Estate planning is a critical aspect of financial and life care planning that too often gets overlooked. Understanding why estate planning matters for you is essential, regardless of your age, wealth, or family situation. It involves creating a set of legal documents to guide the transfer of your assets, the care of minor children, the making of healthcare decisions, and the management of your financial affairs if you're unable to do so.

In this article, we'll explore the components of estate planning, why it's crucial for everyone, and how an estate planning attorney in Orange County can help you navigate this complex process.

Importance of Estate Planning

Estate planning is not just for the wealthy; it's an essential process for anyone looking to protect their assets, ensure their wishes are honored, and provide for their loved ones efficiently and effectively.

Here's a closer look at why estate planning matters for everyone, touching on key components such as protecting minor children, managing financial and medical decisions, avoiding the probate process, minimizing estate taxes, and ensuring your wishes are honored.

Protecting Minor Children

One of the most compelling reasons for estate planning is the protection it offers minor children. Designating guardians in your estate plan is crucial if something unexpected happens to you. Without a valid estate plan, state laws dictate who cares for your children, potentially leading to outcomes that don’t align with your preferences. By proactively naming guardians, you ensure your children's care aligns with your values and wishes.

Managing Financial and Medical Decisions

Incorporating powers of attorney and healthcare proxies (also known as advance healthcare directives) into your estate plan grants authority to a trusted individual to make financial and medical decisions on your behalf if you're unable to do so.

This includes managing bank accounts, investment accounts, and making critical healthcare decisions, ensuring that your financial affairs and medical care are in trusted hands.

Avoiding the Probate Process

The probate process can be lengthy, public, and costly, but a comprehensive estate plan, particularly one that includes a revocable living trust, can help your heirs bypass this process. This ensures a more efficient and private transfer of assets, preserving the value of the estate and reducing stress on your beneficiaries during a difficult time.

Minimizing Estate Taxes

Strategic estate planning can significantly reduce the estate tax burden, ensuring that a larger portion of your assets is passed on to your beneficiaries rather than being consumed by taxes. Tools like revocable trusts, certain types of irrevocable trusts, and tailored beneficiary designations can be instrumental in achieving these tax efficiencies.

Ensuring Your Wishes Are Honored

Estate planning is ultimately about ensuring that your wishes are respected regarding the distribution of your estate, your healthcare decisions, and the care of your children. Detailed estate planning documents, crafted with the help of an estate planning attorney, lay out your instructions clearly, minimizing the potential for disputes and ensuring your wishes are carried out.

Estate planning encompasses various aspects, from drafting legal documents to designating beneficiaries for retirement accounts, real estate, and financial accounts. It takes into account family dynamics, family situations, and future care needs, including contingent beneficiaries and advance health care directives, making it a comprehensive strategy for managing your life care and financial legacy.

Components of a Comprehensive Estate Plan

A comprehensive estate plan is an essential tool for managing your legacy, offering peace of mind that your wishes will be honored and your loved ones protected. Crafting an estate plan tailored to your specific needs involves several key components, each playing a vital role in ensuring your assets are distributed according to your desires, minimizing tax burdens, and safeguarding your family’s future.

Will and Trusts

Wills are fundamental documents that outline your wishes for asset distribution and guardian nominations for minor children, ensuring that your instructions are clear and legally recognized.

Trusts, particularly revocable living trusts, provide a higher level of control over when and how your assets are distributed, allowing you to bypass the probate process and potentially reduce estate taxes. Trusts can also be structured to protect assets from creditors and lawsuits, offering a durable shield for your estate.

Beneficiary Designations

Correctly designating beneficiaries on financial accounts, retirement accounts, and life insurance policies is crucial. These designations are often binding and can override instructions left in wills, making it essential to keep them updated in line with your current wishes and family situation.

Powers of Attorney

A financial power of attorney designates someone to manage your financial affairs, from bank accounts to real estate transactions, if you become incapacitated. A medical power of attorney or healthcare proxy empowers a trusted individual to make healthcare decisions on your behalf, ensuring that your medical care aligns with your preferences.

Advance Health Care Directive

An advance healthcare directive, sometimes combined with a healthcare proxy, explicitly states your wishes regarding end-of-life care and other medical decisions, providing clear guidance for your family and healthcare providers.

Estate Planning Checklist

Maintaining an estate planning checklist is an effective way to ensure your plan remains current. Regular reviews, especially after significant life events or changes in estate planning laws, can help you adjust your plan as needed, keeping it aligned with your goals and legal requirements.

Tailoring Your Estate Plan to Your Needs

Components like revocable trusts for asset protection and management, umbrella policies for additional liability coverage, and spendthrift clauses in trusts to protect beneficiaries from creditors, are all considerations that might be relevant depending on your specific situation.

Consulting with an experienced estate planning attorney is critical in navigating the complexities of estate planning. An attorney can offer personalized advice, helping to craft an estate plan that not only meets your immediate needs but also anticipates future challenges, ensuring your legacy is preserved according to your wishes.

Secure Your Legacy with Parker Law Offices!

Understanding the importance of estate planning is the first step. The next step is to ensure you have a valid estate plan that reflects your current wishes and life situation. Parker Law Offices specializes in providing comprehensive estate planning services tailored to your unique needs. Our experienced estate planning attorneys in Orange County are dedicated to guiding you through the estate planning process, from initial strategy to the finalization of all necessary documents.

Don't wait to protect your assets, your loved ones, and your wishes. Schedule a consultation with Parker Law Offices today to partner with a knowledgeable probate attorney in Orange County who can help you craft a personalized estate plan.

If you have been named the executor or successor trustee of an estate, it's essential to contact an Orange County estate planning attorney who can discuss your obligations and the responsibilities involved in this role. Many feel overwhelmed as they are grieving the loss of their loved one yet also faced with the responsibility of handling the administration of the estate. 

The Steps to Distributing an Estate

Executors, also known as personal representatives in some cases, are faced with an extensive list of to-dos. Let's take a look at the steps to take when it's time to distribute someone's estate.

#1 Locate the Will

Ideally, this detail has been taken care of before the decedent's passing, and you have access to all the critical documents. If not, call their estate planning attorney in Orange County

If they do not have an attorney, consider where they may have kept important documents. For example, if they had a safe deposit box, you would be allowed access to search for the will. If you cannot locate the will, the deceased is said to have died intestate and the state will determine asset distribution.  

