What is a Survivorship Life Insurance Policy?

There are many kinds of life insurance that can be used in an estate plan. One type, survivorship life insurance, covers two people on a single policy. Another name for survivorship life insurance is second-to-die joint life insurance. It pays out a death benefit once both policyholders have died. This article will examine the benefits of this type of policy and how survivorship life insurance works.

What triggers the payout?

  • This policy pays out only after both people have passed away.

Do you have to be a married couple to purchase survivorship life insurance?

  • No, although married couples are often the ones who do purchase this type of coverage, the joint policyholders are not required to be married.

 What are some of the situations where survivorship life insurance is typically used? 

  • High net worth household – after the second spouse dies, the benefit from this policy can be used to pay estate taxes so that the heirs do not have to worry about selling assets to pay the estate taxes.
  • Business succession – this policy can be used to transfer business ownership if both partners die.
  • Special needs child – This policy can be used to fund a trust to provide care for a special needs child.
  • Leaving a legacy –  The death benefit from the policy can help any beneficiary you select, which can include a charity.

 Is survivorship life insurance different from joint life insurance? 

  • First to die vs. second to die – Joint life insurance can refer two any policy that covers two people under one policy. There are two types of joint insurance, first to die and second to die (survivorship life insurance). So, survivorship life insurance is really a subset under the general umbrella of joint life where the trigger is the second death.
  • Different goals – The main goal of the first-to-die joint life insurance policy is to cover the surviving spouse to provide that person with enough funds to replace the lost income from the spouse that passed away. The second-to-die policy has a goal to provide heirs or a charity with the benefit rather than the spouse.

CONSULT THE LAW OFFICE OF DAVID KNECHT

There are many estate planning tools to choose from, so it is vital to create a customized plan that is right for your goals, assets and loved ones. If you want to get started on an estate plan, contact the Law Office of David Knecht. Call us at 707-451-4502. We have extensive experience in estate planning.

Filed Under: Estate Planning, Estates

What are the Main Steps of a California Divorce?

This article will provide an overview of the divorce process with a summary of the information provided by the California Courts.

Getting a divorce in California takes at least six months. There are four main steps to getting divorced and they are the same whether you are married or in a domestic partnership. If you want a legal separation, the steps are the same, but there isn’t a required six month waiting period.

Start the divorce case.

  • One spouse files the papers and lets the other person know that the case has been started by serving the papers on that person.
  • Then the other spouse has a chance to file a response.

Share financial information.

  • The party that filed the papers must share financial information and the other party must also, if they are participating in the divorce process.
  • The documents are shared with the other party and then you file a form so that the judge knows you met this requirement.

Make decisions.  

  • You will need to decide how to divide property and debts, whether spousal support will be paid, and how to care for and support children (if appliable).
  • You can work together with your spouse to come to an agreement on these issues or you can ask the court to decide.

 Finalize the divorce. 

  • This last step involves filing a set of final paperwork. The court will review the forms to make sure that nothing is missing and there are not mistakes and the judge will sign the final form.
  • Visit this site for more information about finalizing a California divorce.

CONSULT THE LAW OFFICE OF DAVID KNECHT

If you need help with a divorce, contact the Law Office of David Knecht. Call us at 707-451-4502. We have extensive experience in family law and can help you feel confident and comfortable navigating a California divorce.

Filed Under: Divorce Advice, Divorce Attorney, Divorce Lawyer, Divorce Planning

Five Ways Life Insurance Can Help With Estate Planning

When you pass your loved ones can face many expenses, which may include funeral expenses, debts that may reduce the assets for your heirs and final taxes, which can include back taxes and taxes for the year in which you die. Life insurance can help your loved ones cover these expenses, which can be very advantageous if the estate holds real estate or other assets that take time to be liquidated to cash. As reported by moneygeek.com, even though over 70% of Americans surveyed think life insurance is a necessity, only about half of Americans actually have some kind of life insurance. As with other types of estate planning, the statistics often show that there is more commitment to the idea that it needs to get done than to the effort to follow through, but in the case of life insurance, the work to get it is often fairly minimal, with some sites offering instant policies . This article will highlight some of the ways life insurance can be part of an estate plan.

  • Payment of Estate Taxes

Federal estate tax applies to the gross estate of the person who has died and must be paid within 9 months after the death of an owner. Proceeds of a life insurance policy can pay these taxes. Life insurance policies are generally not subject to income taxes.

  • Estate Equalization

A life insurance policy can help fill in the gap where there are assets that are not liquid but you want each child to get an equal share. For example, if one child received a farm or a home, where the child receiving that asset does not want to sell it or break it up, then the life insurance policy can help the other child or children get an equal share, where liquidating the asset would have a negative consequence to its value.

