Probate, Estate Planning and Trust Law
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San Fernando Valley Probate & Estate Administration Law Blog

Sister accuses brother of mismanaging mom and aunt’s money

For families in Woodland Hills, having one assume control of a parent or loved one’s affairs could potentially alienate the other members. If such tension exists, one may want to ensure that all of his or her dealings with the estate be transparent and up-front, thus avoiding the potential for claims of mismanagement coming from his or her siblings and/or loved ones. Should one open the door for speculation that he or she may not be performing above board on all of his or her duties as either a trustee or estate executor, he or she had better be prepared for the onslaught of breach of fiduciary duty claims that are sure to run through it.

Such is the scenario facing a New Jersey man whose sister has sued him over the management of his mom’s and his aunt’s money prior to and following their deaths. The sister’s claims include accusations that he compelled his mother to set up a sizable investment account with him as the sole beneficiary. She also alleges that her brother directed money from their mothers financial accounts to his own and those of his law firm. Ultimately, he was cleared of the more scathing charges of conspiracy and conversion. The judge did, however, find him liable for fraud, negligence, and breach of fiduciary duty.

Can you name your doctor as your health care proxy?

When selecting a family member to become your health care proxy or agent in Woodland Hills, you may run the risk of creating contention by choosing one over the other. To you, an easy way to avoid the potential for tension may be to give this responsibility to someone outside of your family, such as your doctor. However, before making such a decision, it is important that you understand exactly who you can name as a proxy to avoid any undue stress on your part of that of your family and friends.

According to the California Probate Code, you are unable to name any of the following as your health care proxy:

  •          The supervising health care provider of a facility where you receive care (this includes your primary care physician).
  •          Any non-relative employees of a facility where you receive care.
  •          A non-relative operator or employee of a residential or community care facility where you are a resident or recipient of treatment.

Helping newly-inherited teens and young adults find their way

Whenever wealth is transitioned from one generation to the next in Woodland Hills, concerns about how a beneficiary will handle his or her inheritance are ever present. This is especially true when dealing with teen and young adult heirs. Immediately, two fears may arise in the minds of those caring for these youths: First, will he or she go nuts with this newfound wealth and completely blow through it, or will he or she allow a lack of experience in such matters lead him or her to trust in people with ulterior motives.

The key to overcoming such fears may just be having a money management mentor that can help a newly-inherited young adult understand what’s available to him or her in terms of investment opportunities, liquidation options, and tax implications. The first challenge for such a mentor is helping provide the youth with a current snapshot of his or her financial profile. However, it should be remembered that he or she will not get much value out of complex financial documents. Thus, vital information such as this needs to be condensed and presented in high-level formats that can provide a baseline understanding for him or her.

How do you relinquish the role of executor?

When a family member, friend, or colleague names you as the executor of his or her estate, he or she is tasking you with an enormous responsibility. What if you fear, however, that you may not be able to adequately fulfill the role? Properly seeing an estate pass through its administration and/or the probate process may require a significant amount of time and energy on your part. If you fill that you simply aren’t capable of handling such duties at the moment, you do have a way to decline the responsibility.

The preferred method of turning down the request to be an executor may be to do it before your official court appointment. You simply need to notify the heirs and beneficiaries of the estate to allow them adequate time to find a replacement. You then file a renunciation form with the probate court in the county the decedent lived in prior to death.

Living wills vs. other estate planning documents

When most in San Fernando Valley hear the word “will,” they likely think of a last will and testament that states how or to whom one wants his or her assets distributed following his or her death. Yet few likely know that there are many different types of wills, some of which have little to do with death. One of these is a living will. As the name implies, this estate planning document addresses issues while one is still alive. However, unlike a living trust, a living will does not deal with the management of one’s assets, but rather his or her health.

The California Natural Death Act defines a living will as a declaration of if and how one wishes to received life-sustaining care in the event the he or she falls into a permanent unconscious condition. The fact that the creator of a living will has already laid out his or wishes regarding end-of-life care differentiates it from durable power of attorney. With power of attorney, medical decision-making privileges are usually handed off to another.

Canceling a revocable living trust

Many of the Woodland Hills clients that we here at The Law Offices of Alice A. Salvo help to set up their estate planning tools see their situations change over time. These changes will often prompt them to consider changing the provisions of a living trust. If you find yourself in such a situation, then you may be questioning whether or not it is even possible to cancel a trust once you’ve signed the trust article. Suffice it to say that it is referred to as a revocable living trust for a reason.

The website for the State Bar of California is very clear in stating that you, as the creator of a revocable living trust, have the right to amend or cancel it at any time. The only stipulation is that you must be in a competent state to do so.

How can you determine the fair market value of estate assets?

If you have been asked to serve as the executor of an estate in Woodland Hills, a potentially daunting task lies before you: determining the fair market value of the estate’s inventory. Many go into an estate distribution vastly overestimating the value its assets. In reality, most estates in the U.S. are much more modest that most believe. According to information shared by CNN Money, the average value of an inheritance in America is $177,000. Yet when you are dealing with beneficiaries who may be expecting much more, convincing them that your valuations are sound can be difficult. Thus, it is imperative that you do your due diligence in getting an accurate estimate of your estate’s assets.

For assets such as investment accounts and real estate, determining their current value may be relatively easy given the many market tools that your have at your disposal. Valuing personal items, however, can be much more difficult. These can include:

  •          Artwork
  •          Jewelry
  •          Tools
  •          Coins
  •          Antiques

The difference between durable and springing power of attorney

For many of the Woodland Hills clients with whom we work here at The Law Offices of Alice A. Salvo, the decision of whom to give power of attorney and what form to grant unto them is a difficult one. Specifically, you may question what the differences are between the various forms of power of attorney in California. As whomever you hand over power of attorney to will have great influence over your finances, health, and general well-being, it is important that you understand how and when that authority is granted.

When referring to the philosophy of power of attorney, the California Probate Code recognizes two distinct forms of this authority: durable and springing. Durable power of attorney goes into effect either moment that you sign the POA form, or at the time you become incapacitated. If given prior to your incapacitation, then that event does not affect your attorney-in-fact’s authority.

Special Needs Trusts in California

For Woodland Hills residents who begin seriously contemplating estate planning at a later age, the care of their children may not be at the forefront of their minds, given that the children are likely adults. Yet what about adult children with special needs? According to the website SpecialNeeds.com, as of 2006, there were more than 716,000 developmentally disabled adults in America whose primary caregivers were over the age of 60. Aging parents in such a situation no doubt want to include provisions in estate dispersion tools that see to the needs of these children. However, they need to know how to do it correctly.

The first thought that an aging parent with a special needs adult child may have is to simply bequeath assets to him or her in a will or a trust to provide for his or her continued care. However, this could actually end up doing more harm than good. The website for DB101 is California shows that the asset limit for an individual to qualify for benefits such as Supplemental Security Income and Medi-Cal is $2000. Leaving an adult child with disabilities assets that exceed that could cause him to her to lose those benefits.

Understanding estate taxes

Many of the San Fernando Valley residents that come to see us here at The Law Offices of Alice A. Salvo all share the same concern: estate taxes. If you are current going through a transition of assets following a loved one’s death, this is definitely a topic worth researching. However, a lot of misinformation exists about who actually owes estate taxes, and how much they actually do owe. This often leads to concerns that can cause a good deal of undue stress.

First and foremost, you should understand exactly who estate tax is owed to. As of 2005, the State of California does not require you to file an estate tax return. That leaves only the federal estate tax for you to potentially have to deal with.