#2 File the Will

Once located, the executor needs to file the original with the probate courts, even if probate is not expected to occur. If the deceased had a revocable trust, the assets and property placed into the trust would not need to go through probate. 

Probate can be a long, drawn-out, and financially depleting ordeal. If beneficiaries end up arguing about the distribution of the estate, you can expect rising fees and decreasing assets. Sadly, inheritance disputes bring out the worst in family members. 

#3 Notify Businesses

The executor needs to notify several companies, including utility and credit card companies, the post office, banks, and the Social Security Administration if the deceased was receiving benefits. 

Executors also need to notify creditors. Depending on state laws, they can do this through the mail or publish a notice in the local paper or both. Creditors then must file any claims within a certain period. 

#4 Appraise Inventory and Assets

After the will has been located, the executor needs to perform a thorough inventory of the assets in the estate. Assets of value, such as jewelry or antiques, will need to be appraised. It's not uncommon for family members to enter the home and remove valuable or sentimental items, making the process of inventory vital to fair distribution. 

If items are removed and the person who took them refuses to return them, the court can demand their return. In addition, if an executor feels that some assets in the home are not secure, they have the legal ability to change the locks. 

#5 Open a Bank Account

The executor is required to obtain a Federal Tax ID number and open up an estate bank account. The accounts of the deceased are then transferred into this account. 

#6 Pay Creditors

Before distributing assets, creditors, bills, fees associated with administering the estate, and funeral costs need to be paid. The Executor also needs to file the final tax return, determine if any state or federal estate tax is due, and pay any taxes. Once paid, a release from the tax agency is required by the probate court.

If there is not enough money to cover these expenses, an executor may need to sell stocks or other assets. Before doing so, contact an estate planning lawyer in Orange County.  

Because of the extensive time factor and to give creditors time to come forward and request payment, the distribution of assets can occur many months after the decedent has passed on. 

#7 Determine if Probate Is Required

To determine if probate is necessary, an executor will need to figure out the value of the assets, if a trust is in effect and the type of trust. Because of the numerous rules and regulations regarding probate, it's essential to contact an Orange County estate planning lawyer to help you through this process. If any mistakes are made in the handling of the estate, an executor can be held liable. 

#8 Work With the Successor Trustee

In many cases, the successor trustee and the executor are the same person. However, if the deceased left a living trust and named a different person as successor trustee, the executor will need to work closely with this person who is in charge of trust assets.

Any assets that have been placed into the trust do not have to go through probate and can be distributed to the beneficiaries much sooner than property going through probate.

#9 Preserve the Assets

The executor is entrusted with the immense responsibility of preserving and managing the assets before they are distributed to the beneficiaries. This means that bills need to be paid, and investments and assets need to be secured. 

Part of this process may be ensuring the home mortgage and utilities are paid as well as the insurance premiums of all valuables. Finally, the executor must also collect any money owed to the estate and deposit it in the estate's bank account. 

#10 Distribute the Assets

Once bills and taxes are paid and the probate, if applicable, has closed, an executor can distribute the assets. If the beneficiaries are not satisfied with the distribution or suspect foul play by the executor, they can request an informal accounting by the executor or petition the court for mandatory accounting. 

Should this occur, it's important to consult with an Orange County estate planning attorney as soon as possible.

Enlist the Help of a Trusted Estate Lawyer 

As you can see, the person named executor holds tremendous responsibility. If you are in the process of developing an estate plan, be sure to choose this person wisely. Anything that is not in writing, such as personal and household items, will need to be distributed by the executor at their discretion. 

For this reason, the person must be impartial and fair. The right person in this position can make the difference between a smooth transition and a family dispute that dwindles away the assets intended for loved ones. At Parker Law Offices, we ensure that our clients have the documents in place that protect your family and your assets and help executors accomplish their duties. For a complimentary consultation, contact us at Parker Law Offices today.   

As an Orange County estate planning attorney, I've had numerous clients contact our law office, concerned about the effects of Proposition 19. To help people understand this sometimes confusing proposition, we've answered some of the most frequently asked questions, including how this new amendment will affect your property taxes as well as your beneficiaries.

What Is Proposition 19?

In November 2020, California voters narrowly approved Proposition 19. The Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act is an amendment that produces two significant changes in property taxes.

For starters, it provides Californians over the age of 54, and others, a significant tax break when buying a new home. To retain their parent's low property taxes, beneficiaries will have to make the inherited property their principal residence.

Let's take a look at each of these impactful changes that are now in effect. 

How Much Do Homeowners Pay on Property Taxes in California?

In California, thanks to Proposition 13, properties are taxed based on their assessed value instead of the fair market value. This value is based on the purchase price, cost of improvements, and an increase of no more than 2% per year. With housing costs in California appreciating rapidly, many homeowners pay significantly lower taxes on their current residence than if they purchased the same home today.

California has one of the highest average property tax rates in the nation, with only nine states coming in higher. The average tax rate is 0.74%, with Orange County's effective property tax rate set at 0.68%.  

An estate planning attorney Orange County CA can let you know how your estate plan will be affected by the passing of this law.

Who Receives Property Tax Breaks? 

Californians who are 55 and older, have severe disabilities, or lost their home in a natural disaster such as a wildfire received property tax breaks with the passing of Proposition 19. Previously, homeowners could transfer their property tax assessments only once in their lifetime and only within their county or nine other participating counties in California. 

To transfer the taxable value of their existing home, their new home had to be of equal or lesser value.

Under those restraints, if a person wanted to downsize their home as they got older and move from Southern to Northern California to be with their son or daughter, they may have been faced with a significantly increased property tax burden. 

For example, a home that a Californian purchased for $200,000 thirty years ago is now worth $1 million. If such a person were to sell and purchase a home for more than $500,000, their property taxes would more than double. 

Under the new amendment, qualified homeowners may transfer their property tax assessments to a new home anywhere in the state and up to three times in their lifetime. The new replacement home may cost up to $1 million more than their existing home.  

Homeowners must purchase the new property within two years of the sale of their original home. 

