5 Essential Maintenance Tips for a Stress-Free Holiday Season

Recently, I contacted Andrea Vernerova of Purpose Property Management to learn how to be proactive with property maintenance so that you can enjoy a worry-free holiday season with fewer emergencies. As winter approaches, it’s important to ensure your property is in great shape to keep everyone safe and comfortable. At Purpose Property Management, they’ve put together five must-do maintenance tasks that will keep your property running smoothly through the winter months. 

1. Inspect HVAC Systems and Change Filters

Your heating, ventilation, and air conditioning (HVAC) system will work overtime during the colder months. To keep it running efficiently:

• Schedule a professional inspection to identify and resolve any potential issues.

• Replace or clean air filters to improve airflow and maintain air quality.

💡 Pro Tip: Regular filter changes can reduce energy costs and extend the life of your HVAC system.

2. Clean Out Gutters

Clogged gutters can lead to water damage or ice dams, which are costly to repair. Before the winter chill sets in:

• Remove leaves, twigs, and debris from gutters and downspouts.

• Ensure water is flowing freely away from the property’s foundation.

💡 Pro Tip: Consider installing gutter guards to minimize buildup and make maintenance easier year-round.

3. Test Smoke and Carbon Monoxide Detectors

With more time spent indoors and an increase in heating and holiday cooking, functional smoke and carbon monoxide detectors are crucial.

• Replace batteries in all detectors, even if they appear to be working.

• Test each device to ensure it’s functioning properly.

💡 Pro Tip: If your detectors are more than 10 years old, consider replacing them with newer models for better reliability.

4. Inspect Plumbing Periodically

Cold weather can wreak havoc on plumbing systems, leading to frozen pipes or leaks. Prevent issues by:

• Checking for visible leaks or drips around sinks, toilets, and water heaters.

• Insulating exposed pipes in colder areas to prevent freezing.

💡 Pro Tip: If you plan to leave a property unoccupied for an extended period, keep the thermostat above 55°F to prevent frozen pipes.

5. Deep Clean Key Areas

A thorough cleaning isn’t just about aesthetics—it helps maintain a safe and healthy environment. Focus on:

• Clearing dust and debris from hard-to-reach places, like behind appliances.

• Cleaning vents, fans, and other neglected areas to improve air circulation.

💡 Pro Tip: Encourage tenants to declutter their spaces for a fresh and peaceful holiday vibe.

By addressing these maintenance tasks now, you’ll enjoy a worry-free holiday season with fewer emergencies. If you rent your property, you will have happier tenants. If you’re a property owner looking for professional help managing these responsibilities, Purpose Property Management is available to assist!

Lastly, verify that the property is in your Trust to protect it from probate and contact the Law Office of Yael Rakib, P.C. if you’ve experienced changes in the last year that may impact your estate plan.

Secure Your Family's Future this Memorial Day!

As Memorial Day approaches, we at the Law Office of Yael Rakib, P.C. want to take a moment to honor the brave men and women who have served our country with unwavering courage and dedication. Their sacrifices have ensured the safety and freedom we cherish every day.

At our firm, we understand the importance of protecting not only our country, but also the families who stand behind our service members. Whether you're currently serving, a veteran, or a family member of a service member, estate planning is crucial for ensuring your loved ones are taken care of, no matter what life may bring. From drafting wills and trusts to establishing powers of attorney and healthcare directives, our experienced team is here to guide you through the process with compassion and expertise.

Memorial Day is not only a time to recognize those who served, but also to reflect on how we can continue serving others.  I strive to do that through my estate planning work, helping families plan for the future and leave a lasting impact.

If you know someone who could benefit from estate planning services, I would be humbled by the opportunity to help. Please pass along my information, or let them know that they can schedule a free consultation directly through my website.

Wishing you and yours a thoughtful and inspiring Memorial Day. With gratitude for those who served and sacrificed,

Yael Rakib, Esq.

Spring Into Action: Secure Your Future with Estate Planning Services!

As the season of renewal and growth blossoms around us, I'm reminded of the importance of nurturing and protecting what matters most in life. Just as flowers need care and attention to thrive, so too do our loved ones and our legacies. That's why I'm reaching out to you today with an inspiring opportunity to take proactive steps towards securing your future: estate planning.

At the Law Office of Yael Rakib, P.C., we understand that life is filled with unexpected twists and turns. That's why it's essential to have a comprehensive estate plan in place to ensure that your wishes are honored and your loved ones are provided for, no matter what the future holds.

This spring, I invite you to consider the peace of mind that comes with updating your trusts, durable powers of attorney, advance health care directives, and guardianship nominations for minor children. By taking action now, you can safeguard your assets, protect your family, and leave a lasting legacy for generations to come.

Our team is dedicated to guiding you through every step of the estate planning process with compassion, expertise, and personalized attention. Whether you're a current client or someone who's been considering estate planning for the first time, now is the perfect time to spring into action and prioritize your future.

Don't wait until it's too late to protect what matters most. Contact us today to schedule a consultation and take the first step towards peace of mind and security. Together, we can ensure that your legacy blooms brightly for years to come.

Wishing you a season filled with growth, prosperity, and the peace of mind that comes with proper estate planning!

The Corporate Transparency Act is effective as of January 1, 2024. Are you in compliance?

Don't be fooled by the name—the CTA targets all types of business entities, especially small limited liability companies (LLCs) and partnerships. If you own a business—for example, to hold out-of-state real property or valuable personal property, receive valuation discounts, or protect assets—you may be required to comply with the CTA.

Small business owners will have one more item on their compliance to-do list this year.

The CTA,[1] enacted as part of the Anti-Money Laundering Act of 2020 (AMLA), places new reporting requirements on many business entities in an effort to expose illegal activities, including the use of shell companies to launder money or conceal illicit funds. Around 30 million small businesses will be impacted by the law, which will establish a federal database of information, furnished by “reporting companies,” that will be accessible to certain authorities and organizations.

 A final rule has been issued stating how the new law will be implemented to help businesses understand whether the law applies to them, how to comply, and which agencies will have access to the information they must report. CTA violations carry civil and criminal penalties, including imprisonment.

Why was the CTA passed?

The CTA was passed as part of the National Defense Authorization Act for Fiscal Year 2021. It directs the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) to gather information from private companies about their owners and controlling persons. Acting Director Himamauli Das said, “FinCEN is taking aggressive aim at those who would exploit anonymous shell corporations, front companies, and other loopholes to launder the proceeds of crimes, such as corruption, drug and arms trafficking, or terrorist financing.”[2]

To counter the risks allegedly posed by anonymous shell companies, the CTA mandates the creation of a national registry that contains certain information about business entities that are formed by filing a document with a state’s secretary of state or similar office.

What does the CTA require?

Effective January 1, 2024, the CTA requires that certain businesses disclose to FinCEN information about the company, its beneficial owners, and in some cases, the company applicant.

