are fewer debts to satisfy and a better outlook for the continued health of the business as well as your families’ future.

• Create a Business Succession Plan. Establishing a system within your business will create a plan for someone to succeed you so that your business can continue to run smoothly without you. The death of a business owner causes a number of problems which can be addressed with proper planning, one of which is that the value of your business may be drastically reduce without you there to run the show unless you plan ahead. Ask yourself:

• Should the business remain in the family?

• Are there capable successors/owners?

• Should the business be sold? If so, to whom and at what price.

ESTATE PLANNING CAN:

• Minimize loss of business assets: What people may not consider is that often, assets from a business may have to be used to satisfy the personal debts of a business owner. When there are not enough personal assets to satisfy personal debts, the creditors/government will go after business assets to satisfy these debts. This may leave a business strapped or even insolvent. However, with proper estate planning, you can protect your business and allow it to continue and grow after you die.

• Plan for the financial needs of your estate. Take a look at your personal assets and debts. Can your family continue to survive based on your financial picture as it is today? If you do not have enough personal assets to cover your personal debts, start to put more money aside to cover those debts. Another option is to purchase life insurance. For many, life insurance can be a quick and less costly solution. Life insurance will provide you and your heirs with an immediate guarantee that when you die, the proceeds from the life insurance can be used to satisfy the personal debts, thereby, allowing your business to continue unharmed.

For many small business owners, it can be difficult to separate business and estate planning as they are each contingent on the other. With proper planning and advice, you can ensure that your family and your business will continue to survive when you are no longer there to hold the reins.

Have you had your trust check up lately?

2010-06-29T21:42:00.000-07:00

Please remember to review your trust each year. Make sure your home and your bank accounts are properly funded. Every probate I have handled this year are for families having to probate a parent's estate where there was a living trust but either the home, or a bank account was outside of the trust.

Haven't had a trust check up in a while, call Alvis Frantz and Associates and get your trust check up today. Call 925-516-1617!

CONSERVATORSHIPS - The result of not preparing.

2010-04-07T18:33:00.000-07:00

Client's mom & dad did their own trust. Dad is deceased and mom has alzheimers. Trust wasn't done right and there was no power of attorney. For son to get mom's property into her trust, he has to go to court to be appointed a conservator of mom's estate. Have your parents set up their estate plan properly? Call Amy Alvis at 516-1617 for an estate plan consult.

Pet Trusts are no joke. Have you protected your 4-Legged or Winged Friends?

2010-03-16T12:35:00.000-07:00

In January 2009, California finally enacted Probate Code 152121 which provides the ability to draft legally enforceable trusts to provide for the care of your pets after your death or incapacity.

Before the law was enacted, planning for pets was a bit tricky and had to be done using loopholes - essentially because a "pet" could not be a valid beneficiary of a will or trust. Courts will now enforce trust that provide for pets and will even allow evidence supporting the intent of the trust or will maker in enforcing these pet trusts. Basically, these new pet trust will be subject to all provision of the Probate Code that govern wills and trusts.

Pet trusts can be designed to ensure that they only benefit the pet(s) (and not the pet care taker) and to provide a reasonable compensation for the person you appoint to manage the pet trust (trustee). The trusts will also provide for a distribution of any unused funds after your pet dies. Furthermore, if there is not enough money left in the trust to care for your pet, the trust should be designed to allow for the trust to terminate.

If you are concerned about how you pet trust is managed, you can also name an "enforcer" of the trust. Depending on how much money you are setting aside, this may be an important planning concern. The other side of this though is that you may want to have your trust drafted to prevent or limit any third party inspections of your trust as is allowed under the new law. The law allows that any person interested in the welfare of your pet or even a charity whose main activity is the care of animals can seek court approval to be appointed as an "enforcer" of your pet trust. These enforcers may have powers that you do not want an outsider person or organization to have.

Finally, as is the case with all trusts, pet trusts must be reviewed every year or so to be certain that your wishes and objectives are still being met as laws and life are perpetually changing.

For more information on how to protect your pets with a pet trust, call 925-516-1617 or email info@alvisfrantzlaw.com to schedule a 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.

What happens to my Facebook, Email, Website when I die?

2010-02-18T16:25:00.000-08:00

When we think about estate planning, we immediately think about how our wills and trusts will protect our physical possessions, our home and our money. But what about your Facebook account, your email, your twitter accounts or even your web site? (For those Facebook addicts.... who will make sure your Farmville crops get harvested when you are no longer able to tend your farm?) But seriously, even if you are not hip with the latest social media, almost everyone has some forms of online account such as email, bill pay, maybe even a dating site membership. All of these accounts have user i.d.'s and passwords. Does anyone else know this information or at least where you store this information in the event that something happens to you?
It is not always easy for someone to just call up Yahoo and ask them to close out an email account. Many internet providers consider this information to be private and will not just send you the passwords without legal authority. Google mail requires a copy of a death certificate, copy of a power of attorney or birth certificate and an email sent front the account you are trying to close. With MySpace, the account dies with the person.

So what is the solution? Keep a file of all your log in information on a flash drive or stored on your computer somewhere but name the file something unique... not "passwords". Give a copy of this to a trusted individual, your agent, successor trustee, executor, family member, etc. When you add log in information or change passwords, be sure to update that file as well. If you prefer not to give this file to anyone else, keep it in a safe or safe deposit box, but be sure to let someone know it exists, and where to find it.

