Countdown for a Stress-free New Year

End of life planning can be an unsettling process. No one wants to think about death, much less plan for it. Yet while the majority of our Living Trust clients are older, often retired or thinking about it, anyone who has assets and a family should have a Trust. It documents how you want your property to be distributed, how you want your children cared for if something should happen to you. Rather than being unsettling, many of our clients tell us that creating their Living Trust provides important peace of mind.

A New Year and a fresh start

There’s a good chance that you’ve been putting this off for a while, so here’s a countdown to a stress-free 2018. Make this the year you finish creating your Living Trust and related documents.

5. Create an Advance Health Care Directive

Creating an Advance Healthcare Directive is an important part of long-term planning. Unless your wishes are stated explicitly in writing, doctors, hospitals and EMTs are taught to keep people alive—not necessarily to follow their wishes. Healthcare professionals are not legally bound to listen to your loved ones.

Think about how you want to spend your final days. If you should become incapacitated, do you want to be at home, surrounded by family, perhaps with the help of an aide or hospice, or in a nursing facility? You will need to think about whether you want to sign a Do Not Resuscitate (DNR) Order. Whatever your wishes, you need to share them with your family and your doctor. Make sure you choose people whom you trust to carry out your wishes—even if their views conflict with their own beliefs or feelings.

4. Appoint a Power of Attorney whom you trust

A Power of Attorney is that person whom you trust to manage your life if for some reason you are no longer able to do this yourself. A Power of Attorney will be responsible for paying your bills, taking care of your taxes and other financial commitments as well as making important healthcare decisions. This can be a demanding role that requires time as well as the ability to manage financial matters, so choose this person carefully.

3. Review a Will or Trust if it is more than five years old

Surprisingly, more than 50% of Americans die without a Will or a Living Trust. The result? Their families will have to go through Probate—a lengthy and expensive process at what will already be a very difficult time.

Many people create their Trusts but fail to update them. That can be a problem if someone dies and his/her Trust is 20 years old–there were likely a number of significant life changes over those 20 years that were not reflected in the Trust.

Consider updating your Trust if it is an AB Trust

There have also been several significant law changes over the last 20 years that affect married couples with Trusts. Many couples did “AB” Trusts in the past because the estate tax threshold was much lower than it is today. Those AB Trusts come with very onerous administration after the first spouse dies, including segregating assets and filing an additional annual tax for the Trust.  The surviving spouse is also prohibited from changing part of the terms of the Trust because it partly becomes irrevocable.

With the recent tax bill, estates under $10,000,000 are not subject to the estate tax, so a married couple should check their joint trust to see whether it is an AB Trust, and whether that is still appropriate for them.  We can help convert an old AB Trust into a simpler and more flexible plan.

Anything that will affect the inheritance of your family is a reason to update a Trust. Births, deaths, divorces, purchases of property and assets need to be reflected in your Trust.

2. Make provisions for your pets

Pets these days are spoiled and pampered for good reason—they’re funny and charming and provide comfort and companionship to millions of people who might otherwise be lonely. If something were to happen to you, whom would you trust to care for your pets? Think about the costs of feeding your pets and trips to the vet. Most important, identify someone who will love your pets as much as you do.

1. Provide access to your digital assets and accounts

Most of us conduct the bulk of our personal business online, but what happens to these online assets and accounts after you die? Take some steps now to help your family deal with your digital property.

• Make a list of all of your online accounts, including e-mail, financial records, Facebook and other social media accounts–anywhere you conduct business online.
• Include your username and password for each account.
• Include access information for your digital devices, including smartphones, tablets and computers.
• Make sure the Agent for your Power of Attorney and the Successor Trustee of your Trust have authority to access your online accounts.

California Document Preparers makes it easy for our clients

Our comprehensive Living Trust package includes a Power of Attorney and Advance Healthcare Directive. We help our clients through every step of the process. Contact California Document Preparers at one of our three Bay Area offices todayto schedule an appointment. We’re helpful, compassionate and affordable.

Cautionary Tale: Father Has Dementia; Living Trust MIA

A client recently came into our Oakland office seeking our advice. His father was 82, in a nursing home after suffering several strokes, and now in the early stages of dementia. He had always assured his family that he set up a Living Trust for himself and his wife, our client’s mother, who is also in failing health. Our client recognizes that there is some immediacy, and while he’d been going through the chaos of his father’s papers looking for the Trust. he could find only unsigned copies of the document.

His mother knows nothing about where his father might have put the signed legal document, but for whatever reason, she doesn’t believe a lawyer was involved. Our client is worried about what will happen when his father dies. If the Trust is not found, his father’s estate will be subject to Probate.

His questions to us were those that we frequently field:

Q: Are Living Trusts recorded somewhere?

