Posted on September 10, 2024 in Estate Planning

A digital estate plan is an essential tool for managing and protecting your online assets after your death. However, if not prepared properly, it may fail to reflect your wishes accurately, leaving your digital footprint unprotected.

When creating your digital estate plan in California, it's important to avoid common errors that could undermine its effectiveness. Here are some critical mistakes to watch out for:

Leaving some digital assets out

Your digital estate plan will only cover the online assets you specifically include. If you fail to account for all your digital property, such as social media profiles, cryptocurrency wallets or cloud storage, you risk leaving parts of your digital estate exposed and unprotected.

Using outdated or vague instructions

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 Posted on August 23, 2024 in Estate Planning

It's an unfortunate situation, but in some families, the parent-child relationship reaches a point where one or both parties decide it's best to cut ties for the time being. It could be due to an addiction, lifestyle choices or a multitude of other reasons.

In such a situation, a parent needs to make a decision: Should they include the child as a beneficiary or not leave anything to them?

California's inheritance laws

Disinheriting a child is a significant and emotional decision. Furthermore, California's detailed inheritance and community property laws make the situation even more complex.

One thing to remember is that California is a community property state, meaning that any assets acquired during the marriage are considered jointly owned by both spouses. While most people view community property in the context of divorce, it also has an impact on estate planning, particularly if you intend to disinherit a child.

Your will must use clear and explicit language that states your intention to disinherit the specific child. There could be misinterpretation and legal challenges if it's vague or ambiguous. Furthermore, failing to name the child specifically could be viewed as an oversight or accidental omission.

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 Posted on August 07, 2024 in Estate Planning

Are you one of the many older Californians who rely on an in-home caregiver to help you with everyday tasks that have become increasingly hard to manage? More and more people are opting to stay in their own homes rather than move to assisted living or other care facilities.

In-home caregivers help them do that if they don't have relatives nearby who can help them. It's only natural that if you have a caregiver to whom you're especially close, you want to leave them a little something in your will – or more than a little something.

You certainly have every right to do that – assuming it's your choice and you haven't been pressured or tricked somehow into doing it. Unfortunately, some caregivers abuse their role in elderly, vulnerable people's lives to exert "undue influence" on their estate planning.

What does California law say about caregivers?

That's why California law states that a "donative transfer...is presumed to be the product of fraud or undue influence...if the instrument was executed during the period in which the care custodian provided services to the transferor, or within 90 days before or after that period." That's called a "rebuttable presumption."

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 Posted on July 29, 2024 in Estate And Trust Litigation

A trust can be used as part of an estate plan. When doing so, a trustee is selected to distribute assets from that fund.

For example, it may be an educational trust. The money is supposed to be used for college tuition and related expenses. The beneficiary doesn't get that money directly, but the trustee is supposed to use it on their behalf or give them payouts to cover their college expenses.

However, litigation sometimes happens between trustees and beneficiaries if there are accusations that the trustee has abused their position. Below are some ways that this could happen.

Using funds inappropriately

First of all, perhaps the trustee just allows distributions for any reason. Or maybe they give out distributions to someone who is not a named beneficiary of the trust. They are not performing their duties properly and they may need to be removed.

Embezzling the funds

Another issue that sometimes happens is that the trustee will start taking money out of the fund for themselves. After all, they have access to the account. But this is clearly a form of misappropriation, depriving the beneficiaries of the inheritance they deserve.

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 Posted on July 12, 2024 in Estate Planning

One way to make future healthcare decisions is to use a medical power of attorney. Instead of making those decisions directly – such as saying that you don't want to be resuscitated – you instead pick an agent and give them the legal ability to make these choices on your behalf. If something happens to you and you are incapacitated, the agent steps in.

As such, it's very important to choose the right agent. What should you look for when selecting this person?

They should live nearby

First off, they should live relatively close to you and your family. Medical situations sometimes require emergency treatment, and they need to be able to get to you quickly.

They should understand the healthcare process

Next, look for someone who won't have trouble navigating the medical process. Maybe they've been through it themselves or they are knowledgeable and articulate, and they'll be able to work with your medical team. It won't feel overwhelming for them.

