Category: Estate Planning

A family caregiving meeting is an essential tool when dealing with the care of an aging loved one.

These meetings are beneficial for helping to keep all family members abreast of decisions that need to be made along with changes in diagnosis or prognosis.  They also help to ensure that all family members feel that they have a voice. Family meetings can help to keep caregiving responsibilities from falling solely on the shoulders of one family member. In addition, family caregiving meetings can foster cooperation among family members and lessen the stress associated with caring for an aging loved one.

Who should attend a family caregiving meeting?

There are a number of people who should be included in a family caregiving meeting. First and foremost, it is important to include the aging loved one in the meeting whenever possible. This helps the aging loved one to feel that they are being heard and that their opinions and thoughts are being considered. If a spouse is living, the spouse should be included, as well as any children and possibly siblings of the aging person. Anyone else involved in care for the person should also be there. This could include paid caregivers, family friends, or neighbors. Depending on family dynamics, out estate planning attorneys often recommend a facilitator can be helpful in running the meeting.

When should a family have a caregiving meeting?

First it is important to note that family caregiving meetings are not a one-time event. They must occur on a regular basis. The first family meeting can occur before an aging loved one actually needs care. This can give the person who may eventually need care more say in their future. Most families will plan to meet when an aging loved one begins to show signs of needing care or when a diagnosis is given that determines care will soon be needed. In addition, meetings should be scheduled regularly to discuss changes in diagnosis, prognosis, or the general needs of the loved one or the caregivers.

How can a family hold a successful caregiving meeting?

The key to having a successful caregiving meeting is cooperation. This doesn’t mean that family members will agree on everything, but it is important that all family members are respectfully heard and considered. Families must be willing to compromise and seek the best plan for their aging loved one. Additionally, a smoothly run meeting should have an agenda and families should try to stay focused on the items included on the agenda. When holding a meeting, always put things in writing and be sure that all those involved get a copy of the important information and everyone’s responsibilities.

What challenges do families face in caregiving meetings?

One of the biggest challenges to family caregiving meetings is the family’s history. All families have their own dynamics that can cause problems in a caregiving meeting. There may be members of the family who are at odds with one another. This can become an obstacle to having a successful caregiving meeting. The role that each family member plays can be a challenge. Some members may be overbearing and demand control, while others are peacemakers and do not feel free to share their thoughts. Another challenge is that some family members may be in denial of the severity of an aging loved one’s needs. This may make it difficult to get a consensus for care.

What are the benefits of a family care meeting?

Family caregiving meetings are beneficial and necessary when an aging loved one can no longer care for themselves. These meetings can help to divide the responsibilities of caregiving and reduce stress placed on the family members. It is important that families remember that the meetings are for the care of their loved one and that they should focus on cooperating with one another to help the process to run more smoothly and successfully.

Contact an estate planning lawyer our office today for more information on planning for the future and long-term care of your loved one.

Estate planning is a tricky subject for blended families, particularly when both spouses have been married before. This situation raises critical questions and planning opportunities for both spouses to get on the same page and understand the impacts of planning for children from the previous marriage at the same time as the spouse or children in the new marriage.

If you need to complete estate planning for your loved ones in Fair Oaks, California and need support for these advanced planning concerns, make sure to schedule a consultation with a trusted estate planning lawyer immediately. What seems like minor mistakes or omissions now from tabling this issue could lead to unwanted transfers of assets if you were to pass away.
<h2x”>Can a Spouse Impact the Transfer of Property Inherited by or In Use By the Other Spouse?
</h2x”>

Imagine that you and your spouse currently live in a home or own a vacation home with the other spouse’s name on the title. In your spouse’s estate planning, they specify the intention to leave the home to you, but perhaps they also have wishes or concerns over what happens to that property once you pass away.

The critical distinction here has to do with the wording of this language in the will. Giving the property to you is different from allowing you to live in the property while you’re still alive. In the first case, you become the legal owner of that property and can choose to do what you wish with it during your life and in your estate planning. In the second case, however, you are only granted the ability to live within the home for the rest of your life or a set period named in the will. At this point, the house might transfer to another owner based on your spouse’s original estate planning.

