Will and Trust Attorneys in La Mesa, CA

Transferring Your Business into a Living Trust to Strengthen Your Estate Plan

You can protect your and your family’s financial future by creating a well-crafted and legally astute estate plan that is in sync with your current and long-term goals. Living trusts can be used by business owners for transferring ownership in an easy and streamlined manner.

This can be done smoothly and without any adverse consequences to the business. You should hire the services of a qualified estate planning attorney to maximize the total value of the estate and reduce your tax burden.

A Living Trust Can Meet Your Estate Planning Goals

Long-term goals and other factors play a vital role in how a business must be transferred in order to ensure its perpetuity. You can choose to transfer the business before or after your death.

Many business owners prefer liquidating the assets instead of transferring operational business assets to a beneficiary. The first step in mapping out the best strategy that will meet all your needs is to get a seasoned estate planning lawyer on your side.

Living trusts can help you transfer the business into ownership of the trust. You can either designate yourself as the trustee or use another entity. You can continue managing the assets if you designate yourself as the trustee.

Transferring Your Business to a Living Trust

You need to understand how different business assets are treated to transfer them for estate planning. You would require a deed transfer for moving real estate property related to business operations into a trust. You can use both quitclaim and warranty deeds. Both have their individual limitations and benefits that a skilled estate planning attorney will walk you through.

This is especially important to consider if you want to give your beneficiaries the ability to sell the business-held assets in the future. Your attorney can help you choose and prepare the appropriate deed by reviewing individual circumstances and estate planning goals. You can transfer accounts, financial assets, and stocks related to the business into a living trust.

Based on this, you would need to notify the financial institutions and complete all necessary paperwork. The majority will require a certificate of trust for completing the transfer. You can avoid delays by gathering all the necessary documents beforehand.

Life insurance, IRAs, and other accounts may not be transferable as they cannot be placed under the ownership of a trust.

Creating an Estate Plan Involving a Living Trust

Business owners are required to take inventory of assets related to their organizations when transferring them into a living trust. You should include all related assets for maximizing their value for beneficiaries. Estate tax rules should be considered as the taxes will be calculated at the time of your death.

The estate and all beneficiaries may be held responsible for meeting obligations when the value of assets within an estate is higher than the exemption limit. You can maximize the tax burden and reduce the estate’s value by leveraging the business structure.

You have the ability to transfer assets to beneficiaries through a trust without really losing control by using a limited liability company (LLC) structure. You can reduce your estate value by using living trusts as valuable tools. They protect business assets from time-intensive and expensive probate processes while limiting the amount of estate taxes that need to be paid.

All available strategies will be outlined by your estate planning attorney to ensure you choose the right plan of action for your long-term financial well-being. Further, living trusts provide greater value to beneficiaries and help in establishing a more secure financial future.

Changing Ownership of a Business Through Trust

You are essentially changing the legal ownership of your business assets when you transfer them to a living trust. Most people appoint themselves as trustee when creating a living trust.

This will give you essential control over the assets while allowing them to be technically owned under the trust. You should note that all items held within the trust will be assigned to your social security number if you take this route.

You can run the business as normal by appointing yourself as the trustee of the trust. You should also name a successor trustee for the smooth transition of the business.

The trust agreement should contain terms and provisions that are scrupulously drafted. This is especially important for the terms related to the operations of the business and the manner in which ownership decisions need to be taken if the owner dies or otherwise becomes incapacitated.

Other specific tax-oriented provisions may be required if the business is taxed as an S-corporation. You will be able to slowly implement your estate plan through early planning. This will help in ensuring that the main source of your family income remains protected.

Speak to a Reputable Estate Planning Attorney Today

For business owners and entrepreneurs, it can be difficult to carve out the time required for contemplating estate planning and business succession. But when you hire the services of a skilled estate planning law firm, you can accomplish your goals with minimum time involvement or hassle.

The Southern California estate planning attorneys at Garmo & Garmo, LLP can help you make the right decisions to ensure your business interests remain protected. Schedule your complimentary consultation with our lawyers today. Call us at 619-441-2500 or contact us online.

 

estate planning for generation x

Estate Planning for Gen-Xers

Gen-Xers are slowly easing into middle age, which makes estate planning an urgent and important action for them. It’s noteworthy that people of Generation X have a number of unique issues that must be addressed during estate planning when compared to millennials and baby boomers. You should talk to a qualified estate planning attorney in La Mesa to meet your primary financial goals in the best possible manner.

