What happens if you don't have a will?

Many times I am asked to notarize a will. In California a Will has to be dated and signed by the testator. ... we do not notarize a Will like some other states do. However, what happens if you do not have a will?  That is part of Estate Planning.   Read this example.

Last week the New York Times reported that Aretha Franklin died at the age of 76 without having a Will or Trust in place. The Queen of Soul left behind an estate valued at nearly $80 million dollars, which number is expected to grow, given her valuable musical works. In light of this revelation, many are wondering, what will happen to her assets?

Who gets her money? Not her grand kids, charities or her unmarried life partner. Although the star’s failure to sign a Will does not mean immediate peril for her estate or loved ones, the lack of proper estate planning will result in unnecessary delay and the loss of millions of dollars. When a person dies without having a valid Will in place, a set of state laws called intestate succession provides that a decedent’s property will pass to his or her direct surviving heirs. In Aretha Franklin’s case, she is survived by her four sons. Accordingly, her estate will likely be equally divided among her sons. However, this distribution scheme may not have been what Ms. Franklin had in mind. For example, at the time of her death, Ms. Franklin was in a long-term relationship; however, she and her partner never married. Under current intestacy laws, in order to inherit from your partner’s estate you must have been legally married at the time of death. Accordingly, it is unlikely that Ms. Franklin’s life partner will receive a share in her estate. Additionally, it is reported that one of her sons may have special needs. If an individual with special needs inherits directly, he or she could lose any aid currently being received and they may be otherwise at risk of harm. The musical icon also had a host of grandkids. By failing to execute a Will or Trust, no provisions can be made for their college or healthcare through her estate.

Without proper planning, children with special needs may be harmed. Estate planning includes planning for those with special needs. Very often, individuals with special needs receive state aid, such as Medicaid, Social Security and even special housing. There are estate planning strategies, i.e., Special Needs Trust planning, one can use to create a legacy for their loved ones that will not jeopardize that individual’s eligibility for extra help. In addition, a Special Needs Trust is administered by a Trustee, whose responsibility it is to secure the assets in the Trust. At times, when people with special needs inherit directly (not through a Trust), they may be at risk of being harmed by those around them.

The lack of proper planning means the estate misses out on efficient tax saving deductions! Aretha Franklin, an American icon, was well known for using her platform and deep pockets to support racial and woman’s equality initiatives. Given that Ms. Franklin neglected to sign a Will or Trust, her estate will not include any legacy distributions to advance any of these charitable causes. The lack of proper estate planning also means that her estate will miss out on crucial tax savings deductions, such as an estate tax deduction for charitable gifts. Presently, the federal estate tax rate stands at 40% for estates that exceed $11.2 million dollars. Luckily, for most Americans estate taxes will not be an issue; however, this is not the case for Aretha Franklin. It is unlikely that the legendary crooner would have wanted nearly half of her estate to be paid over to the tax authorities versus creating a legacy through charitable trusts to support her interests.

The failure to plan could mean the estate’s loss of the superstars’ music rights and digital assets Highly specialized estate planning is required in order to protect the rights of an estate to a deceased artist’s royalties, musical works, and extremely valuable digital content. These rights are all governed by a mix of contract, copyright, and intellectual property law. Ms. Franklin’s failure to execute a Will means that her estate can possibly lose the ability to (1) market her musical works, (2) continue receiving income from the music she left behind, and (3) control how her music is used on a public platform.

  Conclusion – everyone, famous or not, should have their end of life and estate planning affairs in order. Ms. Franklin is not alone when it comes to legendary stars dying without a Will. The same thing occurred to Prince, Kurt Cobain, Jimi Hendrix, Bob Marley and a host of others. Given these stars' impressive careers and undeniable access to legal representation, one would think that their end of life affairs would all be in good order, but sadly, this was not the case. Proper estate planning is important for everyone, famous and non-famous alike. Executing your advance directives lets you decide who should be in control of your affairs, how and to whom your assets should be distributed, and what tax saving incentives your estate can benefit from. For more information, please call our office at (916) 729-1307 or visit our website: www.SacramentoEstatePlans.com

Estate Planning, trusts, right of occupancy versus life estate.

