IRS Gift and Estate Tax Exemptions for 2015

The IRS released their gift and estate tax exemption numbers for 2015 a few months back. In case you missed it they are:

GIFT TAX: It remains at $14,000 per donor per donee.  So a husband and wife can do a “split gift” and give $28,000 to any indivudual (family or otherwise).

ESTATE and GIFT TAX: This exemption bumps up to $5,430,000 in 2015. That is, each person can give away this amount during life, or at death, or in combination. If your net worth might exceed this at death plan ahead with estate planning. There are many ways to maximize the value of each “dollar” given so that $5,430,000 can be much more!

Talk to a qualified estate planning attorney so that your estate gets planned correctly.

Happy new year!  -John


Dying on your terms and POLST

My grandma is 98 years old…. or should I say 98 years YOUNG!?  She called last week to tell me about a great article in the LA Times.  It’s about dying on YOUR TERMS. In fact, the headline in the paper was “Dying on your Own Terms” and the headline online is “How to Help Ensure you Die on your Own Terms.”  You get the point though. Here’s a link to that article.  LINK.

Though very healthy at 98 she is a realist. She’s 98 for gosh sakes! Stuff happens and she is aware of it. She has been saying for 20 years that all her friends are dying. So, at her request, I am sending her a few extra copies of the article to share around her care home.

Also, at her request, I am sending the latest POLST form. The POLST form or “pink sheet” is a document for you to go over with your physician. It’s not for the lawyer.  However, I will provide you a link. The state has a bunch of great information on the POLST form. Here’s a link to the page. LINK.

The key with all of this type of stuff is to talk to your loved ones and talk to your doctors. Do not assume and do not ignore. TALK it out!

Best of luck to you and your loved ones.


Ask your parents some tough questions to help everybody

Back in 2012 I posted a blog about talking to your parents about their estate plan. I called it “5 Questions to ask YOUR parents about their estate plan.”  I encourage you to read it before reading on….

The key here is that it’s a sensitive thing and, often, when dealing with your parents it can be tough. Heck, they are your elders, your respect them, you don’t want to look like a gold-digger. The 5 questions I posted back in 2012 are:

1) What estate planning documents do you have in place?

2) Can I have a copy of your trust?

3) Who are the financial decision makers in your estate plan?

4) At what age are the assets distributed to the kids?

5) Are all of your assets actually titled in the trust?

Let’s ask five MORE questions. That is, here are 5 more questions to help you help them help you!

1) So, the first question can be asked another way which is “have you done any estate planning?” or “What estate planning have you done?” The key is getting the conversation started. I think this is a good way to break the ice.

2) Do you have health care documents in place and do they have the latest HIPPA language?  Ya, I talk about financial stuff a lot on my blog but don’t forget the medical. Hippa can be a killa’ so make sure your parent’s documents are current!

3) Do you have long term care insurance or other protections in place? In case you didn’t hear the rumor long term care can break the bank! Good insurance can protect them… which ends up protecting you.

4) How is stuff set up for my spouse and/or children?  I like to look at estate planning as a multi-generational, or communal, thing. What your parents do affects you and what you do affects your spouse and kids. Plan it all together!

5) How about I pay for it? Let’s face facts. A lot of elderly people, especially depression (or near depression) era people are a little tight with their money. There is nothing wrong with that but sometimes you have to spend money to make money. Get their estate planning done! You’ll save yourself money in the long run!

Ask these five, and my previous 5, or some combination thereof and you should get the family conversation started… or be uninvited to Thanksgiving dinner and disinherited. (Just kidding)



Finish your parent’s probate and then….

Probate can be a long and drawn out process. These days it’s eight months and often longer.  Many probates drag on for a year or more. So when you finish your parent’s probate what should you  be thinking?

It seems to me that’s a great reminder that YOU need a living trust of your own!

You don’t want your kids or loved ones going through probate at your death, right?

You don’t have to wait for probate to be done but that seems as good a time as any.

Here’s the dirty little secret of probate and estate planning. Don’t tell anybody. Shhhhhh. Keep this between you and I….  you will die some day.

Plan ahead and get your revocable trust done and done right!


