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Nine Things Women Should Know - Estate Planning for Women

Posted on | June 30, 2010 | No Comments

“Women’s life expectancy, combined with their tendency to marry older mates and their lower lifetime earnings means they are far more likely to see their living standards compromised in retirement if proper estate planning isn’t done.” This statement begins a very savvy column in an article titled “Six Estate Planning Questions for Women” by Deborah Jacobs for Forbes Magazine. Generally, women enjoy a longer life expectancy than men, which leaves them vulnerable if they fail to make a plan. In my own practice, it is not uncommon to see many women alone in their final years. Beyond that harsh reality, even with supportive family members and friends, the issue becomes not what you want to do with your estate, but rather who will make decisions for you if you fall ill or are unable to make decisions on your own behalf because of an accident or progressive disease.

If you do not make your choice and formalize it via a medical power of attorney (called an advance health care directive in California – see “What is a Living Will? California’s Advance Health Care Directive”), then the government will make the decision through a long and protracted process called a conservatorship. Conservatorships are not fair to your friends and family because of the prohibitive cost and publicity that is attendant to them, and those same people will be placed in the position of having to guess what you would have wanted should you have made your wishes known. Furthermore, you may rebel at the very notion of a conservatorship and may have to hire a lawyer to defend you during the process.

On the other hand, an advance health care directive will only manage personal care decisions for you –leaving perhaps the most important choices regarding your money to your agent through a financial power of attorney. The issue can occur like this: you are involved in an accident and are hospitalized for a month, unable to make decisions on your behalf. Your mortgage or rent becomes due and you have no one authorized to pay it on your behalf. Now you become entangled in a messy legal scenario in which someone must first petition the government on your behalf – usually through an ex parte temporary conservatorship legal procedure – to pay your bills to avoid foreclosure or eviction. All of that is unneeded if you have someone selected as your financial power of attorney. If drafted the right way, that power of attorney will only become effective should you become incapacitated (called a “springing” power of attorney  - see “What is a Springing Power of Attorney?“). To learn more about who to select and other matters on this topic, the article has a nice section under the section “Whom can you trust?”  My thanks to Professor Beyer for bringing this article to my attention.

Category: Estate Planning - Generally
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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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The Estate Tax Will Not Dissappear Under Obama

Posted on | January 15, 2009 | No Comments

The Wall Street Journal is reporting that Barack Obama will block the disappearance of the estate tax in 2010. It is being reported that the Senate Finance Committee will reverse the rollbacks that were being phased in slowly since 2001. As reported earlier on this blog, the Obama campaign plan would exempt estates worth up to $3.5 million with the remainder taxed at 45%. The majority of estates – up to 98% - will pass without being taxed.

Category: Estate Tax
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Heath Ledger’s Daughter Will Inherit His Entire Estate

Posted on | October 2, 2008 | No Comments

Heath Ledger’s daughter Matilda will apparently inherit his entire $16.3 million estate. The actor executed a will (What Are the Advantages of a Will?) that left nothing to his daughter, but left everything to his parents and three sisters. Those family members have allegedly gifted those distributions to Matilda.

Category: Current Events, Estate Planning of the Rich and Famous, Probate, Probate Litigation
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Who May Write a Will? Requirements to Make a California Will

Posted on | September 21, 2008 | No Comments

Who may write a will in San Diego? Any person that is eighteen years of age and of sound mind may write a will (But should you? See Will Advantages; and Disadvantages of a Will). A person is of sound mind if they understand the rights, risks, and consequences of the testamentary act, the property they own, and their living descendents.

A person is not mentally competent if they lack the mental capacity to understand the nature of the testamentary act, understand and recollect the nature and situation of the individual’s property, or remember and understand the individual’s relations to living descendants, spouse, and parents.

In addition, a person may lack capacity to write a will if they have a deficit in mental function, such as alertness, information or thought processing. Of course, a court will not probate (See What is Probate?) a will where the person is insane, defined as a false conception of reality, a belief in supposed facts against all evidence and probability.

