Thursday, December 26, 2013

How Do I give my house to my children without tax consequences?


Lynn A. Dean
Attorney
Let’s say you own your home and the current value is $375,000.00.   If you set up a living trust, the house will pass to your children without the cost of a probate. If the house were your only asset, the attorney's fees for a probate would be $10,500.00!  There will be no estate taxes on your home, unless you have other assets that would cause your estate to be larger than $5 million. In certain cases, the children may be able to keep the property taxes at the same amount that you are currently paying. There is an exemption from increase in property taxes for property passing from a parent to a child. It would be wise to consult an attorney. It will save your children and grandchildren quite a bit of money.  I provide further information about probate on my website, including an easy to understand probate fee schedule.

Thursday, December 19, 2013

Leaving inheritances to children can be a touchy topic in blended families.

Estate Planning can be tricky especially when step children and half siblings are involved.  There is an inherent tension between wanting to keep your new spouse happy and wanting to take care of your own children. This following scenario is not an uncommon situation I hear often in my practice and in this instance, the spouse won.

SCENARIO: My father died 10 years ago, leaving a trust worth more than $1 million. He acquired his assets before marrying his 2nd wife.  When creating the trust, he put his property in joint ownership and after he died, his wife removed us from the trust. When she died a few years later, she left everything to the son they had together and her daughter (my dad's stepdaughter). The stepdaughter and my dad hated each other and I don't believe those were his wishes.

I had to petition her for a copy of the trust and it was a year before I saw it. I have no way of verifying all the amendments made to the trust, including a letter stating that my father and his wife intentionally left me and my brothers out of the will. The letter was never signed. My father said he'd leave us something, yet the stepdaughter received 60 percent of the estate. My brothers and I received absolutely nothing. Aren't we entitled to receive something from our father's estate?

It is unclear whether dad set up his own trust, or a joint trust with stepmother. If it was a joint trust, the stepmother may have had the legal ability to change the trust after your father passed away.  And though it is common for parents to tell their children they have left them something, it's the documents that control what happens to our estate when we die.

If dad had been advised differently, he could have set up a separate trust for his children. It would become irrevocable upon his death and would have protected any gift he wanted to make to them. The children are entitled to see copies of their father's trust and his will. The will should be lodged with the Superior Court in the county where he resided at time of death. If you have not seen these documents, request copies from the trust's heirs. 

Thursday, December 12, 2013

How can siblings be sure they will inherit from mother?

Lynn A. Dean
Attorney
With estate planning, I am often asked this question and each person’s situation is unique.  For example, mom has three daughters. According to her daughter, the trust leaves everything to them in equal shares. She asks, “If one of them were to die, who inherits their share? Does it go directly to her children or to the husband and, after his death, to his kids?”

The answer always depends on the trust's language. For instance, it might state: "I leave everything to my three children in equal shares. If one of my children does not survive me, the share shall be distributed to her children in equal shares, at age 25. The mom would be the one to designate whether she wanted everything to go to her daughter's spouse, her children or both.

In my practice, the most common decision is to leave the inheritance to the children rather than the spouse. The reason: Most people assume that a surviving spouse will remarry, and they prefer to see their inheritance stay within the family.

If the children are still young, the trust typically states that the money stays in the trust until they reach a specified age. With inheritances for minor children, the trust also should name who will be their trustee. It could be the children's aunts or uncles (the deceased parent's siblings) or it could be the child's living parent.

The bottom line is that an inheritance can be left to anyone we desire. You will need to read your mother's trust to see what she designated. 

Thursday, December 5, 2013

As Successor Trustee of my Parent's Estate, am I allowed to pay myself?

As an executor of your parents’ trust you are allowed  "reasonable compensation for services.” 

In order to determine what “reasonable compensation" is, I look at two sources:  

1) California Probate Code Section 10800
The first is the California Probate Code Section 10800, which sets fees for what an executor or attorney can charge. These fees are based on a sliding scale, starting at 4 percent of the first $100,000, 2 percent of the next $100,000, etc. For example, the executor’s fees on a $300,000 estate would be $8,000.  

2)  Other Fee Standards
The other source I look at is, “What would a bank or financial institution charge?” The banks publish a fee schedule, and you can contact a bank directly for their fees.  Typically, a bank will charge 1-1/2% to 2% per year, for their fees.  Each institution has the right to set fees.


Monday, November 25, 2013

What happens when a family member takes advantage of a parent’s estate? Can a Trustee be removed?

Lynn A. Dean
Estate Planning Attorney
When there are questions by family members of whether a trustee breached the fiduciary responsibility for a loved one’s estate, recourse is possible but can be timely and costly. 