Reporting companies—defined as any company with twenty or fewer employees that is formed by filing paperwork with the Secretary of State or equivalent official—that are created or registered prior to January 1, 2024, have until January 1, 2025, to file an initial report; reporting companies created or registered after January 1, 2024 and before January 1, 2025, will have ninety days after creation or registration to file a report. Entities created on or after January 1, 2025 will have 30 days to submit the reports to FinCEN.

Small business organizations such as the National Small Business Association (NSBA) and the National Federation of Independent Businesses (NFIB) oppose the CTA, calling it cumbersome, intrusive, overly punitive, and unconstitutional. NSBA states that small businesses are unfairly impacted because they usually do not have compliance teams or staff attorneys.[3] 

Eighty percent of the small businesses surveyed by NFIB are against the new reporting requirements, which NFIB claims are unclear. NFIB notes that each state has different standards and practices for business entity formation, potentially leading to uncertainty about whether a business must report to FinCEN. For example, some states require sole proprietorships and general partnerships to register with state agencies, while other states do not.[4]

Does the CTA require my business to report?

The CTA applies to companies that are created by filing a document with a state authority. Typically, this includes corporations and limited liability companies. Depending on the state, it could also include limited partnerships, professional associations, cooperatives, real estate investment trusts, and trusts. In addition, the CTA applies to non-US companies that are registered to operate in the United States.

NFIB estimates that, based on these rules, 30 million small businesses will have to report to FinCEN. However, the CTA exempts around two dozen categories of companies, including companies that

●      are publicly-traded;

●      have more than twenty full-time US employees;

●      filed a previous year’s tax return showing more than $5 million in gross receipts or sales;

●      have an operating presence at a physical US office location;

●      operate in a regulated industry, such as banking, utilities, or insurance, that already imposes similar reporting requirements; or

●      are subsidiaries of exempt organizations.

The exemptions, which generally include larger companies that are already subject to regulation, underline the primary purpose of the CTA: to combat money laundering and other illicit activities conducted via small, private, and anonymous shell companies.

What information must be provided in the reports?

The CTA requires three categories of information to be reported: company, owners, and applicant.

●      Domestic reporting companies created before January 1, 2024 must provide information about the company and its beneficial owners.

o   Beneficial owner is defined in the CTA as an individual who exercises “substantial control” over the reporting company or has an ownership interest of at least 25 percent. Company senior officers, directors, and others who make significant decisions on behalf of the company may meet this statutory definition of “substantial control,” although the broad definition may cause confusion in some instances.

●      Domestic reporting companies created on or after January 1, 2024, must provide information about the company, its beneficial owners, and its company applicants.

o   A company applicant generally is the individual who files the formation document with state authorities for the reporting company.

Technically, the information to be filed with FinCEN is called a Beneficial Ownership Information (BOI) Report. The following is what is required in the report for a company, an owner, and an applicant:

●      The reporting company must provide its name and any alternative (DBA) names, the address of its principal place of business, the state of formation, and its taxpayer identification number or FinCEN identifier.

●      Each beneficial owner of a reporting company must furnish their full legal name, date of birth, residential address, and an identification number from a driver’s license, passport, or other state-issued identification (ID), along with a copy of the ID document.

●      A company applicant is required to submit the same information as a beneficial owner.

Who has access to FinCEN BOI reports?

The CTA authorizes FinCEN to disclose BOI information to five categories of recipients:[5]

●      US federal, state, local, and tribal government agencies

●      Foreign law enforcement agencies, judges, prosecutors, and other authorities

●      Financial institutions

●      Federal regulators

●      US Department of the Treasury

FinCEN may only disclose BOI information “under specific circumstances”: there are more stringent requirements for agencies other than those engaged in national security, intelligence, and law enforcement activities. There are also restrictions on how the information may be used and how it must be secured.

Some small business owners have expressed concerns about the privacy implications of the CTA. The NSBA has filed a lawsuit challenging the CTA’s constitutionality, in part on privacy grounds over sharing “sensitive information” with the government[6].

Are there penalties for noncompliance with the CTA?

Penalties for noncompliance may be steep. Willingly providing false information (including false identifying documents) to FinCEN, or failing to report complete BOI information, can result in:

●      Fines of $500 per day, up to $10,000

●      Imprisonment for up to two years

Civil and criminal liability may be avoided if an individual who submitted an original, erroneous report did not knowingly submit inaccurate information and submits an updated report correcting the inaccurate information within ninety days.

Get help with CTA reporting requirements.

Understanding how the CTA applies to you, how it will affect your business, and what you must do to comply introduces new burdens that you may have scarce resources to address.

Terms like “beneficial owner” and “substantial control” may seem vague and confusing, further complicating compliance efforts. But compliance is critical for business owners who want to avoid possible sanctions.

We can help you determine whether the CTA applies to your business and the steps needed to meet its reporting requirements. We encourage you to reach out now to start working on a CTA compliance strategy.

[1] National Defense Authorization Act for Fiscal Year 2021, Pub. L. No. 116-283, 134 Stat. 3388 (Jan. 1, 2021).

[2] Press Release, U.S. Dep’t of the Treasury, Financial Crimes Enforcement Network, FinCEN Issues Proposed Rule for Beneficial Ownership Reporting to Counter Illicit Finance and Increase Transparency (Dec. 7, 2021), https://www.fincen.gov/news/news-releases/fincen-issues-proposed-rule-beneficial-ownership-reporting-counter-illicit.

[3] National Small Bus. Ass’n, The Corporate Transparency Act, https://www.nsba.biz/cta (last visited June 27, 2023).

[4] U.S. Treasury’s Final “Beneficial Ownership” Rule’s Impact Explained, NFIB (Oct. 19, 2022), https://www.nfib.com/content/analysis/national/u-s-treasurys-final-beneficial-ownership-rules-impact-explained/.

[5] Beneficial Ownership Information Access and Safeguards, and Use of FinCEN Identifiers for Entities, 87 Fed. Reg. 77404 (proposed Dec. 16, 2022).

[6] Dave LaChance, Small business group sues over federal ownership database, cites concerns over sharing ‘sensitive’ info, Repairer Driven News (Nov. 17, 2022), https://www.repairerdrivennews.com/2022/11/17/small-business-group-sues-over-federal-ownership-database-cites-concerns-over-sharing-sensitive-info/.

Planning on Giving Money this Holiday Season? 5 Things to Consider

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The holiday season is a time to enjoy friends, family, and loved ones. Often we consider our life circumstances and may get in the spirit of giving. This is particularly true if you are at a point in your life were you have enough from a financial standpoint. If you are planning on giving money as a gift this holiday season, below are five things to consider.

