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What Does it mean to be a Conservator?

What Does it mean to be a Conservator?

What Does it Mean to Be a Conservator?

You have been assigned as a conservator of a person or estate – now what? How is the role defined? What does it do? What are the expectations? These are some of the basic questions that will be covered in this article.

This is not meant to be a do-it-yourself guide to conservatorship. Just a quick introduction to one of the most serious and complex roles that you will undertake. You will most likely be needing the help of a lawyer in order to navigate the legal process which is critical to becoming a successful Conservator.

First, what does Conservatorship mean?

Under U.S. law, conservatorship is the appointment of a guardian or a protector by a judge to manage the financial affairs and/or daily life of another person due to old age or physical or mental limitations. A person under conservatorship is a “conservatee”, a term that can refer to an adult.

Who Needs Conservatorship?

Many elderly people (and some younger people) who are mentally or physically disabled, whether permanently or temporarily – need some form of conservatorship to live the best life possible.

 Some conservatees can no longer shop for food or cook; others need help bathing and dressing. Some need medical care or help cleaning the house. Others can’t drive and need help getting around. Some conservatees are isolated and need social activities and contact with other people.

 Other conservatees can’t keep track of their money or remember to pay their bills. Some give away large sums of money to their relatives, people they think are friends, or even strangers; others need help managing their investments.

What are the types of Conservatorship?

1. General Conservatorships are for adults who can’t handle their own finances or care for themselves. These conservatees are often older people with limitations caused by aging, but they also may be younger people who have been seriously impaired—as the result of an auto accident, for example.

2. Limited Conservatorships are for adults with developmental disabilities who cannot fully care for themselves or their property, but who do not need the higher level of care or help given under a general conservatorship. Developmental disabilities include mental retardation, epilepsy, cerebral palsy, and autism that began before age 18. They also include conditions that are similar to mental retardation or that require similar treatment. For someone with more extensive developmental disabilities, the court may decide to appoint a general conservator.

3. Temporary Conservatorships may be necessary when a person needs immediate help, usually during the time between the filing of a petition for appointment of a general or limited conservator and the court hearing on that petition. A judge may appoint a temporary conservator of the person or of the estate, or both, for a specific period until a general or limited conservator can be appointed. A temporary conservator arranges for temporary care, protection, and support of the conservatee, and protection of the conservatee’s property from loss or damage, during the limited period of his or her appointment.

What is a Conservator?

A conservator is an individual or organization, chosen through a legal process, to protect and manage the personal care or finances—or both—of a person who has been found by a judge or a jury to be unable to manage his or her own affairs. That person is called the conservatee.

Who can be appointed as a Conservator?

A conservator might be the conservatee’s wife, husband, domestic partner, daughter, son, mother, father, brother, sister, other relative, or friend. If there is no suitable relative or friend who is willing or able to serve, the conservator might be a professional fiduciary or a county agency called a public guardian or public conservator.

How Do You Work with the Conservatee?

Let the conservatee have as much independence as he or she can handle. You should involve the conservatee as much as possible in your decisions. When you must decide for the conservatee, try to make choices that respect the conservatee’s stated preferences, personal independence, dignity, and lifestyle.

Remember, though, that in the end, you are the decision maker, and the court will hold you responsible.

What is the core responsibility of a Conservator?

The court and the conservatee are trusting you as a conservator, to follow the law and to act in the conservatee’s best interests. You should make choices that align with the conservatee’s capabilities and wishes; that support, encourage, and assist the conservatee.

 As a conservator, you are authorized to make many decisions for the conservatee, but there are situations that may require you to ask the court for instructions or for approval before you act. Your lawyer will help you prepare and file a petition whenever you need or want to ask for court approval for a specific action.

What are your duties as Conservator of the Estate?

  • You manage the conservatee’s finances.
  • You locate and take control of the conservatee’s assets.
  • You collect income due the conservatee.
  • You make a budget to show what the conservatee can afford.
  • You pay the conservatee’s bills.
  • You invest the conservatee’s money.
  • You protect the conservatee’s assets.
  • You account to the court and to the conservatee for your manage- ment of the conservatee’s assets.

What are your duties as Conservator of a Person’s Assets?

  • Locate and take control of the assets and make sure they are adequately protected against loss.
  • Make an inventory of the assets for the court.
  • Collect all of the conservatee’s income and other money due and
    apply for government benefits to which the conservatee is entitled.
  • Make a budget for the conservatee, working with the conservator of the person, or if there isn’t one, working with the conservatee or his or her caregiver.
  • Pay the conservatee’s bills and expenses on time and in line with the budget you have made.
  • Keep track of how a trustee, spouse or domestic partner, or other party is managing any of the conservatee’s assets in his or her control.
  • Invest the estate assets and income in safe investments that will meet the conservatee’s needs and the court’s requirements. You should consult with your lawyer concerning any investments of the conservatorship estate. Some investments require prior court approval or may not be authorized under any circumstances.
  • Periodically account to the court and to other interested persons about income coming into the estate, expenditures, and the remaining conservatorship property.
  • Prepare a final report and accounting of the estate when the conservatorship ends.
  • Distribute the conservatee’s property remaining in your hands to the conservatee, if he or she has been restored to capacity; to a successor conservator appointed by the court if you resign or are removed as conservator; or to the personal representative of the conservatee’s decedent estate or other successor in interest, if he or she has died.