Having a Power of Attorney is a great tool as well, but most powers do not specifically provide for the power to access internet and/or email accounts. Therefore proper drafting is important. I have created a provision specifically for just such a situation for my clients.

There are also companies out there, such as Legacy Locker, which acts like a safe deposit box for your log-ins, account information, etc. They also provide personalized instructions to survivors as to how you want your online identity handled.

Websites are another issue you may have to consider. If you have a website, what happens to it when you die? You can actually leave your website to a beneficiary - especially if your website provides you passive income, this could be a valuable asset you will want to protect with your estate planning.

So as you can see, estate planning has a variety of new issues to consider when planning, so meeting with a trust and estate attorney who is current on the latest web based media will put your estate plan one step ahead of the rest.

When we think about estate planning, we immediately think about how our wills and trusts will protect our
So as you can see, estate planning has a variety of new issues to consider when planning, so meeting with a trust and estate attorney who is current on the lastest web based media will put your estate plan one step ahead of the rest.

For more information, call Amy Alvis, Esq. at Alvis Frantz and Associates A Professional Law Firm (925) 516-1617, email at info@alvisfrantzlaw.com

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.

Are you moving? Don't forget to pack your estate plan... or should you?

2010-01-20T06:12:00.000-08:00

One question people ask me when getting ready to set up their estate plan (trust(s), wills, powers of attorney, etc) is what happens if they move. It is really a good question.

States typically have different laws. Some states in the U.S. have adopted (either in its entirety or with some modifications) what is known as the "Uniform Probate Code" which basically means they all have the same laws with respect to wills, trusts, probates, etc. California is not one of them. But don't despair, this does not necessarily mean that if you move out of California (or have just moved to CA) you will have to start all over again with your estate plan documents.

A trust is esentially a contract, and contracts that are deemed valid in the state and at the time in which they were created, are enforceable in other states. So your trust for example, is still a valid document if you move out of the State. Wills are also treated the same. However, the real issue is that a trust is used to hold property by a trustee for the benefit of the beneficiaries.... so if you move, what property is the trust protecting now? If you no longer hold any assets in California, what you really need to do is to update your trust to ensure it holds all of your newly acquired assets and reflects the disposal of previously held assets.

It would also be advisable to check with an attorney in your new home state to see if any amendments are required to provide you with further protection in that state. For example, one state may have different STATE inheritance taxes than another and therefore added protections may need to be included in your trust.

Additionally, you may have named someone as a successor trustee/executor in your original trusts/wills and now they live 3000 miles away and the reality of it, is that it may no longer be a practical choice. In this case, amendments will need to be made to re-name a new successor trustee/executor.

Then there is the question of your Powers of Attorney both for your finances and for your health care. As mentioned above, the person you have previously named may logistically no longer be the best choice for your agent(s). For example, say your brother is named as your health care agent and lives back in California and you now live in Texas. You get in a terrible car accident and are in a coma and your leg is severly injured and may need to be amputated right away to save your life. Your brother can not get to you in time to be able to tell the doctors that, because you are a professional dancer and it is your passion above everything else in the world, you would rather risk your life than lose a leg, so with no agent available to act on your behalf, they chose to ampute.

And what about your children? In your will, you are able to name someone who will be their guardians if both parents die. If you really start to get settled in your new hometown, do you want your children to have to move to live with who had named as guardians? Maybe, maybe not. It is just one more thing to consider when you move and decide what part of your estate plan documents needs updating.

In many instances, a few simple updates are sufficient. Sometimes it may be easier (but yes, a bit more costly) to do what is called a "restated amendment" to your original trust. This is basically like starting from scratch but keeping the original name and date of your first trust so that all of your assets do not need to be retitled again.

For additional questions about what to do with your estate plan if you move, call Amy Alvis at the law offices of Alvis Frantz and Associates at 925-516-1617 or email us at info@alvisfrantzlaw.com

Now What.... Estate Tax in Limbo

2009-12-30T11:24:00.000-08:00

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.

THE FUTURE OF THE ESTATE TAX EXEMPTION

2009-10-23T08:22:00.000-07:00

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.

Mediation: What is it & what Is It good for?

2009-10-17T08:03:00.001-07:00

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:

Litigation
Arbritration
Direct negotional between two parties alone
Settlement conferences with attorneys
Special Masters
Private Adjudication
Self-help
Doing nothing.

Mediation is not theraphy or relationship coaching but here's what it provides:

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

Chosing Guardians

2009-09-20T17:04:00.000-07:00

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.

So what is "Estate Planning"?

2009-09-10T10:06:00.000-07:00

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.

I'll DO IT TOMORROW

2009-08-27T18:07:00.000-07:00

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.

Conservatorships...What, why, who, and how to prevent them

2009-08-19T09:03:00.000-07:00

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.

Fraudulent Transfers - BEWARE

2009-08-14T10:25:00.000-07:00

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.

Don't Leave Children Unequal Shares By Mistake - ElderLawAnswers Articles

2009-08-07T13:44:00.001-07:00

Don't Leave Children Unequal Shares By Mistake - ElderLawAnswers Articles

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HELP FOR FAMILIES WITH NON MEDICAL SUPPORT

2009-03-06T09:21:00.000-08:00

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

Have You Unintentionally Disinherited Your Kids?

2009-02-17T14:20:00.000-08:00

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.

Living Trusts by Amy

2009-02-11T11:38:00.000-08:00

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/