http://sacramentoestateplans.com

Right of Occupancy v. Life Estate Many revocable trusts provide that a surviving spouse or another beneficiary has the right to live in a residence rent-free for the remainder of his or her life.  This type of provision is particularly common in a second marriage when the person who created the trust (the Trustmaker) comes into the marriage with a home that is separate property and wants the surviving spouse to be able to live there before the property passes to the Trustmaker's children or other heirs. Sometimes this occurs when one adult child caretaker ha lived with the parent in their final years, and the parent wants to allow the adult child to live in the home for a period of years as a "reward" for faithful care. Right of Occupancy:  The right to live in a home that does not belong to you is typically referred to as a "life estate," or a "right of occupancy."  They are not the same thing. A right of occupancy does not grant the holder any kind of title to the property in question.  During any period of occupancy, the title is held by the trustee of the trust.  The holder has the exclusive right to occupy the property, although usually subject to certain conditions. Unless spelled out in the trust document, there are often disputes between the person occupying the property and the remainder beneficiaries about who is responsible for the expenses regarding the property, such as utilities, property taxes, insurance, maintenance, etc.  The law is unclear about whether someone with a right of occupancy can bring in other residents, like a new spouse or life partner.  Also unclear is whether the Trustee can sell the underlying property and terminate the right to occupancy. Life Estate:  A life estate is transferred through a recorded deed.  A life estate tenant, by law, is responsible for upkeep and repairs, mortgage payments, taxes, and other annual charges, unless the trust says otherwise. Estate Taxes:  There is also an important tax issue in play.  If the right of occupancy is provided in a marital deduction trust of a high-net-worth Trustmaker, and the surviving spouse doesn't provide a full, unfettered right to occupy the residence for life, the settlor's estate could lose the marital deduction on the residential property and be subject to estate taxes.  An example of this is when the right of occupancy would terminate if the surviving spouse does not live in the home or allows others to do so. Consult with an experienced estate planning attorney about your estate planning wishes.

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Things to Consider When Picking an Executor

Things to Consider When Picking an Executor The role of an executor is to effectuate a deceased person’s wishes as declared in a will after he or she has passed on. The executor’s responsibilities include the distribution of assets, according to the will, the maintenance of assets until the will is settled, and the paying of estate bills and debts. An old joke says that you should choose an enemy to perform the task because it is such a thankless job, even though the executor may take a percentage of the estate’s assets as a fee. The following issues should be considered when choosing an executor for one's estate. Competency: The executor of an estate will be going through financial and legal documents and transferring documents from the testator to the beneficiaries. If there are legal proceedings, the executor must make all necessary court appearances. There is no requirement that a testator has any financial or legal training, but familiarity with these areas does avoid the intimidation felt by lay people, and potentially saves money on professional fees. Trustworthiness: The signature of an executor is equivalent to that of the testator of an estate. The executor has full control over all of an estate’s assets. He or she will be required to go through all of the papers of the deceased to confirm what assets are available to be distributed. The temptation to transfer assets into the executor's own name always exists, particularly when there is a large estate. It is important to choose a person with integrity who will resist this temptation. It makes sense to utilize an individual who is an heir to fill the role to alleviate this concern. Availability: The work of collecting rents, maintaining the property, and paying debts can take more than a few hours a week. Selecting an executor with significant obligations to work or family may cause problems if he or she does not have the time available to devote to the task. If an executor must travel great distances to address issues that arise, there will be more of a time commitment necessary, not to mention greater expenses for the estate. Family dynamics: Selection of the wrong person to act as executor can create resentment and hostility among an estate’s heirs. A testator should be aware of how family members interact with one another and avoid picking someone who may provoke conflict. Even the perception of impropriety can lead to a lawsuit, which will serve to take money out of the estate’s coffers and delay the legitimate distribution of the estate.

www.SacramentoEstatePlans.com 2377 Gold Meadow Way, Suite 100 Gold River, CA 95670 __________________________________________________________________ Sacramento, California, Wills,  Trusts, Attorney Lawyer Law, Law office of Joan Medeiros, probate, elder law, medical planning, medi-cal,asset,protection,planning, Estate Planning, Attorney, Lawyer, Law Firm, Sacramento county Probate, Estate Administration