What are the Rights of the Conservatee?

1. The Right to Question – The conservatee has the right to ask questions, to express concerns and complaints about the conservatorship and your actions as conservator.

2. The Right to Take Court Action – The conservatee may ask the court to review your handling of the conservatorship if disputes can’t be worked out between you.

Even if the conservatee does not take direct action, the court will periodically send a court investigator to see the conservatee, to inquire about his or her circumstances and desires, and to advise the conservatee of his or her rights. The court may also appoint a lawyer to represent the conservatee.

3. The Right to Personal Freedoms – The conservatee keeps the right to exercise “personal rights,” including—but not limited to—the right to receive visitors, telephone calls, and personal mail (unless these rights are specifically limited by court order).

4. The Right to Enforce Rights – The conservatee can grant you the power to enforce their rights against others—for example, the administrators of a care facility where the conservatee resides.

How do you apply as a Conservator?

Before you may begin to handle the conservatee’s affairs, you must take certain steps to qualify as a conservator

1. Completing a Letter of Conservatorship, a document stating the terms and conditions of the conservatorship

2. Signing an acknowledgment that you received a statement describing the duties and liabilities of the office of conservator,

3. Obtaining a bond, when one is required (a bond is required in most cases to guarantee proper performance of the duties of the conservator of the estate)

4. Signing an oath, or affirmation, that you will perform your duties as conservator according to the law (this affirmation is part of the Letters of Conservatorship); and

filing these papers with the court clerk

5. Securing a hearing date with a judge who must approve and sign the documents in order to make your appointment as Conservator official.

What’s Next?

We understand that your decision to become a Conservator is not an easy one to make. We at Crider Law can hold your hand through this process by first giving you the right tools and information. Book your free consultation meeting and we’ll help you apply for conservatorship as timely and as efficiently as possible.

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Applying for VA Pension as a Retired Veteran

Applying for VA Pension as a Retired Veteran

Applying for VA Pension as a Retired Veteran

Many of our veterans don’t know that they are entitled to claim VA pension benefits when they turn 65 years old. And that they do not have to be disabled to receive Basic Pension. The Department of Veterans Affairs (VA) provides supplemental income for low-income, retired, wartime veterans, both able-bodied and disabled in the form of Basic Pension, Aid and Attendance and Housebound benefits.

The purpose of this article is to help retired veterans get started in the process of applying VA Pension by preparing the necessary documentation to prove eligibility and successfully apply for benefits they rightfully deserve for their service to the country.

Below is a list of documents that the VA may require, depending on the applicant’s circumstances, to process the application. For the complete information check out the VA Pension Application webpage.

What’s Next?

Once all forms are complete and supporting documents compiled, make and retain photocopies of the originals. Intent to file forms and completed applications can be submitted to the Pension Management Center (PMC), at a nearby regional benefit office www.va.gov/directory/guide/home.asp.

Veteran Service Officers (VSOs) who work at VA regional offices may be able to offer free basic guidance and answer simple questions about the benefit. VSOs volunteers throughout the U.S., frequently at hubs for veterans like American Legion halls and Veterans of Foreign Wars lodges may offer reliable advice. Veterans’ organizations like the VFW, American Legion and DAV (Disabled American Veterans) may be able to provide information about the benefit as well as free assistance to prepare an application.

Read the Guide to Long Term Care Benefits For Veterans to determine your eligibility for these pension benefits. Once you’ve determined that you might qualify for VA Pension and Attendance and Aid Benefits, book your free consultation meeting with our team at Crider Law and we’ll help you apply for the benefits.

Whether you need assistance with putting together the documentation and complete a successful application or just want to learn more about your rights and entitlements under the VA pension program, reach out to us. Your first consultation meeting is free.

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Form Links needed for application:

  • Intent to File Claim FORM 21-0966
  • Basic Pension Form for Veterans FORM 21P-527EZ
  • Medical Expense Report FORM 21P-527EZ
  • Request for Nursing Home Information FORM 21-0779
  • A Statement Of Occupancy From The Assisted Living Community Examination For Housebound Status Of Permanent Need For Aid & Attendance FORM 21-2680
  • General Release For Medical Provider Information FORM 21-4142A
  • Authorization To Disclose Information To The Va (One For Each Physician) FORM 21-4142A
  • Authorization to Disclose Personal Information to a Third Party (son, daughter, in-law) FORM 21-0845
  • Statement In Support Of Claim FORM 21-438
  • Original Military Discharge Papers (Do Not Send A Photocopy) DD-21
Guide to Long Term Care Benefits  For Veterans

Guide to Long Term Care Benefits For Veterans

Guide to Long Term Care Benefits for Veterans

Only a small number of US wartime veterans are benefitting from the Department of Veterans Affairs (VA) “Aid and Attendance” pension program. More than one third of Americans over the age of 65 are wartime veterans or are spouses wartime vets. And most of them are not aware that the program pays for long term care for senior veterans – a financial lifeline in case of a health crisis.

