Estate Planning

Tuesday, February 7, 2017


Estate planning may seem like a looming task, but once you’ve completed the process you will have feelings of comfort and security.  So why do so many people leave their affairs up to chance or the whims of the probate court?  Sometimes estate planning has a hard time making it up your “to-do” list, and I understand.  Generally, we see clients more interested in estate planning when a child is born, when a loved one passes away, or if someone is suffering a serious illness.  However, during these life changes and high times of stress, it is more difficult to complete the estate planning process due to the stresses caused by the life changes.  It is much easier to go through the estate planning process during a time when it’s easier to focus on the estate planning itself.

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Tuesday, January 10, 2017

I Have A Living Trust Based Estate Plan. What Else Should I Do?

A few thoughts about the "simple things" that folks should remember to do as part of their estate plan:  

1)  Make a list of all your logins and passwords for everything.  This may be obvious, but you don't want to be on your deathbed, providing logins and passwords for important websites.  

2)  Keep old tax documents:  the Internal Revenue Service may audit you even after your death, which is why it’s vital to keep old tax documents for several years after someone has died.

3)  Make a summary of your medical history so children and grandchildren know if there is a history of allergies, for example, or diabetes.

4)  Make sure you list what companies and services direct-debit from your bank accounts and credit cards so they don’t continue after those accounts are closed.
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Wednesday, December 7, 2016

The Dangers of Outright Distributions, cont'd.

There are significant benefits to passing property in trust to children and other beneficiaries rather than distributing the property outright.  Property left to a child or other beneficiary in a correctly designated trust will be seen as owned by the trust rather than the individual beneficiary.  The beneficiary may be a co-trustee of the trust, have the use of the trust assets and income to maintain lifestyle, and control the investment of the trust property, but the property will still be protected from the beneficiary’s creditors, including a failed marriage, or the creditors of your beneficiary’s spouse.

When property is left outright to children or other beneficiaries, all in a single lump sum, that property may or may not be invested wisely depending on the choices the beneficiary makes. If the beneficiary is free to make decisions with respect to the entire amount left to the beneficiary, then one mistake could cost that beneficiary his or her entire inheritance.
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Tuesday, November 1, 2016

The Gift Tax Exclusion

The Internal Revenue Service provides a yearly limit on how much you can give to someone else without paying gift tax.  In 2017, the annual exclusion for gifts will remain $14,000.

Spouses can combine their annual exclusions to double the size of the gift.  For example, this year a married couple with a child who is married and has two children could make a joint cash gift of $26,000 to the adult child, the child’s spouse and each grandchild – four people – providing the family with $104,000 a year.  Gifts that exceed the limit count against the lifetime exclusion, which this year is $5.
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Thursday, October 6, 2016

The Dangers of "Disinheritance" Caused by Outright Distriubutions

Most married couples, particularly in a first marriage, share a basic planning goal:  the property of the first spouse to die should pass to the survivor who can use, control and enjoy all of the property until the survivor’s death; then, at the survivor’s death, the remaining property should pass to that couple’s children in equal shares.  The revocable living trust is one of the best tools available to make sure that all of the goals of this plan are met. If a trust is not used and property is transferred outright to the surviving spouse, the couple’s goals may be partially or completely defeated, particularly if the surviving spouse remarries. The typical married couple owns the assets of the marriage jointly. The survivor "inherits" the marital assets by simply being the surviving spouse.

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Tuesday, September 20, 2016

Revocable Living Trusts

As the use of a revocable living trust for estate planning has increased in popularity over the past two decades, it has been seen primarily as a planning tool to be used only by families with taxable estates. While a revocable living trust can be designed to deal quite effectively with estate tax issues, its real superiority over other methods of estate planning focuses on planning for the myriad of non-tax family issues.  Many think of estate planning as being synonymous with tax planning, but estateplanning more fully encompasses issues far beyond the financial size of the estate.