We fix $499 Trusts

I was reading the paper the other day and I saw an ad for a $499 trust. This blog post is not specifically saying that trust company is bad because I have no idea. That $499 trust may be the best trust of all time. However, seeing the ad reminded me that you really shouldn’t price shop for your estate planning documents. That can be VERY costly to your family in the long run.

Let me start by saying that our firm has been providing reasonable cost legal services since 1979. We pride ourselves on this. However, we aren’t the cheapest. We are far from the most expensive but also not the cheapest.

When you are searching for your attorney don’t shop solely on price. Yes, consider it but please don’t use that as your only factor. I have seen way too many trust mill trusts that are completely inadequate in one of different ways.

Some common problems:

1) Unfunded trusts;

2) Incorrect type of trust used;

3) Complete errors;

4) Failure to provide a pour over will;

and on the list goes.

Get your estate plan right by an experienced attorney!


A/B Trust Options

The “A/B” trust is a very common set-up for married couples in the estate planning world.  I should say there are different names for these trusts. I call it an A/B Trust. Others may be call it a Bypass trust, a credit trust or even a 1/2 trust. Whatever you call it a split trust is a common estate planning vehicle. How does it work?

There are 4 main options for a standard husband and wife to consider in trust planning. That is, at the first death what happens to the trust.

1) Totally revocable: This is the simplest trust. I call it a “probate avoidance” trust. It’s the simplest and most straight forward trust. The downside though is that the surviving spouse can completely change the trust and disinherit the kids. However, assuming no estate tax issues this is a good option for many people with more modest estate sizes.

2) A/B Disclaimer Trust: This is a very common trust set up for married couples. It allows the surviving spouse to “disclaim” assets within 9 months of death of the first spouse’s death. This is typically if they are concerned about estate taxes or if they are very concerned about making a bad decision in the future as it limits their ability to change the trust to the A trust as the B trust is irrevocable after the first death.

3) Mandatory A/B Trust: This is common for second marriages or for people with inherited or other separate property assets. It mandates a split into two trusts at the first death. For a long time it was the predominant trust utilized by estate planning attorneys. However, with the great changes in estate tax exemptions the mandatory A/B is used less often now.

4) Totally irrevocable: This is only for elderly people in my opinion. That is, your basic husband/wife trust should not be totally irrevocable at the first death unless you are really confident you won’t get remarried or want to make any changes.  I say 85 years old and up for this. In fact, this trust is the least used of the four.

Whatever trust works for you works for me. There are many A/B trust options so pick what works for you!  Let me know if you questions about your trust set up!  -John

How to properly witness a legalzoom will

I met with a client this week who proudly showed me her old will. It was a fine legal document. It left her assets to her husband and then her kids. It set up a guardian for the kids. It named an executor. It was a fine will. As she pointed out there was a major typo in that one of her kids wasn’t included in part of the disposition paragraph but she believed that may have been her fault in setting it up. She acknowledged that she set it up on

She also proudly showed me the notary page.  What? The notary page? For a will? In California wills are not notarized. The other documents, like powers of attorney, are to be notarized but not the wills.  The notary should have known better but they didn’t.  I am a California notary and it seems to be that every time I have studied for the notary exam I have been reminded that we can not notarize a will.

The law is set forth in California Probate Code 6110(c) which reads:

(c) (1) Except as provided in paragraph (2), the will shall be
witnessed by being signed, during the testator’s lifetime, by at
least two persons each of whom (A) being present at the same time,
witnessed either the signing of the will or the testator’s
acknowledgment of the signature or of the will and (B) understand
that the instrument they sign is the testator’s will.”

Notice it says the will shall be witnessed by two persons.  In fact, a notary can be one witness but they wouldn’t notarize the will. Instead they would sign the witness block.

Again, as stated before, Legal Zoom may create perfectly fine legal documents. However, if you don’t execute it properly all you have is a pile of paper! I am confident that Legal Zoom probably sends detailed instructions for signing the will. However, if it’s done right it’s as if it’s not done!

Get your will done right! Hire an estate planning attorney and make sure the will is signed and witnessed properly!


New Year’s Resolutions 2014

If you are making new year’s resolutions for 2014 does it include any of the following:

1) Get a living trust; or

2) Update our current estate plan; or

3) Add a life insurance trust (ILIT); or

4) Look into a qualified personal residence trust (QPRT); or

5) Have a qualified estate planning attorney review my estate plan….