In essence, it allows qualified individuals to purchase a new home anywhere in the state of California and retain their relatively low property taxes, if applicable.

How Are Beneficiaries Affected?

Before Proposition 19 passed, your estate planning attorney in Orange County may have advised you to speak with them to make changes to your estate plan while the more favorable rules were in effect. The restrictive new laws regarding the property taxes paid by beneficiaries have since gone into effect on February 16, 2021.

The new law mostly eliminated the parents' and grandparents' exclusion from property reassessment when passing on their property to their children and grandchildren under certain conditions. 

Before this date, parents could transfer their principal residence to their children without triggering a reassessment. As an example, if a parent left their home to their children, the beneficiaries could retain their parent's property tax rates and still use the property as a rental or vacation home.

The previous law also allowed children to inherit the property assessments of residential or commercial properties valued up to an additional $1 million.  

Under the new law, the inherited property must be the principal residence of the parents or grandparents and valued at no more than $1 million above the current assessed value. Additionally, the property must become the child's or grandchild's primary residence within one year of ownership for them to qualify for their parent's property tax rates. 

Otherwise, the property will be reassessed and, due to current property values, the property taxes could be significantly higher.

Ultimately, children inheriting property from their parents may decide to sell the property rather than face significant property taxes. For instance, if the parent's bought a rental property for $100,000 decades ago, and that property is now worth $1 million, the children will be faced with paying property taxes on the current value. 

Contact an Orange County estate planning lawyer to determine how this new law may affect you and your family. 

Preparing For the Future

Due to the recent changes, it's important to establish your estate plan or have your existing plan reviewed. In addition to changing California laws, some experts believe that the new administration may reduce the deficit by lowering the estate tax exclusion and increasing the tax rates on transferred properties. 

The current $11.7 million estate tax exemption and gift tax exemption may be reduced to $3.5 million for estates and $1 million for gifts. Additionally, the tax rate on transfers over those amounts may increase from a flat rate of 40% to adjusted rates based on the estate's value. 

While this change affects a small percentage of Americans, several other laws are being considered that will have far broader consequences. At Parker Law Offices, we're committed to helping you protect your family's estate. For a complimentary consultation, contact us at Parker Law Offices today.

When you’ve worked so hard to amass your properties and assets, the next thing you should do is make sure your hard work pays off in the way you intend. Whether that means following a succession plan, taking care of your loved ones, or supporting a charity, you will need an up-to-date estate plan. If you don’t do this, the court will decide what is done with your assets when you pass away.

Contrary to what we like to think, an estate plan isn’t just a one-time written, signed, witnessed, and notarized document that serves you until you die. Changes happen all the time, be it in your life, the lives of your loved ones, or in terms of the law. 

Reasons to Have An Attorney Review Your Estate Plan

For this reason, estate planning lawyers usually suggest an estate plan review every few years, or at the very least whenever there is a life event in your family oryou inherit wealth. One of the reasons for this is that laws which can affect your estate plan change frequently, especially as newly elected officials at federal and state levels make changes to policies, and Congress passes new legislation.

Whether you had our help drafting your initial estate plan or had it prepared elsewhere, an Orange County estate planning lawyer can help you review your estate plan to make sure it’s up to date and according to your current wishes.

One of the constants in life is change. Over time, people encounter changes in their relationships, family, their residential situation and their wealth. Life events such as birth, marriage and death occur. All of these life events influence one’s situation, wishes, and subsequently affect one’s estate plan.

Major Life Event

If you’ve experienced changes in your relationship such as divorce, death of a spouse, or remarriage, you will need to review your estate plan. 

In cases where your spouse is no longer available to oversee your estate after your death, you will need to find someone else, be it a child, or another loved one, to do the job in his or her place. And if you are recently married, you may want to designate your new spouse as co- trustee or successor of your estate.

Meanwhile, if you’ve had changes within your family, such as birth of a child or grandchild, adoption of a child, disowning of a child, or death of a child, you may also need to make adjustments to your estate plan. 

Additionally, if you or anyone in your family has a major illness, becomes disabled, or dies, you should revisit your estate plan to make sure your loved ones will be cared for in case something does happen to you. 

In the event that you or your trustee are unable to manage your estate, you can assign a corporate trustee to help manage your estate according to your wishes. If a trustee or beneficiary predeceases you, you must also revise your estate plans, to appoint a new successor trustee or possibly to redistribute your property among the beneficiaries.

Lastly, if you have moved into a different state or if your trustee or any one of your beneficiaries has relocated, you should check with an estate planning attorney to verify whether your estate plan will be affected and what changes you can make to accommodate such changes.

When people move to a different state, they will be subject to different state laws, some of which will affect your estate plan through their respective estate taxes. In such situations, it is best to find an experienced estate planning attorney to help you navigate the laws and make sure your beneficiaries will receive the inheritance you wish to leave them with.

Changes in the Law

Changes in the law happen all the time, which may directly affect estate taxes. This is especially the case when an election takes place.. As such, it’s important for you to make sure your trust is compliant with current laws.

When there are changes in estate taxes, your beneficiaries might be left to pay significantly more taxes than you originally intended. In such situations, it’s important to go over your estate plan with an estate planning attorney who will help you navigate the new estate taxation protocols. 

Of course, the opposite can also happen. There might be new laws and regulations that you can take advantage of. You can revisit old trusts or establish new ones to hold assets outside of your estate, allowing you to reduce the amount you pay in taxes. 

Acquisition of New Properties or Assets

Changes in your net worth also warrant a review of your estate plan. In time, you may purchase new life insurance coverage,more real estate, or even acquire other assets.. You might also start a business, declare bankruptcy, or even win the lottery.  Any of these developments will change your net worth and financial situation, directly affecting the amount of inheritance you can leave to your beneficiaries as well as your ability to inherit any amount of money from your spouse or other loved ones.

The distribution of your estate will vary depending on the number of beneficiaries you would like to leave your estate to.  Adding or deducting beneficiaries will require a change to your estate plan to reflect such changes.

Change Of Heart

Another reason why estate planning attorneys suggest regularly reviewing your estate plan is because people’s feelings change; Major life events may happen, relationships may develop or crumble. People you hold dear today may lose your favor in the future. A close relative may abruptly sever contact with you and refuse to allow your participation with family events, as one such example. While this may seem unlikely in your family, estate planning attorneys often receive the phone call from their client seeking to disinherit the relative in question.