Case in point:  A clients’ mom had passed away where the daughter, the clients’ sister, was the trustee.  While mom was living, she had multiple strokes and sister decided to have major construction done to her house.  She built two bedrooms, a bathroom and living area and moved mom in.  Mom’s house and the rest of her assets were to be equally divided among all the children. The sister, who still lives in the house now claims there is no money left.  The family believes that the sister spent all the assets all the while claiming the home reconstruction was for mom’s benefit.   The second house (mom’s original property) is occupied by the sister’s child, who is not paying rent to the trust.  The family asked “Is there any way to force pay back to the estate or have the sister removed as Trustee?”

These situations are unfortunate and not simple to answer.  It is a good reminder of the importance of choosing a proper trustee for your Estate and to review who that is over time. 

First, the family believes that the sister took advantage of her position as successor trustee, in order to benefit only herself. This is what we call “self-dealing.”  While mom was alive, the sister was assigned to ensure that any monies spent were to benefit mom’s care. If mom was still living in the home when construction occurred, the first question would be: Did she consent to the work sister was doing? If she did, then there may be an uphill battle trying to persuade a court to force sister to pay back funds.  Whether the sister breached her fiduciary duty to her mom by doing the home construction would be expensive to litigate.

If the sister does not distribute the remaining assets to the family and does not force her child living in the second home to move or pay rent, then there may be a case to remove her as trustee.  Family members can request that the sister provide an accounting of the estate. She is required to account for all funds that came into her possession while acting as trustee.

Visit our resource guide to consider what information you will need in planning your estate.   

Monday, November 18, 2013

You Are a Family Caregiver If...

  • You recently had a family member needing your support as a result of a mental illness, chronic illness or physical injury.
  • You have a special needs child.
  • You are spending more time helping your aging parent, relative or friend.
  • You are one of the 44 million American families and friends who provide unpaid care to another adult!
If you answered yes to one or more, you are not alone; you represent 80% of the long term care in the US!

If you are caring for an individual with special needs, you need to think about how that care will continue when you are no longer in the picture.  A Special Needs Trust allows the individual with special needs to receive income from the Trust without impacting their federal eligibility for income dependent benefits, like Supplemental Security Income (SSI) or Medi-Cal. Assets held in this type of trust do not qualify as available income when calculating eligibility, as the funds are not considered to be within the recipient’s direct control. Set at just 2/3 of the poverty level, SSI alone is not enough to cover someone’s minimum needs. Without this type of trust, your loved one with special needs will likely face enormous hardships after your death, depleting funds from their inherited estate within just a few years. A Special Needs Trust allows them to draw on federal financial benefits in addition to drawing income from the estate.

Family Caregivers need support and tools to help them manage the complex task of assisting someone.  Be sure the loved one has at a minimum, a valid Power of Attorney and Advanced Health CareDirective.   

There are many resources for caregivers.  If your loved one is an elderly person wanting to continue independent living, help can be found with the Area 4 Agency onAging.  The Agency serves seniors in the Placer, Nevada, and Sacramento as well as Sutter, Yolo and Yuba counties. 

You can also contact our office where we can create the documents necessary for your situation and provide you with resources for other support needs. The Law Office of Lynn A. Dean, website: www.LynnDeanLaw.com or phone: (916) 786-7515.

Monday, November 4, 2013

MANY ISSUES AN ELDER LAW ATTORNEY FOCUSES ON

There are many issues that an Elder Law attorney will focus on, including estate planning, retirement planning, and planning to preserve wealth (tax planning). The Law Office of Lynn A. Dean offers a comprehensive portfolio of Elder Law services, including:

1.      Probate
2.      Conservatorships
3.      Medi-CalPlanning 
4.    IrrevocableTrusts 

Elder Law deals with legal issues that may arise with a person’s advanced age. In recent years, attorneys have been called on to fight the growing problem of elder abuse. Elder abuse may take many forms, from mistreatment in a nursing home, to financial abuse by a caregiver or family member. Elder Law attorneys can prepare documents, allowing one or more persons to become the agent for an incapacitated or vulnerable senior. If the senior did not prepare these documents prior to being mentally incapacitated, then the Elder Law attorney may need to establish a conservatorship for the senior.