Caring for Young Children

Many Gen-Xers are still in the midst of raising a family with younger children. Estate planning activities can easily get shunted to the back burner as you go about the daily chores and duties that come with raising children. It’s absolutely essential to craft a plan that protects your children.

An important thing you can do as a Gen-X parent is to draft an estate plan and name a guardian that will take over these duties and responsibility in the event that you and the other parent becomes incapacitated or dies. You need an estate plan to provide inheritance provisions since your young children will not be legally allowed to own property until they come of age.

You will also need to include tools for providing the children with financial protection in case you are no longer around to make an income. Estate planning is useful even if you don’t have children, but just pets. Many people consider pets to be family and may want to ensure their pet is taken care of till they eventually pass away.

You can make arrangements in your estate plan for your pets if you are physically unable to care for them or die. You can name a caregiver and list specific instructions for them to ensure your pet’s needs are taken care of.

Divorce and Remarriage

A significant number of Gen-Xers have gone through a divorce or are in a second marriage. You should update your estate plan as necessary if there has been any significant change in your marital status. The changes you make should include updates regarding advanced medical directives, powers of attorney, and inheritance choices.

Incapacitation

You should include specific tools addressing a possible incapacitation event while estate planning. While the likelihood for Gen X members to become incapacitated is far less as compared to baby boomers, there is always a possibility. Speak with a capable estate planning attorney about making preparations to pass on medical decision-making and financial management responsibilities.

You may also want to include appropriate tools to give representative directions regarding decision-making when you lose the ability to manage your affairs. You would likely have amassed a significant amount of digital assets if you are like the many million members of Generation X. This includes blogs, social media accounts, videos, photographs, financial accounts (Amazon credits, PayPal, Venmo, and Bitcoin), and email accounts.

Your estate planning attorney will help you appoint a person you can trust to manage these accounts when you are too ill to do so. This will enable you to designate a person that essentially inherits the accounts when you die.

You can continue being your own digital boss by planning ahead for the future. You can decide to whom you wish to transfer the digital property while making sure that no significant or valuable digital property gets lost.

What is Involved in an Estate Plan for Gen-Xers?

As a Gen-Xer, you should consider drafting an estate plan that accounts for your unique needs. An estate plan may include the following:

  • Trust: This is a legal document that helps the estate avoid probate. Probate refers to a public court process that leads to the distribution of an estate. The probate court will distribute the estate as per the will if present. If not, the assets will be distributed in accordance with state law. Different goals can be achieved by different types of trusts. This includes protecting assets while your loved one requires care at a long-term or nursing care facility.
  • Power of attorney: This is an efficient way of establishing who will be able to make financial and legal decisions on your behalf if you ever become incapacitated. The guardianship process is the alternative process, which is a lengthy, costly, and public court proceeding.
  • Healthcare proxy: This is again similar to having a power of attorney. However, the proxy will be designated to specifically address your healthcare planning needs.

Review these documents on a regular basis. In fact, you should get in touch with your attorney every three years to discuss potential changes to the estate plan and your will. It is recommended that you work with an attorney experienced in the area of law to draft the plan instead of using a template.

Contact a Seasoned Estate Planning Lawyer in Las Mesa Today for Legal Advice

Estate planning is one of the most important ways to preserve and protect your financial legacy. A skilled and knowledgeable estate planning attorney from Garmo & Garmo, LLP can help you stay focused on your goals and plan for a more secure financial future.

To schedule your free and confidential consultation with us, call us at 619-441-2500 or write to us online.

 

estate planning for your elder parents

Estate Planning for Aging Parents

Thinking about the possibility of your parent’s death or incapacitation can be difficult to say the least. However, it is something you need to do, as it is the only way to ensure your parents’ wishes are carried out after their passing and their assets are managed, divided, and distributed as per their instructions.

Talking to Your Elderly Parents About Estate Planning

First and foremost, you need to talk to your parents about the need for estate planning and find out what they think about it. Generally, elderly people tend to put off estate planning because they do not understand just how important it is or because they believe that it is not the right time to do it.

Tell your parents about probate and help them understand that in the absence of an estate plan, their assets would be divided and distributed by a court-appointed executor – not by someone they love and trust. More importantly, tell them that creating an estate plan is the only way to make sure that their wishes are taken care of after their passing.

If you have siblings and other family members whom your parents might want to pass on their assets to, make sure you involve all of them in the process. Your parents need to know that all of you are on the same page regarding the need for an estate plan.

