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Implications of Proposition 19 and Property Taxes

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:

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.

Death or incapacity can creep up on anyone. If you’re not prepared, your family could bear a heavier burden when handling your estate or financial affairs. Here are five tips to help everyone lighten the load.

Create an Estate Plan

One of the most important things you can do to get your affairs in order is to either make an estate plan or update your current estate plan. This way, you will have the proper protections and documents in case you become incapacitated such as a Power of Attorney and Advance Healthcare Directive, or if you should pass away such as a Revocable Living Trust.

Fund your Trust or Designate Beneficiaries

To avoid probate issues, you should properly fund your Revocable Living Trust. In addition, you should check that all your other financial accounts and policies have beneficiaries named on them. Remember, if leave assets to any underage beneficiaries, a guardian must be named as well to be in charge of the accounts and so that is a reason to leave assets to a trust for younger beneficiaries. Failing to take these steps means your accounts will go into your probate estate, and it may be a long process before the estate is settled.

Review Your Accounts

It’s a good idea to review previous actions for titling accounts and naming beneficiaries. 

Protect Your Assets

There are numerous strategies you can use to protect your assets in the event of a lawsuit, creditor situation, divorce, or if you need to enter into a long-term care facility. Annuity planning, irrevocable trusts, and other forms of asset protection planning are available.

Leave Information About Your Documents

If you become incapacitated or pass away, it’s important that your loved ones can find and access your important documents. This will allow them to handle your financial affairs or settle your estate if needed. You may also want to leave a list of all your important passwords and online accounts in case anything needs to be done with them in your absence.

If you would like to get more information about estate planning or if you’d like to discuss your existing estate plan and your current situation, please set up a free initial consultation at Celaya Law.

An advance directive is a legal document that allows you to proactively make certain choices about your medical decision making and end-of-life care prior to a crisis. An advance directive allows you to tell your loved ones and health care professional in writing who you want to make medical decisions on your behalf; who you want to be able to speak to medical professionals on your behalf; and what your end of life wishes are.

An advance directive is important for anyone over the age of 18! Yes, even your college aged children. It is never to early to get your living will and trust together incase anything ever happens.

An advance directive designates a surrogate to make health care decisions on your behalf and also allows the designation of an alternative surrogate if the original surrogate is unwilling, unable, or unavailable to perform their duties. It also outlines your personal choices about end-of-life medical treatment if you are ever in a terminal condition, end stage condition, or persistent vegetative state and are unable to communicate your wishes. An advance directive allows you to put those wishes on paper so your health care surrogate has direction of what you want to happen. It takes the burden off of your health care surrogate to decide on end-of-life decisions – such as do you want artificial nutrition or hydration if you are in a terminal condition, end stage condition, or persistent vegetative state.

Advance directives are important as ever as we navigate through COVID-19 and this pandemic. Checking that your living will and trust is in order every few years helps keep everything up to date if anything were to happen. If you want to start preparing your advance directive, or are interested in more information, please contact Celaya Law.

More than half of Americans over the age of 55 do not have an estate plan in place. Even more troubling, only 18% of people over the age of 55 have all of the recommended legacy documents, including a last will and testament, health care directive, and statutory durable power of attorney. So, what are the most common bad excuses for failing to make an estate plan?

“I do not want to think about death”

No one wants to think about death. It is an uncomfortable subject for almost everyone, but if you fail to plan, your family could suffer major consequences. No one lives forever, but with proper estate planning techniques, you can take care of your loved ones and provide financial and health care decisions if you become incapacitated.

1. Taking care of your loved ones.

If you die without a will or trust in California, California law, and not your wishes, will determine how a court-appointed representative distributes your estate. To avoid this, you can create a revocable trust and transfer your assets to it during your lifetime.

2.  Detail how you want to be taken care of when you can no longer care for yourself.

Estate planning is not just about who gets your assets when you die; it is also about making your wishes known for your care if you are no longer able to care for or make those decisions for yourself. To avoid guardianship in the event you are incapacitated, you need:

These documents will allow you to name someone you trust as an agent for these critical decisions and detail your wishes about end of life decisions.

