Estate News --- Observations of a Trust and Probate Attorney

Thursday, August 6, 2015

Estate Planning Can Be a Royal Pain

Bad Estate Planning Decisions Can Be a Royal Pain


It seems that nearly everyone is interested in the lives of the British royal family, and now estate planning lawyers have theirs piqued, too.  In September, Prince Harry—Princess Diana’s youngest son—turned 30.  With his birthday came access to the rest of his inheritance from his late mother.  It’s not his birthday that is of such interest, rather the fact that Princess Diana had clearly expressed her desire that he receive her assets five years ago. 


That’s right, Princess Diana’s own estate planning wishes were not followed, and it’s all because of a handwritten letter.  She had stated in her will that her directions should be followed “…as soon as possible but not later than two years following my death…”  She also stated that the directions to be followed could also come in the form of “memorandum or notes of wishes of mine.”  The next day, she wrote a Letter of Wishes that laid out how she wanted various assets to be distributed.


Because of certain wording used in the letter, the distribution of many of these assets was successfully postponed by the executors of her estate—her mother and sister.  In the Letter of Wishes, Diana directed that her assets be held in trust for her two sons and 17 godchildren.  The princes were to receive 2/3 of her property at the age of 25, and the other ¼ was to be divided among the godchildren.  Instead of sticking with the obviously clear intent of the letter, the executors quietly went to court and had things changed.  They were able to do this because the Letter of Wishes allowed them to use their discretion.


And their discretion included only giving one piece of jewelry to each godchild (instead of their share of the 25% of Princess Diana’s personal property) and keeping Harry and William’s inheritance in trust until the youngest reached 30.  In the 17 years since her death, all of her personal property was held in a collection by Diana’s brother who earned money by charging people to view it.


So, what is the lesson that estate planning lawyers here in <insert city> want our clients to learn?  Always work with your estate planning lawyer to double check the language and legality of any amendment to your estate plan.  If Princess Diana’s clearly-worded Letter of Wishes could be dismissed because of a few words, we non-royals probably need to be extra careful.  While Prince William and Prince Harry didn’t struggle to make ends meet, that might not be the case for your heirs.  Double check all amendments with your <insert city> estate planning lawyer to make sure they’ll hold up.


Monday, January 21, 2013

2013 Welcome To a New Tax Law

Estate Planning in 2013 and Beyond under the New Tax Law


The recent tax legislation dealing with the “fiscal cliff” included significant revisions to the estate tax law that will affect estate planning for the foreseeable future. These revisions include:


*    The federal gift, estate and generation-skipping transfer tax provisions were made permanent as of December 31, 2012. This is great news because, for more than ten years, we have been planning with uncertainty under legislation that contained expiration dates. And while “permanent” in Washington only means that this is the law until Congress decides to change it, at least we now have some certainty with which to plan.


*    The federal gift and estate tax exemption will remain at $5 million per person, adjusted annually for inflation. In 2012, the exemption (with the adjustment) was $5,120,000. The amount for 2013 is expected to be $5,250,000. This means that the opportunity to transfer large amounts during lifetime or at death remains, so those who did not take advantage of this in 2011 or 2012 can still do so. Also, with the amount tied to inflation, more assets can be transferred each year.


*    The generation-skipping transfer (GST) tax exemption also remains at the same level as the gift and estate tax exemption ($5 million, adjusted for inflation). This tax, which is in addition to the federal estate tax, is imposed on amounts that are transferred (by gift or at death) to grandchildren and others who are more than 37.5 years younger than you; in other words, transfers that “skip” a generation. Having this exemption now be “permanent” allows for planning that will greatly benefit future generations.


*    Married couples can take advantage of these higher exemptions and, with proper planning, transfer up to $10+ million through lifetime gifting and at death.


*    The tax rate on estates larger than the exempt amounts increased from 35% to 40%.


*    The “portability” provision was also made permanent. This allows the unused exemption of the first spouse to die to transfer to the surviving spouse, without having to set up trust planning specifically for this purpose. However, there are still many benefits to using trusts, especially for those who want to ensure that their estate tax exemption will be fully utilized by the surviving spouse.


*    Separate from the new tax law, the amount for annual tax-free gifts has increased to $14,000.


Therefore, for most Americans the 2012 Tax Act has removed the emphasis on estate tax planning and put it back on the real reasons to do estate planning: taking care of ourselves and our families the way we want. Those who might be tempted to skip estate planning because their estates are less than the $5 million range should remember that proper estate planning provides peace of mind by allowing Americans to:


*    Avoid state inheritance/death taxes that have lower exemptions than federal taxes;


*    Avoid probate, which can be quite expensive and time-consuming in some states;


*    Ensure their assets are distributed the way they want;


*    Protect an inheritance from irresponsible spending, a child’s creditors, and from being part of a child’s divorce proceedings;


*    Provide for a loved one with special needs without losing valuable government benefits;


*    See that control of their assets remains in the hands of a trusted person;


*    Provide for minor children or grandchildren;


*    Help protect assets from creditors and frivolous lawsuits (especially important for professionals);


*    Protect themselves, their family and their assets in the event of incapacity; and


*    Help create meaningful charitable gifts.