WARNING SIGNS OF ELDER ABUSE TO WATCH FOR:
  1. Taking a large amount of cash out of various financial accounts or multiple smaller amounts at a time that don’t have obvious reasons.
  2. Writing a large check to someone, especially if the they do not know the person.
  3. Changing power of attorney or beneficiaries on insurance or investment accounts.
  4. Bills going unpaid or overdrafts from accounts that should have enough money.
  5. Making unusual or unnecessary purchases – Jewelry or camping gear.
  6. Agreeing to make unnecessary home repairs – new siding on the house.
  7. Becoming too close with a much younger person or an inappropriate person.
  8. Having a caregiver or house-cleaner too involved in the finances.
The challenge of Elder Law is that every family situation is unique. An Elder Law attorney will often act as a counselor as well as an attorney, helping to facilitate relationships between family members. Attorneys are even called upon in extreme situations to fight elder abuse. It’s critical that these situations are dealt with swiftly and effectively, which is why choosing an attorney specialized in Elder Law is so important.

Monday, October 28, 2013

Take comfort in knowing you have a plan to protect your family and assets



Planning is a part of living.  You plan your vacation, you plan your retirement, and you even plan your day to day activities.  Oddly, even though you don’t plan to have an accident, you probably planned an insurance coverage. All our life, from grade school on, we learn that planning helps us focus and prioritize; it is the basic building block for informed decision making.  Have you taken time to plan your estate? 

We may tend to think estate planning as something “older people” do, but in reality, estate planning is for all age groups.  Take comfort in knowing you have an estate plan.  Here’s why:

  • Creating an estate plan now will avoid the need for conservatorship later.
  • Obtaining a professional in estate planning whom you are comfortable with can give you peace of mind.
  • Maximize your full federal estate tax exemptions available and minimize the amount of time and money you and your family will pay in estate taxes or probate costs (with a Living Trust).
  • Finalize your instructions regarding medical treatment and life support in case you are unable (with Durable Powers of Attorney)
  • Own it? Who do you want to give it to? Organize your thoughts by identifying those personal items as well as any specific bequests you wish to make (with a Last Will and Testament). 
  • Revisit, review, and revise your plan if necessary.  We recommend every 3-5 years.  After all, life changes, so do you!
  • Tools of an estate plan will assure you have done the most important thing that can SAVE YOUR FAMILY THOUSANDS OF DOLLARS.

With more than 30 years of legal expertise, attorney Lynn A. Dean and her knowledgeable staff can help you create an estate plan that will give you comfort in knowing you have done all that you can for you and your loved ones.

Monday, October 21, 2013

Aging Boomers Checklist Helps Plan for Life's "What Ifs"


Lynn A. Dean
Estate Planning Attorney

As noted on the American Association of Retired Persons (AARP) website, Seventy-six million American children were born between 1945 and 1964.  Over the last few years these baby boomers have been hitting their mid sixties.  The Aging Boomers continue making record milestones. Now they are known as the fastest growth population bracket.  According to the U.S. Census Bureau projections, the population age 65 and older is expected to more than double between now and 2060, from 43.1 million to 92.0 million!  That said, whether you are one of the millions, or part of the next generation with aging parents and responsibilities of your own, we continue to learn more about how to take control of important matters when life’s eventualities hit.   
 
Here are some of the important items you can do now so that people can assist you or you are better equipped to assist your loved ones:
 
1.      Create the following Estate Planning Documents

a.      Revocable Living Trust

b.      Last Will & Testament

c.       General Power of Attorney for Financial & Real Estate Matters

d.      Advanced Health Care Directive

2.      Designate an Agent or choose an advocate (who’s in charge if you cannot be):

a.      Family Member(s)

b.      Financial advisor or attorney

c.       Doctor

3.      Make your Wishes Known as to the following details

a.      Do you want to be placed on Life Support?

b.      Do you wish to be provided Pain Relief?

c.       How do you feel about donation of organs?

d.      What about the disposition of your remains? i.e., funeral / burial arrangements

Equally important is keeping an inventory of your medical insurance carrier, phone numbers, doctor names, medications and contact information of your immediate friends and relatives.  Where are your important documents located? 

For a detailed inventory checklist of your own, visit our web page and Download our complimentary toolkit for the sandwich generation. 

Life is complicated, at the Law office of Lynn A. Dean, we make it easy!

Friday, October 18, 2013

Lynn A. Dean voted “Favorite Attorney” for the 2013 Roseville, Granite Bay, Rocklin & Auburn Readers Choice Awards of Style Magazine.

The Law Office of Lynn A. Dean, specializing in Estate Planning and Elder Law, has earned the accolades and votes of its clients.   In fact, the readers of Style Magazine have voted her their favorite attorney for 3 consecutive years!   

So what makes this law firm stand apart from all the others? Why has the Law Office of Lynn A. Dean become increasingly successful and grown during a down economy?

