San Diego Estate Center - Wills and Trusts Lawyer Blog

The Estate Tax Will Not Dissappear Under Obama

2009-01-15T22:19:00Z

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.

Last Will and Testament of Paul Newman Admitted to Probate

2008-11-26T02:18:58Z

The last will and testament of Paul Newman has been admitted to probate. You can see a copy of his last will and codicil here (See “What Will Happen if I Die Without a Will?”). Mr. Newman directed that his race cars and airplanes be sold for fair market value with the proceeds to be passed to the residuary. His Oscars and other awards will pass to Newman’s Own Foundation, and trusts were established to handle his various businesses (Mr. Newman could have avoided the publicity of probate entirely by using a trust – see “Advantages of a Living Trust”). Thanks to Professor Beyer for finding the article.

The State of Estate Planning After the Election: Obama’s Proposed Estate Tax Plan

2008-11-06T08:42:57Z

The dust has begun to settle after the election - and both the legislative and executive branches are controlled by the Democratic Party. If Obama’s estate tax plan becomes law, the $3.5 million exemption of 2009 would be retained, but amounts in excess of that would be taxed at 45%. The top tax rates of prior years (for dual earners over $250,000 or one earner of over $200,000) would be reinstated 26% or more. Additionally, investors who make more than $250,000 per year would see an increase in the capital gains tax to up to 20%.

California Probate Guardianships - No Contest Clauses in a Will or Trust May Not Apply to Minors

2008-10-09T22:45:01Z

A minor who nominated his mother as guardian ad litem (See What is a California Guardianship?) does not voluntarily participate in a probate proceeding triggering a no contest clause provision in a will or trust. Safai v. Safai, 164 Cal.App.4th 233 (2008).

“The Trust (What is a Revocable Living Trust?) and the will both included ‘no contest’ clauses, with the Trust’s clause stating, as follows: ‘Any beneficiary who directly or indirectly voluntarily participates in any proceeding or action in which such person seeks to void, nullify, or set aside (1) any provision of this instrument; (2) any provision of the Settlor’s will; or (3) any amendment of this instrument or codicil of the Settlor’s will shall be considered to have predeceased the execution of this instrument without surviving descendants[.] The provisions of this paragraph shall not apply to any disclaimer by any person of any benefit under this instrument. The Trustee is authorized to defend any contest or other attack of any nature on this instrument or any of its provisions.’”

The court reasoned that the settlor did not intend “to disinherit his only son in the event that [the son] contested the Trust while still a minor,” even though a “guardian or guardian ad litem is not a party to the action; instead, he or she is a representative of record of a party who lacks capacity to sue.” Thanks to Professor Beyer for bringing this case to my attention.

Steve Fossett’s Remains May Have Been Found

2008-10-03T07:02:44Z

Steve Fossett, the adventurer who disappeared while in flight over Nevada’s desert, may have finally been found in California. The disappearance raised probate issues (What is California Probate?) when his wife petitioned the probate court to declare him legally dead and to probate his will (What Will Happen If I Die Without a Will?). Crash investigators have found a “very small” amount of human remains at the crash site and described the crash as “very high impact.”

Heath Ledger’s Daughter Will Inherit His Entire Estate

2008-10-03T06:05:38Z

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.

How To Find A Good Estate Planning or Probate Attorney In San Diego?

2008-09-30T22:44:51Z

What is the best way to find a good estate planning or probate lawyer in San Diego? There are many resources that can help you find an attorney – but not all of them will produce an optimal result. Two good ways of finding an attorney are by contacting your friends or the San Diego County Bar.

Probably the best way to find an estate planning attorney or lawyer in San Diego is to go through the personal referral process – simply ask a friend if they have used an attorney and whether they were satisfied with the service.

The San Diego County Bar Association has a phone number that you can call and they will refer you to a lawyer. You can find out more about the Lawyer Referral and Information Service here. The first 30 minutes of the consultation with the lawyer will be free.

Will I Inherit from My Husband or Parent If I Kill Them (Part II)? The Answer Could be Yes

2008-09-26T22:32:28Z

A Wisconsin court has ruled that giving a loaded shotgun to a suicidal parent is not the proximate cause of the parent’s death (although it is the actual or but-for cause), so that a wife and daughter of the man may inherit his $500,000 estate. The man was terminally ill with lymphoma and his wife and daughter took him directly from the hospital (where he had only a one day pass to leave) to a cabin, gave him the loaded shotgun and left him.

The Wisconsin Slayer Statute (Read here about California’s Slayer Statute – Will I Inherit from My Parents if I Kill Them? Part I) prohibits those who “intentionally kill” another from inheriting from the person. California’s statute has basically the same language, and it is not clear what the result would be on the same facts here. The wife and daughter were embattled in probate litigation (See What is Probate?), and the case will likely be heard by the Wisconsin Supreme Court. You can read the full story here.

Tax Shelters: Offshore Asset Protection Trusts Become a Political Hot Button

2008-09-25T09:01:30Z

Barack Obama has aired a new ad accusing John McCain of favoring offshore asset protection trusts that operate as tax shelters in Bermuda. McCain is alleged to have taken $50,000 while on a lobbyist supported vacation from those who have benefited from the trusts. You can see the ad here, courtesy of the Huffington Post.

For more on the current state of asset protection trusts, read:

Eight Signs Your California Tax Shelter or Offshore Asset Protection Trust Is Actually Tax Evasion

Criminal Tax Evasion - Trouble Ahead for San Diego Asset Protection Lawyers and Attorneys?

Offshore Trusts and Asset Protection Trusts Are Among 10 Things Millionaires Won’t Tell You About

California Executor and Personal Representative Duties: Filing the Estate Tax Return

2008-09-24T07:07:35Z

If you are appointed as executor, administrator, or personal representative (What are the duties of a personal representative?) of an estate, you are responsible for filing a tax return. An estate tax return must be filed within 9 months of the decedent’s death. Internal Revenue Code §6075. You may file for an extension for no more than 6 months. IRC § 6081. If you fail to file a timely return, the IRS will assess a penalty equal to 5% of the amount required to be shown as tax on the delinquent return for each month during which the return remains delinquent.

The only way to avoid the penalty is to show that the failure to file was due to “reasonable cause” and not “willful neglect.” Reasonable cause is established where, despite the exercise of ordinary business care and prudence, a taxpayer is unable to timely file. Willful neglect is a “conscious, intentional failure or reckless indifference.” Reasonable cause may be established by relying upon the advice of an attorney. “However, a taxpayer’s reliance on the advice of an attorney with respect to matters such as meeting filing deadlines generally does not constitute reasonable cause.” Estate of Gertrude Zlotowski, Docket No. 22150-04 (July 24, 2007). In addition, relying solely on an attorney’s advice is likely an impermissible delegation of your duties as a personal representative of the estate.

“Congress has placed the burden of prompt filing on the executor, not on some agent or employee of the executor” except in a very narrow range of situations (such as erroneous advice that a return was not needed at all). United States v. Boyle, 469 U.S. 241, 249-250 (1985). If you are preparing to assume the duties of a California personal representative, it is important that you consult with a San Diego probate lawyer who can provide guidance on return preparation, filing deadlines, and other issues that could land you in hot water should you fail to spot them.