The new toy, the new tie, the 1/2 day at the spa… they are all soon forgotten. However, do a solid estate plan and the gift will give every year for EVER and that’s a long time! Tell your kids you have updated your estate plan and if your kids don’t have an estate plan wrap up a gift certificate to get it done. I’ll be happy to prepare a classy looking gift certificate for you! -John
Every lawyer and every law firm does things differently in terms of charging for changes to an existing will or trust. For example, I have heard some lawyers say they will not charge for changes for life. Is that your life or their life, I wonder!? What if they retire next week? Does somebody else take on the free changes? On the other hand I have heard some that charge for changes even at the rough draft stage.
There is no right “answer” but rather I think it’s important that you know what YOUR attorney charges. You should know this BEFORE you hire them.
Many years ago I determined that the best practice for my clients was to offer NO CHARGE FOR CHANGES DURING THE FIRST YEAR. This is not exactly 365 days of course. I have had clients come in after 13 months and I have gladly made changes for no charge. It’s just an approximation of one year. My feeling is that I want you to sign your documents because in almost every single case a signed estate plan is better than no estate plan. I thus want to encourage people to sign their documents even when they are still debating some small issues. GET IT DONE is my motto for clients!
As I have told clients in recent weeks if they sign their documents now they won’t have to pay for changes until 2014!
What about after that? Well, I typically charge existing clients very modest fees for changes. A typical change will be billed at 1/2 to 2 hours of my time depending on how involved and how many documents are being changed. Often it’s a very simple deletion of a name in one document so a 1/2 hour charge is normal. On the other hand some people need to modify all their documents so a 2 hour charge is more likely. There are rare cases where it can be more more than that of course. It just depends but I will always try to tell you up front so you know what you are about to spend.
Of course even better than all that… how about we create really flexible documents that do not need to be changed!? That’s my goal when I set up an estate plan. Back up plans, contingency plans, and the like so that your plan will not have to be changed!
Contact me to discuss your case. -John
It can be overwhelming to some to hire an attorney. They don’t even know what will happen at the first meeting. Here are some thoughts so you know what to expect. A few steps:
- Pick up the phone and call us for an appointment.
- We can usually get you in for an appointment within a week and often within 24 hours.
- We have offices in Sacramento and Roseville so you pick what’s best for you.
- We treat our initial meetings as an opportunity to provide education. That is, education on the estate planning process and what will happen during the preparation of your customized estate plan.
- However, we don’t just give you generic education we give you education that is tailored for YOU! That is, we talk about the estate planning options but with your estate specific assets and family in mind.
- We want to give you guidance about you, your family, your assets so that you leave the initial meeting feeling that you learned a lot… whether you hire us or not.
- We will walk through the steps of the estate planning process so that you know what will happen.
- We will explain everything so that no surprises will come up.
Let us show you how easy the estate planning process can be!
The folks in DC are still twiddling their thumbs, posturing, or just out playing golf!? So nothing new has developed out there and thus the fiscal cliff is coming. The loss of the greatest gift and estate tax exemption of my lifetime is about to sunset into history. Will we look back on 2011 and 2012 as historic years in the gift and estate tax world?
In the past week I have met with four different clients with net worths around $20-25m. In our little practice, in little old Sacramento, these are pretty wealthy people. All of them wanted to talk to me about taking advantage of the 2012 tax laws before it’s too late. The GIFT that is the 2012 gift tax exemption. The gift that expires in 27 days. To say it’s not too late is a stretch in that it’s not too late if you start TODAY or maybe tomorrow. However, the longer you wait in the month the harder it will be to put together a truly tax efficient plan.
We might be able to throw something together on December 20th or so. However, it will not get the benefit of a minority and lack of marketability discounting study done by a forensic accountant. That is, they won’t have time to do their job. However, we can still do things like gift 50% of a parcel and get a 15-20% discount through a tenancy in common (TIC).
The key is planning ahead. Yes, you should have called me 6 months ago. However we can still save your family MILLIONS in estate tax so call us, or another qualified estate planning attorney, today.
There are a lot of great estate planning tools available to use. Clearly everybody should have a will, a financial “durable” power of attorney and a health care directive (or “living will”). However, there are other options. Two that I particular like are the Qualified Personal Residence Trust (QPRT) and the Irrevocable Life Insurance Trust (ILIT). Today I am going to talk about my favorite… the QPRT!
