Wednesday, December 6, 2017

Plan While You Can: Now is the Time to Make Critical Life Decisions


Clients frequently come in to our offices seeking to get a Power of Attorney and Advanced Healthcare Directive for a parent who is suffering some degree of dementia. In many cases, one parent has died, and the remaining parent is no longer able to manage his/her financial matters or make informed health care decisions. Unfortunately, by the time these clients come in, it is often too late; that parent is no longer legally qualified to sign documents.

The solution is a Conservatorship

In most of these situations, our clients become court-appointed Conservators of both the Person and the Estate—a process that is both expensive and time-consuming. Sadly, this could have been avoided by creating a Financial Power of Attorneyand a Health Care Directive when those parents were still alert and legally able to sign documents.

Jane Bryant Quinn recommends long-term planning to protect against poor decision-making later in life

Jane Bryant Quinn, a personal finance advisor who writes for the AARP, discusses the importance of making important life decisions while you still can, protecting yourself against the risk of poor decision-making in the later stages of your life when you may be affected by dementia or other illnesses.
Quinn uses the example of a University of California professor whose 85-year-old father had fallen down the stairs, broken some bones and had become very weak. Yet for some reason, without consulting his son or healthcare providers, he decided to cancel his long-term care insurance. Within two years, he wound up in a nursing home, uninsured. That fall had taken a big toll and the client’s father was no longer thinking clearly. If anything, the fall and its subsequent debilitating effect should have prompted him to take out more long-term care insurance—not cancel it completely!

Loss of powers might come on us gradually or suddenly

The better prepared we are, the safer we’ll be. Below are some suggestions on ways to plan for old age now to ensure you will be making sound decisions.
  • Simplify your finances to make it easy for someone to take over.
  • Consolidate any scattered CD accounts and IRAs.
  • Set up automatic payments for household bills.
  • Create good financial files that are easily accessed. If you pay your bills and access your accounts online, provide login information.
  • Choose an Agentwho will help you with your finances if you become uncertain or unable. Give your Agent durable financial Power of Attorney.
  • Get in the habit of talking to your Agent about even small money decisions.
  • Make sure your financial adviser(s) is part of your plans and has the name of your Power of Attorney and can contact him/her if you begin to do irregular things with your money.
  • Create an Advance Healthcare Directive and name an Agent. This person will be making critical medical decisions for you if you can no longer do this yourself.
  • If you’ve not already done this, create a Living Trust and make sure this is funded and updated with important life events. At California Document Preparers, our Living Trust package includes a Power of Attorney and Advance Healthcare Directive.

Other considerations for your long-term planning

  • Where will you live? The family home may be more than you can manage. This may be the time to downsize to a smaller home or condo or investigate independent or assisted living possibilities. Many senior communities provide a wide range of activities and care designed to help keep seniors from becoming isolated.
  • Think about when you’ll give up driving. This may be part of the downsizing plan that will determine where you live. If you give up driving, you may want to live where you’re able to walk or take public transportation to services and activities.
The more work you do now to prepare for the possible eventualities of old age, the easier it will be for your children.
Do you need to create or update your Living Trust? Life changes mean that it’s often necessary to name a different Agent for your Healthcare Directive or Power of Attorney.  Contact California Document Preparers at one of our three Bay Area offices today to schedule an appointment. We’re helpful, compassionate and affordable.

Tuesday, November 28, 2017

CDP Works Remotely for Those Living Outside the Bay Area


For many people these days, working remotely is the way business gets done, and California Document Preparers is able to accommodate clients who live outside the greater Bay Area. We frequently get calls from those who are located in different parts of California or even different states who would like our assistance in creating legal documents.

Last month, “Jo” called to inquire about our Living Trust package. We provided a brief explanation of our services, detailed the pricing and suggested that she come into our office so we could show her samples, review the process, and answer her questions. As it turned out, Jo lived in Calaveras County and driving to our office represented two-plus hours each way. We further explained our process and the documents we would be preparing. She gave us her email address and we sent her our Trust overview, workbook and price list.

Barely one week later, Jo emailed us the completed workbook

She was very impressed with our customer service, paid us by credit card and scheduled a meeting to review and sign the Trust and other estate-planning documents because she had decided it was worth the long drive.
We are always happy to work remotely with our clients by answering questions, forwarding materials and transacting as much business as possible by phone and email. Most of our clients are from the greater Bay Area, so we develop a face-to-face relationship while working on their documents. We look forward to clients from the Central Valley, Southern California and northern counties coming in to complete the signing of their Trusts. It gives us the opportunity to meet them in person, walk them through the contents of the Trust and explain the funding process.

