What is a conservatorship? How could it potentially protect you from undue influence regarding financial matters and end of life decisions? Let’s look at this legal way to protect your decisions even if you should become unable to make those decisions for yourself later in life, or even just for a limited period of time.
What Is a Conservatorship?
A conservatorship is a final line of defense against having financial or medical decisions made without a person’s ability to consent. While proper estate planning can provide a power of attorney to make these decisions, a conservatorship involves the probate court assigning someone to make valid decisions on a person’s behalf. There are 3 types of probate conservatorships.
- A general conservatorship involves the court giving a person the legal ability to care for the personal decisions of another, including financial decisions.
- A limited conservatorship is usually only set up in the case of an adult who is developmentally disabled and needs some assistance in decision making.
- Under the Lanterman-Petris-Short Act, a conservatorship can be set up to assist someone who becomes so gravely disabled they can no longer provide their own basic needs of shelter, food, and clothing.
In the case of a person trying to influence someone who has become mentally incapacitated to make financial decisions that are different from what a will or medical directive may have originally dictated while the individual was of sound mind, a conservatorship may provide a neutral party to maintain the wishes a person expressed in the past.
A Better Way to Ensure Your Decision Remain Yours
The best thing to do is to have your estate planning properly prepared now. Everything from how your assets are to be divided to what you want your funeral to be like should be part of your estate planning. Appointing a power of attorney to make financial decisions or appointing a healthcare agent to uphold your medical decisions can also make things easier on family members who may have differing opinions on how to care for matters if you cannot do so yourself for one reason or another. To learn more, contact Petrov Law Firm today by calling 619-344-0360.Read More
If you determine that the best way to leave your assets to beneficiaries is via a trust that will help keep matters out of probate, there is still something vital to consider. What is the relationship between your heirs and the person (or persons) you are appointing as a trustee? Obviously, a better relationship will make things easier on those who are to inherit your estate.
What Does a Trustee Do?
When the trustor passes away, the trustee is in charge of keeping the trust safe and making appropriate distributions to any beneficiaries. So there are a few things to consider when appointing a trustee:
- Is this person trustworthy enough to carry out your wishes?
- Does the trustee have sufficient ability to handle this responsibility?
- Will the trustee’s relationship with the beneficiary help or hinder the proper distribution of the trust?
Of course, planning your trust properly can also help the process along, even if there is some disputing between the trustee and beneficiary. However, you can minimize how much of the trust ends up going toward administration costs by selecting the right person – someone who has the ability to care for the trust and the desire to do what is best for the beneficiary.
Help for Creating Trusteeships in San Diego, California
If you live in California and need advice or help in creating a trust, the estate planning attorneys at Petrov Law Firm will be happy to assist you. To learn more, call our San Diego and Chula Vista attorneys at 619-344-0360.Read More
There are two important and separate matters that are handled by proper estate planning and the appointment of a power of attorney. They are matters pertaining to your financial assets and matters dealing with your health care. In some cases, you may want a different person to have power of attorney for each circumstance. In other cases, the same person may act as power of attorney for everything. Here are a few things to consider.
Power of Attorney for Financial and Health Decisions
Should decisions about your health or finances need to be made while you are unconscious or no longer of sound mind, appointing a power of attorney who has specific instructions on how to carry out your directives can help to ensure that matters are still handled as you would want them to be, even if you can’t give the orders for yourself.
However, you may not always want the same person making all of these decisions. For example, you may want your wife to make financial decisions in your absence but your son to make medical decisions or vice versa. You may even have certain decisions that you want to leave to a party that is not as emotionally tied to you. In other situations, you may have one trusted friend or relative who can handle all of your decision-making as a POA.
San Diego Residents Planning for Financial and Health Care POAs
If you are a California resident, especially if you live in the San Diego area, and are looking to designate a power of attorney for health or financial matters, contact the estate planning attorneys at Petrov Law Firm today. We can help you to make informed decisions that will lead to your wishes being carried out as closely as possible. To learn more, call 619-344-0360.Read More
A living trust is a legal document in estate planning indicating which assets are to be used for your benefit while you are still living and to whom these benefits would transfer with your passing. Living trusts are used by those desiring to avoid the administrative hassle and possible publicity involved in the probate process.