For those with larger estates, ample opportunities remain to transfer large amounts tax-free to future generations. But with the increase in estate and income tax rates, it is critical that professional planning begins as soon as possible. Also, with Congress looking for more ways to increase revenue, many reliable estate planning strategies may soon be restricted or eliminated. Thus, it is best to put these strategies into place now so that they are more likely to be grandfathered from future law changes.


For those who have been sitting on the sidelines, waiting to see what Congress would do, the wait is over. Now that we have some certainty with “permanent” laws, there is no excuse to postpone planning any longer.

Monday, January 21, 2013


Birthday celebration for Rachel at Jojo's Pizza tonight. It does not get much better than that.

Saturday, August 14, 2010

The Will did Not Work

Horror Story

The Will Did Not Work

In a recent posting, I mentioned horror stories that family members sometimes face after the death of a loved one. Believe me, they are real.

Here’s one. The gentleman drafts a will on a computer program and says he leaves “everything to my son.” But he had two sons. After his wife divorced him, the second son was adopted by the stepfather. The man who died wanted everything to go to his first son; he had absolutely nothing to do with the second son. But under the law, because of the vague wording of the will, the second son was entitled to 50 percent.

That’s the law and because he didn’t plan for it… And this is really a horror story, because he drafts the will and then he kills himself. The first son should have gotten it all, but he had a chance to lose it all – except that the probate was handled by a good attorney. We were able to work around it.

The worst thing is to have no will at all. The reason that’s the worst thing is that you have to pay for probate. You have delays and you run the risk of the siblings arguing about who’s going to be in charge. This is especially problematic if it’s a dysfunctional family and there are disagreements about how the estate should be divided.

If you have no estate plan in place and your home is worth less than half a million dollars, the automatic probate cost is $26,000. If the home is worth $1 million, the cost your relatives will have to deal with is $46,000. But if you have set up a probate avoidance trust, the cost would be $3,000, maybe $5,000 at the most. It’s a big savings.

If the deceased person had set up a probate avoidance trust, within days after the death, the successor trustee can take over. You’re not fighting over who’s in charge. In addition to saving more than $20,000, you’re also making it easy for your family to get through an emotionally charged time.


Saturday, July 24, 2010

It's For Those You Leave Behind

It’s For Those We Leave Behind


People spend considerable time planning for their retirement, but many neglect one of the most important aspects of personal and family planning – estate planning.

Everyone should have a legally accurate and complete plan for the administration of their estate after they die. Remember, you do this for those you leave behind, not for yourself. They are the ones who will bear the burden. You can lighten that burden if you take advantage of the opportunities that are available in estate planning.

It’s your obligation to protect your family members, to save them the headaches and legal problems after you’re gone. Many of you know people who have suffered through such trying times while mourning the loss of a loved one at the same time.

I do this all the time, so I don’t think of it as difficult. But it would be difficult for my wife. I did my planning to protect her not for me.

I’m a family person. I’ve got eight children and a handful of grandchildren. I’ve been focusing my practice for the last 15 years in the areas of estate planning and estate administration. I’ve been practicing law for 30 years. I’m here to listen to you and help you make the very best personal decisions for you and your family.

When someone dies without having a legal representative for their estate, no one can access the deceased person’s assets. They’re all frozen. You can’t get to their bank account. You can’t do anything with their real estate. Everything’s frozen until somebody has authority to act. And even if that person has a will, you don’t get that authority until a judge grants it to you.

If you and your wife have a joint back account and you die, your wife probably still will have access to it. But if there are assets that are not joint, she’s locked out.

If you get the proper legal assistance to make sure your estate is administered correctly, you will avoid the kind of horror story I deal with often in my business.

Saturday, July 24, 2010

Rules that Control Your Estate Administration

Rules you will live by after the passing of a loved one

Estate Planning and Estate Administration are both governed by four different sets of rules or laws.

   1. Rule of Law
   2. Rule of Possession
   3. Rule of the Jungle
   4. Rule of Love & Family

The key to ensuring that your plan will follow the Rules of Law and Love is to work with an attorney who is a Certified Legacy Advisor and uses Story Based planning. Plans that are Story Based result in plans that are purposeful and follow the rule of love & family.

Saturday, April 17, 2010

Quiz -- Do You Need Estate Planning

Do you need to do estate planning?

Your response either    Yes or   No then decide if you need estate planning.