Be patient with your parents, address all their concerns, and make sure they are not pressured or forced into doing anything they do not like.

Determining Your Parents’ Estate Planning Needs

Once your parents are ready to create an estate plan, you need to determine their estate planning needs.

  • Do your parents have a list of beneficiaries that they want to pass on their assets to?
  • Do your parents want to pass on all their assets to their beneficiaries?
  • Do they want to leave some assets to charity?
  • Do they want their assets to be divided and distributed equally to all the beneficiaries?
  • Is there a beneficiary with special needs or some other kind of disability who might need lifelong care?

These are some of the questions you need to ask to determine your parents’ estate planning needs.

Creating an Advance Healthcare Directive

Talk to your parents about what should be done in the event of their incapacitation and create a plan for the same.

Firstly, ask your parents to choose someone as their healthcare agent who can make medical and healthcare decisions on their behalf. It can be you, one of your siblings, or anyone else that your parents trust completely. It’s a good idea to ask your parents to choose an alternate healthcare agent who can make decisions on your parents’ behalf if the primary designee is unavailable, unwilling, or incapable of doing so.

Secondly, make a list of your parents’ healthcare preferences. The most important questions you need to ask your parents include:

  • Do they want palliative care?
  • Under what circumstances do they want to be resuscitated if their heart stops?
  • Do they want to be put on a ventilator if they are unable to breathe? If so, for how long?
  • Do they have any specific preferences regarding the type and level of medical care they want to receive?
  • Do they want their organs to be donated?

Creating a Financial Power of Attorney

Talk to your parents about who should control their finances in the event of their incapacitation. Ask them to choose someone who can handle their financial affairs and make decisions on their behalf. As is the case with the advance healthcare directive, it’s necessary to designate an alternate agent who can take control of your parents’ finances if the primary agent is unavailable, unwilling, or incapable of performing their duties.

Creating a Trust

A trust can help your parents manage their assets while they are alive and of sound mind and make sure the assets are managed, divided, and distributed as per their instructions after their passing. The biggest advantage of a trust is that it eliminates the need for probate completely.

Depending on your parents’ needs, you can set up a revocable or irrevocable trust. You can consult with an experienced California estate planning attorney to decide what kind of trust might be the right choice for your parents.

Need an Estate Plan for Your Aging Parents? Let Us Help You

At Garmo & Garmo, we know how important it is for aging parents to have an estate plan in place. We can talk to your parents, understand what they are trying to accomplish by creating an estate plan, and create a customized plan which is best suited for their needs. We have over 80 years of estate planning experience and can provide you with the specialized guidance you need at every step of the process.

To discuss the estate planning needs of your parents with a proven southern California estate planning attorney, call us today at 619-441-2500 or contact us online and schedule a free consultation.

flexibility in your estate plan

Building Flexibility into Your Estate Plan

Creating an estate plan is without a doubt the best way to plan for the uncertainties in life, protect your assets, and provide for your loved ones. However, your estate plan should be flexible enough to be updated or revised as and when the circumstances change. Here are four useful tips to build flexibility into your estate plan.

Naming Alternate Agents and Trustees

Failing to name an alternate executor, trustee, or healthcare agent is one of the biggest estate planning mistakes you can make. For instance, let us assume that you designate your eldest son as your healthcare agent and want him to make healthcare decisions on your behalf in case you are unable to do so due to incapacitation.

What happens if you become incapacitated and if your son is unable or unwilling to act as your healthcare agent? In the absence of an alternate agent who can step into your son’s shoes and make decisions on your behalf, your family might not know what to do and make decisions that might be contrary to your wishes.

Similarly, if you fail to name an alternate successor trustee, and if the original designee is unavailable, unable, or unwilling to take control of your trust, your family members might disagree with each other on who should serve as the trustee, which in turn can lead to unnecessary litigation.

To avoid such problems, you should make sure you name alternates who can carry out your instructions if the originally chosen executor, successor trustee, or healthcare agent is unable to do so.

Granting Discretionary Powers to the Successor Trustee

Generally, a successor trustee is expected to abide by the terms of the trust you set up and follow your instructions. However, if there is a material change in the circumstances under which the trust was set up, the terms of the trust might no longer be relevant or fair to the beneficiaries.

You can preempt this problem by granting discretionary powers to your successor trustee. When the successor trustee is given discretionary powers, they can make decisions on their own depending on the circumstances and decide how the assets in your trust should be managed and how the income should be distributed.

