San Fernando Valley trust attorney

North LA County Trust Lawyer: Top 5 Mistakes to Avoid When You Make a Living Trust

by Estate Planning

A revocable living trust is an integral part of many estate plans. Its main purpose is to give you more control over how your estate is handled both before and after death while allowing your estate to avoid a lengthy probate process.

The idea of a revocable living trust is fairly simple: it becomes the owner of any assets you – the grantor – put into it. A trustee (typically also the grantor) is named to administer the trust and manage its assets. If at any time you feel the need to step down as trustee – maybe you can’t make it to the bank as easily anymore or just don’t feel like handling each aspect of your finances – the responsibility will turn to a successor trustee, who is someone you named in the trust to take over administration when you choose not to handle it anymore. The successor trustee can also take over in the event of your death, which will easily allow them to manage your assets that would otherwise be tied up in the probate courts until the estate is settled.

While this all sounds great, keep in mind that there are some mistakes that can come with setting up your trust which can ultimately be difficult to fix. Here are the top five mistakes you should avoid when making your revocable living trust:

Not including the right assets
As noted above, the main reason to create a revocable living trust is to avoid the probate process. As a rule, any asset that is solely held by a decedent has to go through probate, while any jointly held or trust-held asset does not have to go through the process. Putting a joint checking account in your trust may not make much sense, and neither would leaving out a house that is solely in your name.

Assuming you’ll be protected from estate taxes
Revocable living trusts do not protect estates from estate taxes. There are different kinds of irrevocable trusts available for that purpose, such as a credit shelter trust and marital life estate trust. These are much more complex trusts and require the experience of an LA County trust lawyer, which brings us to our next point…

Using a DIY trust maker
Many families have seen the effects of creating DIY trusts; namely, they don’t often work. Trusts must follow a strict set of guidelines that are set by the state and federal governments, and any trust that does not follow these guidelines is not worth the paper it’s printed on. An experienced LA County trust lawyer is the perfect resource for finding out if a revocable living trust is right for you and can craft it to meet your needs.

Creating a trust but not a will
Here’s an important note to keep in mind: a trust does not take the place of a will. In fact, a will (called a pour-over will when used in conjunction with a trust) is needed to control any assets that may not have made it into your trust. If you pass away without a will, then your estate will be distributed to beneficiaries as decided by the law – not necessarily the way you would want it.

Saving money now vs. saving money later
We get it – trusts can be expensive, especially compared to a very basic estate plan package. However, the extra cost today could end up saving your family and estate a serious price tag later when probate fees, time, and resources are all added up. A trust simplifies the process and is well worth the cost to whoever administers your estate once you’ve passed on.

If you want to learn more about creating a revocable living trust, or if you currently have a revocable living trust and would like to have it reviewed to ensure it still fits your needs, please give us a call at 818-334-2805 to set up a complimentary consultation.

Calabasas estate attorney

Everything You Need to Know About Prepaid Funerals | Calabasas Estate Administration Lawyers

by Estate Planning

It’s not something people want to think about, but funerals, even modest ones, can be very expensive. Many families pay more than $10,000 for services, burials or cremations, and other aspects of a loved one’s funeral. One idea that Calabasas estate administration lawyers have seen grow in popularity over the years is paying for funeral expenses in advance with a prepaid funeral contract to relieve family members from the stress of decision making and financial burdens. However, as with any financial decision, you should have as much information as possible before making a commitment to a prepaid funeral contract. Here are some key things to know:

You can plan your own funeral.
This may sound a little macabre, but think about it: you would be saving your family from the emotional rollercoaster of having to plan your funeral. They won’t have to guess what kind of service or funeral preparations you would want if you already made the decision.

You can save your family from the financial burden of funeral costs.
Funerals are often an expense that no one is ready for. Your estate may be able to cover the costs, but keep in mind that the California probate process takes on average about six months to settle, meaning it will be quite some time before your family is able to access the money to pay for the funeral. In fact, they may have to go out of pocket to settle debts before that time.

You’ll probably pay a lower price for your funeral.
Locking into a prepaid funeral contract years before your funeral can actually be cheaper, considering that prices always rise as the years go on. Consider that the average cost of a funeral in 2001 was just over $5000, which has doubled over the course of just 20 years.

It helps with asset protection planning.
Prepaid funeral contracts are considered non-countable assets for Medi-Cal planning purposes. Buying a prepaid funeral contract is usually part of the spend-down strategy when trying to qualify for Medi-Cal benefits.