Some people decide to change their beneficiaries or adjust the size of the inheritance they leave to the various beneficiaries often as a result of these changes in relationship. 

The people you trust to oversee your estate plan today may no longer have your confidence; you may no longer be on good terms with the guardian you initially chose to take care of your children; you may want to have a special needs trust created for your child, or remove an ex spouse as beneficiary of your assets due to a recent divorce.

Sometimes, people also have changes of heart and simply want to set things right, whatever form that may take. 

Review Your Estate Plan Today

If you have experienced any life changes or situations such as the ones mentioned above since your trust was prepared, don’t hesitate to work with an experienced estate planning attorney in Orange County. You can never anticipate when your estate plan will come into effect, so the best time to review your estate plan is always now if the idea of making changes is on your mind.
Reach out to an Orange County estate planning lawyer today and make sure your estate plan is written according to your wishes. We’ll help you feel assured that your loved ones will be  cared for and that the people you have chosen will benefit from your legacy.

There are plenty of advantages to using a living trust as a significant piece of your overall estate plan. In fact, any Orange County estate planning attorney who doesn’t at least mention this option is behind the times. Call Parker Law Offices now at (949) 385-3130 for your free consultation with an experienced lawyer who will make your estate planning experience easy to understand, and be able to help you make the decisions that will financially help your loved ones in the future in the best way possible.

If you choose to go it alone, the worst thing that could happen is if your trust fails. When this happens, your trust may be ineffective, unable to help you, your family, or your beneficiaries.

Before you can understand the points of failure in a living trust, it’s worth exploring how living trusts work.

Living Trust: Defined

A living trust isn’t too far off from a standard will, but it has many different advantages. Ultimately, trust, along with a will, can help you avoid significant costs and time lost during the probate court process.

Unlike various other trusts, living trusts allow you to manage them yourself so long as you are alive and able.

Trusts can be full of property, bank accounts, real estate, and more. While you are managing your trust, you can add assets, transfer ownership of assets, add or remove beneficiaries, change the trustee to manage your trust, restate or cancel it altogether.

Some of the most significant benefits of using a living trust are the following:

Ultimately, a living trust gives you more control of how your assets are managed, which should result in reduced expenses and saving money. Make sure you consult an Orange County estate planning lawyer to completely understand how a living trust fits into your estate plan.

The Biggest Point of Failure

While your estate planning attorney in Orange County may have various issues to discuss and overcome with you, there is really only one major point of failure that matters.

Essentially, the biggest way your living trust can fail is if It’s not properly funded.

What is Funding?

Funding a trust is just another way of saying you’re adding assets into the trust. This task typically involves retitling your assets into the name of the trust. 

Instead of you owning your house, for example, the trust technically owns the house while you live in it. You may also have to retitle or set up life insurance policies, bank accounts, or other elements of your estate to fit into your trust.

This is when the help of an experienced estate planning attorney in Orange County CA, really comes into play.

Once your living trust is funded with your assets, your trustee is able to manage those assets if you become incapacitated. This is important as the trustee can use your assets to help pay for medical expenses you incur while you are incapacitated.

A power of attorney (also referred to as “POA”) may provide similar powers to a person of your choosing; it also allows for a person of your choosing to manage funds in the trust. For example, a beneficiary who is a child may need funds to pay for tuition in school, student housing costs, etc. Power of Attorney, in the event of your becoming incapacitated, can allow for the child to be looked after from an appropriate financial perspective and taken care of through your instructions, enabled by powers included in and allowed by your trust.

Keep Gas In The Tank

A living trust isn’t much different than your car needing fuel. For your car, you stop by the gas station and fill up the tank. With a living trust, you properly fund it. If there is no gas, you’re stuck on the side of the road. In the same way, if your trust isn’t properly funded, it won’t be much help to you, your family, or your beneficiaries.

An insufficiently funded living trust could result in time spent dealing with the probate court. The end result is that it may end up taking much time, and costing your family much more both financially and emotionally to receive assets of yours according to the decisions rendered by a probate court judge.

The other part of your car’s fuel system that is often overlooked until it’s needed is the fuel gauge. This indicator lets you know how much gas is in the tank. Keeping your trust updated and accurate is very similar to keeping your eye on the fuel gauge.

A Word of Caution

While it might seem like a good idea to run out and start throwing property and titles into your living trust without advice from an attorney, that may not be the best option. The last thing you want to do is lose money on your assets because of fees or taxes. That could mean negating the benefit of the trust altogether.

One more thing to consider, is that advice should only come from an attorney. There are examples of many paralegals and even notary publics who offer estate planning to clients. These individuals are not certified by the state bar to practice law, and do not have malpractice insurance to protect their clients against problems resulting from errors in trusts and wills that they offer. The problems from incorrectly written trusts and wills can result in partial or even complete losses, which can be catastrophic for loved ones in need of your financial assistance in the future. 

Before you transfer things into the name of your trust, work with your attorney to see how the transfer takes place, and if there are any fees or issues you should consider.

Here are some of the most common areas that could prove problematic when you’re transferring assets into your trust. Mistakes here could result in the failure of your trust as well.

Real estate. Some homeowner associations (known as “HOAs”) require that you get their permission before transferring your home’s title. They may even charge fees. Some states may require a tax or treat your home as if you sold it when you transfer the title.

Personal Property. It’s often worth transferring the title of personal property into your trust. Things like cars, boats, motorcycles, etc., are great candidates. Transferring ownership might well result in fees.

Untitled Property. Property that doesn’t have an official title can still be transferred into the trust. Your estate planning lawyer in Orange County can help you understand this process. It is crucial that your property is described in enough depth so that no one can question it.

Retirement Accounts. Transferring your 401(k), IRA or qualified annuities often requires a process of withdrawing any funds in the account, opening a new account, and then putting the money back. The problem is that emptying a retirement account can come with considerable fees, not to mention having to count that money as income on your tax return.

Start Your Estate Plan Today

Regardless of how big or small your estate is, thinking about your future is a best practice of wealth management. A living trust offers benefits that you may not find anywhere else, but it does take work.