It should be noted that granting broad discretionary powers to the trustee is a good idea only if it is someone whom you have known for a long time and can completely trust. Otherwise, it is advisable to specify the standards that the trustee should abide by and include certain restrictions that can restrict the discretionary powers of the trustee to a certain extent.

Decanting

Decanting is the process of moving the assets from an irrevocable trust into a new trust. If you have set up an irrevocable trust, you can grant the trustee with the discretionary power to decant the trust if and when needed.

Normally, the terms of an irrevocable trust cannot be modified, unless the trustee approaches the court and manages to get the consent of all the beneficiaries. Needless to say, it can be a stressful and time-consuming process.

When the trustee is granted discretionary powers, they can choose to decant the trust if and when there is a material change in the circumstances and if they believe that the terms of the trust are no longer applicable or fair to the beneficiaries. In such a scenario, the trustee can move the assets into a new trust with more favorable terms – as long as the terms are not against the grantor’s intent.

Appointing a Trust Protector

A trust protector is a third party who can guide the trustee to make the right decisions regarding how the trust should be managed and how the proceeds should be distributed among the beneficiaries. They can also make modifications to the trust if and when there is a material change in the circumstances.

A trust protector also has the authority to remove the trustee and appoint a new one – if they believe that the trustee in question is not acting in the best interests of the beneficiaries or if they fail to manage the trust as per the grantor’s intent.

Looking to Create a Flexible Estate Plan? Let Our California Estate Planning Attorneys Help You!

Nobody can predict the future. But by creating a flexible estate plan that can be amended as and when needed, you can make sure your loved ones do not have to approach the court every time there is a change in circumstances.

The estate planning attorneys at Garmo & Garmo have over 80 years of combined experience and have helped thousands of clients from diverse backgrounds with their estate planning needs over the years. We can create a highly personalized, flexible estate plan which is best suited for your unique needs and goals.

To discuss your estate planning needs with a hard-working attorney from our firm, call us today at 619-441-2500 or contact us online and schedule a free consultation.

 

estate planning for new parents in La Mesa

Estate Planning for New Parents

As a new parent, taking care of your baby and catching a good night’s sleep (if possible) might be your top priorities. And during this season of your life, planning for your incapacitation or death is probably the last thing you want to think about.

However, it is necessary to plan for these contingencies – regardless of your age. As a parent, you have the responsibility to make sure your child is taken care of and provided for in your absence. So, this is the right time for you to create an estate plan.

Essential Aspects of Estate Planning for New Parents

Guardianship

As a new parent, this should be your topmost priority while creating an estate plan. By designating a legal guardian, you can make sure that even if something were to happen to you and your spouse, your child will be taken care of by someone you trust and raised the way you want.

The guardian you designate is authorized to take care of your child, make decisions on behalf of your child, and perform what are generally considered parental duties, which include:

  • Providing food, clothing, and shelter
  • Education
  • Healthcare
  • Safety and protection
  • Emotional support

It should be noted that in the event of your death, your child will be raised by your spouse – assuming they are healthy and of sound mind. The guardian is authorized to raise your child only under the following circumstances.

  • If you and your spouse pass away at the same time.
  • If they pass away shortly after you do and if your child is still a minor at that point.
  • If they have a physical or mental illness that prevents them from performing the duties of a parent.
  • If they have a serious alcohol or drug addiction.
  • If they have a history of being abusive and cruel to your child.
  • If they are convicted of a criminal offense and sentenced to prison.
  • If they are unable to take care of your child due to any other reason.

It is always a good idea to name an alternate guardian for your child as well. So that if the original designee is unable or not willing to take care of your child, the alternate guardian can do so.

Life Insurance

Life insurance is meant to provide a financial safety net for your family in the event of your untimely death. The payout from the policy can provide your spouse with the financial security they need to run the household and raise your child.

The best part is that life insurance is extremely affordable for those who are young and healthy. For example, if you are a 35-year-old non-smoker without any underlying health conditions, a 20-year term life policy with a death benefit of $500,000 will only cost you around $40 per month.

You can name your spouse as the beneficiary of your policy so that they can get the proceeds after you are gone. Alternatively, you can set up a trust and name it as the beneficiary, so that the proceeds are used to provide for your child’s needs.

Trusts

Setting up a trust is undoubtedly one of the best ways to make sure your child is provided for until they become an adult. It is particularly important if you have a special needs child who might require lifelong care. Learn more about creating a trust fund in California.

