Some of the common mistakes listed in the article are things that are very easy to fix once you’re aware of them—listing the wrong beneficiary on an old retirement account or life insurance policy, for example. All too often people get a new job or new policy and list the right beneficiary at the time, then that policy goes in a drawer or filing cabinet for years. During those passing years you may get married or divorced, or you may have children. Any of these big life events require changing those beneficiaries. Luckily, making that change is generally a quick and easy fix.

If you aren’t worried about your retirement or life insurance beneficiaries, consider what what will happen to your children in the event of an emergency. Many clients agonize over who to name as guardians of their minor children, but forget to review those decisions every few years. The energetic young couple you chose 7 years ago might now have children of their own, or have moved to another state, and may not be as ideal a choice as they once were. If you listed your parents 10 years ago you might decide in the intervening years that an aging couple is not quite as able as you thought to take on so much added responsibility.

If your trust was prepared years ago when the estate tax laws were different, you may need to update your trust.  Many trusts prepared in the 1990′s under old tax law could actually undermine your wishes if not brought into compliance with current tax laws.  Specifically, the mandatory “trust-split” on the first death common to older trusts may no longer be necessary. Even worse, they could now result in the surviving spouse having only limited access to a couple’s assets after the first spouse’s death.  Also, if one spouse is now receiving Medi-Cal benefits to help with nursing home expenses, an update of your estate plan is usually a “must”.

The fact of the matter is that our lives are not static or stagnant, they are constantly growing and changing, and estate planning documents will need to grow and change with them. If it has been more than 2 years since you last reviewed your plan, it’s time to get out the magnifying glass and give your documents another good look. You might just save yourself and your loved ones some unwanted surprises.

1. Assessment. The first step to creating a plan that can protect your family, your future, and your family’s future begins with simply taking stock of what you have and where you are. Begin by making a list of all your assets, including your house, stocks, investments, bank accounts and personal property. Next consider your responsibilities and goals: what are your plans for the future or for retirement? Who do you wish to provide for in your will? Do you have a spouse or children who might benefit from a trust?

2. Implementation.  Now it’s time to put all that information you gathered in step one into play. The particulars of your estate will have a great impact on how you build your estate plan: A small estate and straightforward inheritance plan may require only a well-drafted will, while a larger estate may benefit from the asset protections found with a trust. Your goals for the future and your wishes for your family will have an equally large impact on your choice of estate planning strategies as well, including whether to include an education trust for young students, a pet trust for your furry family members, or a retirement trust to protect your own investments. An estate planning attorney can help you understand your options and implement the strategy you feel works best for your family.

3. Follow-Through. Once your estate plan is drafted, signed, and tucked safely away you’ll want to ensure that it continues working as you intend it to. The best way to do this is to review your plan with your estate planning attorney every 2 or 3 years. Your family and financial situation is likely to change over the years—estate taxes and laws change as well—and all the hard work you put into creating your plan can be undone if you don’t keep up with the changes.

According to this article on the CNN Money website, you can benefit from a trust “if you have a net worth of at least $100,000 and meet one of the following conditions…

• “A sizable amount of your assets is in real estate, a business or an art collection;
• You want to leave your estate to your heirs in a way that is not directly and immediately payable to them upon your death. For example, you may want to stipulate that they receive their inheritance in three parts, or upon certain conditions being met, such as graduating from college;
• You want to support your surviving spouse, but also want to ensure that the principal or remainder of your estate goes to your chosen heirs (e.g., your children from a first marriage) after your spouse dies;
• You and your spouse want to maximize your estate-tax exemptions;
• You have a disabled relative whom you would like to provide for without disqualifying him or her from Medicaid or other government assistance.”

The article goes on to explain that depending on your assets, your family, and your goals you may have a number of different trust options to choose from. The article gives very helpful explanation of the various types of trusts you may have available to you, and will give an idea of just how powerful and flexible a trust can be.

What the article doesn’t mention is that some of these trusts can be used in conjunction with each other, to provide layers of protection and control of your assets. The world of trusts is complex, but full of potential. Please contact our office (or your own local estate planner) to learn more about trusts, and determine how a trust might be good for your family.

