A pay on death (POD) account allows a person to pass money to family or loved ones without the necessity of probate when he or she dies. The issue with pay on death accounts is that there is no asset protection for the beneficiary. Meaning, if after the death of the owner, a beneficiary files for bankruptcy or has creditors after him/her, the beneficiary runs the risk of losing their POD inheritance because there is no protection. After the account is transferred to a beneficiary, the POD account is owned by the beneficiary and there is no legal protection. Thus, a creditor can garnish the account.
A living trust is a far mechanism to protect beneficiaries from creditors. A beneficiary should inherit an account through a trust, so that there is asset protection and his/her inheritance cannot be accessed by any potential creditor. Contact Celaya Law so our experienced attorneys can evaluate your assets and income to determine what is at risk of collection from a creditor. We can help develop a plan to protect your beneficiaries from losing their inheritance from potential creditors.
The timeframe after a family member dies, usually is confusing and traumatic with family members and friends having to act quickly in planning a funeral, paying bills, taking care of pets, etc. As the family members navigate through these tasks, they often realize they need access to important documents, like an estate plan that had been (hopefully) prepared by decedent before he/she died and often times these documents are located in a safe deposit box. The question arises, how does a person gain access to a safe deposit box after the person who owned it has died?
California Probate Code 331 controls access to a safe deposit box after the death of decedent. If the decedent owned the safe deposit box with a spouse or another person, then that person will have access to it. If the decedent was the only person on title to the box, then any person who has a key to the safe deposit box can access it as long as they provide the financial institution with the following:
- Proof of decedent’s death
- Proof of the identity of the person seeking access
A personal representative or successor trustee of the decedent’s estate shall also have access to the safe deposit box as long as they show the financial institution a copy of the estate planning document that reflects they are the executor/successor trustee of the estate.
Depending on the circumstances, a safe deposit box may or may not be the best place to store your originals of your estate planning documents, especially on the limitations that California places on access to safe deposit boxes after death.
There are many myths about living trusts that often float around; however, don’t be fooled! Here are the three common myths that we, as estate planning attorneys often hear:
“A Living Trust only benefits the beneficiaries named in the trust, and not the grantor”
A lot of times a living trust is created, to ensure that property goes to a person’s heirs after their death; however, a living trust also ensures that a person’s affairs are in order should he/she become incapacitated. With a living trust, a loved one can step in and handle your affairs very easily should you become incapacitated.
“Living Trusts are only for the wealthy”
This is one of the most common myths that people believe. Some people think you have to have a certain size estate in order to have a trust, others do not think they need a trust because they do not have “a ton of assets”. This is untrue! Many people with average incomes set up a trust to protect their assets for their loved ones. A lot of times a person’s largest assets is their home.
“A Living Trust Will Avoid Probate Entirely”
In order for a trust to work properly, the living trust needs to be “funded”, meaning the assets need to be re-titled in the name of the trust. If there are assets that are outside the trust, those will go through the grueling process of probate. This is one of the main reasons you want to hire an experienced estate planning attorney to assist you in setting up your living trust.
The topic of estate planning can be overwhelming and daunting; however, below are five important topics to help you begin the discussion with your family.
Execute a Living Trust:
In order to pass your assets to your loved ones and avoid probate after your death, a living trust needs to be set-up and executed. A living trust will lay out who is in charge of administering your estate (your successor trustee) and where your assets go after your death.
Take an Inventory of your Assets:
In order for a living trust to properly work and avoid probate, your assets need to be re-titled in the name of the trust. Taking an inventory of your assets from time to time will allow you to make sure that there are no assets that are accidentally left out of trust and keeps your affairs in order.
Execute a Power of Attorney:
While a trust will govern where your property goes after you pass away, a Power of Attorney is extremely important to ensure that in the event you lose capacity, your agent will step in and handle your financial obligations.
Execute an Advance Healthcare Directive:
In the event that you lose capacity, and you are not able to make medical decisions for yourself, your agent will step in and make those medical decisions for you. It is also important to discuss your health care decisions with your agent so that your agent understands your wishes in various situations.
Discuss the disposition of your final remains:
Though this is a difficult topic, it is important to note family and religious traditions for the disposition of your final remains. Do you want to be buried or cremated? Perhaps you want to donate your organs to science. You want to discuss this topic with your loved ones, so that your final wishes are carried out.
Though the above topics are difficult to discuss with your loved ones, when done over a period of time, it can be a straightforward and non-stressful process.
Did you miss the February 16, 2021 deadline to transfer a property to your children before Proposition 19 went into effect? Don’t fret! There are various Prop 19 strategies. One of the strategies is with a Family Property LLC, which still may help your children avoid reassessment of property (under Prop 19) when you pass away.
