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Under the new budget reconciliation bill introduced in September, there are many proposed changes to the current estate and gift tax rules that could potentially affect individuals considering their estate planning strategies. While these are only proposed and have not yet gone into effect, individuals should be watchful and consider how these proposals may affect their personal circumstances. For now, there is still a great degree of uncertainty over what the final outcome will be. A professional estate planning attorney can help you understand how these changes may affect you and what your options are before any go into effect. Proposed Increase of Tax Rates for Individuals Under the new proposal, the top marginal income tax rate would increase, with an additional surtax imposed on those with income over $5 million. Capital gains tax…

For many individuals, a will is what they think about when considering the future of their estate. But a will is only one tiny piece of the broader estate planning puzzle. While creating a will is a fundamental part of an individual’s estate planning, estate planning and wills are different things. A will is just one estate planning tool that specifically names an executor, dictates how your estate will be distributed upon your death, and who will become your children’s guardian. Estate planning is an umbrella term that deals with many different things, including how your assets are protected throughout your life, managed if you become incapacitated, or distributed after you die. In other words, a will is a small part of the larger reach of estate planning. While estate planning often involves…

When you die without a will, it means that state law will determine who will get your estate unless specific assets have been titled to go to someone. Without a will, you are considered under the law to have died intestate. The state’s intestate succession hierarchy will then determine who will get your estate and how much they will get, regardless of what you may have wished. All states have laws on their books for those who have died intestate, including California. While the main purpose of intestate laws was to set out a standard way to distribute an estate that most closely resembled what the average person would want, it can be quite different from what you may want or have envisioned for yourself and your beneficiaries. In some cases,…

In the modern landscape of love and marriage, couples often bring their own assets -- and children from previous relationships -- into new marriages. The fact is that blended families now outnumber traditional long-term, one-spouse unions, and the ratio will continue to grow if our current trends are any indication. These families present unique challenges for those who want to ensure for their loved ones and future generations. If someone isn’t cautious with their estate planning, their assets may circumvent family members that they want to provide for or go to ex-spouses to manage for their minor children that they would not have wanted them to go to. These are “blended family” issues that couples and families may face and should iron out before they become contentious issues after the fact.…

While estate planning is usually discussed in the context of distributing an estate among heirs upon someone’s death, for those who are unmarried or without children, estate planning is just as critical. How your assets will be distributed upon your death and who will be responsible if you become incapacitated must still be given very careful consideration. If you are single or without children, what happens during your lifetime may be even more important than what happens to your estate after your death. Having a carefully crafted estate plan, including a valid health care proxy and financial power of attorney, ensures that your estate and your financial welfare are being attended to while you are alive as well as after you are gone. Who Will Manage Your Healthcare? If you are no longer…

There may come a time when we are no longer able to manage our own financial and legal decisions due to an illness, age-related disease, or disability. Under probate law, this is referred to as incapacity. Proper planning allows us to choose how and who will step in for us if we are no longer able to do these things for ourselves. What is Incapacity? In California, incapacity is regulated by California Probate Code § 810-13 and defined as “a judicial determination that a person is totally without understanding, or is of unsound mind, or suffers from one or more mental deficits so substantial that, under the circumstances, the person should be deemed to lack the legal capacity to perform a specific act….” One may be considered incapacitated If they are unable…

In January 2016, Revocable Transfer on Death Deeds, or RTODDs, became available in California as a way for individuals to leave a piece of real property to a loved one simply and cost-effectively. Using an RTODD, a property can automatically pass on to beneficiaries upon an individual’s death without going through the costly and time-consuming probate process. Until RTODDs, Californians had three options to leave real property to loved ones: Maintaining ownership with the right of survivorship or joint tenancy Leaving the property in a will Leaving it through a trust In comparison, a Revocable Transfer on Death Deed offers a no-muss, no-fuss alternative way for an individual’s home to be passed to loved ones upon their death without time-consuming probate or the cost of creating a trust. How an RTODD…

If you are considering estate planning - which any adult should - you likely have heard various terms, including beneficiary accounts, wills, and trusts. These are all parts of a comprehensive estate plan used to pass on property and assets, and the following is a brief overview of each one. To discuss your specific estate planning questions or to learn more, contact a Santa Ana estate planning lawyer today. Beneficiary Accounts Most financial accounts have the option to add a beneficiary, which is the person or persons who will receive your assets after you pass away. The funds do not have to go through probate and, instead, will be issued directly to the beneficiaries who were designated. You can add beneficiaries to: Bank accounts Investment accounts IRAs and 401ks Life insurance policies…

Transfer on death (TOD) accounts are a popular tool in estate planning, as they can have different benefits. Any account that has a TOD designation will transfer ownership right away without the need for probate. This can be highly beneficial for larger estates especially, but also save time and stress for families involved with smaller estates. That said, there are things to consider so you can avoid certain problems with TOD accounts. To discuss your specific situation, speak with a Santa Ana estate planning lawyer directly. TOD Accounts Do Not Replace Your Estate Planning Needs You cannot simply add TOD designations to your financial accounts and property titles and expect your estate planning to be complete. Instead, you need to make sure that your TOD accounts are in accordance with California law and that…

Like most states, California has laws that permit the state to claim - or “escheat” - unclaimed property that is deemed abandoned. This commonly occurs when a person passes away without estate planning documents, and no one claims the property as part of the estate. There are specific rules regarding how businesses must handle unclaimed property, when the state can deem the property to be abandoned, and how rightful property owners might reclaim their seized property. Identifying Unclaimed Property Businesses in California, including insurance companies, banks, and other property custodians, must file annual reports to the state regarding unclaimed property. These businesses must identify when certain property has remained dormant or untouched for a specified period of time in order to classify the property as unclaimed. Some common types of unclaimed property include: Saving…