Meinzer Law Firm, PC

Torrance Trusts and Estates Law Blog

Is a spendthrift trust right for your estate plan?

Most Californians who engage in estate planning do so in order to protect their loved ones' financial well-being as fully as possible. These people also tend to hope that their estate will be well protected, ensuring long-term viability and thereby creating a sense that their legacy will be established.

This is certainly attainable when the proper estate planning tools are utilized, but individuals need to be familiar with their estate planning options to ensure that they are making the informed decisions that further the interest of their estate and their loved ones.

Some common issues with trust administration

A trust can be a great way to protect assets for loved ones who are set to inherit them. Yet, the effectiveness of a trust is often left in the hands of a trust administrator. This person may be named by the individual who created the trust, or he or she may be appointed by the probate court. Either way, the trust administrator, also called a trustee, carries a heavy responsibility that often comes under close scrutiny.

Trust administrators are considered fiduciaries, meaning that they have a duty to act in the best interests of named beneficiaries. Therefore, in some cases beneficiaries claim that trust administrators fail to properly invest trust assets in a way that further the beneficiary's best interests.

Estate litigation can help protect a loved one's legacy

In the days and weeks following the death of a loved one, family and friends often come together in unity as a way to honor and remember the recently passed. While these moments can help build solidarity, they can quickly be forgotten when the deceased's wishes are revealed in his or her estate plan.

For some families, there is nothing surprising in their loved one's estate plan. For other families, though, certain members may find themselves utterly shocked when they find out how their loved one's assets are to be managed and distributed.

Is it time to assume legal authority over your ailing parent?

Some people like to say that the relationship between parents and children turns inside out as kids grow up. When infants are born, their parents must dedicate a lot of energy toward keeping them safe and ensuring that they meet all of their needs, from adequate, safe rest to appropriate food.

As parents grow older and their children themselves become parents, the first generation of the family may soon find themselves dependent on their children for the necessities of life. Adults with medical conditions ranging from physical impairments to cognitive decline can find themselves reliant on their children for everything from getting to and from doctors' appointments to feeding themselves.

A closer look at undue influence in California

Thanks to the Baby Boomers, the number of people age 65 and older is steadily increasing. In fact, by 2030, these individuals are expected to make up nearly 20% of the population, which is more than a 50% increase compared to those in that age bracket back in 2000. This means that many more estates will be changing hands in the years to come, with many of these older individuals' family members winding up with newfound wealth.

Yet, not everyone is happy with the way that their loved one's estate is distributed. In some instances, an individual may be utterly surprised by the terms contained within a will or a trust. Under these circumstances many Californians find themselves asking whether undue influence has occurred. If so, then legal action may be taken to invalidate a will in favor of a more fair estate distribution plan.

Estate planning and business succession

Building and running a successful business takes time, money, and a whole lot of dedication. For many entrepreneurs, their business is their life's work and their legacy. As such, they really should plan for the future of the business when the time comes that they are no longer around to run it. This often comes up in terms of retirement, but it should also be carefully considered when engaging in estate planning. After all, forgetting to address a business in your estate plan may cause it to be left in the hands of someone is inept in business affairs.

For this reason, it is often wise to engage in some sort of succession planning. Those who are sole proprietors can simply choose who they want to take over the business upon their passing and specify that in a will. Alternatively, the business can be left to a beneficiary in a trust so that regular income can be generated for the beneficiary while affairs are managed by others. In businesses with more than one owner, the matter may require much more attention to detail.

The pour-over will can make estate planning simpler

Wills and trusts can be tailored to fit an individual's needs. This is the beauty of estate planning. Regardless of one's family makeup, resources, or desire for asset distribution, there is a legal strategy for them.

Some Californians may feel comfortable relying solely on a simple will, while others may find it beneficial to create a number of trusts in order to ensure that named beneficiaries are appropriately cared for. Trusts can also allow a testator to retain some control over assets by allowing for release of trust assets only after certain conditions are met. This is a major draw for some.

Simple probate may be available to those with smaller estates

Much of estate planning focuses on how an estate can avoid the probate process. There are many reasons why an individual may want to do this. To start, probate can stall the asset distribution process. It requires the identifying of assets, the settling of debts, and determining how assets should be disbursed amongst heirs and beneficiaries. This process can be costly, too. This can cause heirs and beneficiaries to lose a significant amount of their inheritance's value as court and administration fees are withdrawn.

While a competent estate plan can help some Californians avoid the probate process altogether, there are other ways to minimize the impact probate can have on an estate. For example, California law allows for a simplified probate process when the value of an estate is $150,000 or less. Here, a successor need only follow a few simple steps in order to satisfy the law and ensure a quick transition of assets. To start, a successor needs to wait at least 40 days after the estate planner's death. Then, once that time has passed, the successor must submit an affidavit under penalty of perjury that states some pertinent information, such as the decedent's name, date of death, and a number of facts about the estate, its value, and its management.

When is it time to update my estate plan?

Everyone's life is in a constant state of flux. Relationships start and end, bank balances fluctuate and opinions change. Estate plans should be altered in order to reflect this change, but it is, of course, absurd to change them monthly to reflect the small changes in our lives.

Many people struggle to gauge the right time to update their estate plan, and this often leads them to delay the decision. For some people, this delay means that their estate plan is never updated to reflect their true wishes. This either leads to a distribution of assets that do not represent what they wanted at the end of their life, or an upsetting legal battle involving the loved ones of the deceased.

Common issues when creating a will or trust

The will is often thought of as the most basic of estate planning tools. This is true to a certain extent. This document basically spells out how one's assets will be distributed upon death.

As easy as that may sound, the truth is that even basic estate planning requires a lot of attention to detail to carry out effectively. Failing to thoroughly vet your will and other estate planning documents, such as trusts and powers of attorney, can lead to disastrous consequences for your estate and your beneficiaries and heirs.

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