What to Consider When Giving

Sharing your resources - whether money, vehicles, property, or other assets - in a manner that is both simple and smart as well as financially prudent can prove complicated. Accordingly, there are several things to consider such as what the gift is for, the type of gift, and if the gift is for charity. Below are five common scenarios:

1. You Want to Create a Foundation or Give to Charity: You do not have to be Bill Gates or Warren Buffet to be charitable. Through a donor-advised fund (DAF), which are like charitable savings account, you can benefit from an immediate tax deduction for any cash or investments placed in the fund. Of note, any money sitting in a DAF must be donated to charity but any money sitting in the fund can be invested tax free. Notably, changes in tax law make charitable giving different from a tax perspective than prior years. If you want to get a deduction or want to use your IRA to make the gift and you are over 70 ½, you should seek guidance.

2. Grandchildren Need Tuition for College: Consider a 529 College Savings Plan - where the money grows tax free and can also be withdrawn tax free when applied to qualified educational expenses - as a way to save for a child’s future education. There are also tax-free withdrawal benefits for pre-college education, depending on applicable state law. While a grandparent can create an account for a grandchild, contributing to a plan created by the parent can help reduce offsets on any potential financial aid award granted to the child. If your child or grandchild is already in college, consider making payments directly to the institution to avoid gift tax issues.

3. Your car or Boat is Not Being Used: One option is to gift the property, making sure title is officially transfer and filing a gift tax return if the fair market value is above a certain amount. If you instead are passing along the old car or boat worth more than $15,000 to a family member, make sure to let your tax preparer know so they can file any necessary gift tax returns. (You probably won’t owe any gift tax, but filing the return is a way to protect yourself from the IRS.) Alternatively, the property may be donated to a charity to receive a possible tax benefit. What the charity does with the property - in other words, uses it for the organization or sells it at a low price - can affect your tax benefit and how much the charity ultimately gets. 

4. The Next Generation & the Vacation Home: First, make sure to ask whether or not your loved one wants the home. You may be surprised that they do not and, in that case, sell the property. If they do, however, make sure to work out issues in advance that may arise from the transfer of property. One way to minimize issues is to transfer title to an LLC and give LLC ownership to the children, spelling out each member’s rights and responsibilities regarding the property. You should also address what happens if someone wants to sell his or her portion and exclude spouses from the universe of eligible owners in the even of a divorce. These can be complex transactions, even for seemingly simple circumstances, so always speak with an attorney before transferring property into or out of an LLC.

5. Your Kids Have Different Needs: Sometimes fair does not mean equal. This is particularly true if your children have different levels of need due to a disability, younger age, or better financial stability. For some children, it may be necessary or advantageous to gift a portion of his or her inheritance prior to your death because of immediate need. Whatever your reasons, the division of your estate is up to you. While you cannot prevent dissatisfaction among your children once you are gone, you can try to minimize these issues. One way is to leave a letter behind explaining your motivations and adding a no-contest clause in the will. 

Estate Planning Help

While gifting may be the right thing to do, it needs to be done so that everyone, including you, gets the maximum benefit. The tax implications to you depends upon the purpose of your gift, the type of gift, and whether the gift is to charity. We can advise you on your options under applicable law and what tools you can use so that everyone benefits the most from your generosity.

Your 5 Task Year-End Estate Planning To-Do List

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2020 is fast approaching.  As we all prepare for the holidays and a new year, it is important that we wrap up any loose strings.  Before entering into the new year, here are some things that need to be on your end of year checklist:

1.     Make Sure Your Estate Planning is Up To Date

Will or Trusts

Now that the federal estate tax exemption is fixed at $10 million per person adjusted for inflation ($11.18 million in 2018), it is important that you review your estate planning to ensure that it still makes sense. For example, when reviewing your estate planning documents, look for such terms as “Marital Trust,” “QTIP Trust,” “Spousal Trust,” “A Trust,” “Family Trust,” “Credit Shelter Trust,” or “B Trust.” With the exemption amount so high, it may not be necessary to utilize these planning strategies anymore.

In addition, you will want to make sure those individuals you have appointed to serve as your fiduciaries (successor trustee, agent under a financial power of attorney, patient advocate, trust protector, etc.) are still able to act on your behalf if the need arises.

Lastly, if your family has gone through any changes such as a birth, death, marriage, divorce, etc., you will want to double check the distribution scheme in your will or trust to make sure that the beneficiaries are still those you would like to leave assets to. 

Health Care Directives

While the federal Health Insurance Portability and Accountability Act (known as "HIPAA" for short) was enacted in 1996, the rules governing it were not effective until April 14, 2003.  Thus, if your estate plan was created before then and you have not updated it since, you will definitely need to sign new health care directives so that they are in compliance with the HIPAA rules. 

With that said, it's possible that health care directives signed in 2003 or later lack HIPAA language, so check with us just to make sure that your estate plan documents reference and take into consideration the HIPAA rules.

Financial Power of Attorney

How old is your Power of Attorney? Because of liability risks, banks and other financial institutions are often wary of accepting Powers of Attorney that are more than a couple of years old.  This means that if you become incapacitated, your agent may have to jump through hoops to get your stale Power of Attorney honored, if it can be done at all. This could cost your family valuable time and money. 

And, several states have enacted new laws governing Powers of Attorney.  If you want to increase the likelihood that your Power of Attorney will work without any hitches, then redo your Power of Attorney every few years so that it doesn't end up becoming a stale and useless piece of paper.

2.   Check Your Beneficiary Designations

Another area of estate planning that needs revisiting at the end of the year are your beneficiary designations on any life insurance, retirement accounts, bank accounts, vehicles, or real estate.  If you have previously completed the forms for any of these assets, you should review them to ensure the beneficiary named is still the person(s) you want receiving the assets.

If you have not done so already, you also should make sure that your estate planning attorney has this information as well.  Because a beneficiary designation may overrule any provisions you have in your will or trust, it is important that your designations and other estate planning documents all match and carry out your objective instead of having contrary intents.

3.   Gather Tax Documents for 2018 Income Tax Return

The Tax Cuts and Jobs Act made several changes to the tax code, which may make filing your income taxes for 2018 a little different.  Because of these changes, it would be prudent to spend a little extra time collecting the necessary paperwork to show your income and any deductions you may be claiming instead of waiting until the last minute.

4.   Review Car and Homeowners Insurance Policies

Everyone likes to save money and an easy way to do so is to call you insurance agent.  Analyze the coverage you currently have for your home and car to see if you are properly covered and to see if there are any additional savings available to you.  Sometimes, you can save money by having more than one policy through an insurer.  You may also be able to get a reduction on your rates if you have not filed any claims within a specific period of time.  You never know unless you ask.

5.   Review Your Paycheck Withholdings

When it comes to your 401(k), IRA, and Health Savings Account, the federal government allows you to contribute a maximum amount per year pre-tax.  As we approach the end of the year, it is a good idea to review how much you have contributed and see if you are able to give more.  Because this is done pre-tax, it is a good way to put more money away for your retirement or future medical needs while saving some money on your tax bill now.

Call Us Today!