Because there was a small window to make the necessary changes/transfers of property to avoid reassessment prior to the deadline of February 16, 2021, more than likely there were errors that occurred. Creating a Family Property LLC can fix any errors that we made. Contact Celaya Law today to learn how a Family Property LLC can help you and your family avoid reassessment of property once you pass away.
Did you know that there is a way to protect your assets should you need skilled nursing/long-term care? There is no need to “spend down” your estate until you are within the $2,000 asset range. With the proper planning of an estate planning attorney, who specializes in Medi-Cal planning, you can protect your assets and still have the state pay for your care, with a small share of cost. Most people don’t know that certain property is classified as exempt property, which will not count when determining eligibility while non-exempt or countable assets will effect eligibility. There are also various asset transfer strategies that are crucial in getting qualified for Medi-Cal. Contact Celaya Law to learn more about how you can protect your assets and still qualify for Medi-Cal.
Proposition 19 amends the current legislation adopted in Propositions 13 and 58. It allows qualifying owners (over 55 years of age, physically disabled or natural disaster victims) to move into a house of lesser value up to three times in the State and to carry their lower property tax assessments. This is great news for homeowners; however, you should be aware; Proposition 19 also amends the law on inheriting property. Under proposition 19, all real estate will be reassessed at death, with the exception of a primary residence worth less than $1 million that a child actually moves into. When you have the right estate lawyer they can help you understand the differences and what you should be planning for.
Before Proposition 19 goes into effect on February 16, 2021, there are ways that a property owner can leave their primary residence and up to $1 million in assessed value of other real estate to their children and the assessed value would transfer with the property. Contact Celaya Law to discuss the various ways to get around Proposition 19 through irrevocable trust planning. We can walk you through the best way to pass on your property tax basis to your children without having to gift the property to your children while you are living.
Your family and your heirs may stand to lose millions on property taxes if the correct planning is not done prior to February 16, 2021. Are you willing to take the risk? Contact our Estate lawyers at Celaya Law today to be sure you are set for the future.
Many of us are looking forward to turning the page on 2020. Though it may be easy to focus on the low points of 2020, the low points hopefully come with a silver lining: a renewed focus on what is really important to us.
If there ever was a time to focus on New Year’s resolutions relating to your family and health, perhaps it is now. There is not a better time than now to focus on estate planning and getting your plan in place or have it reviewed if it has been awhile.
Some elements for you and your family to consider:
- Do I have the necessary legal documents in place that express my wishes and allow my agents to act on my behalf for financial and healthcare decisions in the event of my incapacity?
- Is my estate protected from probate when I pass away?
- Are there any recent significant tax law changes that affect my current estate plan?
Taking action in creating or updating your estate plan, will allow you to take care of yourself and those you care about.
Contact Celaya Law to set up a free consultation to discuss your estate planning needs today!
After a loved one passes away, one of the biggest obstacles families face is passing wealth onto the next generation. Unfortunately, family dynamics can spur conflict and infighting among children and other family members. No matter how well you work on your estate planning your family can still make things difficult.
One of the hardest parts of estate planning is navigating family dynamics. When there are multiple marriages and blended families involved, it often presents emotional hurdles to putting an estate plan in place. A lot of times, these types of issues arise from the miscommunication of parents to their children. Having these types of conversations with children, while parents are still alive, helps alleviate the stress and family infighting.
When someone passes away, they may leave their estate to family; however, sometimes sentimental items are left to be divided amongst family members which is where conflicts can arise. When immediate heirs (typically siblings) get together to discuss how inherited assets should be divided up, emotions run high and the process can fall apart. It helps to have a third party assist with the family dynamics so that everyone can come to an agreement.
Having an open dialogue when it comes to dividing assets is important and a major way to avoid conflict. More importantly, estate planning where you create a plan that is specific to your wishes, will minimize the chance of conflict and infighting amongst heirs.
With all the extracurricular activities that we are partaking in during this pandemic: bike riding, quilting, bread baking, and reading, there is one more that you should consider. Right now add setting up your living will and trust has been added to the list of items that have become more popular during the pandemic.
During these times of unknowing we find that it is better to plan for all scenarios so you don’t leave your family to plan after something happens. The pandemic has been a wakeup call for people to get their affairs in order and it is not necessarily the elderly population we are talking about. There are people of all ages from various areas of the workforce that are worried that they are at risk of contracting COVID-19, which has created a sense of urgency.
Celaya Law has had to think outside the box in terms of getting documents executed and notarized. Safe signings have been conducted anywhere from online to outside on front porches or backyards, using masks, gloves, and sanitizing all pens and tools involved. We know that planning your living will and trust can be stressful and the fear of COVID-19 on top of that does not help. Rest assured that we are talking all precautions necessary for all of our staff and clients during these times to help relieve some of the stress.
Don’t let the pandemic deter you or your loved ones from setting up their living trust. With the flexibility of virtual meetings and drive-by signings, there is no excuse! Contact Celaya Law Today at 707-492-3312 or on our website to start our discussion.