There are, of course, some drawbacks associated with prepaid funeral contracts. The funeral home may go out of business, you may move out of state, and you also would not get the benefit of interest earned on the contract like you would if you put that money in an investment account instead. This is why it’s important to speak with experienced California estate administration lawyers before you sign any contracts. There may be other ways to handle your funeral plans before you pass away that fit along better with your goals.

If you’d like to learn more about prepaid funeral contracts, or if you already have a prepaid funeral contract and want to see how it fits into a new asset protection plan, please call us at 818-334-2805 to set up a complimentary consultation.

Calabasas estate planning attorney

Cryptocurrency and Estate Planning: How to Make Sure Your Digital Assets Pass to Your Loved Ones

by Estate Planning

While digital assets have been around for quite some time, it seems like very recently that people have been making them an integral part of their investment portfolio. We won’t weigh in on whether that’s a good or a bad thing; however, we will explore the effect of digital assets on estate planning. Namely, what happens to your digital assets once you pass away. But first, let’s start with a definition of cryptocurrency.

What is cryptocurrency?
Cryptocurrency is basically digital money. It can be used to pay for goods and services just like real money. The main selling point is that it’s backed by blockchain technology, which is a decentralized system that securely records and manages all cryptocurrency transactions. Long story short, the risk of your money disappearing from the internet one day using blockchain technology is relatively low.

Why do I need an estate plan?
Even though cryptocurrency is in a different class from the money that typically gets handled by an estate plan, there’s still a need to plan for what happens to it once you’ve passed away. Like any assets, cryptocurrencies are subject to the California probate process, which could potentially leave them tied up for years depending on the state of your estate plan. It doesn’t matter if your family knows where the accounts are and the passwords to access them; your cryptocurrency can still get held up.

Speaking of passwords brings us to another key to any good estate plan: you should have your accounts listed and where to find and access them. Estate plans aren’t just powers of attorney and last wills and testaments – they also include the information needed to help your loved ones administer your estate as quickly and painlessly as possible.

Putting a plan in place can protect your assets and give your family peace of mind that your affairs are in the best possible place to be handled. An experienced Calabasas estate planning attorney can speak with you about the details of your estate plan and how to craft it so it can account for your digital assets.

If you want to learn more about cryptocurrency and estate planning, or if you currently have an estate plan and want to see how an investment in cryptocurrency can affect it, please give us a call at 818-334-2805 to set up a complimentary consultation.

San Fernando Valley Estate Planning Lawyers

San Fernando Valley Estate Planning Lawyers Explain the Basics of a Pour-Over Will

by Estate Planning

When you ask someone what they know about estate planning, most people will tell you about the Last Will and Testament. In fact, very few people will mention a Pour-Over Will.  Today our San Fernando Valley estate planning lawyers will explain the difference.

While a Last Will and Testament is a standalone legal document that directs how your estate should be handled once you pass away, a Pour-Over Will is used along with a Trust, most often a Revocable Living Trust. The Will directs that any assets owned outside of the Trust at the time of your passing should be placed into your Trust and then distributed according to trust guidelines. The big difference here is that assets in a Pour-Over Will, unlike those in a Last Will and Testament, are distributed privately according to the guidelines of the Trust.

Here’s an example of why a Pour-Over Will is useful in estate planning:

At the time of your death, let’s say you owned a piece of property that you forgot to transfer to your Revocable Living Trust. This oversight would cause the property to fall “outside” of your Trust, and it would not receive the protections that the Trust provides. However, because you had a Pour-Over Will, your asset would still get directed back into your Revocable Living Trust anyway.

As mentioned above, one of the greatest advantages of using a Pour-Over Will is that it does not have to go into detail on how the estate assets will be distributed. Instead, it just states that the assets should go into the Revocable Living Trust. This is an important aspect of estate planning, especially for anyone concerned about privacy, since personal affairs can be made public through the probate process.

However, just like a regular Last Will and Testament, the Pour-Over Will is subject to probate proceedings. These proceedings can be long and complex, however, the length and complexity depend on the amount of assets that were held outside of the Revocable Living Trust. The Trust continues to exist for as long as the estate is in probate, which means Trustees’ fiduciary responsibilities may extend for longer than they thought. A basic probate proceeding can last anywhere from a few months to a year.

If you have any questions about the difference between a basic Last Will and Testament and a Pour-Over Will, or if you’d like to review your existing estate plan to ensure it still fits your situation, please contact us at 818-334-2805 to set up a consultation with one of our San Fernando Valley estate planning lawyers.