What Tools Are Used to Protect My Children And My Current Spouse?

The most basic estate planning tool you’ll need is a will. Still, when you wish certain people to be protected and others to receive something specific or nothing at all, you’ll want to use a living trust for most blended family situations.

The default inCalifornia is that a surviving spouse of someone without a will is entitled to a substantial portion of the estate. A common concern with second or subsequent marriages is that the new spouse will not share or distribute these assets to children on their own. Suppose a decedent in California passes away with no biological or adopted children, siblings, or parents. In that case, the spouse will get all community property (property acquired during the marriage except for specific inheritances) and separate property. Using a will or a trust empowers the creator of that document to specify what property they want to be given to which person.

Using a living trust allows you to pass on what you deem appropriate for your current spouse. Suppose you wanted to give your spouse assets to support them but want to ensure that any assets still in their possession at the time of their death go to your children. In that case, you might use a qualified terminable interest property trust within your living trust plan. This enables your spouse to access income generated by the property inside the trust.

If you’re mostly concerned about protecting the assets your children would receive, use an irrevocable life insurance trust to establish a clear transfer of a specific policy value to your children.

Divorce or New Marriage: When To Update Your Estate Planning Documents

At a bare minimum, you should meet with a Fair Oaks, CA estate planning lawyer once your divorce is final, but there are benefits to having a consultation while your divorce is still pending. Once you and your first spouse have separated, the existing documents and plans will still apply until you update them. This includes both direct estate planning documents like a will or revocable trust and beneficiary designation forms filed with life insurance companies or brokerage accounts.

During a pending divorce proceeding or immediately after, you’ll likely want to remove your previous spouse from any estate planning documents and update those beneficiaries to children or other family members.

If you get remarried to someone else, this is another critical opportunity to meet with an estate planning lawyer to work through any updates that must be made based on these issues. It’s common to want certain assets in your estate to go to your new spouse, any children from that new marriage, and children from your previous marriage. This is a complicated estate planning situation. The details matter, so it’s strongly recommended you work with a lawyer to help you create the plan that aligns with your individual goals.

Contact California Probate and Trust, PC to Get Answers To Your Estate Planning Questions

Have further questions about how you can update or revoke previous plans and craft plans for your loved ones at your discretion? Preserve your peace of mind and family relationships by discussing your options with a Fair Oaks, CA estate planning lawyer, California Probate and Trust, PC. Call us at 916-674-2066 or complete the form to schedule an appointment.

Be sure to download our free guide, The 7 Reasons Why You Need An Estate Plan. Or, call our 24-hour hotline at (916) 306-0388 and leave us your name, phone number, and mailing address. We’ll send the guide to you ASAP.

The House Ways and Means Committee agreed to the tax provisions of the $3.5 trillion Build Back Better Act (BBBA) on September 15, 2021. If you’ve been following the political news, you may be wondering how this legislative act might affect you—and especially your estate plan.

At California Probate and Trust, PC in Fair Oaks, CA, our attorneys and their support team know what it takes to draft solid estate plans that will continue to serve as financial safety nets if the Build Back Better Act passes. Let’s discuss how much the tax provisions of the Build Back Better Act will impact estate tax planning in California.

What Is the Build Back Better Act?

President Joe Biden’s Build Back Better Act (BBBA), which passed the House Ways and Means Committee on September 15, 2021, focuses on social and educational reforms. The goals include creating jobs, lowering health care and education costs for singles and working families, and making the tax code fairer by cutting taxes for average Americans.

To balance these measures, the act would also increase taxes on wealthy Americans. Some of the most important aspects of the Build Back Better Act include:

• Excellent workforce training programs
• Reduced prices on prescription drugs
• Lower tuition for higher education institutions
• Less expensive health care costs
• Budget-friendly housing costs
• Tax breaks for families with children
• Tax cuts for individual workers without children
• Additional support for teachers and schools
• Creation of clean energy jobs
• Lowered childcare costs

How Will the Proposed Legislation Impact Estate Planning?