Things to Consider When Picking an Executor

Things to Consider When Picking an Executor The role of an executor is to effectuate a deceased person’s wishes as declared in a will after he or she has passed on. The executor’s responsibilities include the distribution of assets, according to the will, the maintenance of assets until the will is settled, and the paying of estate bills and debts. An old joke says that you should choose an enemy to perform the task because it is such a thankless job, even though the executor may take a percentage of the estate’s assets as a fee. The following issues should be considered when choosing an executor for one's estate. Competency: The executor of an estate will be going through financial and legal documents and transferring documents from the testator to the beneficiaries. If there are legal proceedings, the executor must make all necessary court appearances. There is no requirement that a testator has any financial or legal training, but familiarity with these areas does avoid the intimidation felt by lay people, and potentially saves money on professional fees. Trustworthiness: The signature of an executor is equivalent to that of the testator of an estate. The executor has full control over all of an estate’s assets. He or she will be required to go through all of the papers of the deceased to confirm what assets are available to be distributed. The temptation to transfer assets into the executor's own name always exists, particularly when there is a large estate. It is important to choose a person with integrity who will resist this temptation. It makes sense to utilize an individual who is an heir to fill the role to alleviate this concern. Availability: The work of collecting rents, maintaining the property, and paying debts can take more than a few hours a week. Selecting an executor with significant obligations to work or family may cause problems if he or she does not have the time available to devote to the task. If an executor must travel great distances to address issues that arise, there will be more of a time commitment necessary, not to mention greater expenses for the estate. Family dynamics: Selection of the wrong person to act as executor can create resentment and hostility among an estate’s heirs. A testator should be aware of how family members interact with one another and avoid picking someone who may provoke conflict. Even the perception of impropriety can lead to a lawsuit, which will serve to take money out of the estate’s coffers and delay the legitimate distribution of the estate.

www.SacramentoEstatePlans.com 2377 Gold Meadow Way, Suite 100 Gold River, CA 95670 __________________________________________________________________ Sacramento, California, Wills,  Trusts, Attorney Lawyer Law, Law office of Joan Medeiros, probate, elder law, medical planning, medi-cal,asset,protection,planning, Estate Planning, Attorney, Lawyer, Law Firm, Sacramento county Probate, Estate Administration

Companies: Implementing preventative legal strategies.

Most people are familiar with the idea of “preventative” legal action. The term refers to anticipating legal issues and conflicts and working to prevent them, rather than solving them or “winning” them once they occur. Companies can benefit from implementing preventative legal strategies as this approach is often less expensive than litigation, mediation, arbitration, and local, state and federal fines.

By working with an attorney early on in the creation of your new business, you can build a sound foundation for your company while likely saving money down the road. The following steps can serve as a great starting point for sound legal planning:

1. Establish a relationship with an attorney who can assist you with the legal issues your new business will face early on in the start-up process. When an attorney is familiar with your firm from the onset, he or she can more effectively anticipate and address legal challenges and provide solutions. Also, many business lawattorneys will allow for a flat-fee relationship that enables you to address legal issues as they arise without incurring any additional expenses.
2. Determine what you want, negotiate it and memorialize it in proper legal documents. Businesses encounter disagreements with vendors, landlords, employees, partners and others. To minimize the number of conflicts, it’s important to establish written contracts for all important agreements, arrangements and accommodations.
   
   A business law attorney can help you identify all key concerns regarding employee compensation and benefits, property usage and maintenance, relationships with suppliers and responsibility and profit sharing with partners. An attorney can ensure that, when a question, disagreement or conflict arises, your interests are written down, clearly stated and legally protected by a mutual agreement with the party in question.
3. There are many exciting steps in starting a new business venture; selecting the type of legal entity the business will be is rarely one of them. Yet, it’s important to select a business structure early. Corporations offer numerous advantages but also require officers, boards, articles of incorporation and other formalities. Partnerships and sole proprietorships are simpler than most other business structures but open owners to potentially costly liability. Limited liability companies offer a middle ground for many, providing a liability shield and comparative simplicity. A business attorney can help you determine which business structure will work best for you by taking into account tax planning, location and other key considerations.

Even with preventative legal planning, a lawsuit may arise. If it does, it’s important to approach it from a business, not a personal standpoint. This strategy can help you make decisions that are best for your company’s future, keep your focus on the day-to-day needs of your business and avoid unnecessarily disclosing information. For legal advice and hands-on assistance during the formation and continued operation of your business, contact a qualified business attorney.

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