Uncertain Times Call for Creative California Estate Planning Strategies

For many people, today’s uncertain times can be a source of anxiety, with inflation, international conflict, and political uncertainties creating a question about whether decisions today will still be wise in future years. Estate planning in these uncertain times calls for thoughtful and creative estate planning. This article will summarize thoughts on how to do this as published at Kiplinger.com, see 

 

Recognize that regulatory frameworks can change. 

  • The Tax Cuts and Jobs Act of 2017 increased the estate tax exemption.

 

  • The Secure Act 1.0 and 2.0 made changes to inherited IRA’s, minimum distributions, trusts and more. 

 

  • The 2024 Presidential Election may have implications for your estate plan. 

 

  • Navigating these changes can create challenges for your estate plan, but it can also create real opportunities for strategic and advanced planning. 

 

Creative Estate Planning Requires an Understanding of How the System Works

  • Many tax-advantaged estate planning strategies involve giving up some control of your money to protect it. 

 

  • After spending years accumulating money and property, it may be difficult to give up that control, especially when times of turmoil may have decreased its value or may make you worry about future drops. 

 

  • One strategy is to focus on long-term planning and concentrate on the signals (for example, markets generally rise), and not the noise (daily fluctuations in value). 

 

 What Is the Focus of Effective Strategies 

  • Flexibility is the key to long-term planning. Know what your goals are to make sure that your documents are drafted in a way to accomplish your goals and provide flexibility to adjust for changes in those goal. 

 

  • Balance is a second key to long-term planning. Be reactive but not over-reactive. Many proposed changes do not come to fruition, so be aware that you may need to silence some of the media noise of proposed changes that may never be realized. 

 

  • Staying diligent is the third key to long-term planning. Many people wish that estate planning were a one-time event that they could check off their list, but the most effective estate plans are re-evaluated regularly. Revisit your estate plan regularly to make sure that it is still aligned with your goals and regulatory changes. 

Contact an Experienced Estate Planning Attorney

At the Law Office of David Knecht, we make it our business to stay up-to-date on regulatory changes that impact estate planning. We will customize a plan to help you find creative solutions to meet your estate planning goals, and we will work with you to keep it current and responsive to regulatory changes. Contact us today at 707-451-4502. 



Filed Under: California Estate Plan

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

Making a 529 Qualified Tuition Plan Part of Your Estate Plan

You may have heart that a 529 ,“qualified tuition plan,” is estate planning magic and wondered what the advantages are with this planning mechanism. This article will explain what a 529 plan is and why it can be very beneficial as an estate planning tool, with an introduction about 529 plans summarized from https://www.sec.gov/reportspubs/investor-publications/investorpubsintro529htm.html.

  • What is a 529 plan?

A 529 plan is a tax-advantaged savings plan. It is designed to encourage saving for future education costs. They are known as “qualified tuition plans” and are sponsored by states, state agencies, and educational institutions.

  •  What are the two kinds of 529 plans?

The two kinds of 529 plans are prepaid tuition plans and education savings plans. With the prepaid tuition plan, the account holder purchases credits at participating colleges/universities for future tuition for the beneficiary. With education savings plans, the saver opens an account for the beneficiary’s future tuition, mandatory fees, room and board. The saver can choose various investment portfolio options to grow the initial investment.

  • Why is flexibility one of the benefits of a 529 plan for estate planning?

One of the main benefits of a 529 plan for estate planning purposes is the unparalleled flexibility. The saver can remain the owner of a 529 plan and retain the power to change the beneficiary to a qualifying family member (which includes children, grandchildren, nieces and nephews and others). This is better than another estate planning tool, the irrevocable trust, where the saver cannot act as a trustee and cannot retain the power to change beneficiaries.

  • How does the “front load” factor in as a benefit of a 529 plan for estate planning?

The annual exclusion from gift tax allows a grantor to transfer a set amount per year, per person. This amount is $16,000 in 2022 (See https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2022)

The saver can make five years of annual exclusion gifts in a single year and use no transfer tax exemption. If the saver is married and chooses gift-splitting, the couple can transfer $150,000 to a 529 plan in a single year and use no estate and gift tax exemption. See your attorney or tax professional for more details as the proper elections must be made to take advantage of this benefit.