Calabasas Elder Law Attorney

Calabasas Elder Law Attorney: How to Know When It’s Time to Step in and Care for Your Elderly Loved One

by Estate Planning

The number of adult children caring for their elderly parents is growing at a very fast pace. If you are a baby boomer and not already caring for an elderly parent, chances are high that you might be facing this situation soon.  It isn’t always easy to know when, or how, to step in to ensure that your aging loved one receives the care that he or she needs. As a Calabasas elder law attorney, I’ve helped hundreds of families through this stage of life and can offer tips for assisting your aging loved ones.

How to know when to step in

Age alone is not an indicator of when an elderly person needs you. Some people do quite well on their own into their nineties and beyond.  Others might need help much earlier. The key here is to look for warning signs. The signs might include frequent falls or unexplained bruises, an empty fridge, or even unopened mail. Frequent visits are the best way to get a clear picture of your loved one’s physical and mental health.

Develop a plan

If you think the time has come to step in and provide care for your elderly loved one, you should start by developing a plan that includes all family members. Consider allowing your elderly loved one to also participate in creating the plan. It’s best to start with small, easy changes that still allow your loved one to maintain his or her independence.

Meet with an Elder Law Attorney

To provide the best care for your elderly loved one, you need to ensure that you have the necessary legal protections in place. A Calabasas elder law attorney can help your loved one create documents that will allow you, or someone of their choosing, to make decisions for them in financial and medical matters.

If you suspect that your loved one needs help, I encourage you to take these steps right away. We get a lot of calls from people who waited too long and are facing unnecessary financial and legal crises as a result.  Don’t limit your options. Contact our law office at 818-334-2805 to schedule a consultation for the peace of mind knowing that you are doing everything possible to help your loved one.

Calabasas Estate Planning Lawyer

How to Convince Your Spouse to Meet with a Calabasas Estate Planning Lawyer

by Estate Planning

The estate planning process is sometimes initiated by one spouse, while often being met with hesitation by the other. The reasons are totally understandable, since thinking about death or incapacity can bring many uncomfortable feelings. There is also a sense of comfort in the fact that “ignorance is bliss,” as many people don’t want to confront their current life situation.  

Keep this in mind, though: while it’s never too early to plan, it can oftentimes be too late. Sticking our heads in the sand won’t lessen the need to create an estate plan. That’s why we’re giving you answers to the three most common excuses for avoiding estate planning, which will help you convince your spouse that it might be time to speak with a Calabasas estate planning lawyer:

“Why do I need an estate plan, especially now?”

Most people think that they don’t have to create an estate plan until they reach retirement age. This, of course, is a huge mistake since tragedy can strike at any time. Some people also mistakenly believe that an estate plan is only needed if they have a great deal of money. They should know that estate planning is much more than dividing your assets, as it includes the ability for others to make important medical or financial decisions for you or your spouse in the event of disability or incapacity.

“You’ll inherit everything anyway.”

It’s true, a spouse will most likely inherit the majority of the estate. But what if something happens to both spouses? And what about your children? If you don’t have an estate plan, you won’t have a legal say in who raises your kids if both spouses pass away. Children from a previous marriage may also end up disinherited when the new spouse inherits the majority of the estate. Your spouse could also end up with estate taxes, court fees, and legal burdens after you pass.

“We already have an estate plan.”

This excuse could definitely throw you a curveball since it’s technically true. If you die without an estate plan, your estate goes through the legal process that is set forth in your state’s laws. So why would you spend the money to create an estate plan if the state already gives you one? It’s simple: the State does not take any of your wishes into consideration. Not only that, but the process of settling one’s estate through the probate courts is long, expensive, and extremely stressful for your loved ones.

If you want to get started on your estate plan, or if you want to have your existing estate plan reviewed to ensure it still fits your current situation, please contact our law firm at 818-334-2805 to set up a consultation with one of our Calabasas estate planning lawyers.

Calabasas Will Lawyers

Calabasas Will Lawyers Answer, “What is a Roth IRA and Why is It Good for Estate Planning?”

by Estate Planning

Individual Retirement Accounts (IRAs) are savings vehicles that allow a tax deduction to be taken when you contribute to the account. The maximum contribution in 2021 is $6,000, and those age 50 and over may contribute an additional $1,000. The income is not taxable while the assets are held in the IRA, however, the distributions are included in taxable income when taken in retirement.