The end of the year can be a stressful time for many, but by completing this to-do list, you will be setting up for a financially secure new year.  If you have any questions or need to schedule an appointment to review your estate planning, please give us a call.

Three Tips for Talking About Your Estate Plan During the Holidays

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 The holidays are right around the corner, bringing the joyous season of gathering with family and loved ones into full swing. It is the time to slow down, get caught up with loved ones, and enjoy the family and experience quality time around the dinner table. It is also a great idea to take this opportunity to review your estate plan and talk about the topic with your loved ones.

Do Not Be Indifferent

While the entire topic of estate planning can be a touchy subject, covering your eyes about the issue is not good for you or your family. According to a Caring.com survey from 2017, as many as six in 10 Americans do not have an estate planning document put together -  like a will or a trust. This is particularly alarming when it is estimated that $30 trillion in wealth is set to transfer between baby boomers and their heirs in the next few years. Accordingly, it is vital that families discuss estate planning well in advance of an emergency or life tragedy - while the eldest members of the family are still physically and mentally healthy. Leaving the topic to chance can result in disastrous or costly outcomes.

Time it Right

Not surprisingly, estate planning is a topic that does not come up in everyday conversation. And randomly informing your loved ones who will get your things when you die or if you become incapacitated will likely damper the holiday spirit.

There are ways, however, to discuss estate planning during this season with grace and tact. Instead, choose or make a time when you and your loved ones can be together and talk within a comfortable, calm, and private environment. Make sure that everyone is relaxed and distractions are at a minimum so the conversation stays on track.

In an ideal situation, the parents - or the elders - will bring up the subject. Sometimes, however, they refuse to discuss estate planning. In such a case, children have to broach the subject. Asking where important papers and records are kept is a great start. 

Boundaries Are Important

Once you find the time, place, and opportunity for the conversation about estate planning to happen make sure to set down some ground rules. Keep the discussion as transparent as possible, perhaps by having each family member address their thoughts, questions, or wishes and discuss together. Some items that may be on the list to discuss may include:

●      Notifying them that you have a will or living trust that spells out how assets will be divided when you die or become incapacitated;

●      Letting them know who will act as the executor of your will or trustee of your trust;

●      Discussing who will serve as your agent under your financial power-of-attorney and patient advocate under your healthcare power-of-attorney; and

●      Explaining to your family how to handle any medical or long-term care situations, if necessary.

Bottom Line

While discussing estate planning needs can be straightforward and simple, the conversation can quickly become complicated when personalities clash or emotions get in the way. The main goal is to let your family and loved ones know you have a plan, without needing to go into detail about the plan’s contents. We can help parents and children come together and create an appropriate plan that will meet your family’s short- and long-term estate planning needs.

Estate Planning Isn’t Spooky! But not planning can be downright terrifying.

Photo by Paige Cody on Unsplash

The idea of implementing an estate plan might be one of the scariest things you have to confront as an adult. But estate planning does not have to make chills run down your spine. On the contrary, estate planning is empowering for both you and your family and allows you to live confidently knowing that things will be taken care of in the event of your passing or incapacity. Remember, estate planning is not just for the ultra-rich. If you own anything or have young children, you should have an estate plan. Read below to find out reasons why.

Benefits of Estate Planning

Proper estate planning accomplishes many things.  It puts your financial house in order. Parents designate a guardian for their minor or disabled children, so they’re raised by someone who shares your values and parenting style (rather than whoever some judge picks). Homeowners can make sure their property is transferred to a designated beneficiary in the event of untimely death. Business owners can ensure the enterprise they’ve worked so hard to build stays within the family.

Yet, according to WealthCounsel’s 2016 Estate Planning Literacy Survey, only 40 percent of Americans have a will and just 17 percent have a trust in place. This translates to a majority of American families not being adequately protected against the eventual certainty of death or the potential for legal incapacity.

When it comes to estate planning, knowledge is vital. Less than 50 percent of those surveyed by WealthCounsel understood that an estate plan can be used to address several concerns - financial or non-financial matters - including health decisions and guardianship, avoiding court and preempting family conflicts, as well as taking advantage of business and tax benefits.

Estate Planning Horror Stories

Legal disputes over estate plans and wills - or, usually, the lack of having these in place at all - are common. These conflicts can cause harm to family relationships and be financially burdensome. Disputes among the rich-and-famous often made headlines.

Some scary outcomes of inadequate or non-existent estate planning include:

●      Prince, who died without a will, leaving lawsuits and hefty lawyer’s fees for his family;

●      Whitney Houston, whose failure to update her will negatively affect her daughter Bobbi Kristina’s inheritance;

●      James Gandolfini, who didn’t finish planning causing his estate to be hit with unnecessary and easily avoided death taxes;

●      Michael Jackson, who set up trusts for his children but never funded them resulting in a multiple probate court battles; and

●      Philip Seymour Hoffman, who never set up trusts for his kids causing their inheritances to be unnecessarily taxed.

These horror stories are not limited to wealthy celebrities. WealthCounsel’s survey found that more than one-third of respondents know someone who has experienced or have themselves suffered family disputes due to the failure of an existing estate plan or inadequate will. Additionally, more than half of those who have established an estate plan did so to reduce family conflict. Preserving family harmony is for everyone - not only for the wealthy or celebrities.

Attorneys: Your Guide to Not-So-Spooky Estate Planning

Estate planning can be confusing as each circumstance is unique and requires different tools to achieve the best possible outcome. Nearly 75 percent of those surveyed by WealthCounsel said estate planning was a confusing topic and valued professional guidance in learning more - so you’re not alone if you aren’t sure where to begin.

We’re here to help. An estate planning attorney is essential in determining the best way to structure your will, trust, and estate plan to fit your needs. If you or someone you know has questions about where to begin - contact us today!

Can You Bequeath Your Frequent Flyer Miles?

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If you’re a frequent airline traveler, one of your estate planning concerns may be what will happen to your accumulated miles once you’re gone. They could be worth thousands of dollars, so you probably don’t want them to just disappear, but some airline policies say that’s exactly what will happen.

The law doesn’t consider airline miles assets that can be bequeathed directly to heirs, but there are still some steps you can take to help ensure your miles live on. It all starts with examining the airline policies in question. 

Airline Policies Regarding the Transfer of Frequent Flyer Miles

Some relevant policies include:

●      American Airlines AAdvantage: “Neither accrued mileage, nor award tickets, nor status, nor upgrades are transferable by the member (i) upon death . . . . However, American Airlines, in its sole discretion, may credit accrued mileage to persons specifically identified in court approved divorce decrees and wills upon receipt of documentation satisfactory to American Airlines and upon payment of any applicable fees.”

