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San Fernando Valley Probate & Estate Administration Law Blog

Estate planning dos and don'ts

Estate planning is probably not the most entertaining activity for most Californians; however, planning appropriately the first time around can prove beneficial in a number of ways. Regardless of one's life chapter, the details to planning a will can seem overwhelming. The following information dives into the topic of estate planning and gives a few ins and outs of this legal and financial process.

In the opinion of one U.S. News contributor, Americans are entirely too lax when it comes to estate planning. This is why countless families find themselves in tricky situations when a loved one dies without a clear will, or without one at all. The article draws from a BMO Wealth Management Study, showing that, at the time of the article's 2017 release, 52 percent of adults in the country had not made a will. 40 percent of those surveyed admitted they had not even begun discussing estate planning needs with other family members. According to U.S. News, the following estate planning mistakes are among the most common:  

  • Failure to review documents
  • Not funding a trust
  • Failure to properly handle paperwork

How can undue influence invalidate a will?

If you are like many people in California and across the United States, you created your last will and testament while you were of sound mind and body. When writing your will, you determine who you want to have your possessions and finances upon your passing. In some cases, however, there may be people who try to influence you to make drastic changes in your will, especially as you grow older. This is referred to as undue influence, and it can invalidate a will if it is found you were not making the changes and decisions on your own accord.

Undue influence occurs when someone urges or persuades another person to make changes to their will designating them as the beneficiary to property. This involves changes that the will creator would not have made if they were acting on their own free will.  This persuasion can be used to invalidate the will if the person who is writing the will was under so much duress that they were unable to resist the overwhelming influence of the other person. Furthermore, the changes made to the will must directly benefit the person who is being accused of undue influence.

A power of attorney may protect you from financial abuse

You may still have all your mental faculties, but as you get older, you might worry that someday you will be unable to make financial decisions. What will happen then? At the Law Offices of Alice A. Salvo, we are prepared to answer the questions of California residents who are concerned about preserving their loved ones’ inheritance or protecting an elder from abuse.

As you age, you may become vulnerable to numerous cognitive or physical impairments that may make it difficult to manage your own affairs. Dementia, Alzheimer’s disease or other conditions may rob you of the ability to make informed decisions involving your finances. You could face the same difficulties if you unexpectedly suffer a traumatic brain injury or other accident that leaves you incapacitated.

Does your loved one's estate need probate or administration?

When a beloved family member dies, you may know that many different affairs will need addressing. You may wonder whether you have the right or ability to help handle those remaining tasks, and the answer to that question may depend on whether your loved one created a will or other estate planning documents.

An estate plan — or lack of one — can have a considerable impact on how the deceased individual's estate is handled. For instance, this information will determine whether probate or estate administration is needed and whether an executor or administrator will handle the necessary duties of closing the estate. If you have questions, it may prove useful to understand the differences in these legal proceedings.

How to get through the stress of being an executor

If you have recently been named the executor of an estate, you may be feeling undue pressure and stress at the task that looms before you. You may feel that you do not have time to undertake the position while juggling your normal day-to-day responsibilities. Becoming organized and aware of what is going on around you can help simplify this somewhat complicated process.

The executor is in charge of managing the estate, including protecting the assets, finances and property of the estate. As the executor, you are responsible for the estate during the probate process and must help to distribute the property to the beneficiaries. There are some simple steps you can take to make the process easier for everyone involved.

How do the new tax laws affect my estate?

If you have not reviewed your California estate plan in the past couple of years, you may be in for a pleasant surprise when you do. The Tax Cuts and Jobs Act that Congress passed and President Trump signed into law late last year may have dramatically increased the value of your estate, giving your heirs and beneficiaries more than you thought.

As Market Watch explains, under the old law your estate had to pay a federal estate tax if it is worth more than $5.6 million. Under the new law, your estate will not have to pay this “death tax” unless it is worth more than $11.2 million. In other words, your federal estate tax exemption doubled. Since California has no estate tax of its own, what this means is that your estate will pass tax-free to your heirs when you die unless you are among the uber-rich whose estates worth in excess of $11.2 million will still have to pay the 40 percent death tax.

What is an estate’s final accounting?

If you are a California resident who is serving as the personal representative of someone’s probate estate, you already may know that one of your last duties is to prepare the estate’s final accounting and file it with the Superior Court. You must do this so the court can officially close the estate.

As the Superior Court of Orange County explains, your final accounting must contain specific information, including the following:

  • Date the estate was opened
  • Date of the final accounting
  • Financial statement
  • Inventory value of each estate asset
  • Appraised and market values of remaining estate property as of the date of the final accounting

Should a 529 plan be part of your overall estate plan?

If you are a California parent or grandparent who wants to help pay for your children's and/or grandchildren's future college expenses, you may wish to consider setting up a 529 plan for each of them. Per the U.S. Securities and Exchange Commission, a 529 plan is a college savings plan that benefits your child or grandchild while giving you tax advantages.

Each state sponsors its own plan, but you also can choose among those sponsored by state agencies or educational institutions themselves. 529 plans come in two varieties: prepaid tuition plans and college savings plans. Each has its own advantages and disadvantages.

What is a living will?

As a California resident, if you have not have heard much about estate planning in general or living wills in particular, you may wish to find out more about the benefits a living will can give you. You probably know that your will allows you to state how and to whom you want your assets distributed when you die. But what about a living will? What does it do for you?

As FindLaw explains, a living will is very different from a regular will. In your living will, you instruct your doctor and other health care professionals and facilities about the treatments and procedures you want and do not want if you become terminally ill or suffer from an injury or illness that leaves you in a permanent vegetative state.

Protecting your digital assets and your information

California readers know that most people have a significant digital footprint. From Facebook accounts to online checking accounts, you likely have a portion of your life online. For many people, it is necessary to protect these accounts and private information stored online by including digital assets in a will.

If you have a will, you know that one of its main purposes is to distribute your assets and money as you wish after your death. However, you can utilize this estate planning tool to ensure that your digital life and interests are secure and end up in the right hands. It could beneficial to take steps to add your digital assets to your existing will or draft a will that includes them.