Are you going to die        
Have you been married more than once        
Do You Have 2 or more Children        
Do your children have imperfections        
You do have children or if you have no children do you like all your brothers and sisters and all of their children        
Are all of your children are perfect all of the time        
You want your children to fight over who will be in charge of the estate        
Do You want to give your family guidance for the future        
Are all of your sons and/or daughter in laws are perfect        
Do you care if the majority of your assets are consumed getting your estate to your family        
Do you care if your heirs are in harmony over their inheritance        
Do any of your children need government benefits        
Non of your children will ever need government benefits        
Do you love your children        
Do you give over $1,500.00 to $5,000.00 to charities so they can help strangers and would rather give the money to the charity then to your children.        
Your spouse is perfect        
Do you want to protect your children if your spouse re-marries        
You do not want to protect your spouse if your spouse marries again        
Do you want to preserve your Legacy        
Do you want your children to receive your core assets and experience assets        

What do you think, do you need estate planning and should you talk to an Estate Planning Attorney? Only those who answer the questions Yes need estate planning.

Saturday, April 17, 2010

Why is there Probate and Why must the Trust be Administered

The primary reason for Administration of an Estate is to provide a process of orderly transfer of assets upon death, simply stated someone must be authorized to sign the decedent’s name to transfer assets. Upon the passing of an individual, there are certain steps and phases of administration that every estate goes through – regardless of size they are:

Phases are:

1.    Get Acquainted, Review & Evaluate the situation and Retain the Law Firm.

2.    Authority to handle the estate affairs is conferred upon the person who will be in charge.

3.    Assets/Inventory and Appraise

4.    Creditors

5.    Plan and Reposition.

6.    Taxes.

7.    Report and Account/Protect Heirs and Beneficiaries

8.    Distribute.

9.    Receipts and close

Saturday, April 17, 2010

Straw House or Castle

Are your assets protected by a straw house or a casle with a mote around it?

How much protection do you need?

Sunday, April 4, 2010

Do you know why people do not plan?

    I need your help answering this question.
Why Do So Few People Have An Estate Plan?

    I am sure you have never asked that question and frankly I don’t dwell on it myself.  I am an estate planning attorney and in the estate planning community the fact that only 35% of the population has an estate plan leads my peers to conclude that there is potential for a great amount of business.

    I am not sure their conclusion is correct.  I saw a survey result recently that causes me to conclude estate planners have it all wrong.  People do not have estate plans because they just do not care.  It is not important to them.  It is not because they do not want to talk about death and taxes.  It is because no one is talking to them about what is important.

    Americans are Explorers.  We are a people who are comfortable with uncertainty, 60% of Americans “tend to enjoy the uncertainties of life”.  Only 33% tend to avoid uncertainty and want everything in life to fit in a neat box.  Most of what we have IE., our financial wealth and our stuff we acquired through our hard work as a result of our experience and values.  Things were not neatly boxed up and handed to us.  We took what we had in an uncertain world and made something out of it.  Therefore if we could do it so could our children can do it.

    Over the years I have talked to many parents who have said, “let our children work it out”.  Or we have taught them well and they are prepared to work it out themselves.  Or I just don’t care what happens after I am gone.

    I think estate planners are not offering the correct product.  What we offer is not something people care about.  Consider this the estate plan does not save the planner any money or time.  It is just an expense that may put things in a neat box for their children and save them some money. We need to help parents pass on what is important.

    Estate planning is more than controlling the money from the grave.  Parents want to return to their roots and pass on what is important.  Their core and experience assets because with those assets in a world of uncertainty they know that their children will have the tools to be financially secure.  I believe Estate planners have focused too long on only the financial assets we must also help parents pass on their other more important assets.

    Parents have spent a lifetime living their core values and have years of experience which is more important to share with their children and grandchildren than their money.  They do not do their estate planning becaue they do not want to think their life only in financial terms.  They do not want their children to remember them for the money and estate they left.  They want to be remembered for something more.

    What do you think?    I agree _____ I disagree __________ 

Friday, April 2, 2010

Holding on to Your Hard Earned Assets

A request that is being made more and more often is how do I protect my assets in this litigious society. Over the next few days I will addess that question.

The goal of asset protection is to make if increasingly difficult for a creditor or litigator take your assets. Some of the tools available are:

1.     Insurance

2.     Incorporating Your Business

3.     Moving assets into a Family Limited Partnership

4.     Moving assets into a Limited Liabilit Company

5.     Domestic Self Settled Asset Protection Trust

6.     Off Shore Self Settled Asset Protection Trust

Each of these tools give different amounts of protection and the cost to set each up increases as you obtain more protection. Over the next few posts I will describe the differences between each tool and the additional protection obtained.


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Brock, Robinson & Associates assists clients with Estate Planning, Wills, Trusts, Special Needs Planning, Pet Trusts, Probate & Estate Administration, and Family Business Preservation in Chino, California as well as Chino Hills, Inland Empire, Pomona, Rancho Cucamonga, Ontario, Montclair, Diamond Bar, West Covina, Covina, Glendora, San Dimas, La Verne, Claremont Fontana, Riverside, Colton, Corona, San Bernardino, Redlands, Orange, Brea, Yorba Linda, Fullerton, Hacienda Heights, Eastvale, Norco, Mira Loma, Alta Loma, Upland, Rialto, Highland, Loma Linda and Grand Terrace in San Bernardino County, Los Angeles County and Orange County.

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