If you have any of these thoughts please call me TODAY.  Call now!  Make an appointment and let’s get it started.  Ok, well go to the gym first as that’s always on the list too but after that call me and get your estate planning done!

Happy new years!  -John

Estate tax exclusion 2014

The IRS has released their inflation adjusted numbers for 2014. The estate tax exclusion has gone up to $5.34m for 2014.  The annual gift exclusion remains at $14,000. Below is the text straight from the IRS website:

2014 Inflation Adjustments

IR-2013-87, Oct. 31, 2013

WASHINGTON — For tax year 2014, the Internal Revenue Service announced today annual inflation adjustments for more than 40 tax provisions, including the tax rate schedules, and other tax changes. Revenue Procedure 2013-35 provides details about these annual adjustments.

The tax items for tax year 2014 of greatest interest to most taxpayers include the following dollar amounts.

  • The tax rate of 39.6 percent affects singles whose income exceeds $406,750 ($457,600 for married taxpayers filing a joint return), up from $400,000 and $450,000, respectively. The other marginal rates – 10, 15, 25, 28, 33 and 35 percent – and the related income tax thresholds are described in the revenue procedure.
  • The standard deduction rises to $6,200 for singles and married persons filing separate returns and $12,400 for married couples filing jointly, up from $6,100 and $12,200, respectively, for tax year 2013. The standard deduction for heads of household rises to $9,100, up from $8,950.
  • The limitation for itemized deductions claimed on tax year 2014 returns of individuals begins with incomes of $254,200 or more ($305,050 for married couples filing jointly).
  • The personal exemption rises to $3,950, up from the 2013 exemption of $3,900. However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $254,200 ($305,050 for married couples filing jointly). It phases out completely at $376,700 ($427,550 for married couples filing jointly.)
  • The Alternative Minimum Tax exemption amount for tax year 2014 is $52,800 ($82,100, for married couples filing jointly). The 2013 exemption amount was $51,900 ($80,800 for married couples filing jointly).
  • The maximum Earned Income Credit amount is $6,143 for taxpayers filing jointly who have 3 or more qualifying children, up from a total of $6,044 for tax year 2013. The revenue procedure has a table providing maximum credit amounts for other categories, income thresholds and phaseouts.
  • Estates of decedents who die during 2014 have a basic exclusion amount of $5,340,000, up from a total of $5,250,000 for estates of decedents who died in 2013.
  • The annual exclusion for gifts remains at $14,000 for 2014.
  • The annual dollar limit on employee contributions to employer-sponsored healthcare flexible spending arrangements (FSA) remains unchanged at $2,500.
  • The foreign earned income exclusion rises to $99,200 for tax year 2014, up from $97,600, for 2013.
  • The small employer health insurance credit provides that the maximum credit is phased out based on the employer’s number of full-time equivalent employees in excess of 10 and the employer’s average annual wages in excess of $25,400 for tax year 2014, up from $25,000 for 2013.

Details on these inflation adjustments and others not listed in this release can be found in Revenue Procedure 2013-35, which will be published in Internal Revenue Bulletin 2013-47 on Nov. 18, 2013.

Protecting your digital assets


Protecting your digital assets isn’t talk about by most attorneys. However, it should be!  In some cases your digital assets are of extreme value; either monetarily or for sentimental reasons. Make sure your estate planning attorney discusses this with you!


The most common problems with digital assets is ACCESS. You are alive and incapacitated or you are deceased.  How does your family, loved ones, or trusted professional get access to these digital assets?


What exactly are “digital assets?”  Does this include computers, tables, and smartphones?  Yes, probably. What about access to Facebook, Youtube, and other social networking sites? Yes, I would say so.  How about domain names and blogs owned by the decedent? Yes, I think so.  How about frequent flyer accounts?  Yes, maybe those too!  Plus, so much more!  Digital assets are the future and that future is just being defined right now! The definition will change but the problem is there and it needs to be addressed!


Proper estate planning is the solution!  Your power of attorney, will, trust and general transfer should all make reference to your digital assets. Plus, maybe you should get on-line vault such as or If nothing else tell your trusted person, or people, about where they can get access to your digital afterlife!


Your estate planning attorney should talk to you about your digital assets. If not, ask them why!