  •  Business Asset Coverage

If you die, the surviving business owners will receive death benefits and your family will get the payment for your interest in the company.

  •  Quicker Payouts.  

The death benefit of a life insurance policy can be claimed immediately, which makes is helpful for paying out expenses and lessening the financial burden on your family.

  •  Special purposes

Life insurance proceeds can be dedicated for a special purpose, like divorce obligations for spousal or child support or to providing continuing support for a minor, a child with special needs or an aging adult.

CONSULT THE LAW OFFICE OF DAVID KNECHT

Life insurance is one of many estate planning tools to choose from, so it is important to create a customized plan that is right for your goals, assets and loved ones. If you want to get started on an estate plan, contact the Law Office of David Knecht. Call us at 707-451-4502. We have extensive experience in estate planning.

 

Filed Under: Estate Planning, Estates

How to Get Your Separate Property Down Payment Back

A situation that arises fairly often in a California divorce is when separate property is used for a down payment of a house and then community property funds is used to pay the mortgage, and the question arises how to get that separate property down payment back. Section 2640 of the California Family Code answers this question.

 

What types of contributions are covered by Section 2640?

  • Down payments
  • Payments for improvements
  • Payments that reduce the principal of a loan used to finance the purchase or improvement of the property

What types of contributions are not covered by Section 2640?

  • Payments of interest on the loan
  • Payments made for maintenance, insurance or taxes on the property

What is the process?

 

  • The law requires tracing, which means that you need to prove that the funds came from either separate property or were inherited, which can be shown various ways such as bank statements or providing the will. 

 

 What are the exceptions?

  • The exceptions are a transmutation in writing (agreement between the spouses about the character of the property)  or a written waiver of the right to reimbursement. 

 

  • The amount reimbursed must be without interest or adjustment for change in monetary values and cannot exceed the net value of the property at the time of the division. 

 

Consult the Law Office of David Knecht

If you need help getting your separate down payment back in a California divorce, or if you need assistance in any other aspect of divorce in California, contact us at the Law Office of David Knecht at 707-451-4502. We have extensive experience in family law.  

 

Filed Under: Contract Law, Criminal Law

High Profile Estate Cases

There have been some very interesting high profile estate cases lately, and this article will highlight a few that have been in the news. They show the importance of estate planning and also good communication with loved ones. 

 

Prince’s estate is finally settled after 6 years.

  • Prince did not leave a will, which lead to a legal battle over his estate.
  • Prince’s lawyer, L. Londell McMillan, is quoted as saying that he is “relieved and thrilled to finally be done with the Probate Court system and bankers who do not know the music business and did not know Prince.”
  • The Estate was valued at 156.4 million dollars. 
  • A Minnesota judge has approved a deal that will divide the estate evenly between two legal entities, one of which is controlled by Prince’s half siblings

 

  • Read the full story here: 

 

Country singer, Naomi Judd left her daughters out her will. 

  • Naomi Judd, of the Grammy-winning duo, the Judds, died at 76 of suicide. 

 

  • The Judds were soon to be inducted into the Country Music Hall of Fame at the time of her death. 

 

  • The country music singer named her husband as executor of the estate with full authority and discretion to do as he sees fit with the estate. 

 

 

The Estate of Michael Jackson has made $2 B in 13 years since his death

  • As reported by the Sun, Michael Jackson’s estate has made 2 billion dollars in the years since his death, despite being homeless in some of his final months. 

 

  • What is the reason for the turn around? Recall that at the time of Michael Jacksons death, Neverland was facing foreclosure. As per estate lawyer Jeryll S. Cohen: “The Executors have been able to create exceptional and unique opportunities that did not exist at the time of Michael Jackson’s death to generate substantial revenue…”

 

Consult the Law Office of David Knecht

The mishaps and successes of the rich and famous highlight the need for proper estate planning when many assets are involved, but estate planning is also important for the average person who wants to make sure that their loved ones know their wishes and properly divide what they leave behind. If you are interested in getting started on an estate plan, or if you need help updating an existing plan, please contact the Law Office of David Knecht at 707-451-4502. We have extensive experience in estate planning and can help you make decisions that are right for your loved ones and you. 

Filed Under: California Estate Plan

2022 Estate Planning Statistics

If you have not yet made time for estate planning or if you have put off updating an existing plan, you are not alone. Recent research published at caring.com indicates that although more than half of Americans think a will is important, less than 33% have a will or a trust in place. That means 2 out of 3 Americans are not covered with an estate plan. This article will highlight other interesting findings from the caring.com research and suggest ways to move forward with estate planing. 