Experienced Estate Planning Attorneys in La Mesa, California

If you are a new parent who wants to make sure your child is taken care of and provided for after you are gone, the attorneys at Garmo & Garmo are here to help. We have an in-depth understanding of California’s probate and estate planning laws and have over 80 years of combined experience helping clients with these matters.

We can assess your child’s needs, understand what you are trying to accomplish with your estate plan, and create a plan that suits your needs. If you already have a plan that needs to be revised and updated, we can help you do that as well.

To discuss your needs with one of our Southern California estate planning attorneys, call us today at 619-441-2500 or contact us online and schedule a free consultation.

transferred on death deed California

California’s Transfer on Death Deed: What You Need to Know

A transfer on death (TOD) deed is an estate planning device that allows you to pass on your real estate property to your loved ones in the event of your death. Introduced in California in 2016 through AB 139, TODs allow you to transfer real estate property to your beneficiaries without having to set up a trust.

In this article, we take a look at the upsides and downsides of California’s TOD deeds.

California Transfer on Death Deed: The Upsides

  • It is one of the cheapest and easiest ways to transfer real estate property to your beneficiaries. All you need to do is fill out the TOD form, sign it in front of two witnesses, get their signatures, notarize the form, and get it recorded in the county where the property in question is located.
  • It protects the property in question from probate and allows your beneficiaries to inherit it without any delay or any unnecessary intervention from the probate court.
  • The beneficiaries who are named in the TOD deed can receive the property by recording the evidence of your death and filing a change in ownership notice. No other legal action is required on their part to be able to take ownership of the property.
  • You can revoke it at any time for any reason. You are not legally obligated to get your beneficiaries’ consent before revoking the deed. Similarly, the beneficiaries who are named in the deed do not have the authority to stop from you revoking the deed.
  • A TOD deed allows you to retain full control over the property in question until you die. The beneficiaries named in the deed cannot have any say in how the property should be maintained or what you can do with it.
  • If you only name one beneficiary in the deed and if they predecease you, the deed becomes automatically invalid. You are not required to revoke it. If you name multiple beneficiaries and if one of them predeceases you, their share will be equally split among the remaining beneficiaries.

California Transfer on Death Deed: The Downsides

  • A TOD only allows you to transfer residential real estate property to your beneficiaries. It can be a single-family home, a condo, a property that contains no more than four residential units, or a single-family home that is built on agricultural land (40 acres or less). If you own commercial or industrial property or if your residential property does not fit into any of the aforementioned categories, you cannot pass it on to your beneficiaries through a TOD.
  • It can eliminate the need for probate only if the value of the rest of your estate (excluding the property named in the TOD deed) does not exceed $166,250. If it exceeds this threshold, it must go through probate. In such a scenario, your beneficiaries might be able to inherit the property named in the TOD deed without probate. However, the remaining assets must go through probate, which can be expensive and time-consuming.
  • A TOD does not have any built-in mechanisms to defer the distribution of the property to the beneficiaries named in the deed. For instance, if you want to leave your home to your minor children, you cannot add a provision in the TOD that they can receive the property only after they turn 18. In fact, you cannot set any terms as to how the property should be managed after your death. It is entirely up to your beneficiaries to decide what they should do with the property.
  • The beneficiaries who inherit your property through a TOD deed can be held personally liable for your debts.

Why You Need a Comprehensive Estate Plan

As you can see, a TOD deed has several limitations and cannot be used to pass on all your assets to your beneficiaries. To be able to do so, you need to set up a trust and have a proper estate plan in place.

Unlike a TOD deed, a trust gives you complete control over your assets and allows you to decide how your assets should be managed, how they should be divided, and when they should be distributed to your beneficiaries. So, if you have substantial assets whose value exceeds California’s probate threshold, setting up a trust might be a better way to manage and pass on your assets to your beneficiaries.

Need Help with Estate Planning? Our California Estate Planning Lawyers Can Assist You

At Garmo & Garmo, we understand how complicated estate planning can be. Our attorneys can make the process easier for you by offering the right advice and creating a plan which is tailor-made to suit your unique needs. We have over 80 years of combined experience in estate and incapacitation planning and can create a personalized plan that works for you.

To talk to one of our Southern California estate planning attorneys, call us today at 619-441-2500 or contact us online and schedule a free consultation.

why you shouldn't create a diy will

Why You Shouldn’t Create a DIY Will

The devastation to human life caused by the pandemic has forced many people – including young people – to think about what would happen to their family in case the unthinkable happens. As a result, people are rushing to create online wills, so that their assets are passed on to beneficiaries of their choosing in the event of their death.