Category: Estate Planning - Generally, Probate, Probate Litigation, San Diego Estate Planning, Will Contests, Wills, Wills and Trusts
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California Probate Court Correctly Denied Use of Frozen Sperm by Widow

Posted on | September 16, 2008 | No Comments

A California probate court [See "What is California Probate?"] correctly ruled that a widow was not entitled to her dead husband’s frozen sperm, held the California Court of Appeal (Third District). Estate of Kievernagel, C055516 ( 9/11/08). The issue was whether Joseph Kievernagel would have wanted his wife, Iris Kievernagel, to have the sperm after his death. The sperm preservation agreement provided for two options upon the death of Joseph, either it would be donated to Iris or destroyed. Joseph initialed by the latter option, and both husband and wife signed the document. Joseph died in a helicopter crash in 2005.

Iris was appointed administrator [See "California Personal Representative"] of Joseph’s estate and then petitioned the probate court for a preliminary distribution of an “asset of no financial value” but “of immense sentimental value to the widow.” Joseph’s parents contested the preliminary distribution, claiming that it was against the testamentary intent of Joseph.

Frozen sperm falls within the broad definition of property in California Probate Code §62. Hecht v. Superior Court (1993) 16 Cal.App.4th 836, 846. This court agreed with Hecht that “gametic material, with its potential to produce life, is a unique type of property and thus not governed by the general laws relating to gifts or personal property or transfer of personal property upon death.” Estate of Kivernagel. Presumably, this means that a person can dispose of sperm or embryos in an instrument (or perhaps without any instrument at all) that does not meet the requirements of a formal will [See "Advantages of a Will"] – because the sperm bank agreement at issue was not properly witnessed. “Accordingly, in determining the disposition of Joseph’s frozen sperm, the trial court properly relied on Joseph’s intent as to its use after his death.” Id.

The probate court may find such testamentary intent by a preponderance of the evidence. Id. What is interesting is that this holding opens up the possibility of probate litigation over just what the intent of the donor was in the case of a cryogenic agreement that fails to specify what will happen to the genetic material after death. Nevertheless, in this case the written agreement was in place, and Joseph’s intent that the sperm be destroyed upon his death controlled.

Category: Current Events, Probate, Probate Litigation, Will Contests, Wills
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“Will I Inherit from My Parents if I Kill Them?” California Slayer Statute - A Common Sense Answer

Posted on | September 9, 2008 | No Comments

A lot can hang in the balance upon the death of a person. Although not every family murder is driven by a large inheritance, it has happened enough that a general rule of law has formed to prevent the person from benefiting from the crime. Not only has the rule of law been postulated by various United States courts, it has also been codified into statute in almost every jurisdiction. The following rule is part of a larger statutory system designed to prevent those who commit crimes from profiting from them.

The California Probate Code states that a person who “feloniously and intentionally kills the decedent is not entitled” to “any property, interest, or benefit under a will of the decedent, or a trust created by or for the benefit of the decedent in which the decedent has an interest, including any general or special power of appointment conferred by the will or trust on the killer and any nomination of the killer as executor, trustee, guardian, or conservator or custodian made by the will or trust.” California Probate Code § 250.

Category: Probate, Probate Litigation, Wills and Trusts
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Why You Need A Guardian and How to Choose a Guardian

Posted on | September 8, 2008 | No Comments

Many parents do not realize that if circumstances suddenly change, as in unforeseen death, incapacity, or some other circumstance prevents their ability to care for their children, a legal guardianship process will be instituted in which a caregiver is selected by a California probate court. For example, if a parent were arrested while her child was staying at a friend’s house, those other parents would not be able to prove that they had legal custody of the child. The police would then contact Child Protective Services, who would take custody of the child until someone could be found with the documented legal authority to care for the children. This could result in the child being placed in foster care until the issue is resolved by the probate court.

At court, each family member will have equal priority in determining who will become a guardian, even if your wish is that a reliable friend of the family take care of the children. All of us have family members that are not favorable candidates for raising children – yet those same family members may have that responsibility, even if it is against your wishes. Nobody likes to contemplate both parents dying simultaneously in a car accident, but if you fail to plan accordingly, your children’s future could be adversely impacted.

Some advice on how to choose a guardian can be found here, and include the following questions:

    Whose parenting style, values, and religious beliefs most closely match your own?
    Who is most able to take on the responsibility of a caring for a child — emotionally, financially, physically, etc.?
    Who does your child feel comfortable with already?
    Will your child have to move far away, and will that pose any problems?
    Does the person you’re considering have other children? If so, would your child fit in or get lost in the shuffle?
    Does the person have enough time and energy to devote to your child?