A: Unlike Deeds that are recorded with the county clerk, Living Trusts aren’t recorded anywhere. It’s up to each individual to store his/her Trust in a secure place and make sure that a family member has access.

1. Can the father sign the copies of the Living Trust? 
2. The father can’t sign the copies or have a new Trust created if he’s not mentally competent. At this point, with the strokes and the dementia, it’s likely that he would be declared legally incompetent. If he can’t find a copy of it, and if the assets, such as the house, weren’t transferred into the name of the Trust, he can’t use the unsigned copies to avoid probate. Like the tree falling in the forest—if no one can find the Trust, it doesn’t exist.
3. Can the mother set up a new Living Trust? 
4. While Living Trusts aren’t filed anywhere, Deeds are, and you can check who owns the title to a home. The house may be able to avoid Probate if it’s titled in joint tenancy. If the father dies first, the mother will inherit it; she could then create a Living Trust of her own, thereby avoiding Probate for her son when she dies.
5. They don’t have a lot of assets–just a house and car—is our client worrying needlessly?
6. A. It’s worth putting some effort into this search. A house in the Bay Area is a significant asset.

A few other ideas for tracking down missing legal documents

• Check papers for bank statements—the father might have had a safe deposit box there.
• Time to put on your private investigator hat–the Living Trust may be carefully hidden somewhere in the house. Heirs have found documents hidden in freezers, taped to attic rafters, tucked under mattresses and floorboards and slipped behind the mats of framed pictures. Think of places that are secure and dry, that would be undiscovered.
• Review a checkbook around the period when the documents were created, if possible. If a check was made out to an attorney during that time, the signed document may have been filed with him/her.

A cautionary tale; situations like this happen more often than we’d like

When our clients create a Living Trust, they receive both hard and soft copies. We also take a scan of every signed Trust. We advise them to update this periodically with important life events—births, deaths, divorce and important investments. These documents should be kept in a safe place. Home safes are popular these days, but for them to be secure, they should be difficult to move, fireproof and waterproof. Safe deposit boxes may be a good option as well, but for each of these storage solutions, it’s critical that a trusted family member or friend has access to them.

Do you and your heirs know the whereabouts of your Living Trust? Does it need to be updated with important life events? Call the California Document Preparers team today to make an appointment.

Probate: The Excuses are Lame, Results the Same

More than 50% of Americans die without creating a Living Trust that details how they will distribute their estates. The reasons for not creating a Trust are endless, but they're really just excuses. Below are some high-profile examples of very typical excuses for not creating or updating Living Trusts. Regardless of the excuse, the results are always the same: long, expensive probate ordeals for their families. 

Procrastination

You may or may not be old enough to remember Sony & Cher. After the duo broke up, Sony remarried, moved to Palm Springs, became a politician, skied into a tree at Heavenly and died at the age of 62 without so much as a simple Will. His wife had little time to grieve because she became the administrator of his estate, defending a claim from Cher who believed she was still owed money from their divorce. A secret love child also surfaced and demanded a piece of Bono's estate.

Failure to Fund It

Michael Jackson created a Trust, but failed to fully fund it. A Trust means nothing unless you move your assets and real property into it--when it becomes a powerful legal document. Jackson’s failure to fund his Trust made it much easier for his family to duke it out in probate court, turning this into a public spectacle.

The Do-It-Yourselfer

Former Supreme Court Justice Warren Burger created his own Will, which consisted of 176 words. Some thought it was part of his imperious nature that he failed to prepare for his death at the age of 87. He left out key provisions and his family paid the price-- his children paid more than $450K in estate taxes. Burger’s lack of a proper Trust caused many people to wonder how someone who reached the top of his profession died without the one thing he could have used: a good lawyer. While he served on the highest court in the land for 17 years, he had a fool for a client.

Immortality

Jimi Hendrix apparently thought he’d live forever because he didn’t do any estate planning. He died at 27 in 1970. He was, however, a child of the 60s, and may have been in an extended Purple Haze. Nevertheless, his estate was thrown into a lengthy and expensive court fight that took some 30 years to settle. Jimi's father, Al, sued for the rights to Jimi's music, and finally won in 1995. Under the name of the estate, Al created multiple trusts, partnerships, and corporations, notably Experience Hendrix, L.L.C. based in Seattle.

Failure to Update Your Trust

For millions of Batman fans, Heath Ledger will forever be remembered as the Joker, though his daughter may remember him best for never having added her to his Will. His sudden early death of a drug overdose led to chaos, family infighting and lots of bad press. Ledger was just 28 when he died—another tragic victim of a drug overdose. In general, a Living Trust should be reviewed every few years, updated in the event of divorce, births or deaths and major investments. 

Of course we do Probate!

Contact us at one of our three Bay Area offices. Better yet, avoid Probate altogether and make an appointment to get started on your Living Trust. We help you through every step of the process.