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California Estate Planning Blog

Creating a trust can protect your heirs from inheritance mistakes

If you have spent a lifetime accumulating assets, you undoubtedly have strong feelings about how you would like them distributed upon your death. Estate planning, including drafting a will, is an important first step to ensuring your legacy when you die. However, a will may not be sufficient to protect your assets and your family members.

Although people mistakenly assume that trusts are only necessary for individuals with large estates, any family can benefit from including a trust in an estate plan. Spendthrift trusts are particularly beneficial when family members or heirs have a history of poor financial management or addiction.

Probate could put many obligations on business owners

All estates need someone to take charge in settling final affairs after a person dies. Typically, a person can name an executor to handle the steps associated with any necessary probate proceedings. However, individuals named to this position may worry that their lives may not allow them to properly handle the tasks or that acting as executor could put them at financial risk.

In particular, California business owners may have concerns about taking this role. They may worry that having to handle their deceased loved ones' debts may mean that their businesses will also take on those debts. However, that is not the case. The remaining estate funds are used to handle any outstanding balances, and executors usually only face personal obligation for paying estate debts if they did not follow proper procedure when addressing creditors.

Protecting assets may go beyond creating wills

Many California residents want to protect their assets for future generations and make sure that their end-of-life wishes are known. Fortunately, estate planning can offer several ways to reach these goals. While wills are important documents to include in such plans, there are other aspects of planning to also consider.

One action that could help protect assets is appointing a power of attorney agent. This person would have the ability to carry out important financial decisions on an incapacitated individual's behalf. Having a trusted person in charge could prevent unnecessary financial losses and prevent falling behind on bills. This agent could also move forward with financial transactions that may have been in the works already, such as real estate deals or similar endeavors.

Executors have a great deal of responsibility during probate

In a best case scenario, a loved one would ask another person to act as executor of his or her estate before simply appointing the person. Because California probate can take a considerable amount of time and effort, having someone willing to take on the role may prevent additional hardships. Still, even a willing executor will have a great deal of responsibility to handle.

Because of the importance of this role, it is important that executors do not take the position lightly. They have an obligation to make the best decisions for the estate and to act in the best interests of the estate's beneficiaries. This responsibility is known as the executor's fiduciary duty. If this duty is breached, serious consequences could result.

Individuals may want to incorporate charitable trusts into plans

Many California residents want to find ways to give back during their lives. They may make donations during the year or volunteer or carry out a number of other actions to help the community or otherwise contribute. For some, the desire to create a legacy or continue to help may be so great that they want to arrange to continue the giving even after they are gone. Fortunately, charitable trusts may be able to help accomplish that.

There are various ways to make charitable contributions, and some organizations may have details on how to donate. When it comes to using estate planning to make those contributions later, individuals may want to explore charitable lead trusts or charitable remainder trusts. The type of trust that may suit a particular situation could depend on financial factors and the type of contributions a person wants to make.

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.

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