A QPRT is an irrevocable trust. That means that generally it can not be changed. However, we can build some flexibility into it.
The fact that it is irrevocable is what gives it the power. It’s what makes it superior to the basic living trust for the right clients. Let me stress that a QPRT is not right for everybody but when it’s right it’s really right!
One of the main advantages of a QPRT is that it removes the future appreciation of a home from one’s taxable estate at a reduced value. That is a million dollar house might be removed from your estate using only $600k of estate tax exemption. More importantly, the future appreciation is gone too! Yes, future appreciation is OUT OF YOUR ESTATE. For our clients with estates that might be subject to estate tax after death this is huge.
Additionally as an irrevocable trust there is some protection from creditors. Some call this asset protection or liability protection. I hate to use that as a “selling point” but I do agree there is asset protection here and that’s important to consider. Of course nobody should undertake asset protection if they know of a liability as that can be criminal. However, if you have no reason to know about a future liability or creditor then asset protection is a nice benefit of this trust.
Some people use QPRTs as a house management tool. Sort of like a partnership. They put a house into a QPRT, with a short QPRT period, and then the kids become the owners but in trust. This is like a partnership when set up right. It can NOT be used for income producing property but it can be used for a vacation property. We have many clients with vacation homes at Tahoe and Bodega Bay, for example, and QPRTs are excellent for those.
Lastly, QPRTs are simple and not that expensive to set up!
There are more benefits and advantages to a QPRT. Contact me to discuss how it may benefit YOU. -John
Estate planning is on my brain just about 24/7 and 365. I occasionally give my brain a day off but not often. I thought today I would just post some discussion points or, to put another way, things you should be thinking about in regards to your own estate plan:
- How would you like your assets distributed when you are gone?
- Who will be the physical guardian of your kids?
- Who will take care of your kid’s money if they aren’t old enough?
- Do any of your heirs have special needs?
- Do any of your heirs receive governmental assistance of any kind?
- Would a random drug testing clause make sense for any of your heirs to protect them from themselves?
- Are there any charities, religious or educational organizations you want to benefit?
- Who’s the beneficiary of your 401k?
- What about the contingent beneficiary?
- Do you want to be on life support if you are in an irreversible coma?
- Do you have a business that needs to be included in your estate plan?
- Are there any advanced estate planning tools that you should consider?
The list goes on and on so get your plan started now with an estate planning professional!
Estate planning is overwhelming to some. In my office we try to distill it down to the basics to make it something people can complete. There are basically five steps in the process.
1) GOALS: We need to discuss what YOUR goals are.
2) INFORMATION: We need to gather and organize YOUR information.
3) ANALYZE: We need to analyze and discuss YOUR situation.
4) OPTIONS: We need to analyze and discuss the options that might work for YOU.
5) IMPLEMENT: We need to sign and organize YOUR estate plan.
Let’s get together to talk about YOU and YOUR estate plan soon! -John
As an estate planning attorney, since 1994, I have met with a lot of perspective clients. I have helped thousands of families with my estate planning services. In all that time I think I am yet to meet someone that doesn’t need some type of estate planning document. This is because estate planning is so much more than giving away your money. It’s also about naming a guardian for your kids, determining who will make health care choices for you, determining if you will remain on life support, determining if you will be cremated or not, and on and on the list goes.
If you have assets of low monetary value but they are important to you then a simple will is crucial. It will lay out who gets your treasures.
If you have no assets but care about not remaining on life support for a pro-longed period of time then you should have an Advanced Health Care Directive; sometimes called “Living Wills” or “Medical Power of Attorneys.”
If you want to make sure someone can take of your day to day financial, and quasi-financial, needs you should have a financial or “durable” power of attorney.
Talk to a qualified estate planning attorney to make sure your affairs are organized correctly!
I have spoken to many groups in the last 18 years. From small town gatherings in Davis, Dixon, Sacramento, Roseville and the list goes on. To large groups at Lyon, Rotary and SIRS (Seniors in Retirement). I have taught classes to attorneys, paralegals and financial planners on estate planning, probate and trust matters. I have taught several classes for UC Davis Extension and recently spoke at a UC Davis MBA class. My latest speaking engagement is at the Lyon Real Estate Fun Realtor Education Day (FRED) on October 15, 2012. Here is the press release if you are interested in more details. -John