The reason for this is that more and more parents are coming to realize that there is a learning curve associated with handling large sums of money, and dropping a large inheritance in your child’s lap may be giving he or she more than they can reasonably handle all at once, essentially setting your child up for failure. “Premature distributions to heirs can have the same effect as the jackpot has on lottery winners… The money becomes a burden, and your child may not fully develop into the adult you hope to raise.”

Luckily, if you don’t want to bequeath a fortune to your children all at once, you have a number of options for ensuring your children are provided for and eventually receive the inheritance you intend for them. As mentioned in the Barron’s article, some of the most popular strategies include passing an inheritance through either a revocable or an irrevocable trust. A trust allows a parent to transfer assets to their children while still retaining control of when and how the assets will be distributed. Of these two options, a revocable trust can provide more flexibility, while an irrevocable trust can provide more asset protection, although both kinds of trusts provide a measure of each. You will want to discuss with your estate planning attorney which option will work best for your family.

With either trust option parents can choose to simply keep the inheritance in trust until the child reaches a certain age, or distribute funds slowly over the course of time, to better acquaint the recipient with the responsibilities of wealth. It is wise to give thought to how you wish to structure your gift to your children, especially if you feel they may be unprepared in their early years to receive your legacy.

This isn’t all you can do to wrap up your 2011 tax package. This article in the New York Times explains that the next two years of tax policy are likely to be a bit rocky, and that “beyond the usual recommendations… you should use this year to get your affairs in order for what promises to be an uncertain two years of tax policy.”

If you’re not sure which deductions might apply to you, our office (along with the article mentioned above) has come up with a list of tax breaks to consider:

1. Charitable gifts to most non-profit organizations are tax deductible; and while you can’t deduct any time you spend volunteering, you can deduct any out-of-pocket expenses incurred while volunteering.

2. You can give monetary gifts of up to $13,000 to as many individuals as you would like without incurring the gift tax.

3. The 30% energy tax credits of 2010 expired at the end of last year, but new (albeit lower) credits were passed for 2011. Check the energy star website for information if you made any energy-efficient improvements to your home this year.

4. If you are over 70½ you are currently allowed “to directly donate the required minimum withdrawal from [your] retirement account to charity.” (This is something that may disappear with new tax laws in 2012.)

5. Teachers are allowed to deduct up to $250 spent on classroom expenses.

6. A significant tax loophole set to end this year is one that “allows people whose marginal tax bracket is under 15 percent to pay no capital gains tax when selling securities held for more than a year.”

These are only a few of the tax strategies you may want to consider before the end of the year. For more tax-saving strategies please talk to your financial advisor.

1. Call the nursing home staff ahead of time to schedule your visit. This not only ensures that you won’t be interrupting any previously scheduled mealtimes or activities, it also gives the residents something to look forward to (and prepare for, if necessary.)

2. Be aware of what to expect. Some will have physical disabilities such as trouble with their hearing, eyesight, or ability to move freely. Some residents may have Alzheimer’s or dementia and may have trouble remembering people or conversations. If you aren’t sure how to respond in certain situations you can ask a member of the nursing staff for advice.

3. Knock before you enter a room. The residents’ rooms are their homes and should be treated as their personal and private space. It is polite to ask permission before entering a room or before handling personal objects on display, but residents will likely welcome queries or questions about photos or personal objects, and this is an excellent way to get a conversation started.

4. Be a good listener. Elderly residents have a lot of history and experience to share, and providing a friendly and attentive ear will be gratifying not only to your elderly friend or relative, but will likely be a fascinating experience for you as well.

5. Be aware of your host’s energy level. Nursing home residents can often tire quickly and 20-30 minutes may be a tiring visit for them. (On the other hand, if you and your host are in the middle of a conversation or game there is no need to rush through to stick to an arbitrary schedule.)

