What Can We Learn From Hollywood About Estate Planning

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

  • 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. 

 

Year End Estate Planning Strategies from the National Law Review

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. 

 

Celebrating National Estate Planning Awareness Week!

Did you know that the third week in October is National Estate Planning Awareness Week? This commemoration was set up back in 2008 to encourage all Americans to protect themselves or their families in the event of sickness, accidents and untimely death.  

This article will summarize the text of the bill creating National Estate Planning Awareness Week to explain why this special week was created and help you understand why Americans commemorate estate planning awareness annually. 

What were the reasons why National Estate Planning Awareness Week was created?

  • A poll referenced in the text of the bill related to this holiday revealed that a large number of Americans believe they lack the knowledge necessary to adequately plan for retirement and that they are unfamiliar with basic retirement tools, such as a 401(k) plan. 
  • What are the benefits of estate planning?
  • Careful estate planning can greatly assist Americans in preserving assets built over a lifetime for the benefit of family, heirs or charities. 

 What are some of the important considerations relating to estate planning?

  • Safekeeping important documents
  • Documentation of assets
  • Preparation of legal instruments
  • Insurance
  • Availability of trust arragements
  • Charitable giving
  • Care of the benefactor during life

 What are some of the decisions that can be involved in estate planning?

  • Decisions about the method of holding title to certain assets
  • Decisions about the designation of beneficiaries
  • Decisions about possible transfer of assets during the life of the benefactor

What were some of the concerns that prompted the bill creating this estate planning holiday?

  • Many Americans are unaware that lack of estate planning and “financial illiteracy may cause their assets to be disposed of to unintended parties
  • Lack of careful planning may lead family members or other beneficiaries to being subjected to complex legal and administrative processes requiring significant expenditure of time
  • Lack of planning can lead to confusion and even animosity among family members upon the death of a loved one
  • Failure to prepare may lead to favorite charities being overlooked and benefactor’s gift-giving goals frustrated. 
  • Many Americans may want to have a plan for organ donation and use of life support functions, which intentions may be unclear without proper estate planning

Where does implementation of an estate plan start?

  • The first steps are education and planning and then the proper drafting and execution of appropriate legal documents, which may include will, trusts and durable power of attorney for health care. 

CONSULT THE LAW OFFICE OF DAVID KNECHT

Estate planning does not have to be a chore you dread or procrastinate. At the Law Office of David Knecht, we have years of experience with estate planning and can help make the process easy for you. In honor of Estate Planning Awareness Week, take a step today for the good of yourself and your loved ones, and call us today at 707-451-4502. 

 

More Drama in the Anne Heche Estate Saga

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. 

 

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.

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.

 

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. 

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.

 

If the Market is Down, is it the Right Time for a Roth Conversion?

A Roth conversion is a tool for transferring money from one investment tool into a Roth IRA. When the stock market is down, investors can consider whether the conversion makes sense for their tax planning, investment goals, and estate planning needs. This article is not intended to provide legal or financial advice, but will summarize information published online which may assist you in working with your legal or financial advising professional to create a plan that is right for you. 

 

  • What is a Roth conversion?

 

Why might a Roth conversion be appealing when my stock portfolio is down?

  • With a Roth conversion, the account owner has to pay income tax on the money they convert. 
  • If your stock is down, the amount calculated for income tax will be lower. 
  • For example, if you purchased stocks for $100,000, but now they are only worth $75,000, then a Roth conversion at that time would only involve income tax on the $75,000 amount. 

 

 Why might a Roth conversion be appealing for estate planning in California purposes?

  • The Roth IRA conversion is a strategy to pass IRA assets to non-spousal beneficiaries either directly or as continent beneficiaries upon the death of a surviving spouse. 
  • It is a way to prepay taxes for the beneficiaries. 
  • For more discussion about this strategy, consult these resources:

 

Where can I find information on the other pros and cons of a Roth conversion?

 

 

 

 

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 understand and evaluate the various tools for effectuating your wishes and efficiently preparing for the transfer of your estate. 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.

 

Estate Planning Lessons from One Woman’s Journey with her Mother’s Cancer

A recent article published on Kiplinger.com was authored by an estate planning attorney whose own mother received a terminal cancer diagnosis. It was a poignant perspective from a woman who was a veteran in the estate planning field, only to have to call on that knowledge for her own family member.  

This article will summarize the takeaways from the unique perspective of an estate planner who had to plan for her own family member.  

 

How has the Schiavo case influenced estate planning?

  • Terri Schiavo was a woman who suffered a massive heart attack in 1990 and was left in a permanent vegetative state. Her husband and parents had a complicated and bitter legal battle over whether she would have wanted to be maintained in that vegetative state. 
  • This case was a horror story of what can happen in the absence of a clear advance medical directive. 
  • The number one lesson from this case is that the battle between the husband and the parents was preventable, had Schiavo properly prepared by making her wishes known and documented. 
  • Here you can see more details about the Schiavo case.  

 

Why might estate planning be particularly important for those of a particular faith?

  • In the Schiavo case, the role of faith played prominently in the push and pull of the end of life debate. 
  • Similarly, the author’s mother was part of a faith-based community and therefore had very strong beliefs about what her end-of-life care should look like and how her body should be treated in the final moments. 
  • The takehome lesson here is that family members can benefit from directives as to what the person wanted, what customs to follow, and what preferences to adhere to.   
  • The author’s experience with her mother helped her realize that the stress and emotion of a tough diagnosis are draining, so it can be particularly challenging to start on estate planning when someone’s health is in the declining stages.
  • It’s much easier to plan ahead during times of health.

CONTACT THE LAW OFFICE OF DAVID KNECHT TO GET STARTED ON ESTATE PLANNING

If you need help getting started on estate planning, or if you are looking to update or expand on work already completed, contact the  Law Office of David Knecht. We have extensive experience with estate planning in California. Contact us at 707-451-4502 for more information.