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California Estate Planning Blog

Financial considerations when you have elderly parents

For aging people, there comes a time when they start to lose their independence. This might be because they lack the physical ability to care for themselves and be mobile, or it might be due to a mental deterioration because of diseases such as dementia.

If you have a parent who is aging and is unable to do the things that he or she used to, you may be concerned about their future. In particular, you might wonder about their finances and whether you have the legal right to be able to help them.

Executors have a standard of care during estate administration

The idea of settling someone's final affairs can seem daunting. Indeed, the process of estate administration can have its complications, and an executor has a number of duties to address. This person also has to make sure that all steps taken to close the estate are correct because conflicts can easily result.

California executors may find it useful to understand that they have to follow a standard of care when settling an estate. This standard is known as their fiduciary duty. Individuals with this duty must act impartially when making decisions regarding the estate. Additionally, those decisions must work in the best interests of the remaining estate as well as its beneficiaries. If executors do not adhere to this standard of care, trouble could come about.

Trusts play role in Burt Reynolds estate plan

Each person has his or her own ideas of what to include in an estate plan. For many, utilizing trusts can offer them the privacy and asset protection they desire. This planning tool may not be as obvious as creating a will, but it can benefit California residents looking to make their plans.

It was recently reported that late actor Burt Reynolds utilized a trust to address his estate assets. Information regarding his will was recently reported, and it stated that Reynolds intentionally left his son out of the document while appointing his niece as executor of the estate. However, the omission does not appear to have been done out of malice. The will also states that his son has been provided for in a trust.

Wills can help prevent leaving families in difficult scenarios

It does not matter whether a person is wealthy or has children, every adult should create an estate plan. While comprehensive plans tend to offer the best protection and information, some California residents may be content with just creating wills. In any case, having at least some type of legally-binding plan in place is better than leaving no information.

The fact that many Americans do not have estate plans is becoming more and more obvious as multiple celebrities who have recently passed have not had a plan in place. It is not only celebrities who are failing to plan as a 2017 survey indicated that only four in 10 adults have an estate plan. Additionally, most people do not have a solid reason for not planning; they simply continue to put it off until later.

Estate administration goes smoothly in the Aretha Franklin estate

Recent news reports indicate that the estate of Aretha Franklin is moving forward without a hitch, but the question remains whether the  decedent had a will. Aretha, who died on Aug. 16, 2018 was a resident of another state at the time of death so that the estate administration will not take place in California. The estate was apparently filed on Aug. 20 by her niece who requested appointment as the personal representative.

A will was not presented with the estate filing but the applicable box was not checked to indicate that there was no will. It is possible that a search for the will is ongoing. The estate is estimated to be worth about $80 million. Reports circulated on Aug. 15 that the family had met to discuss probate of the estate. Usually, such matters would be initiated after the funeral, but Aretha had four sons who felt it necessary to meet within hours before her death.

Estate planning options to protect family assets

If you have elderly parents and you are concerned about their estate plan, or lack thereof, you might be wondering what you can do to protect their assets when the time comes for them to move into a nursing facility or when they pass away. Like most people, you probably want to help them keep their assets and heirlooms within the family. The last thing you will want is to watch everything your parents have worked for get liquidated to pay off taxes, creditors and other expenses.

Fortunately, with a little estate planning, you and your parents can protect the family assets. Here are four estate planning strategies that can help your family.

Probate court monitors and oversees administration of the estate

Probate technically means to "prove a will." When a person dies testate in California -- that is, with a will -- the will is filed in the probate court in the county courthouse. The filing and administrative work is done by the executor, who is the personal representative appointed in the will. When filing the will, the executor takes an oath to act as a faithful fiduciary in the interests of the estate during the probate process.

At the top of the hierarchy in the probate courts is the probate court judge. A probate judge does not have to participate in the administration of each and every will but will be there in case a dispute or complication arises. In most estates, the executor works with the estate attorney to process all the papers, pay the appropriate bills and ultimately to distribute the assets to the beneficiaries slated in the will.

Wills, trusts and other powers require strategic planning

Estate planning in California is a necessary protective measure that residents can use to support a more secure and sound financial status. The trusts, wills, powers of attorney and other documents that make up the process must be part of a strategic plan that takes into account all of the person's financial circumstances. Setting up a system of legal protection for one's assets and financial goals is far better than the alternative, which is to allow the courts to decide how and where a person's assets will be distributed after death.

When preparing an estate plan, a person may be well-advised to consider some preparations for personal and financial care if and when the person becomes incapacitated. If staying in one's home is a primary concern, purchasing long-term care insurance early can be beneficial. Premiums will be smaller, and one can strategize with the estate planning attorney on the options available.

Living trusts must be funded for full operational effect

Trusts are often a key element in one's estate plan in California and elsewhere. After reviewing one's financial situation with an experienced estate planning attorney, a plan will be agreed on that may include testamentary and/or living trusts. The creation of a revocable living trust may be a central focus of the estate plan.

However, some people make the mistake of not funding the trust, which results in a wasted effort and basically the defeat of the intended estate plan. Funding, therefore, is an absolute essential to making the trust operative. The attorney will start that process by making up a new deed for all real estate that is earmarked for the trust. In most instances, the deed simply transfers title from the owner back to himself or herself as trustee for the trust.

In addition to wills, other asset distribution tools are popular

In California, there is a basic body of legal instruments that the estate planning attorney will recommend. While the estate plan of a married couple contains several recognized documents, such as wills, powers of attorney, trusts and health care directives, one's estate planning tasks are not yet completed. The couple must do a final search of all assets to determine how they are titled.

They must also check all of the beneficiary designations in life insurance and retirement accounts. IRAs, 401(k)s, and 403(b)s must have beneficiary designations in order to take advantage of all of the benefits attributed to these funds. With life insurance, prior beneficiaries who have since died must be replaced by a current choice. In addition, vigilance is recommended to assure that a former spouse from a dissolved marriage does not still appear as the current beneficiary. All policies and accounts with beneficiary designations must be checked to update the appointments.

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