“Life is filled with uncertainty and clients of all ages want to ensure that their loved ones will be well cared for with the right estate plan. The reality is that this area of the law is becoming increasingly complex and a misstep can prove devastating,” explained Lynn Dean.  For more than 18 years Attorney Lynn Dean supported by her capable team, has helped hundreds of clients to make the right choices for themselves and their families.

Tuesday, October 8, 2013

You Did an Estate Plan Years Ago – No Worries, right? Maybe Not.


Lynn A. Dean
Estate Planning can be complicated, but our law firm makes it easy.  Many people believe that if they had an attorney create their estate plan five or more years ago, there is no concern or reason to review their documents.  This can be problematic and the reasons are as unique as you are. 

Some examples are: 

 1)  The Trust was not fully funded or assets have been removed and should be re-titled into the name of the Trust

Since the primary purpose of a revocable living trust is to avoid probate, assets (bank accounts, personal property) should be funded into the trust. This is action required on your part once the trust is created. Often, assets grow or change over the course of time, and even institutions close or merge - have you reviewed your situation? 

2)      Successor trustee unable to carry out responsibility

At the time you created your estate plan, you chose a trusted relative or friend to carry out your wishes.  Over time, people’s lives change and they may no longer be able or available to act on your behalf.  Perhaps the person you selected has financial difficulties themselves and may no longer be the best choice as your trustee.

3)      Spouse or beneficiary change

Have you remarried?  Has your child divorced or had new children? Have your daughters remarried and now have different names?   

At the Law Office of Lynn A. Dean, there is no situation too difficult to preclude an estate planning solution.  We cut through the confusion of estate planning, and counsel you through the process with compassion and expertise.

Monday, September 9, 2013

Fall is a good time to make a decision to have an estate plan created

Lynn A. Dean
Attorney
While seasons change to shorter days and cool mornings prompt you to think about seasonal transitions, now is a good time to also review your estate plan.  

If you have not made the decision to have an attorney create your estate plan, the obvious question is why not?  Here are some questions to consider. Keep in mind you have choices:

  • Do you have children?  What happens to your children if something happens to you?  Would you want a trusted relative or friend to take care of them or have the court decide for you?
  • How many years have you enjoyed healthy winters uneventful from illness or injury?  What happens to you if you are not able to decide on important health care decisions? Wouldn't you want a trusted loved one to oversee your best interest and wishes on medical matters you may not be able to enforce?
  • Do you own property?  What happens to your house if there are no documents created to protect your assets from probate?  Do you intend to have your loved ones inherit your life long investments or have property and investments tied up in the court system costing money that would otherwise go to your loved ones? 
  • Is there a family heirloom you have in mind for that special someone?  Maybe there are family members you don’t want it to go to - How can these matters be firmed up?
Estate Planning can be complicated, but at Dean & Watters, we make it easy.  Don’t delay – call for a consultation and get rid of the unknowns that may have been holding you back from making that decision.  

Thursday, August 8, 2013

What's New for Estate Planning?

Attorney Lynn Dean
According to Lynn Dean, Principal Attorney at Dean & Watters, "Simple is better and now possible." But the bottom line is you still need a trust to avoid probate in California - court fees are now up to $1,300.  Make sure your assets are titled in the name of your trust.  And last, check all beneficiary designations (IRA's, 401Ks, insurance policies and annuities).  Generally, you do not want the trust to be the beneficiary on an IRA/401K.

Lynn Dean will be discussing Estate Planning at Edward Jones, 4021Woodcreek Oaks Blvd., #140, Roseville, CA on Tuesday, August 27 at 9:15 A.M.  Hosted by Andrew Chen, Financial Advisor, The Monthly Coffee Club Series Topic includes what's new in 2013.  This event requires reservation, contact the Branch Office Administrator, Judith Vergara 916.772.1085.

Find out more information on Estate Planning Resources by clicking the hyperlink. Ms. Dean says "it's complicated, and we make it easy!"

Thursday, May 2, 2013

Speaking Engagement - Post Polio Support Group

Lynn Dean will be discussing the importance of Power of Attorney and other estate planning news at the Post Polio Support Group of Sacramento Saturday, May 4 at 11:00 P.M. The group meets regularly to offer support, provide meaningful education and encourage advocacy for those survivors of polio who are now experiencing Post Polio Syndrome (PPS).  For more information on the group, visit their website: 
http://websitesbycook.com/poliosurvivors/sacramento/

Do you belong to an organization that could benefit from learning more about why having a plan for life's uncertainty is better than no plan at all?  There are topics of interest on estate planning we can present to your group.  Feel free to contact Dean & Watters Estate Planning Attorneys - Compassionate listeners. Experienced advisors.