CONTACT THE LAW OFFICE OF DAVID KNECHT

If you need assistance with understanding a 529 Plan or estate planning in California, contact the  Law Office of David Knecht. We have extensive experience with estate planning and can set up a customized plan that’s right for you and your loved ones. Contact us at 707-451-4502 for more information.

 

Filed Under: California Estate Plan

Estate Planning for New Parents

If you are a new parent, you may be missing sleep and staying very busy caring for your new little family member. However, this is not the time to forget about estate planning because your new bundle of joy is depending on you to plan for their future. This article will highlight the top three estate planning priorities for new parents and give resources for more information.

  • Beneficiary designations

Updating your beneficiary designations is often a fast and easy way to get started. This could be your beneficiary for bank accounts, stock accounts, life insurance or any other type of account with a beneficiary. You can often update these online and it’s a quick and easy process.

  •  Guardianship

With a new baby here, you will want to designate who will take care of the baby if both parents pass away. This person will have legal and physical custody or your child and will make any decisions about the care of the child that a parent would make. For more information about guardianship, see https://www.courts.ca.gov/selfhelp-guardianship.htm.

Here are some things you may want to consider when selecting a future guardian for your child/children:

  1. Shared values – you may want someone to rear your child as you would, with your values in mind. This may include a religion, philosophies of life, geographical location and preferences, similar education beliefs, etc.
  2. Financial security – you may want someone who has the financial security to give your children the attention and care that they need.
  3. Longevity – you may want someone who is at an age that they can be an influence in your child’s life for a long time to come, so considerations about age and health may be important here.
  4. Character – you may want to consider the character and habits of the person, for example, if the person you are considering has a long history of addiction or has criminal history, they may not be a good fit for a guardianship role
  •  Advance Healthcare Directive

An advance healthcare directive allows you to give instructions about your healthcare and designate someone to make healthcare decisions for you in the event that you cannot make them for yourself. As a new parent, you now have a child depending on you, so your healthcare preferences become even more of a priority.

To access a healthcare directive form, go to https://oag.ca.gov/sites/all/files/agweb/pdfs/consumers/ProbateCodeAdvancedHealthCareDirectiveForm-fillable.pdf

CONTACT THE LAW OFFICE OF DAVID KNECHT

If you are a new parent who wants an experienced attorney who can help identify and advise on your estate planning needs, contact the Law Office of David Knecht. We have extensive experience with estate planning and can set up a customized plan that’s right for you and your new little one. Contact us at 707-451-4502 for more information.

 

Filed Under: California Estate Plan, Contract Law

How to Give Your Heirs Quick Access to Your Accounts When You Die

A recent article published by MarketWatch, https://www.marketwatch.com/story/how-to-give-your-heirs-quick-access-to-your-bank-accounts-when-you-die-11633038931?mod=home-page,  answered the question of how to give your heirs quick access to your accounts when you die.  This article will summarize the information in that article and give insights into various other estate planning tips for California estate plans. 

  •  Transfer on Death (TOD), Payable on Death (POD)

When opening a bank account or amending an existing account, you fill out a form either online or in person to make someone the payable on death beneficiary of the account. 

  • What if you have more than one person you want to designate?

Typically, you can designate as many people as you desire and you will allocate a percentage of the account that will go to each person. 

  •  What is the advantage of the TOD/POD?

While there is still some process involved (the beneficiary has to show the bank a certificate of death and the beneficiary’s identification), the advantage is that probate is avoided for this particular account. This saves time, money and inconvenience. 

  •  What about making your heir the joint owner on your account?

Another strategy is to designate your heir as the joint owner on your account. This has some advantages and disadvantages. On the upside, the heir can withdraw the money upon your death right away. The downside is that the heir can also withdraw the money anytime during your lifetime. It also subjects those funds to creditors of your heir during your lifetime. Because of these risks, a joint ownership plan is not the best for some families. For relationships with a very high level of trust, it might make sense. 

