If you are setting up a trust, a key decision is who the right trustee is for your assets and goals. This article is part 2 of a two-part examination about the pros and cons of a family member as trustee and will focus on the advantages of a family member trustee. Each family is different, so this article will review general ideas, but you should consult an experienced estate planning attorney, such as the Law Office of David Knecht, to discuss your specific family, circumstances and estate planning goals. 

Advantages of Family Member Trustee

• Cost savings.

Professional trustee fees can be expensive if a family member is willing to act as trustee for free. 

• Family knowledge. 

Having a deep understanding of the family, the personalities, the relationship and the history can be an advantage to a trustee to potentially be able to anticipate problems and foresee challenges to the trust administration. 

•  Confidence. 

A person doing estate planning may have more confidence in a family member than a professional trustee. Some people feel worried that a professional may not have the empathy for their family or understanding that someone on the inside would have.

Contact an Experienced Estate Planning Firm

If you are considering setting up a trust with a family member as trustee, you may need advice about the pros and cons of the trustee you want. Regardless of your estate planning objectives, an experienced estate planning firm can help you analyze and evaluate your choices.  At the Law Office of David Knecht, we want to help you achieve your estate planning goals. Contact us at 707-451-4502. 

If you are setting up a trust, your choice of who to make the trustee is one of the most important decisions. This article is part 1 of a two-part examination about the pros and cons of a family member as trustee. This will focus on the challenges. The circumstances vary widely for each family, so this article will review general ideas, but you should consult an experienced estate planning attorney, such as the Law Office of David Knecht, to discuss your specific family, circumstances and estate planning goals. This article will summarize information.

Challenges of Family Member Trustee

Fiduciary Duties. 

The family member who serves as the trustee will have important responsibilities. The trustee is managing money for the benefit of someone else, so the law holds the trustee to a higher standard of conduct than someone who is managing their own assets. A fiduciary duty is the duty to act in the best interest and failure to meet those responsibilities can have consequences. 

Inexperience. 

Being a trustee can require financial and legal knowledge and expertise. It can involve managing investments, taking charge of business responsibilities, etc. Depending on the particular trust assets involved, the lack of experience of a family member can potentially be a challenge. 

 Potential personal bias. 

Another challenge for a family member trustee can be a potential personal bias. The family member may have a lot of history, perhaps past conflicts, and personal relationships that may impact their ability to be objective and impartial. Even if the family member is completely objective, you may be subjecting that family member to criticism or conflict with other family members who might want a different result. 

Contact an Experienced Estate Planning Firm

If you are considering setting up a trust with a family member as trustee, you may need advice about how to ameliorate the challenges described in this article. Regardless of your estate planning objectives, an experienced estate planning firm can help you analyze and evaluate your choices.  At the Law Office of David Knecht, we want to help you achieve your estate planning goals. Contact us at 707-451-4502. 

As reported by Newsweek.com, a man recently sparked a storm of debate on Reddit when he inherited a property and refused to honor the tradition of hosting family weddings there. This article will summarize some of the suggestions on how to prevent family conflicts with inherited property from the full article, which can be found here:

A study shows asset transfers are of increasing importance for families. 

• As per an April 2017 study published in Families, Relationships and Societies, “asset transfers are of increasing importance for families as a way of transmitting advantages over generations…but little is known about how inheritance generates disputes, tensions or dissatisfaction among family members.” 
• See 

Research indicates a continuum of motivations by gifters. 

•  A study published in the European Journal of Ageing, indicates that material inheritance constitutes a challenge for families and that the motivation of the gifter can fluctuate on a continuum between unconditional donation (altruism) and conditional donation (strategic, reciprocity). 

The person inheriting property should clearly communicate boundaries. 

• Bill Gladwell, a communication expert, was quoted in the Newsweek article as advising people who inherit property to clearly communicate their boundaries and expectations to family members up front. 
• Make it clear that any use of inherited property by family members must now be agreed to and approved by the person who now owns it. 
• Having an open and honest conversation about concerns is vital. 
• It is important for the new owner of the inherited property to be firm in their boundaries, but it is also imperative to express respect and understanding for the other family members’ feelings to keep the lines of communication open. 

Contact an Experienced Estate Planning Laywer

One aspect of estate planning that is extremely important is thinking ahead to potential family conflicts and creating a plan that will promote the goals of the giver without stirring up disputes in the family. At the Law Office of David Knecht, we have extensive experience helping clients with estate planning and can help you make a plan that is just right for you and your loved ones. Contact us at 707-451-4502. 

For those who follow celebrity news, there have been recent sobering and tragic events. This article discusses the heartbreaking passing of dancer, Stephen (tWitch) Boss, and actress, Kirstie Alley, as well as Celine Dion’s recent news of a challenging health diagnosis with stiff man syndrome. While we mourn with other fans about these events with sensitivity and compassion, we also urge our clients to use these celebrity examples as motivation to consider loved ones and make estate planning priority. Below we share a few lessons that can be gleaned from celebrity news. 

You are never too young for estate planning

• The recent tragic death of Stephen (tWitch) Boss, a dancer who rose to fame through So You Think You Can Dance, is a case in point as he was only 40 when he died. 
• There is much public concern as to the reason Twitch took his own life, but no answers that have been made public at this time and the hearts of many of his fans have been mourning his early death and its impact for his wife and children. 

• The lesson here for estate planning is a heartbreaking one: you may not know the demons your spouse or partner is facing in life or how to help them, so preparing for tragic possibilities is wise even though it can be a challenging topic to discuss with loved ones. 

Estate planning for a health crisis is wise because a health crisis can be severe and unexpected

• Celine Dion, renowned singe, recently announced a challenging health diagnosis, stiff person syndrome, that is preventing her from completing her upcoming tour.