Before making any significant decisions, make sure to meet with an estate planning attorney in Orange County, CA. It’s time you protected your life’s work.

For the best estate planning team around, schedule your free initial consultation with us at Parker Law Offices. Contact us at (949) 385-3130.

While there are plenty of options to properly plan your estate, living trusts are becoming more popular every day. Your Orange County estate planning lawyer will certainly advise you on all of your options--it may be well worth asking if a living trust is right for you. Call Parker Law Offices now for a complimentary meeting at (949) 385-3130.

Of course, there’s more to a successful trust than simply going over it on your own. You also need to adequately fund it without stretching yourself too thin by contacting and working with an estate planning attorney in Orange County.

Here are some of the top tips to help you fund your living trust

What Does It Mean To Fund Your Trust?

If you’re not familiar or you haven’t met with an estate planning lawyer in Orange County CA, it’s crucial to know what a trust is. The easy way to think about it is like a bank account that holds money, property, and other assets.

These assets are then managed by a trustee. A trustee is simply someone you appoint to help manage your trust for the benefit of the trust’s beneficiary.

In some ways, a trust is a lot like a will. Upon the trust owner’s death, the assets that make it up are then passed on to the person or people who are named in the trust.

Funding a trust is the process where you transfer your assets into it. The process includes changing the names on the titles of your assets into the name of the trust, which becomes another entity, similar to another person.

If you don’t fund the trust, you negate the benefits of creating a living trust in the first place, such as avoiding probate.

To learn more about the various kinds of trusts and which ones might be appropriate for your estate plan, reach out to an Orange County estate planning attorney.

Read below for more information about how you can make sure that your living trust can be funded successfully.

4 Tips to Fund Your Living Trust

  1. Watch Out For Real Estate Fees

One of the first things people consider adding to their living trust is any real estate they may own. This is often the right place to start, requiring the transferring of the deed into the name of the trust. 

However, if you still have a mortgage or live in a community governed by a homeowners’ association (otherwise known as an “HOA”), there are several things to consider.

First, transferring real estate often comes with a transfer tax and/or other kinds of fees. There are areas where these fees are exempt when transferring to a living trust, but that’s not always the case.

Some states even consider the transfer as a full sale at fair market value, which might mean you’ll be on the hook for extra taxes because the value of the property has been reassessed.

If your property is part of an HOA, you may also run into other financial issues. Some of these organizations require you to request permission in order to transfer your deed, which may include additional fees. It’s crucial that your decision is based upon a full and complete understanding of all of the taxes and fees involved before any of your real estate is transferred into a living trust.

It is also important to note that when the Executive administration (the President), or the Senate and/or House of Representatives experiences shifts in control by political parties, changes can be made that will impact various circumstances. These may include the passage of new laws, or enacting changes to existing laws which govern how much can be transferred to your loved ones without taxation, along with the possibility of increased or decreased taxation of assets.

  1. Avoid Early Withdrawal

Another starting point for funding your living trust involves transferring some of, or all of your bank accounts into the trust. Ultimately, this is generally a straightforward endeavor.

Check with your estate planning attorney in Orange County to learn how to properly transfer savings, checking, money market accounts and other similar assets into your trust. Most often, you’ll close the existing accounts and then transfer funds into a new one in the name of the trust.

Complications may arise if you have any kind of investment, Certificate of Deposit (CD), etc. Some of these types of account transfer transactions may be viewed as an early withdrawal. In these cases, penalties may be assessed.

One example of this involves allowing a CD to fully mature before officially transferring it’s funds into your trust. So many of these nuances are very well understood by attorneys, many of which often have strong connections to experts in the financial, banking and title industries, just to name a few.

  1. Don’t Forget Your Life Insurance

Some people don’t realize that their trust can be both the owner and beneficiary of a life insurance policy.

When the trust is the owner, it allows the trustee to control the policy in the case that you become incapacitated or pass away. For example, the trustee may need to access these funds to help pay for your medical care, and in the event of your passing, to pass along the proceeds in accord with your documented wishes.

Since the trust is your first and foremost beneficiary, it will receive the payout from your policy upon your death. Your instructions within the trust will ensure that the money will then be passed to your intended beneficiaries outside of the trust with the same protection the trust affords to your other assets.

It is wise to be careful. In some states, life insurance policies are only protected from creditors if they are owned by individual people. In these states, handing over your policy to the trust could make those funds fair game to creditors. It can be extremely beneficial if you work with your estate planning lawyer in Orange County, who can help you create a power of attorney (POA) to enable the persons you select to be able to manage the policy when you are unable to.

  1. What About Assets That Can’t Be Transferred?

There are some assets that actually can’t be used to fund your trust. In these cases, workarounds may be available that will still work for you.

For example, it’s often not wise to retitle any retirement accounts like an IRA, 401(k), 403(b), and qualified annuities.

Retitling these may well result in hefty fees for early withdrawal. Your estate may also end up having to pay income tax on them. Instead of retitling the account, the best option may often be to simply name your trust as the beneficiary of the account. That means those funds will still be available in your trust. Proper estate planning can mitigate many financial risks for your loved ones.

A Medical Savings Account (also known as an“MSA”) is another example of something that typically shouldn’t be retitled. You can designate your trust as one of the beneficiaries. With proper planning like this, people more often than not enjoy peace of mind, knowing that the right decisions are in place for those that they wish to financially be taken care of in the future.

Don’t Go Through the Process Alone

While the basic idea of a trust is rather straightforward, living trusts are complicated because of the fact that everyone’s situation is unique. It’s in your best interest to work with a professional who understands the laws in your state as well as the best methods to protect your assets.

While there are plenty of “do it yourself” articles and websites are available online, getting your estate plan processed correctly is more than worth working with a seasoned professional. What is not commonly understood, is that many of these inexpensive options often accomplish the reverse of the desired effect. Trusts and wills improperly written by non-professionals are challenged in court every day, and many of these are changed or thrown out according to the arguments presented to the judge.

If you want the best legal team on your side, why not schedule your free initial consultation with us at Parker Law Offices? Contact us now at (949) 385-3130.