While making an online will is certainly better than not having a will at all, it is not a good idea to create your own will without consulting an estate planning attorney. If you are not careful, your decision to create a DIY will could prove to be a costly mistake and make it difficult for your loved ones to deal with your estate when you pass on.

DIY Wills in California – What You Need to Know

Under California law, you have the authority to make your own will. It can be a handwritten will (commonly referred to as a holographic will) or a statutory will (a downloadable will that you can fill out).

  • For a handwritten will to be deemed legally valid, you should date and sign it.
  • For a statutory will to be deemed legally valid, you should have two witnesses who must witness you sign the will and sign it themselves.

Since these requirements are extremely easy to meet, many people think that they can save a lot of time and money by making a DIY will. The problem, however, is that a DIY will can lead to a lot of unnecessary legal complications, which your loved ones might have to deal with after you are gone.

The Risks Associated with a DIY Will

Your Will Could Be Declared Invalid

One of the biggest risks associated with a DIY will is that if you are not careful, it could be declared invalid by the court after your death. For instance, if your handwriting is not legible, your will could be deemed undiscernible.

Similarly, if your will does not express your intentions clearly, it could be declared too vague. If you have more than one beneficiary, you should clearly mention how your assets should be split up and who should get what. If you fail to do so, your beneficiaries might choose to contest the will, as a result of which it might get stuck in probate limbo for months – if not years.

A DIY Will Might Not Suit Your Needs

The one-size-fits-all nature of a DIY will might not suit your unique estate planning needs and goals. You are not allowed to make any changes or add anything to a statutory will. If you do, it will be declared invalid. So, by choosing to create your own will, you might not be able to accomplish all your goals.

You Might Add Contradictory Provisions

Without the guidance of a seasoned California estate planning attorney, you might find it difficult to express your intentions clearly in your will. If you accidentally add provisions that are contradictory to each other, the executor might not be able to carry out your instructions. It can also lead to disagreements among your beneficiaries, which in turn can lead to litigation.

There Might Be Issues with Guardianship

One of the common mistakes that many people make while creating a DIY will is that they tend to focus only on the financial aspects and fail to make provisions for other, equally important issues like guardianship of minor children.

The most common issues with guardianship are:

  • If you fail to designate a guardian for your minor children, the court will step in and choose someone as the guardian.
  • If you fail to designate an alternate guardian, and if the original designee becomes ill, dies, or if they are unwilling to be the guardian of your children, the court will have to step in and choose someone as the guardian.
  • If you designate a couple as the guardians for your minor children, and if they split up after your death, your children could get caught in a custody battle.

A Will Is Not an Estate Plan by Itself

A Last Will and Testament can accomplish a lot toward your estate planning goals, but there are some things it cannot do. For example, a will cannot help you plan for your incapacitation. Nor can it help you avoid probate. In order to plan for these contingencies, you need other tools like a financial power of attorney, an advance healthcare directive, and a living trust. So, along with your will, you should utilize other documents to create a comprehensive estate plan that addresses all your needs and goals.

Need Help with Estate Planning? Our Southern California Estate Planning Attorneys Are at Your Service!

Estate planning is a complicated process that requires the guidance of a committed attorney. At Garmo & Garmo, we have a team of highly skilled attorneys who have more than 80 years of combined experience with estate plans and related matters. We can create a plan that takes all your needs and goals into account and update it as your circumstances change.

To discuss your estate planning needs with one of our attorneys, call us today at 619-441-2500 or contact us online and schedule a free consultation.

updating my estate plan

How to Update Your Estate Plan

Updating or Revising an Estate Plan

If your estate plan is three or more years old, or if an heir has died, you need to have it reviewed. Your estate planning attorney should also review the plan when specific events occur in your life. These events include if you got divorced, moved to another state, or you have a new child or grandchild, or there has been a significant change in your assets/liabilities.

If circumstances surrounding your trustees or executors of your estate plan have changed, then also you need to update it. Carefully consider the people appointed in your plan – have they moved away or passed away? Are they still able and willing to perform the jobs you have outlined in your estate plan?

Revising Your Estate Plan After the Death of An Heir

Amending Your Will

If you named the heir in question as one of the beneficiaries in your will, the heir’s family might be eligible to receive their share under California’s anti-lapse law.

However, if the heir in question did not have a family of their own and if there are no blood relatives who are qualified to receive their share under the state’s anti-lapse law, their share will become part of the residuary estate and will be shared among the remaining beneficiaries.