This is where the difference between a Roth IRA and a traditional IRA comes in. A taxpayer who contributes to a Roth IRA does not get a deduction for the contribution, meaning they have to pay full taxes on any amount that goes into the account. From there, however, the earnings grow tax-free and they are generally not taxable when the distributions are made during retirement.

How to Qualify for a Roth IRA
A taxpayer may only qualify to make Roth IRA contributions if their taxable income is within certain limits. Married taxpayers who file joint returns may contribute the full amount if their income is below $198,000 in 2021. A phase-out occurs after $198,000, eventually ending at $208,000, at which point the taxpayer cannot contribute anything if their income is $208,000 or higher. An unmarried taxpayer may make a full Roth IRA contribution if their income is below $125,000 in 2021, with a phaseout up to $140,000, after which point no contribution is allowed.

While the eligibility to contribute to a Roth IRA depends upon the taxpayer’s taxable income, anyone may convert their traditional IRA to a Roth IRA. The amount of the traditional IRA is taxable when the conversion is made, meaning they will have to pay taxes based on his income tax rate on the full amount held in the traditional IRA.

Why a Roth IRA is Good for Estate Planning
Roth IRAs also differ from traditional IRAs in the fact that you can let your savings accumulate tax-free in the account over a long period of time without taking the minimum withdrawals. This will most likely lead to you having a significant amount of money in your Roth IRA when you pass away. Once you pass away, the Roth IRA will pass to the beneficiary you named on the account. This means that the assets in the Roth IRA will not have to go through the probate process, unlike your other solely-owned assets. Be sure that your beneficiary designations are up to date, however, as they could end up going through a long and costly probate process if your beneficiary predeceases you and you do not name a replacement.

If you have any questions about the difference between Roth IRAs and traditional IRAs, or if you’d like to have your current estate plan reviewed to see how a Roth IRA could help, please contact our Calabasas will lawyers at 818-334-2805 to set up a consultation.

San Fernando Valley estate planning attorneys

What is a Life Insurance Trust? | San Fernando Valley Estate Planning Attorneys

by Estate Planning

There are several different trusts available to achieve asset protection planning goals and to ensure you leave a legacy behind for your loved ones. One of the most common trusts to help achieve these goals is an irrevocable life insurance trust, also called ILIT. These trusts protect the benefits of your life insurance policies by keeping them separate from your taxable estate. Experienced San Fernando Valley estate planning attorneys recommend ILITs to their clients who own large life insurance policies that, in addition to other assets, may put those clients over the state or federal estate tax thresholds. ILITs also allow policy owners to choose who benefits from the life insurance proceeds and how those benefit payments are distributed.

But how do you know if an irrevocable life insurance trust is the right tool for you to protect your assets? The first step you should take is to speak with a San Fernando Valley estate planning attorney who can determine if this trust fits in with your goals. Here is some additional information that can help you get ready for that discussion:

An ILIT is an irrevocable trust, which means it cannot be changed or revoked by the Grantor (the person who makes the trust), and the Grantor must give up all ownership of the Trust assets. Once a life insurance policy is transferred to the ILIT, the Grantor no longer owns the policy and technically has no control over the policy or any beneficiary designations. However, the Grantor sets the terms of the trust, so they control how the life insurance distributions are made and to whom, as well as when those distributions are made to the beneficiaries.

The Grantor names a Trustee, usually a spouse or adult child, to oversee the trust and the life insurance policy. Keep in mind that the life insurance policy must be transferred to the ILIT at least three years before the death of the Grantor, otherwise the trust will not be valid.

An irrevocable life insurance trust is difficult to craft correctly and requires the knowledge of an experienced estate planning attorney to create. If the trust is created incorrectly, your estate may be responsible for paying estate taxes on your life insurance policies while your wishes for your beneficiaries may not be fulfilled.

If you are interested in learning more about irrevocable life insurance trusts, or if you’d like one of our experienced San Fernando Valley estate planning attorneys to review your existing irrevocable life insurance trust, please contact us at 818-334-2805 to set up a consultation.

Calabasas trust attorney

Calabasas Trust Attorney: 3 Questions to Ask Yourself When Choosing a Successor Trustee

by Estate Planning

As a Calabasas trust attorney, I help many seniors set up Revocable Living Trusts to avoid probate proceedings and to give clear instructions on how they want their assets and property handled after death. The Grantor creates a trust once it is signed and funded with assets or property; that means anything used to fund the trust is technically property of the Revocable Living Trust. The Grantor no longer owns the trust assets and property, though they do retain control over it if they are the Trustee of the trust.