To take the most advantage of a trust, you should make sure everything you own is held in trust form. It is important to occasionally revisit your trust provisions to ensure all of your assets are included as no assets become a part of the trust without explicit inclusion.
A revocable living trust enables the grantor to later change his mind about the property placed into it or even the existence of the trust itself. Benefits of a revocable living trust include avoidance of probate, resulting in faster distribution of assets to beneficiaries, potential money savings, privacy, and the ability to manage your affairs without court involvement should you become incapacitated.1
An irrevocable living trust is one that cannot be changed once it is signed by the grantor. With certain limited exceptions regarding transfers occurring within three years of death, only property owned at the time of death is subject to estate taxes.2 One big potential benefit of an irrevocable living trust is the avoidance of probate and estate taxes because ownership of property transfers to the trust while the grantor is still alive. Properties that fall under the federal estate tax exemption are not subject to these taxes.
The most important thing to consider when deciding between the two types of living trusts is any potential tax consequences. Talk to an estate planning attorney to obtain further guidance on creating a living trust and ensure your assets are used exactly as you wish during and after your lifetime.Read More
If you run a family-owned business, estate planning can be tricky, especially if one child had worked beside you to build the business. While there are several options for leaving this business to your children, consult with an estate planner. Attorneys have a wealth of resources to help you fairly pass the value of your business to your beneficiaries.
Most importantly you will need to get a verified, third-party assessment of the value of your business. In addition, you will need to set aside funds for this same procedure when you pass away. Trying to avoid this step for the sake of simplicity will have serious financial ramifications. Think about your business as a big mansion. No probate court would simply accept that your $2,000,000 house was worth $1 simply because you say so. You want to avoid the high fees of probate court; you must include your business in your estate plan at its full market value.
Distributing business ownership shares to your children generally falls into the same financial restrictions set by the IRS’s estate tax and gift tax laws. You can gift about $14,000 per year with (roughly) a $5,000,000 limit. That limit is generally the same as the estate tax threshold. But even if your business is valued at less than $5,000,000, you still have some financial challenges to overcome.
If you have one child who has worked for years to build the business, simply splitting the value and handing over equal shares to your beneficiaries may be unfair. Would your business have been as successful if you hadn’t had that family member working by your side. Doesn’t he or she deserve more ownership than anyone else? On the other hand, isn’t your business a significant part of your estate that should be equally divided among your heirs no matter what path they chose in life?
Estate planners have endless options to help you design a fair plan based on your business and your family. For example, you could annually gift shares of ownership over to the family member that works inside the business. Then, upon your death, the remaining shares you still hold are equally divided among your heirs. Plus you can add a buy-out option so that one family member can opt to buy everyone’s shares before the shares are distributed.
Again, an estate planning professional can give you endless options. But you can’t wait. Business succession planning takes time and consideration. Start now for a fair and financially responsible plan.151Read More
When writing your will, you have to find a balance between your specific wishes and the eventuality that your assets will change between the date you sign the will and the day you pass away. The biggest mistake in over-thinking your estate is procrastinating the final signature. It’s far better have an imperfect will than no will at all.
Generally, you won’t list too many specific numbers in your will. Perhaps you can include smaller sums of money for friends or charities. The majority of your cash assets (80%-90%) should be in percentages. For example, “40% of my liquid assets will go to each of my two children.” Large sums of money change over time, and in less than five years you could significantly more money that you had upon signing the will.
The major problem will undistributed funds is that it may have to go through probate court. And anything that goes through probate court will have to pay court fees. Your family could see thousands of dollars wasted in court fees that could be put to better use like an education fund.
Your estate planner can help you account for 99.9% of the assets in your estate. Although you might want to control how much money each beneficiary receives, you might do more harm than good. Generally your estate plan will include a catch-all phrase like, “Any undistributed funds will then go to my spouse.”Read More
Even if you have a relatively small estate, you might face some uncomfortable questions by your family regarding your estate planning. Sometimes, these concerns are well-founded; and sometimes, the questions are simply rude.