Furthermore, things can get complicated if your will is ambiguously worded or if you failed to name any alternate beneficiaries in your will. With that said, it’s wise to amend your will and specify who gets to inherit the deceased heir’s share.

If you are not sure as to how the amendment might affect other provisions in your will, you can revoke your existing will and create a new one with the help of a seasoned California estate planning attorney.

Amending Your Trust

If you have allocated a share of the assets in your trust to the deceased heir or if you have allocated a share of the revenue generated from the assets in the trust to the deceased heir, it’s essential to amend the terms of the trust so that the share can be allocated to the heir’s family or distributed among the remaining beneficiaries.

Amending a revocable trust is only a matter of replacing the existing trust document with a new one. You can do it any time you want, for any reason, with the help of an estate planning attorney.

On the other hand, if you have set up an irrevocable trust, you can only amend it under limited circumstances. If all the remaining beneficiaries are in agreement with the amendment you propose, you can get it done without any legal intervention.

However, if one or more of the beneficiaries do not agree with you, you might have to file a petition with the court and convince the court that the proposed amendment does not impair the interests of the aforementioned beneficiaries and is not against the material purpose of the trust.

Revising Your Durable Power of Attorney and Advance Healthcare Directive

If you have named the deceased heir as your agent who is authorized to make financial decisions on your behalf, it’s vital to revise your durable power of attorney or create a new one altogether. Similarly, if you have named the deceased heir as your agent who is authorized to make medical decisions on your behalf, you need to amend it as well.

Divorce is also another instance when you must revise your advance healthcare directive.
When you are married, it makes sense to designate your spouse as your healthcare agent, as you can count on them to respect your wishes and make medical decisions in your best interests. Once you are divorced, you need to find someone else who can do it for you in the event of your incapacitation or death.
Once you choose a person, talk to them and make sure they clearly understand what you want them to do. With your spouse, you do not have to spell out everything, as they can instinctively understand your needs. However, it might not be the case with a third party – even if they happen to be your close friend or relative. So, tell them exactly what they should do and what they should not do in the event of your incapacitation or death.

Factors to Consider When Creating or Updating Your Estate Plan

An estate plan is not just about what will happen after you die. It also covers the situation of who should have the authority to handle your affairs when you are still alive but unable to handle them yourself.

If you are not sure where to begin with estate planning, your first step should be to hire an experienced estate planning lawyer. They will help put your goals and thoughts onto a paper and prepare language that accurately expresses your ideas.

Create the Following Documents

These documents are a good place to start:

  • Durable Financial Power of Attorney: This is the document where you name an individual to act on your behalf in matters pertaining to all of your property such as bank accounts, real estate, retirement plans, digital assets, taxes, insurance, and so forth.
  • Health Care Power of Attorney: In this document, you will name the individual who will only have the authority when you are unable to make a medical decision for yourself. For example, if you are undergoing surgery or you are in an accident and temporarily unconscious and a question comes up regarding your treatment, this individual will have the authority to make a decision. Note: The “agent” you name cannot override your wishes so long as you can speak for yourself or if you have refused/consented to the treatment in the past.
  • Living Will Declaration: If you do not want to give anyone authority to act on your behalf when you are unconscious, this is the document you need. For example, if you are in a coma and you do not want to receive technologically supplied food and water, you should give a copy of this document to your doctors.
  • Declaration for Funeral Arrangements: In California, you can assign a representative to handle the disposition of your body after your demise. In this document, you will name that person. You can also list preferences regarding preferences (cremation, burial, entombment, etc.)
  • Last Will and Testament: This document will list how your property and assets should be distributed after your demise. You will also need to name an “executioner” to handle the distribution to the beneficiaries you name.

Review Your Beneficiaries

A feature with beneficiaries is that their circumstances can change. If you created your estate plan 10 years ago when you were married to your previous spouse, but they are still a beneficiary on your life insurance policy, your current spouse will get the catastrophic news after you are gone.

You should update the beneficiary designation on all the assets, investments, and accounts where your spouse is named as the beneficiary. These might include:

  • Life insurance policies
  • Investment accounts
  • 401(K) accounts, IRA plans, and other retirement accounts
  • Payable-on-death bank accounts
  • Certificates of deposits
  • Real estate properties and other assets for which you have created a transfer-on-death deed

Also, make sure you have backup beneficiaries in addition to the primary ones in case the latter pass away before you do.