6. Bring photos, cards, or board games with you. Conversation will not always flow easily and freely, and having a back-up plan such as a deck of cards can dispel awkward silences. You may also consider offering to write or read letters for residents who may have trouble with these activities.

7. Don’t promise to visit again unless you truly intend to follow through and can even put it on your calendar right then and there. Nursing home residents may not get many visitors, breaking an appointment can be a heavy disappointment for your friend or relative.

Before you roll your eyes at the idea, consider this: An estate plan is something every person needs, whether it’s your single younger nephew, your older sister with her two young children, or your retired, aging parents. Furthermore, although everyone needs an estate plan, many people (wrongly) consider it a luxury, and put off creating one—often until it’s too late.

You may be thinking, No, an estate plan is too personal (too expensive, too morbid) to give as a gift. But , consider this: If you feel an estate plan is too personal a gift, we recommend giving a gift certificate good for the cost of a basic plan, which the recipient can then design and add to according to his or her needs. If you feel an entire estate plan is too expensive, you may want to consider paying for a portion of the plan, or for the first consultation with an attorney, just to get your loved one started. And if it’s morbidity that you’re worried about, perhaps giving a gift certificate for a  “Loving Family Legacy Plan” sounds more appealing.

This year, don’t give a gift that will impress for a moment but be forgotten within a week; instead, give the gift that will protect your loved one—and their loved ones!—and will last for years to come. Give the gift of an estate plan. 

For most people, the documents in their estate plan constitute a “someday” or a “what if” scenario, but for those people with chronic or terminal diseases the documents in their estate plan address issues that are much more immediate and certain. For this reason, the advice in the article mentioned above focuses mainly on doing whatever you can to take control of your estate planning, health care, and financial affairs right now. Some of the suggestions include:

* Finding financial and estate advisors who are comfortable discussing your situation, and can help you customize your plans to fit your needs.

* Customizing your estate planning documents, including your will, trust, or living will.

* Signing important forms right now, while you still can.

* Making use of your temporary or limited powers options in your healthcare and financial documents, giving your chosen agents the limited power while you are temporarily incapacitated to “pay your bills and file your taxes but not sell your house or make gifts of your assets.”

It may also be wise to include provisions to coordinate your estate plan with the possible need to apply for government benefits to help subsidize the cost of care, e.g. Veterans Pension Benefits and/or Medi-Cal for Long Term Care. Qualifying for these benefits often requires that very special steps be taken.

Living with a chronic or terminal disease is a unique situation and requires unique planning and preparation—planning that is best done right away, for the good of your family and for yourself. If you are concerned about these matter, please contact our office—we can help.

According to this article in CNN Money, “Social Security recipients will receive a cost of living adjustment of 3.6% starting in January.” This will be the first “raise” recipients have seen in three years, and most welcome the increase. “Many seniors have felt squeezed since banks are paying virtually no interest on savings accounts and stock market declines has eroded their retirement accounts.”

Unfortunately, many seniors may not see a useful increase in their social security income thanks to a hike in Medicare premiums expected to be announced next month. “For the past two years when Social Security benefits stayed the same, many seniors were shielded from the increase in Medicare premiums because of a “hold harmless” provision that protects more than 70% of beneficiaries… However, high-income beneficiaries and new enrollees did see their benefits reduced because they are not covered under the provision.”

Even with the expected increase to Medicare premiums, most seniors are simply glad to see the Cost-Of-Living increase in their social security.  Those receiving Supplemental Security Income (“SSI”) will also see an increase, and we expect that the Department of Veterans’ Affairs will shortly announce an increase in Veterans Pension Benefits, as well. Stay tuned.

For more complete information about the coming changes in Social Security please read the full article. 

This is why it’s so important after the death of a loved one to have the support you need to get through the detail-oriented and often emotionally draining probate process, which includes tasks such as sorting through a financial history, submitting legal documents to the probate court, contacting creditors and family members, and more. Some people have family or friends to help with these time-consuming tasks, others enlist the help of an estate planning or probate attorney, but one thing is clear: no one should do it alone.

