Estate Planning Myths That Can Affect The Financial Future Of You & Your Family

St. Helena, Sonoma, and Calistoga estate planning lawyer

Estate planning is an area of widespread confusion that often leads to mistakes that can cost you a lot of time and money and cause a lot of stress to your family especially when you are incapacitated, or when you pass away. Here are the most common estate planning myths you should be aware of:

  1.    The State Gets Your Assets If You Don’t Have a Will

If you pass away without a will, your state will apply the “laws of intestacy” to determine who gets what. You can check various online resources to find out potential outcomes. If you don’t like the court making the decision for you, you should get a will drafted. If you are okay with leaving the decision to probate but have young children, get a will drafted since it allows you to determine who will be the guardian of your children should the need ever arise.

  1.    You Never have to Worry About Probate If You Have a Will

A will guides the court with regards to your wishes, but it does not avoid the probate process altogether. A will is a document that is open to the public, which means that it can be contested easily in court, costing the parties involved money and time. If you have real estate in multiple states, the different properties may have to go through probate separately.

  1.    A Lawyer is Needed to Draft the Documents

You can draft most of the document yourself at little to no cost if your financial situation and family setting are relatively simple. You can use various online resources to prepare the appropriate documentation to help smooth out the process of division of your estate among your beneficiaries once you pass away.

  1.    A Lawyer is Not Necessary at All

The documents you can draft yourself using various free online resources may cover most situations, but there could be a complicated issue that warrants professional legal advice that you might not even be aware of. It is why you should have a qualified real estate planning lawyer check the documents to ensure that everything is in perfect order.

  1.    You Can Draft a Trust to Avoid Probate

One area where you are likely to need a lawyer is drafting the trust. One of the most common reasons why people draft trust is to avoid probate. However, you can use other easier and cheaper methods that could be sufficient for your needs. Jointly owned property, annuities, life insurance plans, and anything in a retirement plan avoids probate if at least one of the beneficiaries is still alive.

  1.    A Trust Avoids Estate Tax

Trusts generally don’t help you avoid taxes in and of themselves. However, if you are concerned about having a taxable estate, you should seek qualified legal counsel since some trusts can be used as part of your strategy for reducing or even eliminating estate tax liability.

  1.    Estate Planning Is for the Wealthy

Estate planning is about ensuring that your finances are properly handled if you become incapacitated, that decisions affecting your health will be properly made, and your beneficiaries are well taken care of when you pass away. Estate planning is for anyone that may pass away or fall seriously ill, which means it is for everybody and not just the wealthy.

The Bottom Line

The misconceptions about planning are quite many, and it is quite understandable since it is always changing and can be quite complicated. Knowing the truth about the myths will help you avoid most of the mistakes.

Schedule Your Consultation with Our Experienced California Estate Planning Attorney

Celaya Law is an estate planning law firm in Napa, California. Attorney Anthony Celaya helps families in Napa, Sonoma, St. Helena, Calistoga, and the surrounding areas with setting up wills and living trusts, special needs planning, asset protection, probate administration, business law, and retirement planning.

Schedule a planning session with our experienced Napa attorney today to learn how we can help you and your family: (707) 492-3112.

How To Reduce Your Estate Taxes With Charitable Donations

St. Helena, Sonoma, and Calistoga estate planning lawyer

If you have an interest in leaving behind a legacy that is positive and to eliminate or drastically reduce the taxes that your estate will owe once you have passed away, the act of making contributions to charitable causes or organizations is the ideal way in which to do this.

Estate planning is a highly valuable portion of your financial plan. For this reason, avoid neglecting this part of managing finances, and you should already have an idea of what you would like to leave as well as to whom. Carefully planned estate plans will prevent any misunderstandings between your chosen heirs as well as reduce the estate taxes which may come with it.

Here are a few important tips to assist you in reducing your estate taxes using charitable donations:

  1. Give While You Are Still Alive

While the act of leaving donations behind once you have passed is admirable, you can also maximize your tax benefits by giving what you can each year. Income tax-breaks that you receive over lifetime donations can assist you in giving more in regards to charitable donations once you have passed.