A successor trustee plays a critical role in the estate planning process by carrying out the wishes of the deceased. As the one named in the trust, they assume control of the estate after the trustee dies or becomes incapacitated, and are entrusted to manage the assets, pay outstanding debts, and transfer the assets to the designated beneficiaries. 

If you have assumed the role of successor trustee, it's important to contact an Orange County estate planning attorney to determine what your next steps should be. 

Let's examine the responsibilities of a successor trustee and when you need the services of a trust attorney. 

The Duties of a Successor Trustee

If you have been named the successor trustee for someone's trust, you may be wondering just what your duties are and whether you are up to the task. Both of those questions are important considerations, as the responsibilities associated with this role are many. 

When the grantor (the person or couple who set up the trust) becomes incapacitated or dies, you, as the successor trustee, take over as the manager of the trust. This means that you are responsible for the assets, which may include investing them in a way that maximizes growth while minimizing risks. 

In that case, you'll need to evaluate the assets held within the trust, as well as the income and expenses. Some additional responsibilities may possibly include ensuring final tax returns are filed, collecting death benefits, and distributing the assets to the beneficiaries. 

As soon as your duties begin, it is important to immediately consider consulting with an Orange County estate planning attorney

For further clarification, the following represent typical scenarios often benefit from an attorney's assistance:  

An Asset Was Left Out of the Trust

A trust is a document similar in most respects to a contract designed to hold valuables and provide instructions for their distribution. The valuables are assets of the estate. However, if the owner acquired assets after creating the trust and failed to add them to the trust, a probate judge may be required to determine rightful distribution. In this case, the 

The best way to stay out of court and reduce expenses and taxes is by ensuring the trust is fully funded and that all beneficiary designations have been updated. After assuming the role of successor trustee, should you discover that some assets have not been funded to the trust,  you will need an estate planning attorney in Orange County to sort out the details. 

The Trust Contains A/B Trust Planning

It's difficult enough to manage a simple revocable trust. Add the A/B trust into the mix makes acquiring the services of an estate planning lawyer in Orange County a necessity. 

In order to help married couples, and avoid additional estate taxes, estate planning attorneys often set up A/B trusts where upon the death of the first spouse, the trust splits and part of it becomes irrevocable. 

For blended families with children from different marriages, an A/B trust can protect the beneficiaries and the distribution of assets to them after the death of one of the spouses. It is quite likely that if you are a successor trustee dealing with an A/B trust, you will need the counsel of an estate planning lawyer Orange County CA.

A Beneficiary's Inheritance Is Held in the Trust

Whether due to specific instructions or the beneficiary being too young to receive their inheritance, dealing with assets held in a trust can raise complications. A trust may mandate certain distributions, such as income, over the life of a trust or lifetime of a person. 

It is a successor trustee's responsibility to implement the terms of the trust and manage the assets carefully.  Understanding your role as successor trustee, and reviewing the key provisions with an estate attorney is vital.

The Estate Owes Taxes

If a successor trustee distributes assets to the beneficiaries before paying taxes, they may be held financially responsible should the trust not have the funds or assets to pay the taxes in full. If you, as a successor trustee are uncertain if taxes need to be paid, consult with an Orange County estate planning lawyer to make sure the appropriate tax returns are filed and paid.

The Grantor Owned a Business

As a successor trustee, you are responsible for all the assets placed in the trust. When a business interest is held in a trust, the successor trustee is then responsible for continuing to operate the business, shutting it down, or possibly selling it. Diversifying the trust's investments is one of the trustee's duties, which means that many opt to sell.

For families wishing to keep their company, some trusts establish an investment advisor who oversees all business interests and has authority to conduct an ongoing business. This person then becomes responsible for the retention or sale of business assets according to the trust, and the trustee must follow their instructions. 

Another possible scenario is that the trust named a business person as co-trustee, one who manages the business interests along with the primary trustee. 

If an advisor or co-trustee has not been named, the trustee may delegate responsibility for the business to a carefully chosen third-party. The bottom line: if a business is held in a trust and you are the successor trustee, it's time to contact an estate planning lawyer in Orange County.  

The Trust Is Named as the Beneficiary of an IRA

There are some reasons to name a trust as an IRA beneficiary, such as when the intended beneficiary is a minor and unable to legally own the IRA, or a second marriage or blended family creates the need to protect the interests of the children of the grantor. 

In this instance, the required minimum distribution can benefit the spouse and then pass over to the grantor's children upon their passing.

Even if an individual is named as the beneficiary of an IRA, an attorney's services include counseling the successor trustee on the handling of the retirement assets and the possible tax ramifications.

Family Trouble

Unfortunately, the internet is awash with stories about families fighting over an inheritance. Money and emotionally-tied family heirlooms seem to bring out the worst in people with tension and distrust replacing thoughtful consideration. 

So, what happens when the family members don't agree with how the successor trustee is handling the estate and distributing the assets? In these instances, a trustee's best option is to obtain the services of an Orange County estate planning attorney.

Manage Your Successor Duties With Ease

Because of the many legal ramifications, some grantors opt to name a trust lawyer to handle the many tasks of a successor trustee. Having a disinterested third party managing the estate assets can result in less family tension and worry.

Whether to name a trust attorney as a successor trustee, or retain the services of a trust lawyer when you find yourself in the role, we at Parker Law Offices are here to support you. Call us for a free consultation today.

Between smartphones and computers, the rise of the internet, and digital platforms such as social media and email, much of our lives are now spent in the cloud and online where we create and store massive amounts of data. 

We protect this data with usernames, PINs, and passwords. Unfortunately, if hacked, our personal information, along with bank accounts and credit card numbers, may fall into the wrong hands. 

Since we’re still in the beginning stages of the digital age, it's easy to forget all the information we store online and what will happen to it when we pass away. If you are thinking about setting up your estate plan or making changes to a plan you already have, you should consider what will happen to your digital assets and determine who should have access by speaking with your Orange County estate planning lawyer.  

Let's take a look at what digital estate planning is and how to secure your digital information by including it in your plan.

Defining Digital Estate Planning

Digital estate planning involves organizing your digital assets and making plans for their disposition after death. The first step is listing your digital assets (you have more than you think). From there, you’ll want to review the terms of service with your providers including the instructions and possible restrictions for transferring these assets. An estate planning lawyer in Orange County can be a big help in this manner. 