What are some of the most interesting findings from the 2022 study? 

  • 50% more young adults now have estate planning documents since pre-pandemic
  • The typical reason cited for not estate planning amongst young people is lack of assets
  • Other reasons cited for not estate planning are 
    • Not knowing how to do a will 
    • Concerns that the process is too expensive
  • For those with the highest earnings, the main reason for delay is just simply procrastination – not getting around to it
  • Higher education correlates with seeking estate planning – about half of those with a postgraduate degree have a plan in place

 Inflation concerns may be another key factor for estate planning delay in 2022.

 What does the research show are the first steps to estate planning? 

  • The most common first step that respondents indicated was talking to a loved one. 
  • Online research was also an initial step.

What are the three main estate planning documents highlighted in the caring.com research? 

  • Wills – this is the most common type of estate document according to the survey. It can be used to divide property, guardianship, debts and more. 
  • Trusts – according to the caring.com article, trusts are useful to avoid probate, provide more support than wills for larger estates or for those who might expect a disability. A trust can take effect during life, as opposed to a will, that determines rights at death. A trust is typically more complex and expensive than a will.   
  • Advanced directives – this provides a person’s wishes regarding end of life or what happens in the event of incapacity. They are intended to take effect during life, not at death. The survey found that only 1 in 5 people knew what an advanced healthcare directive is, which indicates lack of education on this important estate planning component. 

Consult the Law Office of David Knecht

If you are one of the many people in California who need to get started on estate planning, then you would benefit from using an attorney with experience in estate planning in California. Contact Law Office of David Knecht. Call us at 707-451-4502. We have extensive experience with estate planning and can help you. 

Filed Under: Contract Law, Estate Planning, Estates

Chadwick Boseman, Star of “Black Panther,” Dies Without a Will

Is it surprising that the actor Chadwick Boseman, who starred in Marvel’s “Black Panther,” died without a will?

Perhaps, yes, because his estate was large. CNBC reported that it was 2.3 million. But perhaps no, because according to a 2021 Gallup poll, only 36% of Americans between the ages of 30 and 49 indicated that they have a will that describes their wishes for their assets after death.

This article will highlight some interesting facts about the life of Chadwick Boseman and the division of his estate and share some tips about what life events might trigger a desire to get started on estate planning. 

 

Boseman’s widow, the musician Taylor Simone Ledward asked to split the 2.3 million estate between herself and his parents.

 

  • So far there has not been news that there has been a legal challenge to her decision. 
  • The L.A. Times reported here that Boseman’s widow requested an even split with the parents: 

 

 Boseman’s widow was able to honor him at the Gotham Awards. 

  • In January 2021, Ledward was able to honor Chadwick Boseman when he received a posthumous tribute “in acknowledgment not only of his profound work but of his impact on the industry and the world.”

 

  • She extolled his life, “He was able to give himself over fully in every moment to be totally present in his own life and in the lives of people he became.”

Are their life events that would be a good time to consider estate planning to avoid the Chadwick Boseman situation of passing away without a will? Yes, this summary from theweek.com can help you see if it’s time to consider estate planning:

 

  • Upon turning 18, is the first life event where estate planning could be considered.
  • When you have accumulated money or other assets. 
  • When you get married, divorced or remarried. 
  • When you have children.
  • After you start a business.
  • After you purchase a home.
  • If you have been diagnosed with a serious illness. 
  • If it’s been a while – experts recommend updating your estate plan every four to five years. 

Consult the Law Office of David Knecht

Boseman’s meaningful life and the peaceful division of his estate upon death were laudable, exemplar, and highly unusual, and we commend his widow and parents for sharing his wealth without reported strife. However, you may not want to risk depending on good will and sharing by your family members after death. It’s never an easy time to consider estate planning, but it can lead to a greater peace of mind for yourself and your heirs to follow through.  Contact Law Office of David Knecht. Call us at 707-451-4502. We have extensive experience in estate planning and can help you make decisions that are right for your loved ones and you. 

Filed Under: Trust Administration Attorney 

How Do I Make Charitable Giving Part of My Estate Plan?

xIs there a charity or a cause that really speaks to your heart? Do you want to make a difference in the world even after you are gone? If so, you may be wondering how to put your charitable giving desires into effect with your estate plan. This article will give you ideas of how to accomplish charitable giving and where to start. For more information on estate planning.

 

Make an outright bequest.

  • This is probably the easiest method for supporting causes you love through your estate plan. 
  • Typically, this method would involve identifying and exact amount to give to a specific charity and specifying that in your will. 

 

Donations in lieu of flowers when you die.