This quick guide prepares veterans and their families in starting the process of securing long term care benefits so that they will have access to them when they need it most.

What is VA Pension?

VA Pension is supplemental income to wartime veterans or their surviving spouses through the Veterans Pension and Survivors Pension benefit programs. Pension benefits are needs-based and your “countable” family income must fall below the yearly limit set by Congress.

What is Aid & Attendance?

Aid and Attendance benefit is additional financial support on top of basic pension for veterans or their surviving spouses who are housebound due to disability. It is also referred to as VA Assisted Living Benefit or Veteran’s Elder Care Benefit. Being enrolled in the pension program is a prerequisite to claiming Aid and Attendance benefits and is generally referred to as “improved pension.”

Who are considered “Wartime Veterans”?

Veterans (and consequently, their surviving spouses) are eligible for VA Pension and Aid & Attendance benefits if the veteran served at least 90 days of active duty during wartime.

The list of wartime dates are as follows:

  • WORLD WAR II: December 7, 1941, through December 31, 1946.
  • KOREAN CONFLICT: June 27, 1950, through January 31, 1955.
  • VIETNAM WAR: August 5, 1964, through May 7, 1975, although veterans who served in Vietnam itself (“in country”) as early as February 28, 1961, may also qualify.
  • GULF WAR: August 2, 1990, to a future date. (For VA benefits eligibility purposes, the Gulf War period is still in effect, which means that anyone who served on active duty from August 2, 1990, to present is considered a Gulf War veteran. Therefore, totally disabled veterans may qualify for Aid & Attendance or housebound benefits.)

How Much BenefIt Will Qualified Veterans Get?

The amount for Basic Pension and Aid and Attendance benefit depends on the income of the applicant and the actual cost of personal care services paid monthly. Here’s the rate sheet summarized from the Veterans Assistance website for quick reference.

How Does the VA Send Payments?

The money is directly deposited to the enrolled bank account of the veteran or beneficiary. In cases where the beneficiary does not have a bank account, the VA sends payments via Direct Express Debit Mastercard.

How Long is the Application and Approval Process?

It’s a slow and uncertain process that takes months. Applicants over 90 years old may send a formal written request to have their applications expedited. While the application and approval process may be frustratingly slow, the VA pays benefits retroactively uup the date of approval.

Who is Eligible for Pension Benefits?

Generally, a veteran or the spouse of a veteran who has served at least 90 days in active duty during wartime, age 65 years and older with limited or no income is eligible to apply for pension benefits.

Aside from that, the veteran or the surviving spouse must also be able to meet any one of the following criteria:

  • Receiving Social Security Disability Insurance
  • Totally and Permanently Disabled
  • Receiving Supplemental Security Income
  • A Patient In a Nursing Home

Who is Eligible for Aid & Attendance Benefits?

The veteran or the spouse of a veteran who is already qualified to receive basic pension may also qualify for Aid & Attendance benefits if any of these conditions are met:

  • Requires the aid of another person in order to perform some tasks of everyday living, for example – assistance with bathing, feeding, preparing meals, taking medications, dressing, using the restroom, adjusting prosthetic devices and/or providing daily oversight to help ensure safety.
  • Bedridden, apart from any prescribed course of treatment or therapy.
  • A patient in a nursing home, due to a mental or physical incapacity such as Alzheimer’s disease or dementia.
  • Eyesight is limited to a corrected 5/200 visual acuity OR less in both eyes OR concentric contraction of the visual field to five degrees or less.

Are the costs of Personal Care Services covered in VA Aid & Attendance?

VA defines Personal Care Services as “requiring the aid of another person in order to perform personal functions for everyday living such as bathing, feeding, dressing, attending to the wants of nature, adjusting prosthetic devices, or protecting himself/herself from the hazards of his/her daily environment”

When applying for Aid & Attendance benefits, the monthly cost of Personal Care Services in various elder care communities and facilities may be deducted from countable income. Here are some examples:

1. Retirement Community

Aid & Attendance typically cannot be used to pay for independent living itself. However, it may help cover the cost of personal care. If an applicant was denied pension benefits while residing in an independent living community and then later moved to an assisted living community because their need for assistance has progressed, that person may now qualify for benefits.

2. Assisted Living Community

If the applicant meets clinical requirements for Aid & Attendance and the assisted living community is helping with personal care needs, then typically, the monthly amount paid to the assisted living community is deducted from the gross income.

3. Memory Care Community

Memory care communities are secured so that residents cannot wander off and becomelost. Most residents who reside in a memory care community qualify for Aid &Attendance clinically as a result of their dementia diagnosis. 