Taxation on Sales to Grantor Trusts

The new legislation would no longer allow one of the most popular estate planning strategies. In the proposed Build Back Better Act, Section 1062 states that you would have to pay capital gains taxes on all assets you sold to your irrevocable grantor trust. Losses and asset depreciation would not affect your tax burden.

Changes to Other Estate Planning Strategies — Taxation of Grantor Trusts

Some of the changes that will take place if Congress passes the proposed Build Back Better Act would include:

• Spousal Lifetime Access Trust — Trusts that provide for the needs of the spouse during the spouse’s life would be treated as a grantor trust and become subject to the estate tax
• Grantor Retained Annuity Trusts — Appreciation of assets within Grantor Retained Annuity Trusts (GRATs) would become taxable at the end of the annuity term
• Insurance Trusts — Premium payments made for an insurance policy held in trust would become subject to the estate tax

Would Reduce the Federal Estate, Gift, and Generation-Skipping Transfer Tax Exemption

Under the current law, the estate and gift tax exemptions will stand at $11.7 million per person until January 1, 2026. The proposed Build Back Better Act legislation would lower the estate, gift, and generation-skipping transfer (GST) tax exemptions to $6 million, effective on January 1, 2022.

Material Relief for Properties Used in Farming or Other Trades or Businesses

As per the proposed Build Back Better Act legislation, any property used for farming or other trades and businesses would get valued depending on the use of that land, rather than the actual market value. With this change, properties used for farming and other trades would enjoy material relief from the estate tax.

Choosing a Living Trust Attorney for a Revocable Trust

If you need a highly experienced estate planning attorney in Fair Oaks, CA, to draft your revocable living trust documents before the Build Back Better Act impacts California estate tax planning, be sure to call upon our highly credentialed legal experts at California Probate and Trust, PC (SCL).

Our professional estate planning attorneys at California Probate and Trust, PC will help you with the legal ramifications of any tax code changes caused by the proposed BBBA legislation. We will enable you to decide on the distribution of your assets, maintain control over your assets while you are alive, and provide for your family members upon death.

One of our team of estate planning attorneys will guide you through all legal matters by:

• Giving you a thorough understanding of federal and state laws
• Helping you in making decisions if the Build Back Better Act gets passed
• Remaining up-to-date on changes to the law
• Reviewing your existing estate plan
• Helping you create a new, custom-tailored estate plan
• Advising you regarding strategies and techniques to keep your family assets safe
• Devising a personalized business tax strategy

California Probate and Trust, PC — Trusts and Estate Planning Attorneys in Fair Oaks, CA

As with all major overhauls of tax laws, The Build Back Better Act has the potential to turn your California estate plan upside down. If the BBBA passes, consult with our estate planning attorneys at California Probate and Trust, PC to create optimized strategies for your estate.

Our living trust attorneys focus on drafting durable estate plans and take immediate action regarding planned trust transfers. We strive to provide valuable tax advice, draft customized revocable living trusts and wills, and serve the best interests of our clients.

Protect your assets and provide for your family’s future by preparing a detailed estate plan. Call our California Probate and Trust, PC team at (916)-674-2066 to book a free consultation.

Request a copy of our free guide, The 7 Reasons Why You Need An Estate Plan by calling our 24-hour hotline at 916-306-0388. Leave us your name, phone number, and mailing address and we’ll send the guide to you ASAP.

Copyright © 2021. California Probate and Trust, PC. All rights reserved.

The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.

California Probate and Trust, PC
9701 Fair Oaks Blvd
Fair Oaks, CA 95628
916-674-2066
https://cpt.law/

Estate planning can be complex. Far from being static, the circumstances that dictate proper estate planning often change. Laws evolve, and markets can shift drastically, which is why it’s a good idea to review and update your estate plan as necessary. But first, you should understand some of the potential changes. If this seems complicated or confusing, you don’t have to worry. At California Probate and Trust, PC, our experienced estate planning attorneys can help you every step of the way. In the meantime, get to know some of the basics.