Securing Your Digital Information

Start by creating a list of your digital assets. Once you start, you'll realize just how much of your information is computer generated. In addition to listing the assets, be sure to note how your loved ones can access the information. A few important devices and platforms include knowing any passwords and otherwise how to access the following: 

Let's take a closer look at some of these important digital assets.

Photos

When faced with the task of ensuring a will or trust is in order and all assets have been included and given to those you love, it's easy to leave out the assets that can't be seen or touched. Given that almost all of our photos are digitally produced and stored these days, these highly sentimental snapshots in time are one of the important digital assets that are easy to overlook. 

Consider all of the digital platforms photos may be stored on. Do you have a Shutterfly, Dropbox, or Google account? How about social media sites like Facebook? 

Perhaps even more vexing is when a loved one would like to see any pictures from another who has passed away. This happens countless times today. With an iPhone or iPad, you only have a limited number of attempts to enter the password. Once those password attempts are exhausted, the device is locked and more than likely Apple will not unlock it for anyone--even the owner of the device. In that case, it would need to be reset to factory settings in order to operate at all, and all data including pictures would be lost.

Without the information on how to access devices such as cell phones, these valuable family memories could be lost forever. 

Pictures are the only items that can be lost forever. Email email accounts which with the right password in hand can be accessed, might also be lost permanently.

Online Accounts

In addition to items with sentimental value, those with monetary value can also be lost and forgotten. Sometimes this is due to your beneficiary's inability to access them, while other times it's simply that no family member, accountant, executor, successor trustee, or lawyer knows about them. With today's regulations protecting personal identity, data privacy laws, and limited access to digital accounts, it's difficult and often impossible to access the information once the owner has passed away.

Preventing Identity Theft

Millions of people experience identity theft and fraud every year. Common targets include mortgages, student loans, car loans, and credit cards. In fact, thieves can also gain access to online accounts and seize control of them. 

Failure to close or transfer accounts can result in lost revenue from the estate (creditors may file claims from new outstanding charges) as well as lost time and increased trouble for your family should identity theft or fraud occur. 

Some third-party companies can help alert you of a breach, but this is often time-consuming and difficult to clear. Digital thieves know this and use it to their advantage to get away with as much data as possible.

Storing Your Information

Be sure to keep a list of your online assets and digital accounts--but keep the access information private and available to your loved ones in the event of your passing. A will becomes a public record when filed, so be sure to consult with your estate planning attorney in Orange County regarding your digital assets and how best to include them in your estate yet keep them safe. 

Keep in mind that not all attorneys have current estate planning documents. In these cases, their documents may not include digital information protection for your loved ones. With this in mind, choose wisely when you select your lawyer to prepare your estate planning documents.

One solution is ensure that your lawyer provides you with power of attorney to the digital assets in your estate planning documents.  In this manner, the person you give power of attorney to will have a far better chance of having access to your digital property. It is important to let your agent for your power of attorney, executor or successor trustee know of the location of your documents. You should also give them the name and phone number of your Orange County estate planning attorney who may also have a copy of the documents needed for access.

Determining Your Beneficiaries

Once you have a list of items, it's time to determine what you want to do with your digital assets. You may want to have some digital property erased, but you will more than likely want to transfer some of the information to your beneficiaries. 

Include your wishes in your will or trust and let your executor or successor trustee know how you'd like to handle this asset and where your information is stored.

Discuss Your Digital Assets With Your Estate Planning Attorney

The digital age has created vast amounts of data and paperless options for those opting to perform everyday financial tasks and communication online. It's easy to forget about this unseen data when making end of life plans, but incorporating planning for these digital assets results in much less stress for your family. 

Including these assets in your trust ensures the most likely scenario where appropriate people receive the assets, whether financial or sentimental. Taking time to address your digital assets may also assist your loved ones in decreasing taxes and minimize other financial issues. 

An estate planning attorney Orange County CA who understands digital assets can help you integrate these assets into your trust and create a complete estate plan.  

At Parker Law Offices, we've worked with countless individuals, families, and businesses, ensuring that their last wishes are carried through and protected. We are able to uncover assets, including those that can be easily forgotten, including digital holdings often when the proper digital asset language is in your estate planning documents. Procrastination can lead to many complications for your family and friends. Taking care of your affairs now may provide you with peace of mind. Call us, your trusted Orange County estate planning attorney, today to set up a free consultation.

Setting up a revocable living trust with your Orange County estate planning attorney is an excellent way to avoid probate and reduce the financial strain on friends and family.  

The process involves naming one or more people, or sometimes a corporate trustee, to act on the settlor's (also known as the grantor or creator) behalf upon incapacitation or death. The person bearing this responsibility is called the successor trustee.  

What Is a Successor Trustee?

The successor trustee, as the name implies, "succeeds" the trustee, usually the person who creates the trust, following their incapacity or death. In essence, they assume responsibility for managing the trust and its assets when the creator can no longer manage the trust themself. 

What Are the Duties of a Successor Trustee?

The duties of a successor trustee vary, depending on many factors, and are usually detailed in the trust document. Some of these duties include instructions for what to do  if the creator has become mentally or physcially incapacitated or has passed away, and what to do if they have minor children. Let's take a look at what these different scenarios mean. 

What Does a Successor Trustee Need To Know After Agreeing To the Role?

After agreeing to the role of a successor trustee, you should become familiar with the trust and the conditions stated within it. Find out where the trust is kept, along with any insurance documents. Go over the beneficiaries with the grantor to ensure they contain the appropriate designations. It's also a good idea to have an estate planning attorney in Orange County review the trust and corresponding documents on an annual basis, or when there has been a change in the family or assets. 

In addition, determine if you are the sole successor trustee or if you will be acting with someone else.  

What Are the Successor's Responsibilities if the Grantor Is Incapacitated? 

If prepared correctly, the trust should contain instructions for how to determine whether the grantor is no longer capable of handling their financial affairs. Usually, one or more doctors are required to certify that, due to physical or mental disabilities, the grantor is incapacitated and can no longer handle their financial affairs. This document may be requested by banks and other institutions. 

Once legally determined, a successor trustee's role is as follows: 

What Are the Successor's Responsibilities if the Grantor Dies?