●      Delta Airlines SkyMiles: “Except as specifically authorized in the Membership Guide and Program Rules or otherwise in writing by an officer of Delta, miles may not be . . . transferred under any circumstances, including . . . upon death. . . . ”

●      Southwest Airlines Rapid Rewards: “Points may not be transferred to a Member's estate or as part of a settlement, inheritance, or will. In the event of a Member’s death, his/her account will become inactive after 24 months from the last earning date (unless the account is requested to be closed) and points will be unavailable for use.”

●      United Airlines MileagePlus: “In the event of the death or divorce of a Member, United may, in its sole discretion, credit all or a portion of such Member’s accrued mileage to authorized persons upon receipt of documentation satisfactory to United and payment of applicable fees.”

As you can see, policy terms vary, and they may vary even further depending on your agent. Airfarewatchdog.com has found differences between written policies and what customer service representatives told them over the phone—a discrepancy that played out in the story of Kathe Holmes, who successfully claimed her late husband’s Alaska Airlines miles with minimal effort and no additional fees, even though that seemed to go against official policy.

How to Transfer Miles After Death

The main takeaway is that although airline policies may say they don’t allow miles transfers after death, employees often have the discretion to approve them. Still, there’s no sure way to know whether your airline will work with your loved ones regarding the transfer of your miles.

One way to better ensure your miles get transferred is to include a provision in your will that makes your wishes clear. This step is especially important if your airline requires a copy of a will as documentation, but it can be helpful in any event 

Another option is to leave your account number, login and password to the person you would like to be able to use your miles. Some airlines permit such transfers and usage of miles after the account holder’s death.

In either scenario, you should talk to your loved ones about your intentions so they know to pursue the issue in your absence. Also, if you’re the one trying to claim miles of a deceased person, you should understand the airline’s policies before offering information about the account holder’s death, as the account could be cancelled immediately, leaving you with no recourse. 

Final Thought on Frequent Flyer Miles

Frequent flyer policies can change at the whim of the airlines even as you are living, so another idea to keep in mind is to use the miles now and create experiences with your loved ones rather than plan to pass the miles on later. In doing so, you can be absolutely sure your miles aren’t lost; an added bonus is that you can also share moments none of you will ever forget.

If you have any concerns about frequent flyer miles, contact our office, and always be sure to include all your assets, even your airline miles accounts, when discussing wills, trusts, and estate plans with your attorney.

Small Business Owner? Know What Can Happen to Your Business If You Become Incapacitated or Pass Away

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Preparing your company for your incapacity or death is vital to the survival of the enterprise. Otherwise, your business will be disrupted, harming your customers, employees, vendors, and ultimately, your family. For this reason, proactive financial planning -- including your business and your estate plan -- is key. Below are some tips on how to protect your company and keep the business on track and operating day-to-day in your absence.

Preparing for the Unexpected

If you are a small business owner, your focus is likely on keeping the company running on a daily basis. While this is important, looking beyond today to what will happen if you can’t run your business should be on the top of your to-do list. If you die or become incapacitated without a plan in place, you will leave your heirs without clear instructions on how to run your company. This can jeopardize the business you worked so hard to build. The right plan along with adequate insurance can help keep your business running regardless of what happens.

Execute the Proper Business Documents

If your company has several owners, a buy-sell agreement is a must. This contract will outline the agreed upon plan for the business should an owner become incapacitated or die. Provisions in the buy-sell agreement will include:

●      how the sale price for the business and an owner’s interest are determined,

●      whether the remaining owners will have the option to buy the incapacitated or deceased member’s interest, and

●      whether certain individuals can be blocked from participating in the business.

Execute the Proper Estate Planning Documents

A properly executed will or trust will allow you to state how you would like your assets to be transferred -- and who will receive these assets -- at your death. A will or a trust also lets you identify who will take charge of the assets and manage their disbursement (including your business accounts) according to your wishes.  

Although a will can be used to pass assets at death, creating and properly funding a trust allows any assets owned by the trust to bypass the probate process making distribution of assets to heirs much faster, private, and may reduce the legal fees and estate taxes your heirs will owe.

Additionally, a trust can help your loved ones manage your trust assets if you become incapacitated. While you are alive and well, you typically act as the trustee of the trust, so you can manage your business and assets with little change from the way you do now. But unlike a will, a trust allows your successor trustee to step in manage things if you become incapacitated. This process avoids court involvement, allows for a smooth transition of trust management (which can be very important if your business is an asset of your trust), and proper continuing care for you in your time of need. Although having a will can be a great way to start, most business owners are much better off with a trust-based estate plan.

Purchase Additional Insurance

Whether you own the business by yourself or are a co-owner, it is important to have separate term life insurance and a disability policy that names your spouse and children as beneficiaries. The money from these policies will help avoid financial hardship while the buyout procedures of buy-sell agreement are being carried out.

Contact an Estate Planning Attorney

Having a plan for your business in the event you are unable to continue managing the company is essential to keep the company going. An attorney can explain the many options you have to protect your enterprise so that you can focus on what you do best -- running your company. Give us a call today to get started protecting your business.

High Deductible Health Plan? How Your Health Savings Account (HSA) Works with Your Estate Plan

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If you’re enrolled in a qualified high-deductible health plan (HDHP), you must consider how your health savings account (HSA) fits into your estate plan—especially to make sure that any hard-earned money left in your HSA when you die goes where you want it.

What is an HSA?

An HSA is an account whose funds may be used to pay for qualified medical expenses or saved for expenses that arise in the future. These accounts have several tax advantages. You can deduct contributions to the account up to the yearly limit. You pay no income taxes on earnings in the account (such as interest or dividends). And, withdrawals from the account to pay for qualified medical expenses are tax-free. An HSA is an option for any one enrolled in a qualified HDHP. Your insurer will be able to tell you if you have a qualified HDHP.

Unused HSA funds may be carried over into the following year, which is in sharp contrast to a flexible spending account (FSA), whose funds are considered “use it or lose it,” because you can only carry over up to $500 from one year to the next, as long as your plan allows for the carry over.

An HSA functions as a bank account plus investment account fusion while you’re alive but gets treated more like a retirement account at your death—and this dichotomy makes strategic estate planning that considers all tax ramifications crucial.

Estate Planning with HSAs

How you approach estate planning with your HSA depends largely on your account goals. There are two broad categories of people with HSAs. They are:

(1) Accumulators may use HSA funds for medical expenses, but their overriding intention is to build up a balance year after year and use the HSA as a supplement to retirement funds.

(2) Spenders use HSA funds to pay for qualified medical expenses tax free and their overriding intention is to save income taxes each year by running their qualified medical spending through the account.

Both accumulators and spenders should be concerned with directing where HSA funds should go after death, but contacting an estate planner is an immediate must for accumulators because of the potentially large sums of money and tax issues involved. Without a plan in place, your HSA balance may pass to your heirs through probate, the court-supervised process of distributing a deceased person’s estate. Probate can take several months and add extra expenses for your estate on top of the income tax bill.

