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We Can Plan Any Estate In California - The Law Offices of Roy Newman

How You Can Avoid a Family Feud

Posted on | May 31, 2010 | No Comments

The following quote sums up estate planning quite well:

“Family, money and death are a combustible combination,” said Toronto-based attorney Les Kotzer, who has co-authored a new book — “Where There’s an Inheritance ” — a compilation of 80 real-life vignettes taken from his law practice and radio show callers.

Having no estate plan is a recipe for disaster – your mother or father, wife, or child could end up in costly probate litigation if they do not have an advance health care directive and financial power of attorney in place. The government substitute is called a conservatorship (see What is a Conservatorship?) or guardianship (see What is a Guardianship?) . They are expensive to put in place and expensive to maintain.

But that is just one piece of the puzzle. You also have to make decisions about who should get what – and when they should get it. The Portland Press Herald has four tips  to keep things under control: let your family know what you want to do with your personal effects, name a good family member as trustee or executor, watch for pitfalls in how you allocate money in your estate, and think it through from the beginning.

Category: Estate Planning - Generally
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Tax Relief and Trusts: How Wal-Mart Avoids Taxation

Posted on | December 31, 2009 | No Comments

The Wall Street Journal has unraveled a scheme used by the giant retailer to avoid the imposition of state taxes in as many as 25 states. The simple graph of how the scheme works can be viewed here. Basically, Wal-Mart pays rent to its real estate trust and that trust then pays dividends to Wal-Mart Property Co (therefore avoiding state taxes) and Wal-Mart Property Co. pays dividends to its parent, which deducts them from its state taxes because they come from a subsidiary. Unlike most tax deductions that involve cash being paid for expenses, this strategy by Wal-Mart actually allows them to keep a majority of the rental payments.

The tax savings to Wal-Mart are likely in the billions of dollars, even though the loophole was long ago closed at the federal level. Several states are now challenging this structure in court, and more are likely to follow. The full article can be viewed here, and a Wal-Mart watchdog has compiled a list of tax avoidance schemes by Wal-Mart with updates on how states are counteracting them.

Category: Business Planning
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Legal Fights Over Wills - No Contest Clauses Hit the Public Spotlight

Posted on | October 31, 2009 | No Comments

With the death of Michael Jackson and other celebrities, no contest clauses have come to the fore of the public’s attention. No contest clauses are an attempt to keep brothers and sisters, aunts and uncles, and everyone else from suing in probate court every time someone writes an unfair will. There are quite a few benefits to discouraging litigation – as well as some detriment where there is a legitimate cause for concern. In fact, the California law on the subject is complex and will change in 2010. As it stands now, there are multiple statutory exceptions to no-contest clauses that everyone must follow. It is even possible to set aside a no-contest clause if the contest is brought with “reasonable” cause on the grounds of forgery, revocation, or an action to establish the invalidity of any transfer. So at least for now, would-be litigants can take heart that there may be a remedy when a relative makes a move to steal through influence or lack of capacity, as long as there is a solid reason to pursue it.

Category: Estate Planning - Generally
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Estate Planning 101: Steve McNair’s Estate Is A Complete Mess

Posted on | September 30, 2009 | No Comments

Steve McNair never had an estate plan in place. He never had a will, a trust, or any other testamentary instrument. Although I frequently warn about the dangers of not having a proper estate plan in place, it is hard to imagine a set of facts that will be more devastating to his heirs. First, he likely made over $75 million over the course of his lifetime. Since he did not shelter that money from the federal government, he now may lose up to 45% of that wealth in taxes. That could be a $33,750,000 error. In addition, his wife will be receiving less money than he may have planned, because the remainder will be set aside for his children when they turn 18.

It is generally not a smart idea to give an 18 year old $10 million in one lump sum. That distribution could have been staggered for the rest of the child’s life to prevent misspending. Finally, because he did not have a trust in place, the entire probate of his estate will be subject to publicity through the media – and now all sorts of unsavory characters have access to the fact that those children will be receiving vast sums of money – which is disconcerting to say the least. Check out this blog’s breakdown of the unfortunate mistakes made in the McNair estate. Contact a San Diego estate planning attorney today to make a responsible step in the right direction for your family.

Category: Uncategorized
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What is an Advance Medical Directive or Living Will?

Posted on | August 31, 2009 | No Comments

A recent Wall Street Journal article discusses the importance of having an advance health care directive in place should you become incapacitated. Though the article refers to an “advance medical directive,” in California it is called an advance health care directive. These directives give doctors direction, in your own words, should you not be able to speak them. Yet less than a 1/3 of Americans have them in place, despite the fact that most Americans will need them at some point. This saves your family members from making agonizing choices that may place them at odds with each other in the midst of a crisis. For more advice on advance medical directives, you can read the article here.

Category: Uncategorized
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10 Odd Bequests; Or How to Disinherit With Style

Posted on | July 31, 2009 | No Comments

The law regarding wills and trusts has changed greatly over the years. New law makes it difficult to precondition a devise by will or trust on an act that would violate public policy. For instance, California Probate Code § 710 prohibits imposing a condition or restraint on marriages under certain circumstances. In other words, you can’t place a restriction that discourages your son or daughter from marrying a certain person or encouraging their divorce. Likewise, “[i]f a condition precedent requires the performance of an act wrong of itself, the instrument containing it is so far void, and the right cannot exist. If it requires the performance of an act not wrong of itself, but otherwise unlawful, the instrument takes effect and the condition is void.” California Probate Code § 709. In other words, be careful what you wish for in a will or trust.

The link at the end of this paragraph gives ten examples of odd bequests that may or may not be enforceable in a court of law – but are entertaining nonetheless. Consider the man who preconditioned his wife’s receipt of £330,000 by devising that she could only receive it if she smoked 5 cigars a day (she refused to allow him to smoke). Or the woman who gave her husband $2.00 provided he spend half the money on rope to hang himself. Check out the full list here.

Category: Wills and Trusts
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Michael Jackson “Disinherited” Father in Last Will and Trust

Posted on | June 30, 2009 | No Comments

In a case that will surely be publicized to no end, the first of possibly multiple wills (see “What Will Happen if I Die Without a Will?“) executed by Michael Jackson have been submitted to the Los Angeles Probate Court. The will apparently refers to a trust (see “What is a Revocable Trust?“) in which Jackson titled all of his assets. It appears initially that Michael disinherited his father, Joe Jackson, leaving everything to his mother. The court granted temporary custody of Jackson’s children to Katherine Jackson via a guardianship proceeding (see “What is a Guardianship?“). If this probate is anything like Jackson’s life, there will be plenty of drama in the coming weeks.

Category: Current Events
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