How to Help Your Loved Ones

There are many choices with estate planning in California, but the first step in helping your loved ones is to become informed of your options and get a plan in place. You’ll want to make sure any paperwork related to estate planning easily accessible to your loved ones and that it is up to date with any changes needed. At the Law Office of David Knecht we have extensive experience with estate planning in California and can help you get started or update your existing plan.  Contact us at 707-451-4502 for more information.  

 

Filed Under: California Estate Plan, Vacaville Attorney, Vacaville Lawyer

Revocable Transfer on Death Deeds

A Revocable Transfer on Death Deeds, also known as a  “TOD” or “beneficiary deed” is a simple way to leave your residence to beneficiaries without the need for probate. A free form for this deed can be found here:  https://saclaw.org/wp-content/uploads/sbs-tod-deed.pdf

Because there are potential pitfalls with this type of deed, this article is not intended as a recommendation of Revocable Transfer on Death Deeds. We provide this information as education on this option. 

  •  What is a Revocable Transfer on Death Deed?

The current owner during their lifetime names beneficiaries. The deed has no effect until the death of the transferor, so the deed can be changed, the property can be sold or refinances, etc. When you die, the property does not need to go through probate, but your heirs will need to file or record certain documents. 

  •  What type of properties are eligible for Revocable Transfer on Death Deed?

A Revocable Transfer on Death Deed can only be used with a property with one to four residential dwelling or condominium units or a single family residence with less than 40 acres of land. 

  •  What are the advantages of a Revocable Transfer on Death Deed?

You can potentially avoid probate, provided that it was done correctly and there were no unexpected family changes. It is a simple process. It can be revoked during the lifetime of the transferor if you change your mind. There are some tax advantages. 

  • Have there been recent changes to the laws relating to Revocable Transfer on Death Deeds?

A recent Bill which you can access in its entirety here, https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB315, addressed some of the problems with Revocable Transfer on Death Deeds. 

 It states:  This bill would revise and recast those provisions, and instead make them operative until January 1, 2032. Among other things, the bill would redefine and newly define terms for these purposes, including, but not limited to, “beneficiary,” “real property,” “subscribing witness,” and “unsecured debts.” The bill would make changes to how and when a revocable TOD deed becomes effective or revoked, and would instead require the deed or revocation to be signed by the transferor, acknowledged by the transferor before a notary public, dated, and signed by 2 witnesses, as specified. The bill would add additional provisions to the statutory forms for executing and revoking a revocable TOD deed to conform to these changes, and would add additional information to the statutory “common questions” pages. The bill would require, after the death of a transferor, that the beneficiary serve notice on the transferor’s heirs, and would create a new statutory notice form for these purposes.

 

  • Where can I find out more information on how to properly execute a Revocable Transfer on Death Deed or discover whether there is a better mechanism to transfer my property to heirs?

 

At the Law Office of David Knecht we have extensive experience with estate planning in California. We can evaluate your assets and give you an opinion on whether a Revocable Transfer on Death Deed is right for you and your family. We will listen to your concerns and customize an estate plan that is advantageous to you and your loved ones. Contact us at 707-451-4502 for more information.  

 

Filed Under: California Estate Plan, Vacaville Attorney, Vacaville Lawyer

Where You Should Keep Your Estate Planning Documents

A recent business story in the LA Times online posed an interesting question:  Where should you keep your estate planning documents?  This article will answer this and other basic estate planning questions.  

1. What is the downside of putting your estate planning documents in a safe deposit box at the bank? 

People sometimes think they should keep their original estate planning documents in a safe deposit box.  However, when the bank is notified that you have died they will often seal the box until your executor can prove they have the legal right to access the contents.  If the documentation needed is in the box, then that can create a sticky situation. 

2. What is a better place to store your estate planning documents?

One option is to keep the documents in your own safe, but that is not the best solution.  If you fear someone with bad motives could access your safe, then that is not a great option.  For most people, the best option is to leave the original with your attorney and provide copies to your executor and other trusted people.  You can give them your attorney’s contact information and have peace of mind knowing that the documents are in a safe place. 