The successor trustee's responsibilities include distributing assets and property held in the trust and transferring titles according to the trust agreement. The role changes dramatically if minor children are involved, or if the trust is going to exist for a number of years after the death of the creator. 

If there are children or individuals that will not receive their inheritance until after they reach a certain age or fulfill a specific agreement, the trustee must protect the inheritance, and assets, until the time they can be distributed to the beneficiaries.  

The responsibilities assumed once the grantor passes away are as follows: 

If money is needed to pay off tax liabilities or debts, the trustee may need to sell some existing assets. Be sure to consult with the estate planning attorney in Orange County before placing any assets up for sale. 

Handling Your Role as a Successor Trustee

As is evident from this list, the responsibilities of a trustee are numerous and can last for years. If you feel overwhelmed as a trustee, you can hand over the duties to a successor trustee, if one has been named. If there is no successor trustee, contact the estate planning attorney Orange County CA to determine alternative solutions. 

At  Parker Law Offices, we understand the importance of a well prepared estate plan and are dedicated to preparing the appropriate documents required to keep a family's assets out of probate and up to date with current laws. 

We are committed to making this already trying time a little easier. Call us today for a complimentary consultation.

Estate planning can be a complicated and overwhelming endeavor. It often involves complex issues with extended families and blended families, and often brings about conflicts of interest as family members discuss what assets go where and who should be the designated successor trustee. 

Avoiding Problems During Estate Planning

As a top Orange County estate planning attorney, we at Parker Law Offices have served clients from all walks of life and understand the conflicts that can arise when determining these important considerations. 

Estate planning difficulties usually arise out of differences of opinion. Fortunately, those differences can usually be settled through thoughtful planning. Let's take a look at the most common conflicts of interest and how to overcome them. 

Beneficiaries

A survey conducted by TD Wealth found that the leading threat to estate planning is family conflict. 

Respondents cited designating beneficiaries as the number one cause of conflict, followed by the contention that arises from blended families and lack of communication among family members. 

Determining which family members receive what assets can lead the closest of families into heated debates. While money plays a major role, you would be surprised at how often the debate isn't really about money, but love.  For example, Mom's wedding ring symbolizes the connectedness and security of a family, and both siblings want it.

In order to keep your children from heading to the courts to fight, it's important to have all assets, including family heirlooms or objects with emotional attachments, listed in the trust. The instructions in the trust ensure that all parties understand what your wishes are.

What happens, however, when you and your spouse disagree about who should receive what?

Your Orange County estate planning lawyer can advise you and your family on what is customary in certain situations. Discuss your options and concerns with your attorney who has prepared countless estate plans and witnessed so many that have led to peaceful resolutions and have avoided embittered battles because of properly prepared estate plans having been put into place. 

Blended Families

Approximately 40% of married couples in the U.S. with children are defined as step-couples. This term of the 20th century refers to families in which at least one of the partners has a child from a previous relationship. 

Unfortunately, this family composition is the third leading threat to estate planning. One party wants their birth son designated as the successor trustee, while the other wants his or her birth daughter designated. 

Children from previous relationships, and the complex bonds from those family connections, can make this conversation particularly difficult to settle.

If one of the parties does not approve of the trustee the other party is set on, an alternative trustee needs to be discussed. The role of trustee is an important fiduciary position and should be designated for only the person who is most trustworthy.

One of the many benefits of a trust is it protects the estate from going through probate, potentially saving your family a tremendous amount of time and money. This also means that the court will most likely not be involved and will not be overseeing the actions of the trustee--or making decisions on behalf of those who may inherit from the estate. 

If the successor trustee finds it tempting to take more than his or her rightful share of the estate as determined by the trust, family members can end up in court at a substantial cost in terms of both money, time, and emotions to all involved.

Communication

Communication about estate planning topics can be difficult even in the best of situations. Having a conversation involving money, assets, and death can throw many families into heated controversy. 

For some families, bringing an unrelated third party to the table can reduce emotional turmoil and ease conflict. Similar to coming together with your financial advisor or a trusted family friend who does not have any stake in the outcome, meeting with your estate planning attorney can help provide a neutral, unbiased perspective. 

Successor Trustees

Couples will need to decide who they will designate as the successor trustee. This is the person responsible for managing and protecting the assets as well as distributing them to the beneficiaries. 

The role of successor trustee should be entrusted to the most dependable and trustworthy family member. Unfortunately, couples do not always agree on who will best represent them and take care of the many responsibilities in an appropriate manner. 

To complicate matters, some families opt to have more than one person take on this role, or fail to designate a back-up trustee should the first successor become ill or find the many responsibilities overwhelming.

Discuss this important decision over with your estate planning lawyer Orange County CA. You will be able to confidently cover essential topics including provisions that allow, or do not allow, your beneficiaries to replace the trustee with someone of their choosing.

Guardianship

Choosing a guardian for your minor children will enable someone to care for them should something happen to both parents, might result in tremendous family tensions. There is, after all, much at stake. 

If left undecided, or not legally documented, the decision rests with the court. If no family member steps forward that the judge deems a presentable parent, the children could be placed in Child Protective Services. 

Some considerations include choosing a person that currently has a loving relationship with the child. For some families, this individual may be a close family member or distant relative; for others, they may be a friend. 

Don't let "lack of blood relations" steer you away from the clear choice. Be sure to designate an alternative guardian in case the person you named is unavailable.

If you and your spouse disagree, it's time to seek guidance and counseling. This is far too important a decision to set aside until you can come up with a suitable agreement. 

Your estate planning lawyer in Orange County can help you work through these difficult decisions and ensure your estate plan lists the appropriate preferences and instructions, as well as clarifying financial support for guardian and children.

Joint Representation Versus Individual Representation

Joint representation makes sense for many couples. For those that agree on the most important decisions, have an open and honest relationship, and solid communication skills, working together with one lawyer saves time and presents a cost-effective strategy. 

For those couples that may have disagreements, individual representation may be the answer. This approach maintains the attorney-client privilege and allows each party to share concerns as well as information that they may want to remain confidential. By consulting with an estate planning attorney in Orange County, you're able to discuss your concerns and put an estate plan in place that will be a comfort to your surviving family members.

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