Ordinary Income

You might not think ordinary income can have an impact on estate planning. But in a modern economy, ordinary income can fluctuate or suddenly change. These types of changes in ordinary income affect what assets you hold on to and what assets you decide to transfer to heirs, and when. For example, the Biden administration proposed The American Families Plan Act, which could significantly impact your ordinary income if passed. The Act would restore the top marginal tax to 39.6%. The American Families Plan Act is essentially a mixture of tax cuts and raises when it comes to ordinary income. It could impact estate planning by influencing how much money you bring home to invest and save.

If you would like to learn more about how your ordinary income impacts your estate planning or the potential changes to your tax rate, contact us at California Probate and Trust, PC. Our estate planning attorneys will help you figure the right estate plan for you and your family.

Capital Gains Hikes

For the 20% capital gains tax rate to apply to a married couple filing jointly, they must have a combined income of over $500,000. Most Americans, however, fall into the 0% capital gains tax rate. If the American Families Plan Act passes, it will increase rates on long-term capital gains and capital dividends from 20% to 39.6%, impacting business owner decisions and estate planning decisions for many people. Such a dramatic change could cause them to modify their estate plans in creative ways.

Some may choose to hold onto assets until death instead of selling. Others might consider giving more appreciated property and assets to a charity to avoid paying higher taxes when selling the property. And business owners may want to consider selling their business faster, resulting in gains year after year. Or, they may opt for an installment sale rather than a single-year sale.

Step-Up In Basis Rules

Modification or removal of step-up in basis rules could have a direct impact on your estate planning. These rules essentially mandate that appreciated property at death passes to your heirs at the value it is worth at your death, as opposed to your basis. This rule allows many stocks and other properties to appreciate during your life and for you to leave them to your heirs without them having to pay capital gains taxes on the appreciation. However, The American Families Plan would close the step-up rules for gains over $1 million or $2.5 million per couple. This law could significantly change which assets you want to leave to your heirs and which ones you choose to spend during retirement.

Factors to Keep in Mind for Estate Planning

Considering the ways your circumstances can potentially change, there are three points you should consider when putting your estate plan together.

• Determine how charitable planning can impact your estate plan. Charitable giving can be a great way to give while keeping your taxes down.
• Review your beneficiaries every couple of years. Circumstances may change what you want to leave and to whom. You may want to shift property from one to another based on their income. You may also want to increase or reduce what you choose to leave based on your income.
• Ensure your estate has the right liquidity. If the estate doesn’t have enough liquid assets, issues can arise quickly, especially with a business or appreciated assets.

These are just three essential points to consider. Depending on your particular circumstances, estate planning could be significantly more complicated and require the help of a seasoned estate lawyer to get it right. Fortunately, at California Probate and Trust, PC, we can help with every step of the process.

California Probate and Trust, PC

At California Probate and Trust, PC, we help families & professionals in California with all their estate planning needs. Although The American Families Act and other similar acts are only proposals, it is vital to understand the potential ways they can impact your estate plan. As laws and circumstances evolve, so should your estate plan. But don’t worry, you don’t have to wade through complicated laws yourself. Our trust attorneys are here to help. We can help you navigate the complex world of estate planning to ensure that you have the right estate plan for yourself and your family.

Our free guide, 7 Reasons Why You Need an Estate Plan, answers many common questions about estate planning. To get your free copy, call 916-603-2782, leave your name, mailing address, and phone number, and we will mail the guide to you right away.

Do you have questions or concerns about proposed changes in the law and how they can impact your estate plan? Don’t wait until it is too late. Contact California Probate and Trust, PC today at>916-674-2066 or complete our online form to schedule your free consultation.

Senator Chris Van Hollen of Maryland has proposed new legislation that could significantly impact wealth preservation and estate planning strategies used by wealthy families. It is called the Sensible Taxation and Equity Promotion Act.

One of the most significant issues under this law change is that when a wealthy person passes away, the estate of that individual must pay income tax on any previously untaxed gains, just as if that person had sold those assets before their death.