4. Residential Care Home

As with assisted living, Aid & Attendance benefits can help pay for personal careservices residential care homes but only if the home is licensed by the state.

5. Nursing Home

Nursing homes are generally for patients who are bedridden and require round-the-clock care. The national average cost of a nursing home is over $7,000 permonth.

Aid & Attendance can be used to help pay for a nursing home, except when the nursing home patient is already receiving Medic-Aid or Medi-Cal. Aid & Attendance will not pay more than $90 per month to someone who is already receiving or will soon be eligible for Medic-Aid. However, nursing home patients who reside in state veterans homes are exempt from this ruling.

6. In-Home Care

The cost of in-home care from a licensed agency or private caregiver providing personal care services to a qualified veteran, may be deducted from gross income when applying for housebound or Aid & Attendance pensions. 

7. Adult Day Services

The amount paid for adult day services (average of $70 a day) may be deducted from gross income when applying for housebound or Aid & Attendance pensions.

Can Low-Income, Able-Bodied Veterans Apply for Aid & Attendance Benefit?

Qualified veterans with low incomes who are totally able-bodied, may qualify for a smaller amount of Aid & Attendance benefit. When no personal care is necessary, the benefit is extended as general financial assistance:

  • Able-bodied Single Veteran – $1,128 per month
  • Able-bodied Surviving Spouse – $1,006 per month
  • Able-bodied Couple – $1,477 per month

What’s Next?

Once you’ve determined that you might qualify for VA Pension and Attendance and Aid Benefits, book your free consultation meeting with our team at Crider Law and we’ll help you apply for the benefits that you so rightfully deserve for your service.

Whether it’s your first time to file a claim, pursuing an appeal or just want to learn more about your rights and entitlements under the VA pension program, we will support you every step of the way.

Who Are The Legal Heirs in California’s Intestate Succession Law?

Who Are The Legal Heirs in California’s Intestate Succession Law?

Who Are The Legal Heirs in California’s Intestate Succession Law?

Heirs are individuals who are entitled by law to inherit a portion or the entire estate of a person who died “intestate”, meaning, someone who passed away without establishing a legal last will and testament.

Heirs vs Beneficiaries – What’s the difference?

Strictly speaking, not all heirs inherit property. The legal term “heir” is used to describe a direct descendant who is entitled to inherit property in the absence of a will. The correct term used to describe someone who inherits property as designated by a will is called a “beneficiary”.

If we go by the above definitions, it is correct to say that “not all heirs are beneficiaries” as in the case of a decedent’s children who are intentionally left out of a will. The statement “not all beneficiaries are heirs” is also true. For example, a friend or a non-relative may be entitled to receive property as specified in the decedent’s will.

But if a person dies intestate, friends and non-relatives are not entitled to the decedent’s property because they are not “heirs”.

What are the types of heirs?

1. Heirs-at-Law

Surviving spouses and children are first to qualify as direct heirs-at-law in California’s Intestate Succession which orders the priority of heirs on how closely they are related to the decedent. Grand children would qualify as direct heirs only if their parents are deceased.

2. Collateral Heirs

The decedent’s parents, siblings, grandparents and other relatives are next in line from the heirs-at-law to inherit property in case there are no surviving spouses, children or grandchildren. They are considered “collateral heirs” because they could only claim inheritance if there were no living direct descendants.

3. Unknown Heirs

In cases where a decedent has no known heirs-at-law, California requires that a special notice be run in the newspaper so that individuals who believe that they are related to the deceased can come forward and be recognized. They will undergo a court process to establish heirship which would then entitle them to inherit the decedent’s property. If no heirs are identified, the decedent’s assets and property would go to the state.

Breaking Down Heirship in Children

The simple term “children” can mean different things in establishing legal heirs especially now that blended families are the norm. Below is a quick breakdown of how children are recognized as heirs-at-law in California in the absence of a legal will.

1. Natural Children

In California intestate law, the biological children of a deceased person, regardless of the marital status of their parents, have the strongest rights to inheritance because they are direct bloodline descendants.

2. Adopted Children

Legally adopted children have the same inheritance rights as biological children do in the absence of a will or estate plan.

3. Step Children

In California, stepchildren can inherit from an estate if there is no will provided that there are no other close relatives alive, e.g. children, parents, nieces, nephews, aunts, uncles, grandparents, etc.

4. Children Adopted by Another Family

A child given up for adoption severs the legal ties with its birth parents and can no longer qualify for inheritance under intestate succession laws.

5. Children Adopted by a Stepparent

In California, children adopted by a stepparent may still inherit property from their birth parents.

6. Foster Children

In the absence of a will, foster children don’t inherit property from foster parents as “children”.

Beneficiaries and Estate Planning

These guidelines on legal heirs only apply to persons who pass away without a will. Laying these out, hopefully gives you an idea of how the court would decide on your behalf. You can, however, purposely distribute your assets and property to your intended beneficiaries by doing some estate planning.

