Estate Planning

Why Do I need an Estate Plan?

While it may be uncomfortable to think about the possibility of one's incapacity or mortality, it is never too early to have a succession plan.  A well crafted estate plan by an Estate Planning Attorney will enable those you trust and love to avoid the delays, frustrations, and costs associated with accessing your assets because of court activity or financial institution procedural requirements.

Trusts

Revocable Trusts:  

A revocable trust can be modified and terminated while the settlor (person establishing it) is alive. A trust is a fiduciary arrangement which appoints another person, a trustee, to carry out the  trust terms and responsibilities on behalf of the beneficiaries. Trusts avoid  the time and expense of probate and allow for a greater degree of flexibility and control over management and distribution of assets.  Upon passing away, a trust allows for the immediate succession of the estate by the trustee and provides the option of stretching out over time distributions of estate assets for beneficiaries with special needs, minors, or those not well suited to receive a lump sum. In addition, unlike a will which is public record once admitted to probate court, a trust provides a higher degree of privacy. 


Irrevocable Trusts:  

An irrevocable trust is a separate entity for tax purposes, with its own tax I.D.  These trusts offer asset protection and tax planning opportunities for Families, Elder Care Planning, and Non-Resident Aliens.

Wills

A standard Will is more suitable for a smaller estate, without real property, where the beneficiary will receive a lump sum distribution upon passing of the testator. A Special Needs Trust can be built into the Will if outright distribution is not desirable.

Power of Attorney

Durable Financial Powers of Attorney:  This power of attorney is delegates authority to another person to assume responsibility for managing the client's financial affairs. The DPOA can be extremely helpful in an emergency that otherwise may require Court approval to access assets.


Advanced Health Care Directives: This power of attorney designates another person to receive health care status information and advocate on the patient's behalf in the event incapacity. It also allows the patient to provide advance written instructions regarding end of life preferences.

FAQs

If I am establishing a Trust, why do I also need a “Will”? The Pour Over Will is complimentary and “part and parcel” of the Trust. One of the main purposes is to act as a “catch-all” by declaring that all property not held in trust at the time of passing is deemed to be transferred and held in Trust.   


What is the Difference Between a Trustee, Executor and Guardian? The Trustee is responsible for administering (i.e. ensuring the written wishes are effectuated) the terms of the Trust. The term Trustee is exclusive to the Trust. The Executor is responsible for administering the terms of the Will. The term Executor is exclusive to the Will. The Guardian is the person you nominate to take over the parental responsibilities for your minor child(ren) in the event you pass prior to the child(ren) reaching 18. 


Does the Trustee, Executor, and Guardian have to be the Same Set of Individuals? If you have selected a Trust, the Trustee and Executor should be the same set of individuals in the same order/sequence. The Guardian often is the same as the Trustee/Executor as it is administratively more efficient (no splitting of the power of the purse v. responsibility of day-to-day care among different individuals).  


Who Should be the Successor Trustee or Executor?   While alive the settlor(s) (individual establishing the Trust) will also be the Trustee.    For the successor Trustee/Executor, the settlor(s) will often look to qualified family members. Ideally the successor Trustee/Executor will be well organized and have a good grasp of financial and/or legal matters. The successor Trustee/Executor will be able to consult an attorney or CPA if he or she requires assistance regarding the Trust or Will administration.  Nominating a relative who is a Non-U.S. citizen/resident should be avoided as it increases the administrative burdens on the Trust and will likely cause the Trust to be re-characterized as a Foreign Trust.   


What Type of Compensation is Common for the Trustee? While there is no set standard, commonly an annual fee ranging from 0.5% to 5% of asset, depending on size of assets, prorated by number of days served.  



International Estate Planning

Pre-Immigration Planning

Once Nonresident aliens become resident U.S. taxpayers all of one's worldwide assets will be subject to U.S. taxation. This can have significant ramifications. For example, pursuant to the Foreign Account Tax Compliance Act, the IRS has extraterritorial agreements with foreign financial institutions resulting in the sharing of US taxpayers financial information. Similarly, under the Report of Foreign Bank and Financial Accounts, part of the U.S. Bank Secrecy Act, U.S. taxpayers (including resident aliens) are required to report to the IRS any financial interest in foreign financial accounts.  Fortunately there are tax mitigation solutions. By planning ahead while still a nonresident alien and rearranging one's non U.S. based assets before becoming a U.S. resident one can incur significant tax savings. 

Qualified Domestic Trust

When a married couple consists of U.S. citizens,  and one spouse dies, the decedent spouse's portion transfers to the surviving spouse free of the estate tax thanks to the marital deduction. In essence the estate tax, if applicable, is deferred until the death of the surviving spouse.  However, if the surviving spouse is not a U.S. citizen , no marital deduction is allowed. Any applicable taxes can be deferred on the decedent spouse's estate with a Qualified Domestic Trust ("QDOT").  If you find yourself in this unique situation please contact our office for more details about the QDOT.

Multi-Jurisdictional Wills, Probate, and Estate Administration

We provide wealth coordination and management services for individuals who have assets and properties in different countries. A will or trust prepared for a California resident may not necessarily be recognized in another jurisdiction. For example, there may be forced heirship laws which supersede any writing concerning the testator's wishes. Other pitfalls include differences in taxation, recognition of legal title, creditor rights, or character of property for marital division purposes.  By coordinating in advance one can save significant time and costs and reduce the risks of any unforeseen and unintended consequences. 

Foreign Investor Taxation

Non Resident Aliens with U.S. based assets have a limited gift and estate tax exemption of $60,000 with a being imposed on any amount in excess.  Available solutions include making qualified gifts during life or transferring ownership into a legal entity that will survive its principal. 



Estate Administration

Trust Administration

Upon the settlor's passing away, the trustee is required to diligently and competently administer the decedent's trust. We provide legal guidance throughout the trust administration process, including  sending out required notices to interested parties, inventorying the estate assets, paying the decedent's debts and taxes, preparing accountings, and implementing tax efficient subtrust funding and tax efficient distributions of principal and income.  

Small Estate Administration

When a love one passes intestate ("without a testamentary instrument"), financial assets worth less than $150,000 can be collected by the heirs-at-law through the Small Estates procedures. For more information, please contact our office.

Conservatorships and Guardianships

Conservatorship

It is all too common to have a loved one who has lost the ability to take care of his or her personal needs or manage his or her finances.  Common causes include loss of capacity due to aging or mental health issues. This can cause significant emotional toll and frustrations on those seeking to help, but are met with resistance by their loved one. 


A conservatorship is a court proceeding where a fiduciary (called a "conservator") is appointed to act for the benefit of an adult (called a "conservatee"). In a conservatorship of the person, the conservator manages the conervatee's physical health, medical care, food, clothing or shelter. In a conservatorship of the estate, the court appoints a conservator for an adult who is unable to manage his or her financial affairs or resists undue influence. The conservator has the responsibility to use ordinary care and diligence to conserve, manage, and use the conservatee's property and financial assets for the benefit of the conservatee.

Guardianship

A guardianship is proceeding where an adult fiduciary (called a "guardian") is appointed to act for the benefit of a minor (called a "ward") until age 18. In a guardianship of the person, the guardian becomes the custodian of the ward, with responsibilities of providing shelter, education, medical care, food, and clothing. In a guardianship of the estate, the guardian has the responsibility to use ordinary care and diligence to conserve, manage, and use the ward's property and financial assets for the benefit of the ward.