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Just like your life is fluid and subject to change, your estate plan should also be. Having a well-developed estate plan is only as good as how effective it will be, considering your current situation. Estate planning is not a one-time occurrence, but it should be revised with any changes in your assets, personal relationships, and expectations. If you want your estate plan to protect you and reflect your wishes when it matters, you need to be proactive in keeping it updated. Life Changes Can Alter the Effectiveness of Your Estate Planning Documents None of us can predict the changes that may occur in our lives. Life comes with multiple changes, including new family members, divorces and remarriages, deaths, or even changes in philanthropic interests. Each one of these can have…

In order for a last will and testament or living trust to be valid and enforceable, the person creating the document must have the requisite mental capacity. This is similar to needing the capacity to get married, sign a contract, make medical or financial decisions, and other important aspects of life. When someone with standing calls into question the capacity of a testator or trustor, the will or trust could be rendered invalid. But how does California decide when someone is incapacitated for estate planning purposes? California Probate Laws Probate laws in California define testamentary incapacity as: The individual does not have the sufficient capacity to: Understand the nature of creating the trust or will Understand and remember the nature of their own property at issue in the trust or will, OR Recall…

Since 2016, California has allowed property owners to sign revocable transfer on death deeds (RTODDs). These deeds authorize the automatic transfer of property title to designated beneficiaries upon the property owner’s death. This means the property transfers without going through probate or being held in trust, which many people were happy to take advantage of. There are some particularities with these deeds, and anyone drafting one should understand them. First, only three types of property qualify: Condominiums Residential property with one to four units Single tract of agricultural land with a single-family residence (up to 40 acres) Further, if there is more than one beneficiary, each one must receive an equal share. Issues With Current RTODD Laws There were problems with California’s RTODD laws as they stood, however. For example, if the transferor unknowingly designated…

As a small business owner, you take pride in being an expert at what you do each day. Running your business often requires wearing several hats on a daily basis. You are responsible for many important matters concerning the running of your business as well as the well-being of your employees and their families. But what you may not have considered is one of the most important responsibilities of all. Who will run that business if you die or become incapacitated? As a small business owner, creating a business succession plan should be an essential part of planning for your business. Although you may expect to run your businesses until you retire, life often has other plans for us. It is critical that we plan for them. What Happens to Your Business…

When you die, your property will go through the court process known as probate. During probate, the court will process your will, accept or name a representative, and appropriate any inheritance to your heirs. The Probate Process in California When you die, someone must come forward to begin the probate process. If you have a will, that will probably be the executor you named. When there is no will, or the executor is not available, the court will appoint a representative to oversee the administration of the estate. Once this person is given the authority by the court, he or she will begin the process of organizing, gathering, and valuing all the assets in your estate. While the job of an executor can be extensive, other family members or your estate attorney can…

When most people think about estate planning, the first thing that comes to mind is creating a will. But a will can be limited in what it can do for you, and there may be other devices that can offer greater benefits to you and your family. A trust is one of these devices. Whether you are looking to protect and manage your assets, pass them on to your loved ones, or shield them from taxes, a trust can be a good option for anyone who is looking to the future. What is a Trust? A trust is a legal estate planning device that involves three parties: The creator of the trust, or the grantor, who funds the trust The trustee, who manages the trust according to its terms, and The…

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.…