Remote clients can arrange for the Trust’s signing in a convenient location

In those cases where our remote clients cannot meet in our offices for the signing, they can arrange the signing with a local notary. We send detailed instructions for the signing process, highlighting those areas of the Trust and other estate-planning documents that require signatures, initials and dates.

Because of our personal attention and service, Jo’s brother and friends have become Living Trust clients as well. We believe our thoroughness makes a difference. We do not charge for our time and are happy to answer questions. We want our clients to be informed and comfortable about the decisions they are making. Ask any small business owner: the best compliment he/she can receive is a referral of new business from a happy client.

Creating a Living Trust is an important part of your retirement planning

Contact California Document Preparers at one of our three Bay Area offices today to schedule an appointment. We’re helpful, compassionate and affordable.

Sunday, November 19, 2017

Consequences of Lost Wills and Trusts; Where to Keep Your Trust


We get a lot of questions about what to do if a Will or Living Trust is lost. Unfortunately, this question generally arises after a loved one has died and the heirs have begun the process of settling the estate.

If you think you’ve lost your Will

  • You can only have one Will, and the one with the latest date will supersede all others.
  • If an attorney prepared the Will, contact that attorney to see if he/she has the original.
  • Contact your Executor(s) to see if you gave it to him/her.

In the eyes of the law, if a Will is lost, it is presumed to be revoked

If someone finds a copy after you die and your heirs are willing to sign an affidavit that you did not intend to revoke your Will, the court will accept the copy. If neither the original nor a copy can be located, your estate will go to your legal heirs, regardless of what was in your Will.

What happens if you have lost your Trust?

Families also contact us about what they can do if a Living Trust is lost or they can’t find it. If you lose your Trust and die, not only will your Successor Trustees be missing valuable information about how you wanted your estate distributed, but they may be faced with moving assets that are titled in the name of the Trust into your Probate estate.
If a Trust is lost, and the decedent has assets titled in the name of the Trust, the court will require that the heirs/Successor Trustees spend a significant amount of time and money searching for the Trust and documenting the search process. This process involves Probate court and all of the expenses and fees associated with Probate—exactly what you hoped to avoid by creating a Living Trust in the first place!
Once any Trust assets are moved into the Probate estate, the full Probate case begins to distribute the assets. All of this translates to more time and more money. This scenario is extremely labor-intensive and expensive. We encourage our clients to keep their Trusts in a secure location and to share that location with at least one other family member.

If you lose your Trust or Will while you are still alive

If you’ve lost these legal documents while you’re still alive, California Document Preparers can assist in creating a new Last Will and Testament and/or Living Trust. You can restate your entire Trust, creating an updated Trust with the same name and origination date as your initial Trustwhich will replace your old Trust.

Where should I keep my Trust?

We always caution our clients to keep the original Trusts in a secure place in their homes or offices. As a backup, you can give a copy to your successor Trustee and/or another trusted friend or family member.

Is a safe deposit box the answer?

A safe deposit box may not be the best solution, as it could require a court order to open the box if it’s in your name without a joint owner. This means your Trustee wouldn’t have immediate access if you became incapacitated or died.
  • Don’t want to name a joint owner? Title the safe deposit box in the name of your Trust. In this way, your successor Trustee could gain immediate access to your safe deposit box if needed.
  • Keep your Trust in a fire/waterproof safe in your home or office. Share the combination with someone you trust.
  • If these other options are not realistic, keep your documents on a high shelf—away from floods, children and animals.

Most importantly, make sure your family knows the location of your Trust

Make sure your family knows you have prepared your Living Trust. In addition to the bound copy of your Living Trust, we can provide an electronic version, and many families share this with their heirs. Remember that many years may elapse between the time the Trust is prepared and the time it is needed to settle an estate, and circumstances can change. Successor Trustees themselves may die or become incapacitated. It may be advisable to share the Trust with several trusted family members. Most of all, don’t hide it —if people can’t find it now, there’s little chance they can find it when they need it.

Creating a Living Trust is an important part of end-of-life planning

If you’ve lost your Will and/or Trust, or you would like to create one, contact California Document Preparers at one of our three Bay Area offices today to schedule an appointment. We’re helpful, compassionate and affordable.

Wednesday, November 8, 2017

Summary Dissolution: A Simplified Divorce Process


Remember the old thing about “what happens in Vegas stays in Vegas?” 

Our client, “Matt”, spent a wild weekend in Vegas and ended up married. He and his wife, “Zoe”, realized that whatever happened in Vegas clearly stayed right there. By the time they got home, Matt and Zoe knew they had made a very bad mistake.
Annulments are granted in very limited circumstances, and the court does not consider short-term marriage as grounds for annulment, so they were exploring their options. Zoe was leaving for Mexico in two months, and they wanted to complete any necessary paperwork before she left.