This is the beauty of a Revocable Living Trust: it can survive the incapacitation and even death of the Grantor and Trustee because the trust owns the property and allows for various people to control it as Trustees. When the Grantor/Trustee passes away or becomes incapacitated, a Successor Trustee (who is already named in the trust to serve in that capacity) gains control over the Trust assets, though must still abide by the terms and conditions of the trust. But before you choose a Successor Trustee for your trust, you should ask yourself the following questions:

Who will want to handle my trust?

Typically, Successor Trustees are either the spouse or adult child of the Grantor/Trustee, but just because they’re family doesn’t mean that they want to handle the trust. A spouse may not be able to handle the work needed to be a Successor Trustee, and adult children may want to avoid conflicts with siblings or other family members or may even have a complicated personal situation and simply cannot take over the extra responsibility. Speak with your potential Successor Trustees to find out if they think they’ll be able to handle the job, and make sure to provide additional instructions in your trust on who should become Successor Trustee if the person named cannot or will not accept the position.

Should I name co-Trustees?

There are pros and cons to having co-Trustees. On one hand, it may be a good solution to ensure everyone feels they are being treated equally. On the other hand, it can lead to family conflicts and difficulties in administering the trust. In many cases, co-Trustees are named to serve as Successor Trustees, but one will usually relinquish power to the other in order to make things go smoothly. If you are considering naming co-Trustees, you should speak with an experienced Calabasas trust attorney to find out all of the potential pitfalls.

Will the Successor Trustee be strong enough to serve?

One thing that is often overlooked is the fact that a Successor Trustee will have to operate during difficult moments, such as when the Grantor becomes medically incapacitated or after the Grantor passes away. This is why many people ultimately settle on a professional trustee or Calabasas trust attorney to serve as Successor Trustee. This avoids any emotional issues and family conflicts, while allowing decisions to be made objectively. One potential drawback to having a professional Trustee or attorney serve as Successor Trustee is that they charge a fee for their services, which is usually a percentage of the total trust assets.

If you’d like more information about Revocable Living Trusts and Successor Trustees, or if you’d like to review your existing Revocable Living Trust with an experienced Calabasas trust attorney, please contact us at 818-334-2805 to set up a consultation.

LA County special needs lawyers

North LA County Special Needs Lawyers: 3 Important Steps for Special Needs Trusts

by Special Needs Planning

All parents who have a child with special needs want to make sure that those children are taken care of in every instance – most importantly, after the parents have passed away or can no longer provide personal care for the child. Creating a special needs trust is extremely crucial in keeping that continuity of care and making sure your loved one can receive all the benefits available to them from state and local agencies. Here are three important steps that North LA County special needs lawyers recommend for special needs trusts to ensure it will provide for your loved one with disabilities:

Step 1: Create the Trust

The most important goal of a special needs trust is to make assets and property available for the benefit of your special needs loved one without transferring ownership to them. Ownership of those assets will disqualify them from needs-based benefits and make it much harder to receive necessary care and enjoy a nice quality of life. The first step in making this happen is to contact a lawyer who has experience creating special needs trusts to make sure the trust is valid and covers all your loved one’s needs. The last thing you want to do is create a trust that you believe provides protection for your loved one only to have it invalidated after you pass away due to mistakes made during its creation. This may leave your loved one in a bad situation without any way to receive funds or necessary care.

Step 2: Fund the Trust

A special needs trust must be funded with assets or property once it is signed for it to come into effect. This can happen immediately, or the trust can be funded by a Last Will and Testament at the time of your death. North LA County special needs lawyers will review both options with you and help you choose which one works best for your situation. The assets and property held within the special needs trust are used to pay for items that are not typically covered by government benefits, which means that your loved one can enjoy a better quality of life through housing, education, and entertainment.

Step 3: Administer the Trust

The Trustee is the person who administers the special needs trust. The Trustee is tasked with making sure the terms of the trust are followed and your loved one receives everything they need from the trust. The Trustee typically will be a parent or whoever initially created the trust, however a Successor Trustee should be named to take over in case the original Trustee is incapacitated or passes away. Administering a special needs trust can be difficult since there are so many rules that need to be followed, so it’s advised to consult with an experienced special needs attorney in North LA County to determine how best to choose a Successor Trustee.

If you would like to get more information about setting up a special needs trust for your loved one, or if you’d like to have your current special needs trust reviewed to make sure it provides the right amount of protection for your loved one, please contact us at 818-334-2805 to set up a consultation.