A Brief Overview of President Biden’s Tax Proposals

Congress could potentially make these changes retroactive, which could complicate estate plans for those who pass away before the law’s implementation. There are seven primary components of this law worthy of consideration when you think about your estate plan. Two different laws proposed in March 2021 – the 99.5% Act and the STEP Act – address the issues in this article.

7 Vital Components of the STEP Act That Could Affect Your California Estate Planning

Be prepared for potential changes with the STEP Act and the 99.5% Act that could influence previous estate planning strategies. Although the law has not received full approval and implementation yet, there are seven things to consider.

Reduces the Estate Tax Exemption to $3.5 Million

The current estate tax exemption sits at $11.7 million per person, and the proposal to reduce this is significant since it would drop the amount down to $3.5 million for transfers. Funds beyond that would trigger taxes. It would become effective after the end of 2021.

Reduces the Gift Tax Exemption to $1 Million

The estate tax isn’t the only high exemption issue on the table in these proposals; they would decrease the gift tax exemption for lifetime gifts to $1 million.

Establishment of New Tax Brackets

There will be new tax brackets with rates from as low as 45% for taxable estates between $3.5 million to $10 million to as high as 65% for taxable estates bigger than $1 billion. A 39.6% rate will also apply to taxpayers who have incomes higher than $400,000.

New Limits on GST Trusts

Also referred to as generation-skipping trusts or dynasty trusts, the new laws would put a 50-year limit on these tools in action.

Minority Interest Discount Changes

The new law would impose limits on the discounts received for minority interests when valuing the transfer of specific non-business assets for estate tax and gift tax purposes.

Step Up in Basis Prohibited in Certain Trusts

For those grantor trusts not included in the grantor’s gross estate, the new laws would block using a step-up in basis for assets inside those trusts. Instead, grantor trusts under the 99.5 Percent Act would be included in the grantor’s taxable estate, and any distributions made from that trust to a non-grantor recipient would be subject to the gift tax.

Many estate planning professionals are currently recommending creating and funding these grantor trusts while they are still allowed.

Adds New Chapter to the Code

Chapter 16 will be added to existing regulations with rules associated with the estate, gift, and GST transfer taxes related to grantor trusts. It would formalize how various assets and issues would be treated and impact those waiting to begin their estate planning process until after the new law is adopted.

Plenty of people concerned about the possible impacts of both of these laws are spending the current time setting up meetings with their estate planning lawyer to discuss the viability of current or potential strategies. Many of the tools targeted by the 99.5% Act and the STEP Act are coming under fire in these proposed laws. Even if Congress amends these proposed laws to eliminate some of the impacts, they will likely codify some of them into law. That is why it is even more critical than ever to enlist the support of an estate planning attorney in California to ensure that you’re prepared to adapt as needed.

Ensure Your Estate Plan Is Set Up Properly with the Help of California Probate and Trust, PC, a California Estate Planning Attorney

You might not know what tomorrow brings, but with the support of California Probate and Trust, PC, at least you’re prepared for it. Our estate planning firm helps our clients create an estate plan that preserves their peace of mind and family relationships with the future in mind. In addition, since we watch for legislative changes that could remove or weaken the strategies you have in place, you can count on us to inform you about new laws that directly impact your estate planning strategies and adjust accordingly.

Listen to Estate Planning Attorney R. Dustin MacFarlane discuss The System on his podcast, Legally Speaking:

https://soundcloud.com/jes-anderson-721964976/legally-speaking-07-the-system/s-pWDRFJZCkfI?in=jes-anderson-721964976/sets/legally-speaking-2020//s-iEMFoazchjv

Are you concerned about the STEP Act and the 99.5 Percent Act and their potential impact on your estate planning goals? Do you have questions about how you can update or revoke previous plans and devise plans for your loved ones at your discretion? Give us a call at California Probate and Trust, PC at 916-674-2066 or complete our online form to schedule an appointment

Request a copy of our free guide, The 7 Reasons Why You Need An Estate Plan by calling our 24-hour hotline at 916-306-0388. Leave us your name, phone number, and mailing address and we’ll send the guide to you ASAP.