Summary Dissolution: A simplified Divorce process

Fortunately, the California courts offer a Summary Dissolution, a simplified Divorce process. If the parties meet the qualifications, the Summary Dissolution involves fewer steps and less paperwork than a Divorce. The couple submits a joint Petition to the court, and the court sends them a filed judgment order approximately six months and one day from the day the Petition is submitted. (By California law, a Divorce must take at least six months and one day to finalize.)

Qualifications for Summary Dissolution are fairly stringent:

  • Fewer than five years between the time the couple got married and the time they separate.
  • No children have been born to the two of them before or during the marriage.
  • They have no adopted children under 18 years of age.
  • Neither is pregnant.
  • Neither owns any part of any land or buildings.
  • Their community property is not worth more than $40,000 (excluding vehicles).
  • Neither has separate property worth more than $40,000 (excluding vehicles).
  • The total of their community obligations (other than vehicles) is $6,000 or less.
  • At least one of them has lived in California for the past six months or longer and has lived in the county where the filing is occurring for the past three months or longer.
  • They have prepared and signed an agreement that states how their possessions and debts are to be divided (or they have no community property or community obligations)
  • Both are willing to sign the joint Petition and all related documents to carry out the agreement.
Fortunately, Matt and Zoe qualified for a Summary Dissolution, and they completed our workbook together. We prepared the legal document, the Joint Petition, within a few days, and they came in to sign it and have it notarized. After paying our fee and the county court’s fee, we took the Petition to be filed with the court. After the required six-month window had passed, we called Matt and Zoe and confirmed that they had received their order from the court. Their Dissolution was final, and their brief marriage was officially over.
Family law is an important legal document assistance area for us. We’ve helped hundreds of couples get divorced. For those who may be contemplating Divorce, we are happy to answer questions and explain how we work with our clients. Contact California Document Preparers at one of our three Bay Area offices today to schedule an appointment. We’re helpful, compassionate and affordable.

Wednesday, November 1, 2017

Complexity of Blended Families Creates Need for Multiple Trusts


“Julie” came in to our Oakland office to get more information about creating a Living Trust. She and her husband headed a blended family, and theirs was a complex scenario. Wanting to avoid going to an attorney, she was hoping we could help her. She and her husband, “Jerry”, had both been previously married, and each brought children and assets to their relationship.

Julie and Jerry owned two properties together, and they agreed that these properties would go to Jerry if she passed away first; after he died, they would be divided among their collective five children. Julie also owned four properties that were in her name only, and she wanted these properties to go directly to her three children when she died--not to Jerry or his two children.

After carefully reviewing her estate and options, she decided to prepare two Trusts:

  • A Joint Trust would be created to hold their community assets, including the two properties that Julie and Jerry owned together. They agreed that the surviving spouse would inherit these assets. After he the surviving spouse died, these assets, including the properties, would be equally distributed among the couple’s five children.
  • An individual Trust would be created just for those four properties Julie owned as her separate property; upon her death they would be distributed among Julie’s three children only.

This was a clever way to separate assets, allowing for different distribution strategies

  • We would help Julie and Jerry transfer title of their jointly owned properties into the Joint Trust, and these assets would go to the surviving spouse. After the death of the survivor, these would go to the beneficiaries they named in their Joint Trust.
  • We would also help Julie transfer title of her separate properties to her Individual Trust. Since their Joint Trust can be amended by the surviving party, Julie took the extra precaution of segregating these properties because her Individual Trust becomes irrevocable and unamendable after she dies. Julie wanted to avoid any confusion about wanting to distribute the four separate properties among her three biological children.
While Julie and Jerry could have stated in the Joint Trust that these properties were to be given upon Julie’s death (rather than after the death of both of them), sometimes spouses worry that circumstances may change after their deaths and their wishes won’t be followed. These Trusts are now structured so that Julie’s wishes will be carried out.

Creating a Living Trust is an important part of end-of-life planning

Contact California Document Preparers at one of our three Bay Area offices today to schedule an appointment. We’re helpful, compassionate and affordable.

Thursday, October 26, 2017

Estate Planning: Wait Until 70 to Draw Social Security?


Many of the clients who come in to our offices are either creating or updating their Living Trusts. They’re often older, and if not retired, they’re thinking about it. As a result, we hear many concerns about healthcare, social security, disability insurance and hospice.