“I only have one child. There is nothing to fight over”

Avoiding fights over your assets is only one reason to have a plan in place. An estate plan can also provide for a minor child’s physical and financial care, avoid nasty custody battles, and determine how your heirs receive your assets. If both you and your spouse die, who will care for your child? An estate plan can avoid this by appointing a guardian you and your spouse trust in advance.

“My estate is not large enough”

Estate planning is not just about a trust. Estate planning can also provide for minor children, plan for your future medical decisions, and determine how your representative will distribute your assets. Ultimately, estate planning is about ensuring that you do not leave your final affairs to your heirs to untangle. Planning ahead can make a painful, stressful, and costly process much easier for the people who love you.

Contact us today to schedule a consultation with our estate planning attorneys to start the process in planning ahead for your loved ones.

Attorneys these days are connecting with clients via video conference realms like Zoom or Skype in the comfort of their own home. The basic estate planning documents that clients want to discuss are: a trust to name who should inherit their property, a durable power of attorney that assigns an agent to make financial decisions for them if they’re incapacitated; an advanced healthcare directive that allows a specified individual to make health care decisions for them if they can’t do so for themselves; and the HIPAA authorization form to consent for someone else to access medical information from a health care provider. 

At Celaya Law we are conducting meetings via Zoom and when it comes times to signing the estate planning documents, we are able to do so by having our paralegal appear to notarize the documents, making them effective once signed.

Don’t put off getting your estate plan in place, another day. Take the virtual route!

Often estate planning focuses on the “big picture” issues, such as who gets what, how to avoid probate, and tax planning to minimize gift and estate taxes. Often, there are many smaller issues, which are just as critical to the success of your overall estate planning. Below are some of the issues that are often overlooked by clients.

Cash Flow
Is there sufficient cash? Estates incur operating expenses throughout the administration phase. The estate often has to pay state or federal estate taxes, filing fees, and various legal expenses associated with settling the estate just to name a few.

Taxes
How will taxes be paid? Although the estate may be small enough to avoid federal estate taxes, there are other taxes which must be paid before any disbursement to your beneficiaries occur.

Assets
What, exactly, is held in the estate? A list documenting what major items are owned by the estate should be left for your successor trustee. 

Creditors
Your estate can’t be settled until all creditors have been paid. As with your assets, be sure to leave your successor trustee a document listing all creditors and account numbers. 

Beneficiary Designations
Some assets are not subject to the terms of a trust. Instead, they are transferred directly to a beneficiary according to the instruction made on a beneficiary designation form.  By keeping your beneficiary designations up to date, the asset is not included in the probate estate and simply passes to your designated beneficiary by operation of law.

Fund Your Living Trust
Your probate-avoidance living trust will not keep your estate out of the probate court unless you formally transfer your assets into the trust. Only assets which are legally owned by the trust are subject to its terms. Title to your real property, investments, and other financial accounts should be transferred into the name of your living trust.

At Celaya Law we ensure that these important issues are addressed when creating your estate plan. Contact us if you are looking for a probate attorney or an estate planning attorney.

In the United States, 75% of Living Trusts will be totally ineffective when the Trust creator dies. Why?

Most people have and create a living will and trust in lieu of traditional Wills to dispose of their estate because they have been promised that a Trust avoids probate. Well, that’s partly true.

In fact, a Trust avoids probate only for those assets correctly titled into it!

Unlike with a Will, listing assets in a Trust does not put those assets into the Trust. Rather, assets must actually be “retitled” with the Trust name—real estate, bank and investment accounts, life insurance beneficiary forms, and so on. This is called “funding” the Trust.

In almost 20 years as an estate planning attorney, not once have I sat down with a trust-holder whose trust was fully funded (outside of my own clients). Funding a trust can be as complicated as actually creating it, and it is a great blot on estate planning attorneys generally who have not made funding part of their practice.

Have you reviewed your living trust recently? Are you sure that every singe one of your assets is titled properly in the Trust’s name?

At Celaya Law, we ensure our clients’ trusts are fully funded from the moment we create or update a trust. And because of our Lifetime Client Care, we help our clients keep their trusts funded without ever charging them another penny to do it.