• This highlights that disease and disability can happen suddenly to anyone, and that serious health conditions can impact ability to work and qualify of life. 

• Part of complete estate planning is thinking ahead to your wishes regarding health challenges in the future – for example, who do you want to help make medical decisions for you if a health condition prevents you from making decisions for yourself, how can you plan your assets for protection from creditors in the event of a major health crisis?

Estate planning is necessary because you never know how much time you have left

• Kirstie Alley, the actress perhaps best known for her roll in the sitcom “Cheers” recently passed away from colon cancer. 

• In 2022, roughly 1.9 million people will be diagnosed with cancer. 

• The reality for all of us is that life is precious and the amount of time we have left is unknown, so estate planning to communicate your wishes to loved ones and dispose of your property as you see fit is timely no matter when you begin. 

Contact an Experienced Estate Planning Law Firm

Although these celebrity stores are sobering, the good news is that you can seize today to get started on an estate plan that can help alleviate the stress and sorrow of loved ones in the instance of challenging or tragic events. the Law Office of David Knecht we have extensive experience with estate planning in California and can help you successfully plan for the future. We look forward to assisting you.  Contact us at 707-451-4502. 

A recent article from the National Law Review shares 2022 year end estate planning updates and strategies for clients to consider. This article summarizes this publication, which can be found in its entirety here:

Gifts for 2022 

• A person can make gifts up to $16,000 per recipient to an unlimited number of persons free from gift tax. 
• For a married couple splitting the gift, this means they can gift up to $32,000 per recipient. 
• Gifts are within an annual exclusion amount, so they do not reduce the tax payer’s lifetime federal estate and gift tax exemption. 
• This creates an easy and effective way to pass wealth to family members or others. 
• The gift must be made by December 31, 2022 to qualify. 
• All gifts made outright can qualify and certain gifts made to a beneficiary in trust can qualify also if properly structured. 
• In 2023, the annual amount will increase to $17,000 per recipient. 

The gift exclusion is a tool that is used by many of clients because it is a straightforward and easy mechanism for passing wealth to family members and others without a gift tax consequence for the giver. For clients with greater resources, the lifetime federal estate and gift tax exemption amounts should be considered in estate planning.

What is the lifetime federal estate and gift tax exemption?

• This is the combined amount a person can transfer during life without 
  • triggering a current gift tax 
  • or upon death, transferring free from estate tax. 
• However, transfers to U.S. citizen spouses and qualified charitable organizations are not generally subject to tax. 
• Annual gifts within the gift exclusion described above do not “count” against this lifetime number
• Other lifetime gifts, however, will reduce the amount of estate tax exemption available at death. 
• Currently the lifetime exemption is $12,060,000 per taxpayer estate.
• In 2023, this number will go up to  $12,920,000 per taxpayer estate.
• This allows opportunities for estate planning in 2023 with these new numbers in mind.  

Contact an Experienced Family Lawyer

Whether you are just embarking on building your wealth or whether you have significant assets, estate planning can be helpful in utilizing tax advantageous tools and planning for the outcomes you seek. At the Law Office of David Knecht we have extensive experience with estate planning in California and can help you successfully prepare the right estate plan for you and your family. We look forward to assisting you.  Contact us at 707-451-4502. 

Last month, we wrote an article about the insightful estate planning lessons that could be derived from the Anne Heche case, and this article will provide updates on the saga of her estate and the custody of her minor son. The take home lesson is PLAN AHEAD. Many people do not want to prioritize estate planning, but this celebrity saga is one that shows the importance of proper planning and follow through when it comes to estate planning and guardianship. This article references information reported by usa.com at the article.

Who was Anne Heche and what happened?

• Anne was an actress known for various movie roles including starring in the movie “Seven Days Seven Nights” along with Harrison Ford.

• As reported by Fox News, the actress died in August in a car crash, leaving behind two sons, one an adult and one a minor.

• The family indicated that she was “peacefully taken off life support” on Sunday August 14, 2022, after being declared brain-dead.  

Who is involved in the dispute?

• As of October 15, 2022, a family legal battle is still underway. The players are Homer Laffoon, Anne’s adult son and her ex-husband, James Tupper, who is the father of her minor son, Atlas. 

• Laffoon, the adult son, made a claim to his mother’s estate as the oldest heir. Tupper, the ex-husband, filed an objection declaring the Laffoon was not suitable for appointment over the estate. 

Did Anne have a will?

• Did Anne have a will? That is the “Million Dollar Question” so to speak. Laffoon believes there was no valid will, but Tupper has claimed there is a will based on an email from 2011 establishing Tupper as the person in “control” of her assets and an email to her attorneys at the time with that the message should “go into my records as my word until further papers are drawn up.” 

 What are the latest developments? 

• As of October 15, 2022, as reported on Yahoo.com, Tupper and his son Atlas, appeared in court to determine the next steps in their ongoing dispute with Laffoon. According to the article Court found that Tupper did not present enough evidence to halt Laffoon from becoming his half-brother’s guardian ad litem. When Tupper shook his head in disapproval of the judge’s decision, the judge reprimanded him with the statement: “We’re not here to pick the best person. I’m here to decide if he’s qualified, or disqualified.”

Consult the Law Office of David Knecht

While celebrity estate disputes can be fascinating to the public, they also provide a cautionary tale to all of us that death can come unexpectedly to anyone at any age. They are a beacon of warning telling us to prepare early to avoid the messes that can ensue when proper planning is not undertaken and documents are not finalized appropriately and lawfully. Contact the Law Office of David Knecht at 707-451-4502. We have extensive experience in estate planning and can help you prepare to avoid heartbreaking disputes. 

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.

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.