  1. Create A Charitable Trust

The Charitable Lead Trust is forced to donate a specific amount to charities or a charity each year over a particular period, while the rest will go to the heirs you have chosen. You can set up these types of trust in such a way that will make sure there is no gift or estate taxes on the left over funds that your beneficiaries will receive. The Charitable Remainder Trust allows for a way to place particular assets into a trust followed by selling these assets to defer taxes that would usually impact them. The charity or charities will receive a set percentage on the overall value in regards to the Charitable Remainder Trust.

  1. Charitable Gifts

Any of the assets that you decide to gift to a cause or charity is excluded in regards to your taxable-estate. Provided the recipient happens to be a qualified 501(c) 3 organization, there will be no payment of estate taxes on these donations. There are no limits in place on the amounts you would like to donate. If you have decided to leave the entire estate to a charity, you will not be liable for any estate taxes.

  1.  Annual Lifetime Gifts 

You are permitted to gift set-out amounts in regards to your assets to one other person every year without having to incur estate or gift taxes. By taking advantage of these provisions, you can significantly decrease the overall taxable amount of your estate over time. This is also a way to offer financial assistance to any of your “current” beneficiaries. Relatives and close friends are excellent candidates for this form of gifting method.

  1. Q-TIP Trusts

This trust type provides a way to bequest an income stream from a trust onto your spouse once you have passed, followed by having assets in this trust passed onto what is known as an irrevocable beneficiary that can be charitable cause or organization. This is the ideal way to still provide for a spouse as well as still make sure the assets within the trust will go to the beneficiary that you have chosen.

Schedule Your Consultation with Our Experienced California Estate Planning Attorney

Celaya Law is an estate planning law firm in Napa, California. Attorney Anthony Celaya helps families in Napa, Sonoma, St. Helena, Calistoga, and the surrounding areas with setting up wills and living trusts, special needs planning, asset protection, probate administration, business law, and retirement planning.

Schedule a planning session with our experienced Napa attorney today to learn how we can help you and your family: (707) 492-3112.

Minimizing Your Estate Tax Using An AB Trust

If one of the spouses dies and passes on his or her assets in the last will, the estate will be heavily taxed before the beneficiaries ever receive it. Spouses looking to avoid this tax can set up an AB trust where they can each leave their assets to an irrevocable trust.

What is an AB Trust?

An AB Trust is a trust that married couples create to maximize federal tax exemptions. A common misconception is that AB trusts are only beneficial to those with large estates. However, the truth is that an AB trust benefits anybody that may owe estate tax.

How Does the AB Trust Work?

If one spouse dies, the beneficiaries named in that trust receive his or her assets. However, the irrevocable trust is used to benefit the surviving spouse that technically doesn’t own the property. One critical condition is that the surviving spouse can use the assets and he/she may spend principal in some instances.

If the surviving spouse dies, all the property benefits and rights of the irrevocable trust are passed on to any surviving beneficiaries of the trust. Since the surviving spouse is not the owner of the property, it does not attract estate tax. Using this approach to set up the AB trust keeps the taxable portion of the estate of the surviving spouse half of what it would be without it.

The Rights Of the Surviving Spouse Over the Assets

The benefits and rights of the surviving spouse include receiving all income from the trust including:

  • Use of the property
  • Interest
  • Spending to benefit his/her health, education, standard of living, and support and maintenance

The surviving spouse enjoys the rights until his/her death when all the property is distributed to the beneficiaries of the original trust.

The Drawbacks of the AB Trust

The AB trust is an irrevocable trust, which means that no changes can be made to the trust once one of the spouses dies. This has the potential to create friction between the beneficiaries of the trust and the surviving spouse. The rights of the surviving spouse to use the property will be limited.

It can be expensive to settle and distribute property in an AB trust and requires the services of an accountant and lawyer. Tax laws are constantly changing and hiring a professional is important to keep current on the changes and what they mean for the trust.

AB trusts require a lot of bookkeeping and paperwork. The surviving spouse needs a tax ID number for the trust and is required to file annual income tax returns on it. He/she is also required to keep records of the AB trust property.