Start taking action with your estate planning by booking your free consultation with our team at Crider Law.

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Should You Invest In Life Insurance For Your Child?

Should You Invest In Life Insurance For Your Child?

Should You Invest In Life Insurance For Your Child?

Typically, investing in life insurance for a child is not recommended. Life insurance is essentially a form of financial protection for dependents when the bread winner dies. And since the heads of the family do not usually depend on children for income, it does not always make sense to spend money on life insurance for them.

But there are also important reasons for insuring your children. And if you’re well covered yourself as a parent and provider and can spare the cost, investing in life insurance for your child could be a smart move.

Before you decide if children’s life insurance is right for your family, consider these points below —

5 Reasons to Invest in Child Insurance

1. It secures coverage for health risks due to COVID-19

The pandemic is a wakeup call for many families to consider getting life insurance for kids to secure their insurability in case of infection or serious health risks associated with the COVID-19 virus.

2. It locks in low premium rates

Insurance premiums increase with each year of life. So, the younger your child is when you buy a whole life insurance policy, the cheaper it will be. You will pay the same low premiums from the time of your purchase up to the maturation of the policy.

3. It guarantees insurability

Insurability is guaranteed when you enroll a child for a policy to protect them in case they develop health problems later in life or if you have a family history of genetic medical conditions. Another benefit of purchasing insurance for children is that it guarantees insurability in case they take on a job or hobby in the future that insurers consider risky, for example – scuba diving or mountain climbing.

4. It will accumulate cash value

When you buy an insurance policy for a child, a larger portion of the premium will go toward cash savings. Because the cost of insurance premiums are so low, your investment will accumulate in value when your child reaches adulthood, giving them a financial head start.

5. It provides financial support in case of death

The chances of a parent surviving a child are low. But in case of a child’s death, insurance proceeds can provide much needed financial support to beneficiaries, for example, minor siblings, elderly or handicapped parents and relatives.

Final Thoughts –

Insuring children is a long-term financial commitment that could be better spent on supporting their well-being or establishing a family emergency fund. For high-income parents, investing in kids’ life insurance and placing them in a family trust is a strategy worth considering for estate planning.

Is Child Insurance the best option for your family? Consult our team at Crider Law and map out your family’s financial future through smart estate planning.

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Biden estate tax changes could hurt you

Biden estate tax changes could hurt you

Over the past 20 years there have been dramatic changes to estate tax laws. Currently, anyone can give away up to $11.7 million without being subject to federal inheritance tax. Estate tax reform is a now a distinct possibility because Democrats now control Congress and the White House. Tax rates could be changed under a Biden administration, but not without significant changes to the tax code and the law itself.

Current estate tax law

In 2001, the amount that a person could donate or transfer and be subject to estate tax was $675,000. The top tax rate was 55 percent. In 2010, the estate tax allowance or exclusion amount was dramatically increased to $5 million per person and was tied to inflation. The estate tax rate was decreased to 45 percent. Since then, the rate has been at 40 percent.

The Tax Cut and Job Creation Act went into effect in 2010, bringing the tax-free allowance to $5 million per person, though the law was previously amended. Under the law, the tax exemption was doubled to 10 million in 2015, and by 2021, we will have a tax exemption of $11.7 million. The law is due to sunset in 2026, at which time the exemption amount will decrease back to 5 million, unless Congress changes the law before then. California has no state estate tax of its own.

Another important aspect of estate tax planning is basis adjustment. “Basis” can be thought of as the cost of the asset when purchased, with certain deductions. Capital gains tax is calculated on the difference between the tax basis of an asset when purchased and the sales price of an asset when sold.  When certain assets are added to the deceased’s estate, these assets are given a new tax base corresponding to the fair market value of the property on the decedent’s date of death. This “basis adjustment rule” prevents those inheriting property from having to pay a potentially law amount of capital gains tax. At present, pension accounts and retirement funds are exempt from this rule.

For example, suppose that Robert Jones paid $50 per share for 1,000 shares of Google stock, or $50,000. John died ten years later. At the time of his death, the stock was worth a total of $130,000, and beneficiaries of Robert’s estate sold the stock. If Robert had sold those shares the day before he died, he would have had to pay capital gains tax on the $80,000 in appreciation of the Google stock ($130,000 minus $50,000). However, because of the increase in basis on the date of his death, if his beneficiaries sell the shares the day after Robert died, they would pay no capital gains tax. 

Biden administration proposed changes

The Biden campaign proposed lowering the estate tax exemption to $3.5 million per person and raising the top tax rate to 45 percent. They have also proposed to abolish the basic adjustment for assets upon death. It is unclear whether Biden’s plan would result in capital gains tax being paid at the time of death.

Estate Tax planning opportunities

One of the easiest ways to plan for estate tax is to make gifts. First, the annual gift-tax exemption allows anyone to give up to $15,000 a year to another person. Second, a person can create a 529 plan for a loved one using gifts.