After you have made your decision, you must discuss the decision with the guardian, so that you can gauge that person’s willingness to perform the role. After selection, you must memorialize it in a legal document such as a will or trust. If you have life insurance or an estate, you can divide the duties between a guardian of the person and a guardian of the estate. Trusts are especially well suited to limiting the disbursements to children – such as providing only for the child’s health, welfare and education – while also protecting the assets in the trusts from the child’s creditors (what is called a “Spendthrift Trust”).

Category: Estate Planning - Generally, Probate, Probate Litigation, Trusts, Wills, Wills and Trusts
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What is a Guardianship? California Guardianships In San Diego Probate Court

Posted on | September 7, 2008 | No Comments

A guardianship is appointed for juveniles whose parents cannot take care of their children anymore for any number of reasons, such as a physical illness, military deployment, drug or alcohol problems, or child neglect. In California, there are two types of guardianships, each of which is handled by the San Diego Probate Court.

Probate Guardianship of the Person: A guardian of the person is responsible for meeting the child’s basic needs, including protecting and safeguarding the child, and providing food, clothing, and shelter – as well as medical care and education.

Probate Guardianship of the Estate: A guardian of the estate may typically be provided for when a child has inherited a large sum of money or property from a deceased parent.The guardian will manage the child’s financial affairs until the child reaches the age of majority (18 years), and in many cases the surviving parent will assume the role.

Probate guardianships do not terminate the parental relationship, but may end when the parent can resume taking care of the child. Anyone may petition the court to be appointed as a legal guardian, such as an aunt, uncle, grandparent or friend of the family. Some parents may be surprised to learn that their child can petition the court to appoint a guardian. In addition, a parent can name a guardian for their children in the case of premature death by will, or if the parent has a terminal illness. In the latter case, the court may appoint a joint guardianship, so that the guardian may provide for the child while the parent is still alive, and then take full custody upon that parent’s death without further hearing.

Category: Estate Planning - Generally, Probate, Wills
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California Personal Representative – Duties and Liabilities

Posted on | September 2, 2008 | No Comments

“What happens if I die without a will or trust?” The answer is that a California Personal Representative will be appointed by the court to administer your estate. A “’Personal representative’ means executor, administrator, administrator with the will annexed, special administrator, or successor personal representative.” California Probate Code §58. The order of preference, by priority (not all inclusive) is: the surviving spouse or domestic partner, children, grandchildren, other issue, parents, and brothers and sisters. California Probate Code §8461.

Even if you have a will that names the personal representative for your estate, the probate court must still approve of your selection. If you do not have an instrument in place, the probate court may require that the personal representative post a bond in order to serve in the position, which could cost thousands of dollars. The bond requirements include a credit check of the personal representative’s net worth.

Duties and Liabilities of a California Personal Representative

The personal representative is required to sign an acknowledgment of receipt of the “Duties and Liabilities of Personal Represenatitive.” California Probate Code §8404. The personal representative is an officer of the court, and the acknowledgment (drafted by the state Judicial Council) advises repeatedly that “[a]n attorney is best qualified to advise you about these matters.”

Managing The Estate’s Assets: The duties include managing the estate’s assets and investments prudently (the “prudent investor rule”), that is with the care of a prudent person dealing with someone else’s property. Another rule familiar to estate planning attorneys is the prohibition of commingling estate funds. Money in the estate must earn interest and be kept in insured accounts, and an estate planning lawyer should be consulted before making investments. Additionally, “[y]ou should not spend any of the estate’s money unless you have received permission from the court or have been advised to do so by an attorney.”

Estate Property: A California personal representative must locate and take possession of all the estate’s property, determine its value (likely by court-appointed referee), and file an inventory and appraisal within four months of all the assets in the estate. At the time of the inventory and appraisal, the personal representative must file a change of ownership statement with the country recorder or assessor where estate property is located.

Notice to Creditors: The personal representative must mail a notice of administration to each known creditor within four months of appointment.

Insurance: In California, the personal representative is required to obtain and maintain adequate insurance covering the assets and risks of the estate for the entire period of the administration of the estate.

Record Keeping: You must keep complete and accurate records of each financial transaction affecting the estate, including money and property received, spent, and the dates of the transactions. These records will reviewed by the court.

Consulting an Attorney: The Judicial Council’s form expressly states that “if you have an attorney, you should cooperate with the attorney at all times. . . When in doubt, contact your attorney.”

Finally, the form warns that your actions as a personal representative are “governed by the law itself and not by this summary.”

Category: Estate Administration, Probate
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