  • You can ask friends and family to leave a gift to a certain foundation in lieu of flowers when you die. 
  • This can be a good way to not only fund-raise for your favorite charity, but also to bring awareness and public support for the charity also. 

 

Name beneficiaries for non-probate assets. 

  • Assets that do not go through probate include assets held in trust, life insurance policy payouts, and retirement accounts and pensions  
  • You can name the beneficiary on these accounts as the charity or charities that you want to support. 
  • As a note of caution on this one, though, your loved ones may want to inherit these types of assets because tax benefits may be involved.

 

Can I remain anonymous in my charitable giving?

  • Prior to 2021, California had a law requiring nonprofits to file a list of their large donors with the state. The U.S. Supreme Court in a 2021 decision struck down California’s law, thus siding with donors who may have a desire to remain anonymous. Consult the Law Office of David Knecht

 

At the  Law Office of David Knecht, we have extensive experience with estate planning and can help you accomplish charitable giving or a plan that accomplishes the purposes you have in mind. We will perform a one-on-one evaluation to help you create an estate plan that is customized for your needs. Call us at 707-451-4502.

 

Filed Under: Estates

Imputation of Income for Child Support and Alimony in a California Divorce

A common issue in child support and alimony cases in a California divorce is imputation of income. This article will explain the concept of imputation of income and provide an overview of some of the basics in this area of divorce law. For a deep read on these issues, go to this article, “Kids, Custody and Alimony” from the Journal of Contemporary Legal Issues.

When does imputation of income typically become an issue?

  • In child support or alimony cases
  • When one spouse claims that the other refuses to work or is underemployed. 
  • The court has discretion to assign an income to that person consistent with their earning capacity, ability and income earning opportunities

Does imputation only apply to employment? 

  • No, the imputation can also relate to assets. 
  • The court can also look at income producing assets and impute a reasonable rate of return to historically non-income producing investment assets.
  • For example, if money is in the bank and not earning any interest, a family law judge does have discretion to assign a reasonable rate of return to that investment. 

Is the imputed income added to the actual income?

  • Typically the imputed income is not in addition to the actual income but in lieu of the actual income when it comes to employment.
  • However the judge does have discretion to add the imputed income from assets to imputed income from employment.  

Is there a case that can help me understand how imputation works in a divorce case?

  • An interesting case from the California Court of Appeals 2001, In Re Marriage of Cheriton,  involving imputation of income from employment and investments can be found here:  

Consult the Law Office of David Knecht

Cases that involve imputation of income from employment or assets can be complex. If you need help with child support, alimony or any other issue in a California divorce, please contact us at the  Law Office of David Knecht. We have extensive experience with estate planning and can create a customized and effective estate plan just for you. Call us at 707-451-4502.

Filed Under: Family Law

Property and Debt Division in a California Divorce

In a California divorce, even if the parties agree, a judge has to approve the division of property and debts through an order. You don’t necessarily have to go to court because a judge could approve an agreement between you and your spouse. If the parties don’t agree, the judge can make a determination for you at a hearing or a trial. Information in this article will help you better understand https://selfhelp.courts.ca.gov/divorce/property-debtsproperty and debt division in a California divorce with information sourced from online resources provided atx. 

 

  • What is property? 

 

  • Property has a formal definition, but in general it is anything that you can own, buy or sell. This includes real estate, bank accounts, life insurance, retirement and more. 

 

 

  • What are the categories of property and debts?

 

  • Community property is generally what you own together during your marriage and the debts that you owe together during your marriage. 

 

  • Separate property is generally what you each owned individually before you were married or after you separated and any gifts or inheritance or any debts you incurred before or after your marriage. 

 

 

  • Why is the date of separation important for categorizing assets and debts?

 

  • The date of separation is important because generally, from that day forward, what you or your spouse earned or loans that you take out are no longer community property. 

 

 

  •  What are the rules for the date of separation?

 

  • The separation date is the day that one of you let the other one know (by actions or words) that they wanted to end the marriage, provided that after that day, your or their actions were consistent with wanting the marriage to be over. 

 

 

  •  How can I tell if something is community property?
  • Generally, community property is anything you earned while married, anything you bought while married and debt that you incurred while married. 

 

Consult the Law Office of David Knecht

Property and debt division is one of the most important aspects of a divorce for most people. The information in this article is very general, but an experienced family law attorney can help you make your case to get the property to which you are entitled and fight to prevent your being saddled with debt that isn’t yours. Please contact us at the  Law Office of David Knecht. We have extensive experience with divorce and family law issues and can answer your questions. Call us at 707-451-4502.

 

Filed Under: Divorce Advice, Divorce Attorney, Divorce Lawyer
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