3. What estate planning documents should I store with my attorney?

 

The following is a list of estate planning documents that you will want to have stored safely: 

  • A Living Trust
  • Powers of Attorney for Property and Healthcare
  • HIPAA Authorization
  • A Living Will/Advance Healthcare Directive
  • A Pour-Over Will
  • Deeds to Your Properties
  • Beneficiary Designations
  • Guardian Nominations for Minor Children

Where can I find an attorney who can help me with estate planning in California?

An experienced attorney can help you make advantageous estate planning decisions for the benefit of you and your loved ones.  At the Law Office of David Knecht, at 707-451-4502, we have extensive experience in estate planning in California and can help you create the right plan for you. 

 

Filed Under: California Estate Plan

Equal or Equitable:  Should Each Child Get the Same in a California Estate Plan?

Dividing assets among your children is not always an easy question.  Should each get an equal share or should you look at the totality of the circumstances to create something not equal, but in fact fair and equitable?  This article references an Investopedia analysis of this topic and highlights questions to consider:  https://www.investopedia.com/articles/personal-finance/102215/advice-wills-should-each-child-get-same.asp

  1. Equal Division.  

In many cases, and equal division of assets is conventional and seems to be the most logical choice.  Such is the case when each child has similar needs.  This often happens if they are similar in age, in earning capacity, in responsibility, in mental and emotional maturity, etc.  One advantage of an equal division is that it typically appears fair on it’s face to outside observers and perhaps the heirs themselves. If you want to leave children different assets, but to give them equal value, then it makes sense to assign values to each of the assets and to ensure equality in the overall monetary division.  

 

  • Equitable but not Equal Division. 

 

There are many situations in which you feel more comfortable or fair by giving children unequal but equitable divisions.  For example, if one child has been a caregiver, then perhaps you want to reward that child for his or her sacrifice during your lifetime with additional assets in the inheritance.  Or perhaps you have given certain children more financial assistance during your lifetime and want to even out the distributions after your death. If you have a family member who cannot care for themselves, then you may want to leave the bulk of your estate for the care of that heir. You may have a blended family and want disparate amounts to go to children depending on which children have a biological connection to you.

Consult with the Law Office of David Knecht

Whether you are leaning to an equal distribution or an equitable plan, the Law Office of David Knecht, at 707-451-4502, can help. We have extensive experience in estate planning and can help you create a plan that addresses the needs of you and your family and accomplishes your goals.  

 

Filed Under: California Estate Plan, Estate Planning, Estates

Estate Planning for Blended Families in California

Blended families are very common, but estate planning for a blended family can come with a set of challenges to consider.  This article will summarize 5 blended family mistakes to avoid, with content referenced from:  https://www.aarp.org/retirement/planning-for-retirement/info-2021/blended-family-estate-planning-mistakes-to-avoid.html

Not Changing Beneficiaries.  

One of the most common mistakes is failing to update wills or beneficiary designations.  It’s not unusual that the ex-spouse may be inadvertently left as a beneficiary.  Make sure that you have properly updated the beneficiary on all stock accounts, life insurance, bank accounts, and all other type of account with a beneficiary designation. 

  • Treating All Heirs Equally. 

It’s important to give extensive thought to the needs of each of the children and the assets that you have.  For example, you may have some children with different ages, earning capacities, or lifestyles.  You can treat heirs equitably without treating them all equally. You may see that one possible heir might have special needs or disabilities.  One spouse may have greater assets going into the marriage than the other and want some of those proceeds to go to certain heirs.  Every person’s situation is different, but careful consideration of your heirs and their needs will help you plan wisely. 

  • Waiting Until You Are Gone to Give. 

You may want to give your heirs a gift when you are alive to see them enjoy it.  You can gift up to $15,000 a year (in 2021) without a tax consequence.  See https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes

Skipping the Lawyer. 

If you are older and on your second marriage, it’s likely that your estate plan may be somewhat complicated.  Ex-spouses, blended families and comingled assets can add to the complexity.  For this reason, investing the time and money in getting a thorough estate plan may give you the comfort of knowing that the plan you have is sound and solid.  