Under these rules, a single person could fund a $75,000 college account for their children without using any of the estate tax exclusion amount, and a married couple could fund an account to $150,000.

Secondly, a person may also pay certain school or medical expenses directly to a third party. For example, parents can pay a child’s tuition directly to the college and give the child an annual gift of up to $15,000 in the same year.

These simple gift techniques can reduce the size of a person’s estate, thereby reducing the future burden of estate tax.

What you can do about estate taxes

Given that the tax exemption expires at $5 million in 2026, and that the Biden administration could seek to reduce it sooner and to a lesser extent, there are situations in which the exclusion amount should be used or could be lost.

Since the estate tax allowance doubles in 2017, estate planners have advised wealthy individuals against making large taxable gifts to take advantage of the tax-free allowance. The IRS has confirmed that if a person made a large gift and the allowance was reduced, the gift would be grandfathered in and no taxes would be due. This technique is a fantastic way to make a taxable gift in your child’s first years of life without the need for a gift tax exemption.

The Estate Tax Act seems unlikely to pass this year. Individuals still have time to make large gifts before the end of 2021, and they should review their current estate plans and consult with their advisers to take steps to reduce or eliminate inheritance and tax risks. Other options for inheritance and tax planning include a variety of tax-free options available to individuals, including a tax plan for the first three years of life, a gift of up to $5 million, or $100,000 for each child in the first year of life.

We can help

If you have any questions about estate taxes or estate planning, please contact us. We cover the full range of estate tax and estate planning services.

 

 

10 Reasons Why You Need a Last Will and Testament

10 Reasons Why You Need a Last Will and Testament

10 Reasons Why You Need a Last Will and Testament

Writing a last will and testament is hard because it forces us to confront the certainty of death. But if you don’t have a will (or some other strategy for transferring wealth when you pass on) the court determines how your assets will be distributed under state law, and you won’t have a say on any of it. This is a tragic scenario that can be easily avoided with a legal last will and testament.

There are definitely more than 10 reasons to write a last will and testament. We have identified the most critical ones to help you get into the right mindset as you prepare to create the most personal and most important piece of writing that you will ever make.

Below are ten reasons why a last will and testament is important:

1. It’s for your own peace of mind

First and foremost, having a last will and testament gives you great peace of mind knowing that your property will be distributed according to your wishes when you die. Also, with a will, you can choose your estate’s executor – the person who will be responsible for carrying out your instructions.

2. It avoids confusion and potential conflict over who gets what

If you die without a will, the court will make the decision on how to distribute your wealth according to intestate succession laws – potentially leaving your heirs disappointed or short-changed. Creating a will removes any fear or doubt on who gets what by setting forth your instructions regarding the disposition of your wealth in advance. This eases the anxiety of your surviving family members during a highly emotional time.

3. It removes uncertainty over issues related to wealth

Often, assigning a monetary value on your assets is a difficult task but it needs to be done. The process of creating a will forces you to take stock of your property and assets, and helps you think strategically as you plan for the financial future of your loved ones when you die.

4. It carries out your wishes for the disposition of remains

The disposition of last remains is a common source of conflict among the surviving family members. Often, relatives have opposing views as to precisely what the deceased’s wishes were. Having a will that lays out specific instructions for funeral arrangements – whether your remains should be buried, cremated or donated to medical science – clears any confusion and allows your will’s executor to take the right course of action.

5. It facilitates the transfer of your assets to beneficiaries who would not receive anything under intestate succession rules

You will need a will if you want to leave specific assets to specific heirs. Intestate Succession rules in California distribute property first to surviving spouses or registered domestic partners, followed by children, parents, siblings, aunts, uncles, cousins and so on. For example, if you wish to donate a part of your estate to charity, you will need to specify this in your will. Or if you want to divide your financial assets equally among your children but leave the house to a non-relative, you can only accomplish this with a will.

In case you have no living relatives, your property will be turned over to the state.

6. It allows you to appoint the legal guardian of your children

A will can also settle other issues not directly related to wealth or finances. If you have minor children and you die without a will, the judge will appoint the legal guardian for your kids. Sure, the judge will always consider what’s best for them. But he does not know your family or the guardian that he’s about to task with your children’s care. Having a will ensures that your intentions are carried out with regard to your appointed guardian.

7. It allows you to name someone to manage finances and property left to minor children

There are two distinct types of guardians in California law entrusted with the care of minor children – the guardian of person and guardian of the estate. The guardian of person is the child’s caregiver and is responsible for their health and well-being, e.g. housing, education, medical etc. While the guardian of the estate acts as the trustee of the minor child and is responsible for the management of the child’s finances, e.g. income, assets, property and so on.

8. It lets you designate an executor to carry out your wishes on your behalf

Your appointed executor is empowered by law to administer your estate on your behalf. If you don’t leave a will, the role of your executor is filled by a representative designated by the court. It’s critical that you make this appointment because the executor is tasked with the serious responsibility of not only distributing your estate according to your wishes but also managing your credit, handling legal matters and filing tax returns.

