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ADVANCED HEALTH CARE DIRECTIVES: This is also referred to as Durable Power of Attorney for Health Care or Living Will. Because of recent events many might refer to it as the “Terry Schiavo” “pull-the-plug” document.  In this directive you name people and provide guidance regarding medical care,  “heroics”,  “pull-the-plug” end of life wishes, and even directions for certain details about what happens after you die (cremation, autopsies, gifts of body parts, etc). The United States Supreme Court has said these documents are supposed to be VERY SPECIFIC. I can help you with a VERY DETAILED “roadmap” regarding your wishes on what I call the “road of bad.” We cover a broad landscape of clinical possibilities where you can provide guidance regarding your wishes for treatments and termination of treatments. I find my clients really value the attention and time I give to this often overlooked document.

DURABLE POWERS of ATTORNEY:  These are documents you sign to pick people YOU TRUST to pay bills, sign checks, and handle your dealings if you cannot. I recommend you choose ONLY people you trust with your life!  Here’s another caution: I see many Powers of Attorney that are written so no one can help you unless they prove you are incompetent…to me, that makes so little sense…especially if you say you trust these people. Making them prove you are incapacitated before they can do anything can be expensive, embarrassing and time consuming. If you TRUST people,  my preference is to have these documents prepared to make it EASY for people you say you trust to be able to help you.  Change your documents if the people change, but make it easy for people you say you trust to step in and help. Make sense? I’ll prepare these any way you tell me, but this is what I’ve seen work the best.

ESTATE TAXES:  Congress cannot make up its mind, but after 2010, estates over $1,000,000 are hit with 55% taxes on the excess if there’s not proper planning.  Couples can avoid tax on twice that amount, BUT ONLY WITH PROPER DOCUMENTS. Many CPA’s and other professionals wrongly advise that there’s no problem with taxes until $2,000,000…that’s not true.  If you want more than $1,000,000 to get to your loved ones FOR FREE, you MUST take this planning seriously. There are many ways to accomplish this. I can help you identify the best way for you to accomplish your goals for the people and causes that mean the most to you.

JOINT TENANCY: This may be the worst way to hold title. With Joint Tenancy you add another person’s name on title with you so they can  immediately receive the asset when you die. But there are all sorts of potential problems with joint tenancy BEFORE you die and when you die.  These are rarely mentioned. I will be happy to discuss these problems with you, and you can decide if joint tenancy will still have a place in your planning.  Regarding spouses, for example,  the survivor is often handed worse income tax consequences when they try to sell an asset that was joint tenancy.  Or, you can lose YOUR OWN PROPERTY as a joint tenant, if the people you add on title have their own financial problems. People you love can be left out when you die if you don’t include everyone as a joint tenant because the joint tenant gets it all and is faced with having to turn around and make gifts to the others you intended. That can get really messy… for family reasons AND tax reasons.

LIFE INSURANCE: This is often a great and affordable way to be sure there will be money for loved ones if you die.  CAUTION to young couples with young  (under 18)  children. Be careful NOT to name your children as an alternate beneficiary to your spouse.  This is what many life insurance agents do with their young clients.  The problem? If minor children are beneficiaries of life insurance, in California, that money CANNOT be touched when you die by anyone UNTIL the child is 18. It’s called a “blocked account.” That’s awful… for starters.  Worse…when the child is 18, THEY GET IT ALL! That’s more awful! Who believes an 18 year old is ready to handle money on his own? That’s why coordinating your life insurance with a properly drafted Living Trust can make sure the money benefits your children IMMEDIATELY, but not handed all to them to blow.

In preparing your trust, I can be sure the money will be protected FOR THE CHILD’s ENTIRE LIFETIME, used for the child’s benefit, but safe if the child later faces life events like a  divorce, lawsuit, or serious creditor problems. Most Living Trusts do not cover this. I will give you the choices on how you want to set up your childrens’ inheritance,  including letting them be in charge at an age you designate, but PROTECTED FROM LOSS for the child’s entire lifetime.  That’s truly empowering.  Most attorneys NEVER discuss this. Most of my clients WANT this. I’ll help you to make your own choices.

LIVING TRUST:  A Living Trust would be your own private instructions (not public like wills and probate) to your own chosen “team” (usually, family members…not attorneys or banks) for when you cannot handle your own affairs and when you die…without the courts. The key to a Living Trust avoiding probate is MAKING SURE TITLE on your assets (with some exceptions) is CHANGED to make reference to the trust…not just your name(s) as individuals or as joint tenants. Retirement plans (and MAYBE some life insurance policies) may get special treatment with other beneficiary designations, but generally, the SMOOTHEST transitions with a Living Trust  and the LONGEST AND SAFEST BENEFIT TO LOVED ONES occur when almost everything that has title is titled in the name of the trust.  When I meet with you, I can explain more why this is so important and why getting things right requires such care.

PROBATE: This is where the courts take charge when someone dies… that usually means time, expense, and emotion… In California, probate usually takes the better part of at least one year.  On an estate of as low as $200,000, the attorney and executor fees could be $14,000 or more. On $500,000, those fees could reach $26,000 or more. They don’t subtract the value of your mortgage to calculate those fees. It’s a shock in a hurry!

Let’s put  2 + 2 together with wills and probate: A will does not AVOID probate…it virtually GUARANTEES PROBATE.  This is a shock to so many people who have thought all they needed was a Will to handle things when they die…not if you do not want loved ones tied up in the courts for a year or more, and out THOUSANDS of unnecessary dollars. 

WILLS: A will is your own written instructions TO THE COURT…. PROBATE COURT  (If assets in your name only  exceed a certain amount). In California, that amount is  $100,000. I joke that even in the recessed real estate market, when you buy a home, you just bought a probate! Can you find a house in California for less than $100,000?  The expenses and court fees are not based merely on what you paid into the house, but rather on the ENTIRE market value…including your mortgage. This is a shock to many young couples who struggle merely to get a down payment.  With a will, they stand to see their down payment eaten up by court costs and attorneys fees.  I want my clients to be clear on this.

The most expensive will an attorney can prepare STILL GOES TO PROBATE. Obviously, online wills are no better.