The Dayton Law Firm, P.C.

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Vacation Planning

Summer is everyone's favorite time to go adventuring across the world. Clients of ours who completed a comprehensive estate plan can head off on those journeys knowing they have their affairs in order. For those out there who either haven't completed a plan or haven't started, we offer the following tips to try and get things in a good situation.

When Asset Protection Fails

The California Supreme Court recently clarified how spendthrift trusts are treated in federal bankruptcy, and the news is not good for those who want to protect assets from creditors. Carmack v. Reynolds, opinion filed 3/23/2017, answered a question about how much of the current and future payments of a spendthrift trust are payable to the creditors of the beneficiary of the trust. Over the course of the opinion, the Court lays out the following formula as an interpretation of Probate Code Section 15306.5: Unless the distributions are designated for the beneficiary's support and are actually required for support, a creditor may collect the full amount of distributions that are payable now, and in addition the creditor may collect now up to 25% of all future known payments. The creditor may then request to be paid the remaining 75% in each year that a future payment becomes currently available. This is despite the trust's spendthrift provision because the Trust includes a way to calculate distributions. Near the end of the opinion, the Court felt a hypothetical was needed. It clears up the otherwise convoluted formula:

Sometimes The Greatest Change Brings About Even Greater Opportunity

After learning who won the election, many of us went looking to the president's campaign website for his policy choices. Those of us in the estate planning world took note of the industry-changing decision to repeal the federal estate tax. At this point, the federal budget is still working its way through congress before the new President has his say about what it should include, but it does looks likely it will not include a federal estate tax.

Estate Planning Tips for Noncitizen-Residents of the United States

In light of recent events, we felt offering a few free tips for noncitizen-residents was in order. While we don't know much about immigration law, Estate Planning and Administration are an important part of everyone's life. National boundaries may cause some complexities, so below are a few tips to help you navigate:

How To (Estate) Plan For 2017

As we prepare to ring in the new year, there are a few upcoming legal changes set occur early next year. These are both from the Federal and California State governments, and some are still yet to be determined. Below is a brief rundown of major legal changes related to estate plans in expected in early 2017:

What the 2016 Election means for your Estate Plan

The results of the 2016 Election have been surprising to say the least. Most experts were expecting a very different result, and it has caught the professional planning community off guard. Up until early November, estate planners expected a certain set of tax rules to stay in place. Interestingly enough, among the possible Budget proposals expected for 2017 include wholesale replacements of those exact tax rules. Specifically, we are expecting a repeal of the Estate Tax and a substantial change to how Capital Gains tax is affected by the property owner's death. This means an estate plan put in place to prevent unnecessary taxes under the current rules may need a revision in the next few years.

Who to choose as your fiduciaries?

One of the biggest decisions we counsel people through when creating an Estate Plan is who will be responsible after you are gone. The nominated agents and trustees who act under the powers in your estate planning documents (Trust, Will, Power of Attorney, Advance Health Care Directive, etc.) are known as fiduciaries. This is a term that carries with it a specifically legal meaning. There are two parts of being a fiduciary that most aren't aware of: (1) being a fiduciary carries personal legal liability if the job is done incorrectly, and (2) the role is not mandatory, so a named person may can decline to act or step down, leaving the next in line to act. With these in mind, let's review the general options available for choosing fiduciaries:

New Medi-Cal Recovery Rules (and a Free Booklet)

In June this year, Governor Jerry Brown signed the proposed California Budget for 2017. While most newspapers focused on the hot-topics like an increase to the rainy-day fund, there is also a big change for those of us in the estate planning world that we are all still getting to grips with. As of January 1, 2017, the estate recovery rules for Medi-Cal (California's unique version of the federal Medicaid program) are reworked to limit what assets are available for recovery.

Knowing Your Emergency Contact

It's vacation time, and many of us are having fun on trips enjoying jeopardizing activities like surfing, boating, zip-lining, hang-gliding, go-karting, rock climbing, and mountain biking. When signing up, there is normally a form that asks you to list an emergency contact. Most of us have someone in mind for this, but sometimes not. As you find yourself filling out emergency contact forms, there are three big considerations to think about before choosing an emergency contact.

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