9. It helps minimize probate or the intervention of the court

Probate is a complicated, time-wasting, court-supervised process of determining how your estate should be distributed. It starts with filing a petition in court followed by a series of hearings and the naming of a court-appointed executor. There’s no telling how long this process could last. One thing is for sure, the uncertainty and the wait is stressful for the surviving relatives. Don’t let this happen to your family. To help minimize probate or even avoid it altogether – make sure to prepare a last will and testament coupled with a living trust document.

10. It lets you transfer assets that are not covered by a living trust

If you already have a living trust, it’s important to back that up with an updated will to cover any assets that may be excluded from the trust. A trust only covers assets that are enrolled in the trust. So, without a will, assets that are not part of your trust would have to go through the probate process.

FREQUENTLY ASKED QUESTIONS ABOUT WILLS

Are there exceptions to distributing property with a will?

Not everything that you own can be included in your will. You can only bequeath assets registered in your name at the time of your death. So, yes, there are exceptions. For example, community property that you share with your spouse or registered domestic partner should not be included in your will.

What are the other types of assets that should not be included in a will?

Retirement plans, i.e. 401(k) or an IRA and life insurance policies already state the beneficiaries or the recipients of these proceeds and should not be included in your will.
Also, the assets detailed in a living trust should not be a part of your will as they will be distributed according to the terms of the trust through the designated successor trustee.

Can you change your Last Will and Testament?

A California last will and testament may be changed whenever you please. It is recommended that you review your will annually to include changes in your family circumstances, like the birth of a new child, for example. Just make sure to amend your will according to the same procedures and format as the original. Simply adding notes, or making direct edits are not considered valid amendments in California.

Can you revoke your Last Will and Testament?

You can revoke a part or the entirety of your will by being “burned, torn, canceled, obliterated, or destroyed,” with your expressed intention of revoking as the “testator” or the author of the will.

READY TO CREATE YOUR LAST WILL AND TESTAMENT DOCUMENT?

It starts with our Right Fit Meeting™, where together we determine whether our firm is right for you. If you decide to work with us, together we’ll draft a last will and testament as part of your estate planning strategy. Are you ready to get started? Click the button below and schedule a call now.

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Common Mistakes in California Estate Planning

Common Mistakes in California Estate Planning

Common Mistakes in California Estate Planning

It is a common misconception that estate planning is only for the rich. Most people have at least one thing of significant value – such as a home, car, insurance, money in a bank account and so on. Having an estate plan secures your assets and saves your loved ones from undue emotional and financial stress in case of your death or incapacity.

An estate plan also helps with maximizing the actual value of the estate you’ll bequeath to your heirs and beneficiaries. And allows you the opportunity to make informed decisions concerning how your assets should be handled while you are still alive.

Below are ten common mistakes in California estate planning and how to avoid them:

1. Failing to make a plan

The most common mistake is not recognizing how critical it is to have an estate plan in place. It is an unfortunate fact of life that we will all die someday and planning for what may happen after death is critical to securing the future of your heirs.

2. Failing to update your will

Births, deaths, divorces, and new property acquisitions – it’s hard to keep up with the changes in the family and business.To ensure the assets you leave behind are given to your intended beneficiaries, it’s best to remind yourself to periodically review your will – say, every year as you celebrate your birthday, for example.

3. Failing to plan in case of sudden disability

Disability could adversely impact your personal and financial affairs. Have you thought about who will handle your finances, raise your children, or make healthcare decisions when you fall ill and become disabled? It’s critical to appoint a power of attorney and create a living trust to act on your behalf in case you are unable to.

4. Failing to donate or send gifts

Sending donations or gifts under your estate plan reduces your estate taxes. According to the Internal Revenue Code, gifts up to $14,000 a year per spouse may be excluded from estate tax. That’s $28,000 in savings. Your act of charity will be rewarded with more money in your estate for distribution.

5. Putting your child’s name on the deed

When you put your child’s name on the deed to your home, you are, in effect, giving your child a hefty taxable gift. (Refer to number 4). While gifts up to $14,000 are excluded from estate tax, gifts more than $14,000 per spouse are taxable. The best thing to do is to place the home in a trust for inheritance.

6. Failing to appoint the right trustee

While you may trust your spouse or child more than any other person, they may not be suited to handle the affairs of the estate when you are gone. Sometimes it’s wiser to appoint someone outside of your family to objectively handle the extensive duties and demands required of an executor, trustee, or guardian.

7. Failing to transfer your life insurance policies to a life insurance trust

A life insurance policy is subject to estate tax when you die and a sizable chunk of your estate could go to the IRS instead of your intended beneficiaries. One way to avoid this is to set up a life insurance trust to act as the owner of your life insurance policies. This way you shield the insurance from a hefty tax so your beneficiaries can get the full amount of the insurance proceeds.

