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Irvine Probate & Estate Administration Blog

Estate planning for parents of children with special needs

California parents of children with special needs often have challenging, lifetime planning options to consider. Lifetime care, including support for housing, caregivers and other professional support, can have costs that run well into seven figures.

There are various saving strategies and tools that can support savings for future care while allowing children to maintain access to special needs government programs. These programs include Supplemental Security Income (SSI), Medicaid and related disability benefits.

Same-sex couples and estate planning

Estate planning is used to ensure that assets are handled according to the owners' wishes after they have died. For California same-sex couples, there may be issues that require additional consideration.

Although the 2015 decision by the United States Supreme Court legalized same-sex marriage, there were prior state laws that may present complications same-sex couples. Individuals should make sure that if they were previously married in a state that recognized their marriage, relocated to a different state that did not recognize their marriage, and then parted ways with their spouse without obtaining a formal dissolution, according to state law they may still be married. They should verify that any previous marriages are legally dissolved.

Estate planning issues after a second marriage

It is not uncommon for California residents to get married more than once. However, a second or subsequent marriage could lead to estate planning issues that may be overlooked. For example, property that a person brings into a marriage is generally considered to be that person's property. However, money or property accrued during a marriage will likely be considered property of both spouses.

Money or property may also be controlled by ownership designations or similar documents. When a person passes on, his or her property may be commingled if a spouse gets remarried. Creating a trust may ensure that property goes to children or other intended beneficiaries no matter what happens after a person passes on.

Estate planning challenges for the family-owned business

When estate plans include a family business, owners face a unique set of challenges in establishing continuity and protecting the company during transition. Owners of California-based family businesses will want to carefully think ahead to avoid family disputes over control, keep third-party relationships intact and minimize the estate's tax implications.

An early step in estate planning for any family business is establishing succession. It's important to consider who will have a controlling interest in and manage the business. This may include multiple people, and there's no requirement that the manager be a member of the family of owners. Ensuring stability among customers, suppliers, financiers and other third parties means identifying capable, willing and prepared people for the leadership roles.

Writing a letter of final wishes

A person in California who is preparing an estate plan might also want to consider writing something known as a letter of final wishes. This is a document that addresses all the aspects of an estate plan that wills, powers of attorney, health care proxies and other documents cannot. An LFW might discuss a testator's reasons for making certain estate planning decisions and more.

For example, an LFW might include a section on funeral planning. This could include an obituary, funeral arrangements and even a playlist for the wake. The letter may also include passwords for various online accounts.

How to handle changes to the estate tax

If the federal estate tax is repealed, it may have implications for the estate plans of California residents . At the very least, it may be a reason to review any existing estate plan documents that an individual may have. To account for estate taxes, some have chosen to create exemption trusts that hold the exemption amount or generation-skipping trusts to take advantage of that exemption as well.

It is thought that there won't be a lot of time for people to react to any tax reform that takes place. Therefore, the time to ask questions is now. Taking steps to tweak an estate plan now may result in significant savings if changes to estate tax law results in greater exemptions or a repeal of the tax entirely.

The importance of estate planning

It is important for Californians to consider how they want to handle their estates and then to make certain that they have the proper tools in place. If you are thinking about your own estate plan, it is important that you understand the different types of documents that may best protect your interests and those of your family.

The foundation of good estate plans is comprised of wills and trusts. These allow you to make certain that your assets will be transferred according to your wishes. These documents are important for everyone to have, regardless of how large or small their estates might be.

Being a fiduciary

California residents who have been designated as an executor of an estate have been given significant responsibilities in the handling of a decedent's assets. There are certain steps that they have to take to ensure that they administer the assets according to the decedent's wishes.

Executors and trustees should fully review and understand the decedent's will or trust so that that they know to whom the assets will distributed, which assets will go to each beneficiary and when and if there are any co-fiduciaries. The will and trust will also detail the specific powers of the fiduciary and which assets should be applied to expenses and taxes.

Social media accounts after death

After people die, their social media accounts amay have to be dealt with by an executor or surviving relative. California residents may benefit from learning how this should be handled.

The terms of service of each platform on which the decedent had an account should be examined. The different social media websites each have a different policy for handling the death of a user. Facebook requires the completion of certain online forms in order to memorialize or delete an account. After being notified of a user's death, Twitter will request a copy of a death certificate and the identification of the individual requesting the deactivation of an account. LinkedIn requests details, such as the decedent's obituary and email address.

The components of an estate plan

According to a 2016 survey, almost two-thirds of Americans do not have a will. Such a document, which designates how a person's assets should be distributed, is an important part of an estate plan, but many California residents may not have created one because they do not like to think about the subject. However, a well-organized estate plan can be a help to families after a person's death.

An estate plan may have many other components besides a will or a trust. People might want to include a health care power of attorney that chooses someone to make their medical decisions if they are unable to do so. They may also want to write out their wishes for end-of-life care. They might even plan their funeral and what they want done with their social media accounts.