As families and estate planners work through this era of tax uncertainty, the revocable living trust transcends the potential for estate tax repeal and provides a mechanism to meet the diverse and complicated issues of both tax and family planning.  For those who do not thoroughly understand trust planning, the assumption has been that trusts are only for large estates.
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Monday, August 1, 2016

Fraud, Duress and Undue Influence

Fraud, duress and undue influence commonly shortened to simply "undue influence," is statistically the most frequent basis for blocking probate of a will or enforcement of a trust. It can also result in partial invalidity if the remainder of the document is not invalid for other reasons. Simply stated, it is the substitution of another person's will for that of the testator or trustmaker.

A frequent scenario in such cases is this: A family member or caretaker brings in an elderly client, stays with the client during the planning meeting, may even pay for the attorney's or other professional's services, and becomes the main beneficiary or heir. The beneficiary may or may not be related to the client.
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Monday, July 18, 2016

Joint Tenancy

Joint ownership with right of survivorship or "joint tenacy" is often relied upon as a probate-avoidance mechanism, but its risks are often not even considered.  Adding a joint or co-owner exposes the affected asset to the joint or co-owner’s liabilities, increasing the owner’s risk of being named in a lawsuit or losing the asset to a creditor of the joint or co-owner.

With right of survivorship property, when one owner dies, full ownership usually transfers to the surviving owner without probate; but what if that surviving owner dies without adding a new joint owner, or if both owners die at the same time?  Then the asset must pass through probate before it can go to the heirs.  This could cause someone in your family to become unintentionally disinherited when the property transfers automatically on death because a will does not control most jointly owned assets.

Moreover, avoidance of probate is not guaranteed with non-probate transfers.
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Wednesday, July 6, 2016

Modern Estate Planning

Modern estate planning is not a transaction; it is a process. It involves not only our clients but many generations. It allows our clients to care for their loved ones with resources, love and wisdom.  It truly is "wealth counseling."  Modern estate planning is not just something done to plan for death – it is planning for life, and life involves changes and uncertainties.
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Sunday, June 5, 2016

Inheritance Protection

Back in the 1930s Joe and Rose Kennedy wanted the kids inheritance protected from five major possible attacks: (1) law suits (2) divorce (3) making sure that Kennedy wealth went only to Kennedy descendants and not gold digging son-in-laws and daughter-in-laws who could remarry after the death of a Kennedy descendant and spend Kennedy wealth on a replacement spouse (4) living and death probate and (5) estate taxes.  In order to accomplish their goals, they set up a living trust to protect their children's inheritance.

On November 22, 1963, when President John F. Kennedy died the separate trust that his parent’s created for him continued to be held in trust for his two children, Caroline and John, Jr.  There were no estate taxes or probate costs and his wife Jackie was not a beneficiary.
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Tuesday, May 10, 2016

Planning for the Unexpected

Estate planning is not just for older or wealthy people. Younger people, especially those with minor children, need to have an estate plan in place in order to give instructions to their loved ones to follow in the event of a debilitating accident or untimely death.

You may recall the media circus surrounding Terri Schiavo's unexpected incapacity.  In 1990, Terri Schiavo certainly did not anticipate slipping into a coma when she was only twenty-six year old. She did not have a Living Will and/or an Advanced Health Care Directive in place which led her husband and parents to fight over her medical care and ultimate wishes for the next 15 years.
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Hinshaw Estate Planning is a practice group of Hinshaw, Marsh, Still & Hinshaw and assists clients in matters related to Estate Planning, Asset Protection, Planning for Children, Inheritance Protection, and Estate & Trust Litigation in the areas of Saratoga, San Jose, Los Gatos, Monte Sereno, Campbell, Santa Clara, Sunnyvale, Cupertino, Los Altos, Los Altos Hills, Mountain View, and Palo Alto within Santa Clara County, the areas of Menlo Park, Woodside, Atherton, Portola Valley, San Carlos, and Redwood City within San Mateo County, and the Greater San Francisco Bay Area.

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