“Do you have a will?”
Generally, this is an acceptable question. An estate that passes into probate can cost thousands of dollars in fees; many of which can be avoided by simply having a valid will. If a family members asks this questions, they may simply want to know where you keep your will. It’s not outrageous for a close family member to want to know the name of your estate attorney and the location of your will.
“What’s Your Plan for Your Estate?”
Occasionally, this is an appropriate plan. Generally, only the closest family members have the right to ask such a person question. Because financial circumstances can change so dramatically over time, a will is not a promise, but simply a plan that may need adjusting when your estate is released to beneficiaries. Sometimes, adult children with significant assets of their own may want to make a contribution to the overall plan. For example, an adult child might want to buy the family summer home in an attempt to keep it in the family instead of seeing it sold after you pass.
“How Much Will I Get When You Die?”
While there are several ways to answer this question, the best answer might be with your own question. “Why?” “How much will I get?” is a rude question, but it might be based in a pressing need. Instead of being offended, you might delve deeper to find out if there is something you can do while you are alive. For example, you might be able to offset the cost of tuition for a grandchild or offer a gift for a down payment on a house.Read More
When you create an estate plan, most people take children into consideration. However, parental care is a serious issue, and many elderly people rely on adult children to help them maintain a dignified existence.
Start by asking your parents if they will have sufficient funds to live in their own home when they retire. Because the cost of a maintaining a home will use up at least one social security check, your parents may need to rely on you if they don’t have any additional retirement funds.
Work with your estate planner to assign some portion of your estate to your parents. Of course, if your have a spouse and children, dividing the estate between generations could cause serious conflict before or after your untimely passing.
Your estate attorney will be able to help you build a portfolio of life insurance and financial contingency plans to ensure that everyone in your family has financial resources. For example, you could create a plan that would pay-off the mortgage on both your home and your parent’s home if you passed away.
If you have (or will have) a single, elderly parent, you should assume he or she will eventually need your help. Once a single parent develops a chronic illness, you will be called upon to help. Work with your lawyer now so these financial eventualities are addressed before they become an impossible burden.Read More
First, your spouse needs to know where to find a comprehensive list of any financial accounts you have. If you have several, disconnected investment accounts, you need to keep a list of account numbers and bank names. Banks don’t go scouring the obituaries for the names of dead customers. If your spouse doesn’t know you have an account at a specific bank, that money could sit untouched for generations. This is especially true today because banks are no longer sending paper statements. With nothing more than e-mail communications, your spouse could live on, completely unaware of your hidden nest egg.
Next, are there any major surprises in your will? If so, prepare your spouse for the news long before your death. If you are planning on giving half of your money to a charity, you should consult with your spouse. Without his or her consent, your spouse has grounds for contesting the will, nullifying your wishes, and doing as he or she wants with your money.
Finally, does your spouse know your lawyer or estate planner? With a substantial estate, the lawyer who wrote the will can manage post-death estate issues. However, if your spouse has never had a face-to-face meeting with your lawyer, he or she might be very unwilling to trust a stranger with such important financial matters. Your spouse needs to have quick and easy access to your estate planner’s contact information along with the trust to let the lawyer handle the will during a difficult time.Read More
Both revocable and irrevocable trusts can protect your house (or other assets) from creditors including the IRS, but neither provides total protection. Consult with an estate planner to create a trust to protect your current assets for your future beneficiaries. Use your trust to protect your assets from medical debt and other end-of-life expenses.
Because assets can move in and out of a revocable trust, they offer less protection against creditors. However, if you appoint someone other than yourself as the trustee, you legally lose control over the trust making it more difficult for anyone to place a lien against the assets in the trust.
Irrevocable trust offer more protection, however, they also are more difficult to create and maintain. Irrevocable trusts operate as independent entities, responsible for filing tax returns annually, just like a living person.
While irrevocable trusts offer more protection, your estate planner can probably use a revocable trust to protect your assets without the challenges that come with irrevocable trusts.Read More