Copyright © 2021. California Probate and Trust, PC. All rights reserved.

The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.

California Probate and Trust, PC
9701 Fair Oaks Blvd
Fair Oaks, CA 95628
916-674-2066
https://cpt.law/

A power of attorney (POA) refers to a document in which you name an agent or an attorney-in-fact to make decisions on your behalf if you become incapacitated and unable to make these decisions for yourself.

A power of attorney is one of the cornerstone documents inside a California estate plan that can give you peace of mind that if you cannot speak up for yourself, someone else can step forward to protect your interests. The selection of the appropriate agent in a power of attorney is vital for executing your intentions.

What Does It Mean to Say Something Is a California Durable Power of Attorney?

Each state has its own rules related to things like a last will and testament or a power of attorney. As an estate planning attorney can tell you, it’s essential to have these critical documents to protect yourself and make things easier for your loved ones if something happens to you.

In simple terms, a California durable power of attorney authorizes an agent of your choosing to handle your financial affairs if you are unwilling or unable to manage them on your own. You are authorizing this person to make financial decisions and actions on your behalf, which is a significant amount of responsibility to give to someone else. You must select this person carefully by considering whether you can trust them to act in your best interests.

Why Is a California Durable Power of Attorney Important?

An estate planning lawyer can help you to draft a durable power of attorney with your best interests in mind. You want to avoid a situation in which it is not possible to contact your relatives easily or in which the court must appoint someone else to serve in this role as your financial caretaker.

Such a scenario adds to significant delays, particularly as it relates to important financial transactions you may need to have undertaken during a time when you are otherwise incapacitated. The durable financial power of attorney remains active if the principal or the person who created it becomes incapacitated.

Furthermore, if you have a loved one or trusted friend who understands your wishes and will protect them in the event of incapacity, it gives you peace of mind that even when you can’t speak for yourself, someone else can handle these crucial affairs. Due to the high level of trust involved, you should only appoint a confident and willing person to serve as your power of attorney agent.

Creating a Durable Power of Attorney

A durable power of attorney should be among other tools such as a last will and testament in your California estate plan. If you already have a health care power of attorney, you have already covered the durable power of attorney issues. However, with any other type of power of attorney document, you will need to include language inside that expressly makes it durable to ensure that your chosen agent is properly authorized to make decisions for you.

You can discuss the specifics of what your agent can and cannot do with a power of attorney directly with your estate planning lawyer. Although your power of attorney agent might also be called an attorney-in-fact, you are not obligated to choose a lawyer for this role.

There are a few things a power-of-attorney agent cannot do regardless of the terms of your document, including:

• Changing or creating your will
• Making decisions on your behalf after you’ve passed away (unless you have also appointed them as the estate executor)
• Transferring the POA agent role to someone else

Getting Help with a Durable Power of Attorney

You should always work with a California estate planning lawyer to ensure that all forms or paperwork for a durable power of attorney are completed properly. After the form has been completed, signed, and determined to have met state requirements, it becomes valid immediately.

It is essential to take care when choosing who will serve in this role. You can also revoke a power of attorney at any time for any reason as long as you have the necessary mental competence. You can work directly with your estate planning lawyer to draft an official statement revoking the existing power of attorney document. The document must include your statement, the name, date, the assigned agent, the initial date of the first power of attorney document, and your signature. You should also provide a copy to your agent. One of the most common mistakes people make related to a durable financial power of attorney is failing to update the document after getting a divorce. As with all estate planning documents, it’s critical to ensure it has adapted to your current life circumstances.

Do you have questions about California estate planning and durable power of attorney? Give California Probate and Trust, PC a call to schedule an appointment at (916) 674-2066.

Get a copy of our free guide, The 7 Reasons Why You Need An Estate Plan by calling our 24-hour hotline at 916-603-2782. Leave us your name, phone number, and mailing address and we’ll send the guide to you ASAP.

Listen to California Probate and Trust, PC and Estate Planning Attorney Dustin MacFarlane Discuss How to Start with the End in Mind on his podcast, Legally Speaking.

Disclaimer: The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.