Every family or couple will have a different experience with the probate process, but our firm would like to offer a basic list of universal “to-do” items to remember after the death of a spouse. We hope this will help give our readers a little bit of security during a very emotional and stressful time.

* Obtain multiple copies of the death certificate
* Gather any and all estate planning documents
* Contact an estate planning attorney. Even if you don’t plan to retain an attorney, a brief initial consultation can help you understand the task ahead and prevent you from skipping important steps
* Notify the person named as executor or trustee
* Notify the necessary institutions or agencies (the deceased’s employer, social security administration, insurance company, creditors, post office, etc.)
* Ultimately, you should remove your spouse’s name from all joint accounts or ventures, such as bank accounts, utility companies, credit card accounts, etc., but we recommend holding off on the  co-owned bank accounts until you first consult with an estate planning or elder law attorney.  Sometimes there are disclaimer provisions in your spouse’s trust or will which might be affected.
* Pay final bills
* Cancel accounts, subscriptions, etc.

Depending on your situation and location, there may be many more tasks to be done. Additionally, if you are serving as executor or trustee (as many spouse’s do) there will be a great number of administrative tasks to be performed in addition to the ones on this list. Under these circumstances even the strongest and most capable people can feel overwhelmed. Remember that you don’t have to go through the process alone.

The sad announcement of his death has many people now wondering “what next?” How will this change the company he started? What will happen with his family? As this article from ABC News relates, “The ever-private Steve Jobs was famously secretive when it came to Apple’s new products. As with his personal life, the future of Steve Jobs’ wealth [and family] will also stay under the radar.”

The article mentioned above states that “Given Jobs’ vast wealth and penchant for privacy, he likely set up private trusts for his family and charitable purposes.” Private trusts would certainly have been the logical thing to do, under the circumstances. Trusts are a much more flexible, powerful, and private tool than a simple will when it comes to estate planning. Trusts are useful under any circumstances, but they provide a much greater amount of control and protection of assets, especially when dealing with very large estates.

If Steve Jobs did choose to create trusts to protect his estate then it is possible that we may never truly know how he chose to distribute his wealth. It is probably safe to assume, however, that in addition to providing for his family and loved ones, he may have left a considerable amount to charitable or visionary endeavors. His words and actions during life provide a clue about how he thought about wealth: “Being the richest man in the cemetery doesn’t matter to me…Going to bed at night saying we’ve done something wonderful…that’s what matters to me.”

Choosing a Primary Caregiver. The primary caregiver often ends up being the sibling who lives closest to mom or dad; it may start with a ride to the doctor here and there, but before you know it one sibling is shouldering almost all the responsibilities. Discussing the role of primary caregiver as a family can make everyone feel more involved and result in more support for mom or dad. The local sibling may still choose to care for parents’ daily needs, but out of town siblings may choose to take mom or dad on annual vacations or provide financial support.

Making Financial Decisions. Hopefully your parents have made arrangements for their long-term care expenses; but if not, you and your siblings may feel honor-bound to take care of the expenses yourselves. While the most logical route may seem to be an equal division of expenses between siblings, this may not be feasible or fair for every family. Siblings should take the time (and perhaps consult with an advisor) to discuss the various medical and care expenses, payment options, and financial strategies. Check to see if any public benefits may be available to help, such as Veterans Pension Benefits.

Living Arrangements and Long Term Care. Facing the reality that mom can no longer care for herself is a painful revelation for any family; making the decision to move a parent to a nursing home or long term care facility can be fraught with feelings of anger, guilt, or even denial, and siblings may be tempted to lash out at each other during this emotional time. Consulting with a Geriatric Care Manager or another trusted advisor at this time can help the entire family understand the situation, manage expectations, and keep emotions in check.

Making decisions as a committee can be difficult, especially when some members of the “committee” live far away, but when everyone is involved in the decision-making process then everyone is more likely to support a final outcome. Getting together with your sibling on a regular basis—even if it’s only by phone—to discuss the care of elderly parents can not only keep everyone on the same page and minimize disagreements, it can also provide a rare opportunity to grow closer as a family.