The Bottom Line: Is the AB Trust the Right Option for You?

If you and your spouse are both over the age of 60 and don’t have children from previous marriages, the AB trust is ideal for you. If there are children from previous marriages, conflicts often ensue between the surviving spouse and the children of the deceased spouse regarding sharing of assets.

If you have more questions regarding AB trusts or think that it is right for you, you need to contact an estate planning attorney that will advise you based on your specific needs and circumstances.

Schedule Your Consultation with Our Experienced California Estate Planning Attorney

Celaya Law is an estate planning law firm in Napa, California. Attorney Anthony Celaya helps families in Napa, Sonoma, St. Helena, Calistoga, and the surrounding areas with setting up wills and living trusts, special needs planning, asset protection, probate administration, business law, and retirement planning.

Schedule a planning session with our experienced Napa attorney today to learn how we can help you and your family: (707) 492-3112.

Finding The Right Elder Law Attorney For Your Case

While it is a touchy subject, dealing with the legal matters of aging loved ones is extremely important. Far too often people take on burdens that they shouldn’t have to and spend the final years with their relatives feeling their relationships crack and falter. One of the ways to prevent this is hiring an experienced elder law attorney who will go to bat for both the senior and family members, ensuring that everyone is protected and given the dignity that they deserve.

Understanding What An Elder Law Attorney Can Help You With

There are a large number of different areas where an elder law attorney may be of use. The most common of these involve guardianship of the elder, planning their estate, managing their finances, ensuring that their healthcare is going to be in line with their needs and wants, and helping create a plan for the rest of the elderly individual’s life. There are also other areas that they can help in, such as disputed over property, motions to protect the best interest of the senior, and ensuring that the rights of the elderly individual are not being encroached upon by their family.

Each of these is an area that can lead to a significant amount of tension between family members, but that can also impact the mental and physical health of people on both sides of any given argument. This is why contacting an attorney who navigates these difficult situations on a daily basis, rather than a family law attorney, is a good idea.

Making Sure That The Elder Law Attorney Fits With Your Needs

Not all attorneys will accept or deal with all cases. In fact, you do not want an attorney who will take on any case, just because it happens to be in the same field that they usually practice within. You will always want to make sure that you are choosing an attorney who specializes in the case that you will be pursuing.

If you are struggling with medical issues, you will want to get an attorney who is comfortable navigating systems such as Medicare and Medicaid, while also being comfortable working with hospital administrators. If your issue is relating to guardianship, you will want an attorney who is comfortable filing motions to appoint guardians and who can access unbiased experts with ease.

Also, you will want to look for a lawyer who understands you and your family’s needs. If you feel like you are not being listened to, or that the attorney is too busy to give your loved one the attention they deserve, you are well within your rights to seek different counsel.

Ensuring Your Choice Has Enough Experience

Once you have determined what you need from an elder law attorney, you will want to make sure you hire an experienced lawyer. One of the best ways to do this is looking into a law directory and finding a lawyer who retains membership in the list. Lawyers who have proven themselves to be incompetent will not be in these directories, making it easier for you to narrow down your options.

Schedule Your Consultation with Our Experienced California Estate Planning Attorney

Celaya Law is an estate planning law firm in Napa, California. Attorney Anthony Celaya helps families in Napa, Sonoma, St. Helena, Calistoga, and the surrounding areas with setting up wills and living trusts, special needs planning, asset protection, probate administration, business law, and retirement planning.

 

Schedule a planning session with our experienced Napa attorney today to learn how we can help you and your family: (707) 492-3112.

 

What Are the Top Three Benefits of Having a Living Trust?

St. Helena, Sonoma, and Calistoga estate planning lawyer

Estate planning is an essential aspect of managing your financial portfolio, and a living trust might be a preferable way to disperse some or all of your assets when compared to a will. If you are not familiar with living trusts, these are the top three benefits of putting your assets into one:

Avoid Probate with a Living Trust

No matter how meticulously you have planned your will, it is still subject to probate. This can consume time and keep your heirs from obtaining the properties you have left to them. On top of the grief associated with your passing, they might have to wait months before they can access the funds you intended for them to have. In some cases, this can cause undue financial hardship for survivors.