Work with Seasoned Estate Planning Attorneys to Secure Your Legacy

You have worked hard to create the wealth you have today, regardless of its size. To ensure your legacy has a lasting impact, it is crucial to work with an estate planning attorney that you can trust.

At Garmo & Garmo, we understand that estate planning can seem overwhelming, which is where we come in. We can help you pass your property to your family and/or to charity, both upon death and during your lifetime. We can also analyze and implement asset protection and tax reduction strategies, coordinate life insurance, and help plan for possible disability.

Schedule a free, no-obligation consultation today by calling us at 619-897-2144 or filling out this form.

joint tenancy in estate planning

Joint Tenancy Problems in Estate Planning

Joint tenancy is seen by many as one of the easiest ways to pass on their assets to their loved ones without having to go through probate. While it is true that a joint tenancy arrangement can help you bypass the probate process, it is not an effective tool for estate planning – due to the inherent disadvantages associated with the arrangement.

How Does Joint Tenancy Work in California?

Under a joint tenancy agreement with rights of survivorship, you can co-own a property with one or more people – all of whom have ownership interests in the property. When you die, your ownership interest in the property will get transferred to the joint tenants.

As simple as the arrangement might sound, it can lead to several problems down the road. 

What Are the Disadvantages of Joint Tenancy as an Estate Planning Tool?

Your Estate Might Have to Go Through Probate Even with Joint Tenancy

The biggest reason why many people – especially couples – select joint tenancy is that it allows them to bypass the probate process. However, the truth is that even with joint tenancy, your estate still might have to go through probate under certain circumstances.

Let us assume that you and your spouse own your home in joint tenancy. If you and your spouse die in a car accident, your property has to go through probate, since both the owners are dead. A guardian or conservator appointed by the probate court will decide how your assets should be distributed among your beneficiaries.

Let us now picture another scenario. You and your spouse own your home in joint tenancy. A few years later, you die of a heart attack and your spouse inherits the home. However, your spouse is too distraught with your death to add another joint tenant. A few years later, your spouse dies – without adding any joint tenant to the property. Again, in such a situation, probate becomes unavoidable.

The Risk of Liens

There are many circumstances under which a lien could be placed on your joint tenant’s ownership interests in your property.

If your joint tenant injures someone accidentally and gets sued as a result, they might have to pay compensatory damages to the injured party. If they do not have sufficient liability insurance coverage, the court might decide to place a lien on their ownership interest in your property in order to compensate the victim.

If your joint tenant is unable to pay off their debts, the creditors might choose to file a lawsuit against them. If they win the case, a lien can be placed on your joint tenant’s ownership interest in your property.

If your joint tenant has children from their previous marriage and if they are unable to pay child support, the recipient can approach the court and get a lien placed on your joint tenant’s ownership interest in the property.

If your joint tenant fails to pay back taxes, the IRS might decide to place a lien on their ownership interest in your property – as well as any other property they own. If the amount owed by your joint tenant is substantial, the IRS can force a sale as well.

You Might Not Be Able to Pass on Your Assets to Your Loved Ones

This is by far the biggest disadvantage associated with a joint tenancy agreement.

Let us assume that you and your spouse jointly own all your marital assets and have two children. After your death, your spouse will inherit all your assets automatically. If they decide to remarry and name their new spouse as the joint tenant, your children might be left with nothing in the event of your spouse’s death.

Let us picture a different scenario. You and your spouse both have children from your previous marriages. After your death, your spouse decides to add the children from their previous marriage as joint tenants. Again, in such a scenario, your children might be left with nothing.

In other words, far from making it easier for you to pass on your assets to your loved ones, a joint tenancy agreement might actually prevent you from doing so.

Trusts – The Better and Safer Alternative to Joint Tenancy

If you want to protect your assets in the event of your death and make sure they are passed on to your loved ones, setting up a trust is generally a much better option than getting into a joint tenancy agreement with your spouse or anyone else for that matter.

A trust not only allows you to bypass the probate process, but the right types of trusts can also protect your assets from liens and make sure they are managed, divided, and distributed exactly the way you intended them to be.

Need Help with Estate Planning? Contact Our Southern California Estate Planning Attorneys Today

At Garmo & Garmo, we are committed to providing high quality estate planning services to our clients. Our attorneys are highly skilled and have over 80 years of combined experience in this area of law. We can craft a comprehensive estate plan that is customized to your needs and can accomplish your goals both now and after you are gone.

To schedule a free consultation with one of our seasoned attorneys, call us today at 619-441-2500 or contact us online.