Jane Bryant Quinn discusses timing of Social Security payouts

Jane Bryant Quinn, the personal finance expert who writes for the AARP, discusses when to start taking your social security payments in her article, Don’t Rush Social Security. Many people start at 62 because they need the money; others wait until they’re 67. But Quinn encourages people to wait until they’re 70 because their monthly payout will be a whopping 76% higher than if they’d begun receiving their payments at 62. For those who are married, waiting will also provide the surviving spouse with a larger survivor’s benefit.

What about the strategy of drawing social security at 62 and investing the money?

Let’s say your circumstances and investments allow you to make a choice: Would you be better off drawing Social Security at 62 and investing the payments? One expert, Bill Reich­enstein, a professor of finance at Baylor University, has created a powerful Social Security calculator that allows him to apply filters, such as the effect of taxes on the additional income, probable return on investments, and cost-of-living increases. He created various scenarios, taking into account the average life expectancy of a 62-year-old, and found that it’s better to wait until you’re 70.
For instance, if you take your Social Security benefit at 62 and start growing the funds through investments, how long would it last if you then started drawing from that fund at age 70 at the monthly amount you would have gotten if you’d waited? Unfortunately, not long enough. Your fund would be gone by the time you reached age 81. That may be average life expectancy, but 40% of people live longer than that and half of those will live into their 90s. With the fund now spent, you will have to do with the reduced benefit you took at age 62.

A valid case for drawing Social Security at 62

If your health is failing and you are not worried about a spouse getting a larger survivor’s benefit, the best decision may be to start drawing at age 62. If you are not going to need the benefit and want to start drawing and investing it, you could leave a fund for your heirs. Yet for most of us, good judgment and Bill Reich­enstein prevail; it’s difficult to beat the system. Investing those Social Security benefits taken at 62 will not beat the lifetime return of those benefits you draw at age 70.
Creating a Living Trust is an important part of your retirement planning. Contact California Document Preparers at one of our three Bay Area offices today to schedule an appointment. We’re helpful, compassionate and affordable.

Wednesday, October 18, 2017

Distribution of Assets: Beware Property Tax Consequences



A recent experience with a Living Trust client brought up an issue that frequently surfaces for those who are dividing their estates among their children. “Joe” and “Marilyn” were planning to gift real property equally to their son, “Tony” and daughter, “Sarah”. In the beneficiary section of the Trust, they also were granting the residue (the remaining assets after all specific gifts have been made) of their Trust estate to Tony and Sarah equally.
In each case they named an alternate beneficiary in the event something happened to either Tony or Sarah. For both the property and the residue, the alternate beneficiary was the other sibling. This seems straightforward, but it creates potentially significant property tax ramifications for Tony and Sarah.

Background: Prop 58 excludes transfer of real property from reassessment

In 1986, voters in California approved Proposition 58, which excludes real property from being reassessed when it is transferred from parent to child. When the primary residence is transferred, there is no limit on the value of the property. For property other than the primary residence, there is a limit of $1 million per transferor.
This means that instead of reassessing the property at its current value, the assessment of the current Prop 13 value results in significantly lower property taxes. For Joe and Marilyn and their family, this means that when the property is transferred equally to Tony and Sarah, there will be no reassessment at that time (if they wish to exercise their exemption).

Sarah and her family are living in the primary residence

The situation gets a little more complicated with this family, as it does with many of our clients. Sarah and her own family are currently living in the property and plan to remain there after Joe and Marilyn die. Sarah can buy Tony out, but the assessor will treat the transfer this time as that of one sibling to another—which means that this time it will be without the exemption, so that 50% of the property would be reassessed at current values. In today’s inflated real estate market, this could result in an increase of a few hundred thousand dollars in assessed value and skyrocketing property taxes.

This scenario caused our clients to reconsider

Joe and Marilyn began rethinking how they would split their estate between their children. If they included the property as part of the residue of the estate, this gave Tony and Sarah additional options. If the Trustee valued the total of the estate and then split the estate, one half could include the home that one child wanted and the other half would include a total of equal real and liquid assets. With this scenario, the transfer of the home to Sarah would qualify for the exemption on the entire value of the home. No buyout would be required and no transfer from one sibling to the other would be necessary—avoiding the potentially huge property-tax burden. Tony could receive real property and assets equal to the value of the property that Sarah was inheriting.
California Document Preparers assists clients with the creation of Living Trusts, transferring property into the Trusts, and assisting Successor Trustees in transferring properties to beneficiaries. We also can assist in transferring property to your children now. The implications of the Parent-Child Exemption should be considered in any Deed transfers between parents and children.
Contact California Document Preparers at one of our three Bay Area offices today to schedule an appointment or to get more information to help make informed decisions. We’re helpful, compassionate and affordable.