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 Posted on June 24, 2024 in Estate Planning

In the past, it was very common for people to attend a will reading after someone else passed away. The attendees may include family members or others who believed they would be beneficiaries. They would go to the will reading so that an attorney could read them the document and they could find out what they had inherited.

Does this still happen today? Not in most cases. Readings were generally just because the majority of the population was illiterate, so families needed to gather together and have someone who could actually read the estate plan do so for them. Today, the average person can easily just read the plan on their own. Instead of going to a will reading, they will receive a copy of the estate plan telling them what they are going to get as an inheritance.

Who distributes the documents?

This is one of the main duties of the estate executor. They have to administer the estate, which means reading the estate plan first and then following the instructions. They are given the initial copy after the other person passes away, and they can then send copies on to the named beneficiaries.

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 Posted on June 18, 2024 in Estate Planning

One part of estate planning that's often overlooked is determining who to name as the executor of the estate. This is the person who is going to make sure that the instructions you provided in your estate plan are followed.

There are several responsibilities besides just following your instructions. They also have to find beneficiaries, locate assets and pay creditors in accordance with applicable laws.

1: Financially savvy

You need to choose someone who can make good financial decisions. The executor will have to ensure that your estate taxes are paid and that assets are taken care of. Because of this, naming someone who's financially stable is likely the best choice for your beneficiaries.

2: Not self-serving

All the decisions the estate executor makes must be based on what's best for the estate and your beneficiaries. They can't make any decisions based on what's easier for them or what will benefit them. Everything must be based on your plan and what needs to be done for the estate.

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 Posted on May 31, 2024 in Estate Planning

Disclaiming an inheritance in California is a legal process wherein an heir or beneficiary refuses to accept an inheritance or gift from an estate. This process can be a strategic decision for various reasons, including tax implications, creditor issues or personal preferences.

Understanding the procedure and implications of disclaiming an inheritance is important for anyone who is trying to make an informed decision in this regard.

Common reasons to disclaim an inheritance

Inheriting assets can sometimes result in significant tax liabilities. By disclaiming the inheritance, the asset can pass to another beneficiary, potentially reducing the overall tax burden on the estate or aligning with better tax planning strategies.

If an heir or beneficiary has substantial debts or is facing bankruptcy, accepting an inheritance might expose the assets to creditors. Disclaiming an inheritance allows the assets to pass to another beneficiary who can protect them from being claimed by creditors.

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 Posted on May 10, 2024 in Estate And Probate Administration

As it applies to estate planning, undue influence is a type of coercion or manipulation. A beneficiary attempts to influence the way that the estate plan is written for their own financial gain.

For example, one beneficiary acts as a caretaker for the elderly individual, while the other beneficiaries live further away from home. The caretaker tells the elderly person that they will no longer assist them unless they make certain changes to the estate plan. They're using their position of power to manipulate that person‘s estate planning documents.

Sudden changes

One potential red flag of undue influence is when things change suddenly. If there are last-minute alterations to an estate plan, that can be problematic.

Highly unequal bequests

Unequal bequests are legal, and many people do use them even when they haven't been influenced by someone else. But if the estate plan is heavily in favor of one person over the other, that could be a sign of undue influence. In the example above, perhaps the caretaker ends up getting 90% of the estate. Other siblings or beneficiaries may feel that such an unequal split was never the elderly person's intention.

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 Posted on April 26, 2024 in Estate Planning

Debt can be complicated when someone passes away. We have previously discussed the fact that many minor debts have to be paid off by the estate executor. For instance, they may need to pay property taxes or pay off credit cards. This debt is not inherited by the adult children or any other beneficiaries but is simply taken care of by the executor.

That said, what about a home mortgage? For instance, say that your parents recently passed away and left you their home. The housing market is very competitive right now, so you were stunned to finally have your own place to live.

But it turned out that it wasn't free and clear, because your parents still had 10 years to pay on the mortgage. Do you get to keep the house, do you inherit the mortgage or is the lender going to reclaim the home and sell it to someone else at an inflated price?

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