Increased Privacy with a Living Trust

While wills are made public, living trusts are not. In addition to avoiding probate, you can keep records of your assets out of the public eye with a living trust. Your estate is handled privately, as you laid out in the trust, with the appointed trustee taking over immediately.

Save Yourself Cash with a Living Trust

Another benefit associated with a living trust is that you can save money in most cases. While you will need to make sure that you are in the right financial situation for this, most people with estate planning needs will find that putting at least a portion of their assets into a living trust will help to minimize expenses related to taxes, and legal planning and execution.

In some cases, it is best to use a combination of the two types of legal documentation. You might put many of your assets into the living trust but draft a will that will cover anything not included in the living trust. This will protect any assets that you purchase after establishing the living trust as well as those that were inadvertently overlooked during the initial process. For instance, a life insurance policy through an old employer that you don’t even know is still in effect.

You can draft a living trust on your own, or you can use the services of a professional attorney who specializes in estate planning. While you can save cash by filling out the forms and filing them yourself, you will miss out on valuable insight these professionals bring to the table.

For instance, do you know how to establish your estate, so your assets don’t end up paying for your ongoing medical needs as you age? An attorney can help you to arrange your estate documents so that you adhere to the law while taking advantage of planning tools like living trusts for protecting your assets and your family.

While a will is a useful document to have, you might discover that a living trust is the best choice for protecting your assets. By choosing your trustee with care and obtaining legal aid with the documents, you can rest assured that you have taken the necessary steps to your financial health, and that of your family.

Schedule Your Consultation with Our Experienced California Estate Planning Attorney

Celaya Law is an estate planning law firm in Napa, California. Attorney Anthony Celaya helps families in Napa, Sonoma, St. Helena, Calistoga, and the surrounding areas with setting up wills and living trusts, special needs planning, asset protection, probate administration, business law, and retirement planning.

Schedule a planning session with our experienced Napa attorney today to learn how we can help you and your family: (707) 492-3112.

Tips For Hiring An Estate Planning Attorney

St. Helena, Sonoma, and Calistoga estate planning lawyer

Most people need to hire the services of an attorney only a few times in their lifetime. An attorney can be an excellent resource, especially for estate planning. However, most people do not do their estate planning until it is too late. Nevertheless, it is important to plan your estate wisely to make sure that the next generation inherits the assets you have worked so hard to earn, without any unnecessary problems. A smart, experienced and reliable estate planning attorney can help you do the same.

Keep in mind that there is a lot of difference in the quality of service offered by various lawyers, and you need to do your homework to find the right estate planning attorney. Follow the tips mentioned below to choose the right estate planning attorney for your needs.

Experience

While qualification is necessary, experience is much more important when it comes to financial planning dealing with estates and trusts. You do not want to hire someone who does not have the necessary experience in creating trusts and estates to pass down the assets without any issues. It is recommended to hire an attorney who has at least three years of expertise in this field. Needless to say, you want a lawyer whose primary focus of practice is estate planning.

Document Review

Make sure the attorney sends the documents to you for review before everything is finalized. This will allow you to review the documents and ensure that everything is as you want. While your attorney may be highly experienced, there can be mistakes due to miscommunication. Therefore, the review process is essential to make sure everything is setup as per your wishes. As far as the time taken for estate planning is concerned, there should not be any rush in most cases. Instead, your focus should be on planning your estate to pass on the assets to your intended beneficiaries without going through the probate process.

Setting up a Living Trust

Setting up a revocable living trust helps with effective estate planning, but all attorneys do not help their clients fund a trust. You should ask this question to the attorney before hiring them.

Maintenance Program

Many people ignore the maintenance aspect of their estate planning. Keep in mind that the laws keep changing and a structure that was tax efficient a few years earlier may not be the most effective option available currently. Therefore, it is important to review the setup once or twice a year. Good attorneys will offer to do a review once or twice a year for a small fee to ensure that everything is as according to plan.

Pricing

As far as pricing is concerned, it is recommended to hire an attorney who works at a fixed price. You do not want someone who charges by the hour as you will not be very comfortable discussing important things with the attorney. Therefore, make sure that you ask about the pricing before you hire them.