Consult with the Law Office of David Knecht

At the Law Office of David Knecht, at 707-451-4502, we have extensive experience in estate planning and can help you create a plan that addresses the needs of you and your family and accomplishes your goals.

 

Filed Under: California Estate Plan, Estate Planning, Estates

What is a California Estate Plan?

A comprehensive California estate plan should be specific and customized to fit your personal circumstances.  It  generally includes a Living Trust, Powers of Attorney for Property and Healthcare, a “HIPAA” authorization, a Living Will/Advance Healthcare Directive,  a Pour-Over Will, Deeds to your properties, Beneficiary Designations on life insurance, annuities, IRAs, 401 (k)s, Guardian Nominations for minor children and perhaps more.  Sounds like a lot?  Well, there can be many advantages to getting everything in order while you are in good health and capacity to make the many decisions involved in preparing these documents.  This article will give you an overview what each of the pieces of the Estate Planning puzzle are and how they can help you.  

What is a California Living Trust?

A California Living Trust protects you while you are alive.  During your lifetime, you have complete control over the Living Trust to change it, and you will have the right to use the property during your lifetime with no restrictions.  However, upon incapacity or death, the Living Trust puts the power into the hands of your heirs, generally with no requirement to go to court.  It can have advantages for tax planning and avoiding creditors.  You can find more information on Living Trusts here:  https://www.scscourt.org/self_help/probate/medical/living_trust.shtml#what

What is a Living Will/Healthcare Directive?

A California Living Will is more commonly knowns as an Advanced Healthcare Directive, and it helps your loved ones know how to carry out your wishes when you are no longer able to make your own decisions.  It can direct them on tough decisions such as breathing and feeding tubes and other end of life dilemmas.  You can find more information here: https://oag.ca.gov/consumers/general/care#advance

What is a California Durable Power of Attorney for Property and Healthcare?

A Power of Attorney is a document that authorizes someone to represent you.  A Power of Attorney can authorize another person to make bank transactions, trade stocks, pay your bills, buy or sell your property, file your tax returns, hire people to take care of you, apply for benefits on your behalf and more. You can find more information here:  https://www.scscourt.org/self_help/probate/medical/poa.shtml#what

How do I designate a guardian for my children in California?

If you have minor children, it is likely a great concern for you to determine who will take care of your children if you pass away or become incapacitated. When both parents are dead, the court will decide who the guardian will be as per what is the best interest of your children.  The court will ask the children what they want and consider your guardianship wishes.  Alternatively, while you are alive, if you have legal custody, you can obtain a joint guardianship, and then when you pass away, the legal custody will transfer to the other joint guardian usually without additional hearings.   You can find more information here: https://www.courts.ca.gov/1215.htm?rdeLocaleAttr=en

What is a California Pour-Over Will?

A Pour-Over Will works hand-in-hand with our Living Trust.  It  covers everything that may not be in your Living Trust at death to your trust.  For example, if you took your home out of your trust to refinance and forgot to put it back into the trust, you Pour-Over Will would make sure that the home is distributed under the terms of the trust.  You can find more information here: https://www.scscourt.org/self_help/probate/medical/living_trust.shtml

What is a HIPAA Authorization?

A HIPAA authorization allows the people you designate to have access to your healthcare documents.  This can be important for your family members to get updates on your condition, view diagnostics such as lab reports or test results, and to make more informed healthcare decisions on your behalf. You can find a HIPAA form here:  https://www.dhcs.ca.gov/services/Documents/Authorization%20for%20Release%20of%20Protected%20Health%20Information%20DHCS%206247.pdf

How can the Law Office of David Knecht help you personalize your estate plan?

Depending on your specific circumstances, you may need other documents.  If you are anticipating bankruptcy, divorce, or certain types of lawsuit, you may need strategic planning to protect your beneficiaries.  An estate plan goes further than a checklist of documents, but should be approached with a unique plan just for you that provides the best tax strategies and plans to carry out your wishes with exactness. The attorneys at the Law Office of David Knecht, have extensive experience in all aspects of estate planning and can help you create a plan that is complete and advantageous.  Contact us at 707-451-4502 for more information.  

Filed Under: California Estate Plan, Estate Planning, Estates