8. Failing to take advantage of federal exemptions

For married couples, one of the easiest ways to reduce estate taxes is to fully use the federal exemption for each spouse (set at $11.18 million per spouse in 2018). Surviving spouses are allowed to make a “portability election” which passes any of the deceased spouse’s unused exemption to the surviving spouse, in effect potentially doubling the exemption amount for the surviving spouse.

9. Being lazy

Death comes for us all and though you may already realize that an estate plan benefits you, sometimes this realization comes a little too late. There is no better time than now to get started, consult an attorney and put a proper estate plan in place.

10. Doing it yourself

Failing to consult a professional estate planning lawyer is a risky move especially if you have complicated assets or if you have doubts about your own ability to draft an estate plan. An experienced attorney can provide you with tax-planning strategies based on the particular needs and demands of your estate.

Final thought…

It’s best to work with an estate planning professional to make sure that all bases are covered. Talk to an attorney to learn more about avoiding the pitfalls that you may encounter in the complicated business of estate planning. Click the button below and schedule a call with our team to get started.

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What are the Inheritance Rights of a Surviving Spouse?

What are the Inheritance Rights of a Surviving Spouse?

What Are The Inheritance Rights of a Surviving Spouse?

A Surviving Spouse deals not only with the grief but also with the legal and financial responsibilities that come with the death of a husband or wife. It is important to be aware that the California Probate Code has protections for them and to assert that protection.

Knowing this is the first step to ensuring that a surviving spouse receives the property that is entitled to them by law. Here are 5 basic things you need to know about the inheritance rights of a surviving spouse.

In California, the surviving spouse is first in the line of succession

If your spouse dies, you are first in the line of inheritance and will assume ownership of the estate. If a decedent was not legally married at the time of death, any biological or legally adopted children, living parents, siblings and relatives are next in line to inherit the estate.

It’s worth noting that in California, the protections for legally married couples also apply to registered domestic partners.

California is a communal property state

This means that married couples have an equal but undivided claim to shared property which includes – real property, cash investments and other liquid assets acquired during the marriage including property acquired prior to and then shared during the marriage.

Community vs Separate Property

Community Property generally includes all property acquired while you were married, while Separate Property means property acquired prior to marriage. There are some exceptions however – gifts and inherited property of one spouse are separate property even if acquired during marriage.

The surviving spouse will inherit half of the Community Property

Many married couples consolidate their assets and don’t have any Separate Property. But in case they do, the surviving spouse will inherit all or a portion of it.

The size of their share of the Separate Property will largely depend on whether or not there are living parents, children, siblings, nieces or nephews. In which case, the surviving spouse will have to share the deceased’s separate property.

Legally separated but not yet divorced

If your spouse suddenly dies while you’re legally separated but not yet divorced – you will not be entitled to their property. It’s best to see an experienced family attorney if you are concerned about this area of the law.

Learn more about California Estate Planning and Inheritance

California has specific guidelines for passing property to loved ones. Consult our team at Crider Law to understand Intestate Succession Laws in California and how they will play into your estate planning.

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Who Are The Next of Kin in California?

Who Are The Next of Kin in California?

Who Are The Next of Kin in California?

“Next of kin” under California law simply means – the closest living family members to survive a decedent or the deceased person who leaves behind property and assets under an estate. The inheritance of the decedent’s estate flows to the next of kin in this order —

  1. Surviving spouse or registered domestic partner
  2. Children
  3. Grandchildren
  4. Parents
  5. Siblings
  6. Nieces and Nephews
  7. Grandparents
  8. Aunts or uncles
  9. Cousins
  10. Issue of predeceased spouse

When Does Having Next of Kin Matter?

The status of your next of kin will come into into play if any of these life or death scenarios occur –
  1. In case of mental or physical incapacity, it is critical for the next of kin to fulfill the task of making health care decisions on your behalf1. In case of mental or physical incapacity, it is critical for the next of kin to fulfill the task of making health care decisions on your behalf
  2. In case you die without a will in California, your next of kin will inherit your assets under the state “intestate succession” laws.

Who Else Can Qualify As Your Next of Kin?

1. Half-Relatives. “Half” relatives inherit as if they were “whole.” That is, your sister with whom you share a father, but not a mother, has the same right to your property as she would if you had both parents in common. (Cal. Prob. Code § 6406.)

2. Posthumous Relatives. Relatives conceived before but born after you die, inherit as if they had been born while you were alive. (Cal. Prob. Code § 6407.)

3. Immigrant Relatives. Relatives entitled to an intestate share of your property will inherit whether or not they are citizens of the United States. (Cal. Prob. Code § 6411.)

Who Among Your Next of Kin Gets What

In California law, your next of kin are also your intestate heirs. Intestate heirs are your closest family members who will inherit your estate if you die without a will. Who inherits what depends on who survives you as the decedent.

In determining who among your next of kin gets what in California, refer to the categories in the diagram below. The way it works is that you only move to the next item in the diagram if the people in the previous category did not survive the decedent.

Learn more about intestate laws in California to get started on Estate Planning and secure the future for your next of kin. Book your free consulting session.

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