Availability

You should make sure that either the attorney or someone in their office is always available in case you have a query regarding your estate. Also, the attorney should offer to help you in case there are any unexpected issues at a later date. You want to work with an attorney who isn’t just about business. You may not feel comfortable dealing with such a person, and it is essential to find an attorney you are comfortable with.

Avoiding Probate Process

If the attorney tells you to set up a will, there is a chance that the attorney is more concerned about his income than efficient estate planning. Creating a living trust is a much more efficient way to pass on your assets without the probate process as it is extremely time-consuming and expensive. The answer to this question tells you a lot about the intentions of your attorney.

Conclusion

Estate planning is not easy, but an experienced and reliable attorney can make things easy for you by helping your design an efficient process. The tips as mentioned above will help you decide whether a particular attorney is the right choice for you.

Schedule Your Consultation with Our Experienced California Estate Planning Attorney

Celaya Law is an estate planning law firm in Napa, California. Attorney Anthony Celaya helps families in Napa, Sonoma, St. Helena, Calistoga, and the surrounding areas with setting up wills and living trusts, special needs planning, asset protection, probate administration, business law, and retirement planning.

Schedule a planning session with our experienced Napa attorney today to learn how we can help you and your family: (707) 492-3112.

 

Estate Planning Tips for Single and Childless Individuals

St. Helena, Sonoma, and Calistoga estate planning lawyer

While most people don’t give much thought to estate planning, particularly if they are single and have no children, that is a big mistake. Whether you haven’t done so because you don’t want to consider your passing or just haven’t gotten around to it, it is important that you take the time to handle this legal responsibility.

 

The courts will give priority to spouses and kids when a person does not have a will or documentation regarding who should make medical decisions when they can’t. However, if you don’t have these relatives or paperwork stating who should be in charge, it becomes up to the court to decide. Choosing a local person you can trust to make medical choices if you are incapacitated is one of the important points your estate planning should cover.

Just as you need to address your medical concerns, so do your finances. While there is a systematic way the court determines who should inherit your money, it consumes time and money. The arguments can go on for years, and it won’t always go upon your wishes.

With the number of singles over the age of 25 steadily on the rise for the past fifty years, this is a concern that will continue to grow. As more folks opt for non-traditional lifestyles, the single and childless households are likely to continue increasing in the future.

If you have assets, working on an estate plan will help to ensure that the money goes where you want. For those with nieces and nephews, a college fund or other financial bonus can be a great way to keep some or all of the money in the family. Perhaps you have a sibling who could benefit from the cash should you pass away. One wealthy woman even left her dog a fortune to ensure the pooch was well cared for once she couldn’t do it herself!

Singles who don’t have any family or don’t like the family they do have can make other arrangements for their estates. One popular choice is the college or university the departed attended. Even if you don’t have the type of cash to back a new building on campus, your contribution will be acknowledged and appreciated by the school.

There are also plenty of charities that would be happy to receive extra funds for their projects. Animal shelters across the country struggle with keeping up with the unwanted dogs and cats in the nation while school programs for the arts are underfunded in many cities. Women’s shelters and donations for first responders are other ways you might decide to direct your fortune once you are gone.

It is important that you discuss your estate plans with an attorney and review your documents at least every five years or after a major life change, such as marriage. Doing so will help you rest soundly at night knowing that your wishes will be carried out for your medical care and your money.

Schedule Your Consultation with Our Experienced Napa Valley Estate Planning Attorney

Celaya Law is an estate planning law firm in Napa, California. Attorney Anthony Celaya helps families in Napa, Sonoma, St. Helena, Calistoga, and the surrounding areas with setting up wills and living trusts, special needs planning, asset protection, probate administration, business law, and retirement planning.

Schedule a planning session with our experienced Napa attorney today to learn how we can help you and your family: (707) 492-3112.