The easiest way to avoid probate for your HSA is to designate a beneficiary to receive the funds upon your death. Many people name a spouse as a beneficiary. A surviving spouse who receives an HSA can continue to treat the funds as an HSA, allowing the spouse to continue to defer taxes and use the money for qualified health expenses.

You may also choose to name a non-spouse beneficiary, perhaps because you are unmarried or have children from a previous marriage. For non-spouse beneficiaries, the account will cease being an HSA upon your death, the HSA fair market value becomes taxable income to the beneficiary in the year of your death, and the account balance (less income taxes) is distributed to your named beneficiaries.

Another option is to name a trust as the beneficiary of your account. This can be a particularly good option if you would like to leave the funds to a minor. If you leave the account to a trust, the HSA amount becomes taxable income on your final income tax return, and funds pass to the trust for the benefit of the beneficiary. For minor beneficiaries, this avoids costly guardianship proceedings for the minor’s inheritance. For other beneficiaries, a trust may offer better asset protection, divorce protection, and privacy than leaving the account outright.

Your family can pay your medical bills out of the account within a year of the death. Depending on your other assets, paying final medical bills out of the HSA can result in significant savings. If a loved one has passed away and had an HSA, it’s always a good idea to obtain a professional opinion before paying the deceased’s medical bills.

 Overall, HSAs can be extremely useful tools in retirement, tax planning, and estate planning, but the tax rules surrounding them are complex. To maximize your benefits and do what’s best for you and your loved ones, call our offices for a consultation today.

Estate Planning Considerations for Benefits Open Enrollment

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The fall, generally late-October or early-November, is the time when employers send out summaries of employee benefits offered by the company and give employees the option to enroll in these benefits. These can generally include retirement plan options, health care, dental, vision, short and/or long-term disability, and life insurance coverage. Your employer may pay 100 percent of the premiums, split the costs with you, or you may have to pay all of the premiums yourself. Below are several considerations you should keep in mind once open enrollment begins.

Benefits Explained

When considering any retirement plan offered through your employer such as a 401(k), 403(b), or 457 plan, you will need to consider: what percentage of income you choose to contribute and whether the contribution must be made pre-tax, after-tax, or to a Roth plan (if available). How much you can contribute, and whether pre- or post-tax, depends on your specific financial circumstances. Remember to also consider any “matching” contributions your employer may make since these contributions can help improve your overall retirement savings.

Healthcare benefits may include the ability to enroll in a Health Savings Account (HSA), in addition to enrolling in the usual healthcare, vision, and/or dental coverage. HSAs allow plan participants to set funds aside, tax-free, for health care costs.

Employer-provided life and disability insurance coverage will provide your beneficiary with a stated amount of money if you die while employed by your employer or become disabled. The coverage generally expires when you no longer work for that employer.

Perhaps the most important thing to do during your employer’s open enrollment period is to review the employer-provided benefit package to determine what should remain and what should be changed. If you do not understand the options being provided to you, contact human resources right away for more information.

Beneficiary Designations

While you are reviewing your benefit package, you should consider your beneficiary elections or those who will inherit these assets upon your death or incapacity. A primary beneficiary is the first to inherit. Should he or she pass before you, or with you, assets would then go to any secondary beneficiary you have designated. These are often referred to as contingent beneficiaries.

Even if you have previously enrolled, you must review your beneficiary designations on your employer-provided benefits to ensure they are still how you want them. Benefits that may require a beneficiary designation are life insurance policies, retirement accounts, health savings accounts (HSA), as well as disability insurance.

If there are any new providers for your employer-sponsored benefits, this means that the insurance company has changed. Keep in mind that your previously chosen beneficiaries, and possibly coverage, may not have carried over. It is always better to review these documents, even if you are not planning any changes.

Estate Planning Concerns

If you are contemplating any changes to your beneficiaries, give us a call so we can ensure your beneficiary designations work as expected with your current estate plan or so we can properly prepare a plan that carries out your ultimate goals for you and your family. Once you have updated your beneficiaries, make sure to obtain written confirmation of this from your employer’s human resources department and share this information with us.  If you have any questions, please feel free to contact us. We’re here to help!

5 Mistakes Made by Successor Trustees (and How to Prevent Them)

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When establishing a trust, you need to give serious thought to choosing your successor trustee—the person who will administer your trust once you’re no longer able to do so. This individual ideally should be:

●      Someone you trust implicitly.

●      Someone who is organized, responsible and meticulous.

●      Someone who can remain steadfast to your wishes in the face of family disagreements and other disputes regarding the trust.

That said, even the most capable, well-intentioned successor trustees can make mistakes when managing affairs. Here are five surprisingly common mistakes along with steps to take to prevent them from happening.

1. Faulty Record-keeping

To ensure that a trust fulfills its purpose without being contested, the trustee must keep accurate, detailed records of income and distributions. Your trustee must also be prepared to report these figures regularly to the beneficiaries and heirs. If these records are incomplete or inaccurate, the door is opened for someone to challenge the trust, potentially leading to lengthy and costly court battles.

To prevent this mistake: Hire an accountant to assist the successor trustee in record-keeping, and make sure the trustee and the accountant make a connection before the trustee takes over.

2. Misunderstanding the Fiduciary Role

Many trustees mistakenly assume their job involves acting in the best interests of the person setting up the trust. In reality, their job is to act in the interests of the beneficiaries of the trust. Furthermore, the trustee may be legally liable for any failure to protect the beneficiaries against bad investment advice concerning the trust.

To prevent this mistake: Detail the fiduciary role of the successor trustee in the trust documentation itself, and be certain that the trustee understands his/her role.

3. Not Collaborating Effectively with Your Established Financial Team

The successor trustee’s failure to communicate with key members of your team while administering your trust can lead to inaccuracies, misunderstandings and significant, preventable financial losses.

To prevent this mistake: Make sure your trustee is properly introduced to, and connected with, your attorney, CPA, financial planner and anyone else involved with your estate planning. 

4. Failing to Discuss Compensation

If your appointed trustee is a close friend or family member, the topic of compensating the trustee may be glossed over or forgotten. This oversight can result in a lack of morale or even resentment if managing the trust becomes difficult or time consuming.

To prevent this mistake: Bring up the topic of compensation yourself when you establish the arrangement; be as generous as you deem necessary; and put the compensation terms in writing.

5. Failing to Remain Objective 

Many people choose a close family member as a trustee. This strategy can be appropriate, especially when privacy matters. However, disputes about money can happen even in the tightest-knit families, and it can be difficult to near-impossible for a relative to remain neutral when resolving those fights. The end result could be decisions that family members perceive to be unfair or that wind up being inconsistent with your intentions.

To prevent this mistake: Make certain the person you choose can remain neutral and faithful to the terms of the trust, even under duress. If there is any doubt, consider hiring a corporate trustee with no emotional connection to the family or estate.

Selecting a successor trustee is one of the most important decisions you will make during your estate planning process. For insightful counsel on this issue, contact us today to schedule a free consultation!