 

The Steps You Need to Take to Ensure Your Estate Plan Is Executed as You Wish

St. Helena, Sonoma, and Calistoga estate planning lawyer

Whether you have minimal investments and an apparent heir or have accumulated a significant amount of wealth that you would like to distribute to your family or others, it is vital that you establish an estate plan. While singles and those without a lot of assets might think this unnecessary, doing so is an important part of protecting yourself, your assets and those you care about.

1. Decide on Who Inherits Your Assets After You Pass Away

The first thing you must do is decide how to distribute your assets. If you don’t have any family members, you can donate your assets among academic and charitable institutions. Make sure you are thorough in going through your finances as you work on this step.

2. Draft a Will or a Living Trust With the Help of an Attorney

Next, you need to draft the will legally and make sure you have followed the guidelines of your state. Additional protection in the form of a self-proving affidavit can further your proof if allowed in your area.

One of the things that you will have to be sure of is that you sign the will in front of two legal witnesses who can sign the document as well. If you don’t have at least this many signatures, it is possible for your will to be contested. Depending on the circumstances, your wishes could even be overturned because you lacked the appropriate validation for your will.

Whether your documentation involves a living trust or will doesn’t change the fact that your wishes must be found when necessary. You can store your will and other legal documentation in your home safe or have an attorney keep it for you. A bank safety deposit box is another option for helping ensure the security of these papers. No matter what you decide, make sure that your family and other appropriate parties know about the will and how to find it.

If you opt for a living trust instead of a will, you will be placing your assets into it and control them while you are still alive. Then, a person you have chosen will take over and handle the funds according to your wishes. When you do this, you will need to place all of the investments involved in the trust. The ownership of the assets will then be transferred from you to the trust.

3. Make Sure That Your Estate Planning Documents are Complete and Well-Organized

There are various legal documents involved with managing your trust. For instance, you should have a pour-over will that will ensure any assets you forget to transfer will be after you pass away. Make sure that you have everything well organized and documented as you go through your planning. Whether you opt for a trust or will, taking care of the matter now will ensure your finances are distributed the way you want.

4. Update and Review Your Estate Plan Regularly

Make sure that you add new properties to the trust and review your documentation regularly in either instance, so you never have to worry about your assets being eaten up in court fees. Enjoy the peace of mind that comes with handling this important legal matter.

Schedule Your Consultation with Our Experienced Napa Valley Estate Planning Attorney

Celaya Law is an estate planning law firm in Napa, California. Attorney Anthony Celaya helps families in Napa, Sonoma, St. Helena, Calistoga, and the surrounding areas with setting up wills and living trusts, special needs planning, asset protection, probate administration, business law, and retirement planning.

Schedule a planning session with our experienced Napa attorney today to learn how we can help you and your family: (707) 492-3112.

 

Is Your Trust Funded?

Several years ago, while administering a deceased client’s trust, I was closing out what I thought was her last account. As the financial representative and I concluded our telephone call, the conversation went something like this:

Rep: “Now wait, what about this account?”

Me: “Uh, what account?”

Rep: “I see here that she has another investment account with us.”

Me: “No, there are no more accounts. It’s probably one we’ve already dealt with.

Rep: “Are you sure?

Me: “Pretty sure . . . [awkward pause] . . . Alright, alright, so what account is this?

Imagine my surprise when I discovered it was an account that the family and I knew nothing about, and it was worth close to $200,000.00!

My delight soon turned to dismay, however, when I discovered that the account was never titled in the name of the trust, which meant that we needed to open probate. I thought we were finishing up the administration, but in fact we were just beginning. A year later, the money (minus thousands of dollars in probate fees), was finally disbursed to the children.

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Property or People?

The first client I ever met with as a licensed attorney forever changed the way I thought about estate planning.

The young lady had walked into my office with bowed head, shuffling feet, and closed lip. I thought she seemed a bit morose for one who was simply organizing her estate. I had purposely chosen not to practice in areas of law that were full of drama—criminal, bankruptcy, torts, family law, and others. What, in the name of estate planning, could possibly have caused this young lady such an apparent burden?

“My brother just jumped off the Golden Gate Bridge,” she finally eked out. “He committed suicide . . .”

Needless to say, nothing in law school prepared me for that. In short order, I experienced a monumental paradigm change about the real meaning of estate planning.

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