Can I Make a Video Will?

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In the golden age of the smartphone, you’re never far from a camera. This has made the sharing of videos and photos easier than ever before. Easy access to a quality camera has led many people to wonder: can I make a video will? More importantly, folks are curious about whether such a “will” can hold up in court. Given how ubiquitous technology is these days, it’s natural to have such questions! 

Unfortunately, though, the law has yet to catch up with the constantly-evolving digital trends. In most states, a will must be written down, signed, and witnessed for it to be considered valid. Video wills can be used to accompany the written document, but generally, a standalone video account of a person outlining their estate plans will not likely stand up in court. It may, however, be used to contest a will. 

Some argue that the face-to-face, personalized nature of video wills should trump the old-fashioned signing of documents. While the way wills are handled in the future may indeed change, the law is unlikely to reflect such evolving attitudes soon. For all their benefits, video wills reflect just a few moments in time. Official documentation of the person’s wishes, complete with signatures and witnesses, will likely continue to remain supreme in the eyes of the law.

That’s not to say, however, that all wills are written down all the time. Some states are willing to recognize oral wills made on a person’s deathbed. Also known as a nuncupative will, these oral statements are often made when someone is too sick to have their estate plans formally executed. Nuncupative wills aren’t accepted in every state, though, and they rarely supersede a written will (if one exists).

If you have specific instructions for how your assets are distributed after you pass, it’s worth spending a little time with an estate planning attorney to formalize your will or trust. Should you choose to make a video will in addition to the written estate plan, it may be used as visual proof that you were of sound mind when you made it. You may wish to read the will on camera and add in explanations for the reasoning behind your choices. Such a video may help clarify your wishes and settle any will contests from relatives unhappy with their inheritance.

Your legacy is important. Don’t leave it to chance by recording your wishes on a smart phone. Instead, work with an experienced estate planning attorney – it’s the best way to ensure your wishes are carried out in the way you intend. Call us today!

Planning for Disabled Children: What Parents Need to Know

If your child was recently diagnosed with a disability, you probably have a lot of questions about their future. Parents of a disabled child in the U.S. worry about the child’s access to medical care (whether private or government funded); social services; and educational services. They want to protect the child from being ignored and disregarded by the education and medical systems, and hope the child will have stability and dignity as an adult. 

Regardless of the disability diagnosis, every parent wants to know, how do I make sure my child is taken care of, even if I’m not around? The answer to this is more complex if a child is disabled, and also varies depending on the severity of the disability. To get the answer, the parent should consider:

1. will the disabled child be self-supporting as an adult (i.e., have access to job-based health benefits and job income), and be able to acquire assets, have supportive human relationships, and/or live outside of an institution?

2. will the disabled child meet federal and state poverty program guidelines for disability, and qualify for medical coverage, monthly income, and case management services provided by government and their service partners?

3. what is the age of the child at the time of planning?

4. what is the nature of the disability and the prognosis over the projected life expectancy of the child?

Understanding Distributions

Estate planning for minor children is more complex if a child is disabled. If the disability is significant, the parents may want to permit expansive treatment distributions in their minor’s trust. It is important for parents to understand what benefits will flow from the trust because some trustees resist making distributions from a trust, and/or fail to adequately investigate the beneficiary’s situation to determine how distributions may help. Parents can include specific recommendations in a letter of intent for the trustee. Then a copy of the recommendations can be provided to a trust protector, relatives, or the disabled child, so that after the parent’s death there is someone who can push the trustee to help the disabled child as intended. Distributions from a support or discretionary trust help the employed disabled adult’s living standard. A letter of intention could also suggest enhanced standard of living distributions. The trustee can make distributions for transportation, telephone, and internet services, or provide support during intermittent periods of unemployment. The child’s disabilities could limit his or her lifetime earnings, and a trustee could make company retirement plan contributions, or fund Roth and traditional IRAs, or supplement the child’s retirement savings by purchasing a deferred annuity providing monthly payments when the child reaches a certain age. The disabled adult child may periodically need vocational counseling and assistance to find suitable work. the trust can hire private vocational advocates and job coaches, rather than having the disabled adult rely on haphazardly funded public vocational services. The trust could pay for counseling, COBRA and HIPAA health plan premiums, or moving expenses, and eventually provide income to supplement the disabled working adult’s Social Security Retirement checks. 

Public Benefit Qualifications

If the disability will substantially impair the child’s earning abilities, then the planner must consider the possibility of future public benefit qualification. Where a disabled minor child is not expected to be self-supporting, the parent needs to know about Social Security survivor benefits, and financial screening eligibility criteria for many publicly paid benefit programs. Supplemental Security Income, Medicare, and Medicaid all have a “means” test for eligibility, and therefore become the central focus for much special needs trust planning and administration. Available resources valued over $2,000 disqualify the minor disabled child from some public programs. To find out more about these services and how they impact disabled individuals, the Special Needs Alliance has published a free handbook with more information downloadable at: https://www.specialneedsalliance.org/free-trustee-handbook/

The school district programs for the minor child do not have financial screening eligibility criteria, but financial screening will be required for access to many adult residential or social service programs. Public funds for job and residential care slots flow through different government agencies serving different disability populations. For example, different agencies manage developmental disabilities monies, mental health disabilities monies, and physical disabilities monies. All residential placement for disabled adults is limited. Job or residential planets suitable for a sweet, calm, developmentally disabled young adult will be unsuitable for the young adult with an explosive combination of mental illness, autism, developmental, and cognitive disabilities. The estate residential care providers will simply refuse to take the young person with difficult behaviors, or drug and alcohol problems as well as disabilities. parents cannot rely on the overburdened haphazardly funded public case managers to find a home for the chaotic disabled child. Many communities have trained advocates who can be privately hired to assist the parents in finding job placements or residential placements for the disabled adult child. The parents of a disabled minor child need to know that the special needs trust should pay for a private advocate’s services in the transition from public education-paid to adult disability services. If a paid professional advocate is available, a reluctant family member may be persuaded to take on the responsibility of being a trustee, a trust protector, or guardian nominee for a disabled child. In the chaotic disabled child planning situation, the special needs trust is a critical payment source for a hired advocate who accesses social, medical, and other care needed by the disabled child.

If the parents expect the disabled child to be self-supporting, a special trust may not be necessary since some disabled children can manage their own work life and earn enough to support their families. In these cases, parents will still want to consider whether the child is susceptible to undue influence from financial predators. Some disabled children, like some non disabled children, would also benefit from a trust for creditor protection. This practitioner does not do generic contingent trust planning, but rather, I help parents or other relatives plan concretely for that particular child’s condition, particularly situations in which the child suffers some condition that will likely reduce the child’s vocational choices. 

Life Insurance

Most families with disabled children have one stay at home parent and another who works outside the home. If the working parent dies, the surviving parent has an immediate need for income to pay necessary expenses for housing, medical care, food, etc. If the stay at home spouse dies, the working spouse needs to buy custodial services for the disabled child. If the working surviving parent has to leave the job to provide care, or reduce his or her work hours, the family may spiral into poverty, and lose health coverage.

Substantial life insurance for each parent is the best way to insure against the risk of loss of the services of the stay at home parent and the loss of income from the working parent. Since the child is often a minor or is receiving Medicaid or other means-tested government benefits, the child should not own the policy. The cash value of the policy is a countable asset of the owner for purposes of Medicaid and SSI, programs which have very low asset limits. Loss of these critical benefits could be catastrophic for the child. You may be the owner, as long as you do not have long-term care or estate tax issues, which could cause complications for you. An alternative could be to have another child own the policy, or, for a larger policy, to have an appropriate type of trust as the owner and the beneficiary. The Trust distributions could, if written liberally, benefit both caretaker surviving spouse and that child—keeping the caretaker mentally and physically healthy will be crucial to the minor disabled child’s welfare. It is particularly important for parents of disabled children to get a substantial life insurance policy if they expect their nominated guardian to share their home if both parents are gone. Around-the-clock supportive care costs $6,000 to $10,000 per month. Health care costs are astronomical for some medical conditions. Many health plans have a lifetime limit on benefits (usually $1 million to $2 million). The most expensive health benefit is mental health coverage. No private heath plan will provide sufficient in-patient or out-patient treatment for the chronically mentally ill child. If parents believe they can fully support the projected care costs for a disabled child, they can still use estate planning help to (1) help the family find an expert to develop a life plan and cost estimate for their child, to determine whether the family can afford to fund a discretionary or mandatory support trust, and (2) draft a discretionary or mandatory support trust for the child as part of testate plan.

Financial Power of Attorney Provisions

During a parent’s incapacity or decline, the parent’s own power of attorney can include specific provisions designed to help the child, as the parent would have were the parent not suffering a medical or cognitive decline. These provisions vary by the parent’s wealth and resources, but usually include gift and transfer provisions, support and/or special needs provisions, and provisions for the creation of a trust for the benefit of a disabled child.

Because a disabled child often has greatly disrupted life patterns as a parent becomes ill or declines mentally, I suggest the parent’s financial power of attorney specifically authorize the agent to help the child. If the parent wants his or her funds used to fully support that child, even if the support takes the child off public benefits, the power of attorney should so instruct the agent.

Conservatorship

If your child has a cognitive disability and is near or over the age of 18, you might be wondering whether you should seek a conservatorship over your child. The short answer to this question is, “it depends.” Once your child turns 18, you as their parent lose the legal authority to make decisions (medical, financial, educational, etc.) for your child. The parent must then decide whether to seek decision-making authority for the child, and if so, how much authority. The person given the authority to make decisions is called a conservator and in California, a conservatorship can only be established by an order of the probate court. A conservator is appointed for another adult, called a Conservatorship of the Person, when the probate court concludes that the adult is unable to care for his personal needs, such as maintaining regular hygiene and taking prescribed medication. The conservator is charged with protecting the adult by ensuring that his daily needs health care are adequately met. A Conservatorship of the Estate is established when an adult cannot handle financial matters so a conservator is necessary to manage his income and pay bills. In most cases, the court will appoint the same conservator to be responsible for the adult's person and estate if both roles are required.

Full and Limited Conservatorships

In California, the probate court is authorized to appoint a conservator with full powers over the adult or to limit those powers in specific ways. The appointment of a conservator with full powers is typical in the case of an elderly person suffering from dementia who cannot provide for his own daily care or manage his finances. A limited conservatorship is normally established for an adult with some form of developmental disability, but who is capable of performing many tasks unsupervised. In this case, the probate court's order will specifically specify the conservator's limited powers, such as deciding where the conservatee will live, his vocation or educational training and signing contracts.

LPS Conservatorship

California law also provides for a special type of conservatorship known as an LPS Conservatorship. The name LPS is an abbreviation for legislation -- the Lanterman, Petris and Short Act -- that authorizes conservatorships specifically for adults who are diagnosed with a serious mental illness according to the Diagnostic and Statistical Manual of Mental Disorders, such as schizophrenia, obsessive compulsive disorder and bi-polar disorder. The probate court will establish an LPS Conservatorship only if it finds beyond a reasonable doubt that the proposed conservatee suffers a serious mental illness based on an evaluation by a psychiatrist authorized to do LPS evaluations.

Contact me for more information about the steps to obtain a conservatorship in California and for help preparing all of the required paperwork.

What Should Non U.S. Citizens (Resident and Non Resident Aliens) do to Protect Their Kids While in California?

Are you a non U.S. citizen with children living in California, temporarily or permanently?

What should non U.S. citizens (resident and nonresident aliens) do to protect their kids while in California?

If you have minor children, don’t leave them unprotected.

California has more immigrants than any other states — more than 10 million people, which is close to one in four of the foreign-born population in the U.S. as a whole. Foreign-born resident represent more than 30% of the population in eight of California’s largest counties: Santa Clara, San Mateo, Los Angeles, San Francisco, Alameda, Imperial, Orange, and Monterey. Half of Californian children have at least one immigrant parent, compared to 26% nationwide. Who takes care of the children if something happens to their parents?

With today’s scattered families, it is common for parents to want a family member who lives in a different state than California or even another country to be the guardian. If a minor child is left without a living parent, the probate court judge appoints a guardian. Appointment of a guardian in California requires notice to family members, investigation into appropriate placement, and in the end it's up to the judge to make an appointment that is in the best interest of the child. These guardians, like parents, have a lot of influence over a child's many day-to-day experiences and impact the big decisions your children make as adults. You are in the best position to make the tough decisions of nominating a guardian for your minor children because no judge will ever know your family like you do. I always advise parents to nominate a guardian in their wills because judges take these recommendations seriously. Also, I am weary of deferring responsibility to the probate court to locate and give notice to your family members abroad. It is best to tell the court exactly who you nominate and provide their contact information.

If your desired guardian is outside of California and especially outside of the U.S., it makes sense to nominate a temporary, local, guardian to take care of your children until family members can arrive from abroad. This is because it may take time for an international guardian to receive notice of the death and travel to California. An international guardian seeking to relocate a child to his or her country would need to come to California, petition for appointment as a temporary guardian, and post a bond as insurance that they will faithfully perform their duties as a guardian. In that petition, the guardian would have to ask the court to permit him or her to travel back to the home country and get appointment as permanent guardian there. Once appointed permanently, the guardian would then notify the California court of the children’s new address, and ask the court to terminate the temporary guardianship in the U.S.

Lastly, I also tell parents to make sure that their children have passports, since they will need them to travel abroad.

As a mother and a child of immigrant parents, I am familiar with the concerns of non U.S. citizens with regards to estate planning. Please contact me for more information on this and more reasons to create a living trust for your family.