Lost Money Resources for Life Insurance

Many people know that you can search for lost money on the California Secretary of State website as well as similar sites in most every other state in the union. Also, foundmoney.com is another great resource.

Lost money, found money, unclaimed property, or whatever you want to call it. They are ASSETS that should be in your trust or estate if you are administering one after death.

There are also resources for finding old life insurance policies. Here are a couple of key ones:

New York has a free service which searches all New York life insurance companies. Since many companies are housed there this is a great resource. It can be found here on this link.

Another great one, that currently costs $75, is at MIB.com.  They have a policy locator services for probate and trust cases. This is a great resource and well worth the $75 if you think your loved one took out a policy since 1996. The direct link is here.

Of course there are other services on the internet and this is just a start. You can also hire private investigators to really dig in to the search. Whatever you do I encourage you to not just watch. Get active and find that lost money!

-John Palley

What will tax laws be in 2013 and beyond?

I saw the following in Stephen Leimberg’s Estate Planning Newsletter.  This week’s issue written by Marty Shenkman and Bob Keebler who are well known national experts on tax law. I will quote Mr. Shenkman and Mr. Keebler’s words and then provide a couple of points below that as my added commentary:

“Likely Changes to the Current Estate and Gift Tax Laws:

  • The estate and gift tax exemption may decline. While the law provides for a $1 million exemption in 2013, President Obama has proposed a $3.5 million exemption.   However, the gift tax exemption is unsettled and may be only $1,000,000.
  • The generation-skipping transfer (GST) tax exemption is scheduled to decline to $1 million inflation indexed in 2013, but again President Obama has proposed a $3.5 million exemption.
  • The estate, gift and GST rate is scheduled to increase from the current 35% to 55%, but President Obama has proposed a 45% rate.
  • Grantor retained annuity trusts (“GRATs”) may be required to use a 10 year minimum term. This will substantially increase the mortality risk for using GRATs making the technique ineffectual for older taxpayers. Numerous bills to restrict GRATs were proposed previously.  For example, the House of Representatives passed the Small Business and Infrastructure Jobs Tax Act of 2010 on March 24 (H.R. 4849). Changes may be patterned after this or other prior proposals.
  • Grantor trusts have been proposed to be included in the grantor’s estate; however existing grantor trusts will be grandfathered in.
  • Portability of the estate tax exemption is set to expire in 2013. However, President Obama has proposed that it be made permanent. Regardless of what happens to portability it seems to be the consensus of most tax advisers that the shortcomings of portability generally make it only a technique to rely upon when better proactive planning was not pursued, or in a limited number of other circumstances.
  • Valuation discounts have been proposed for restriction or repeal numerous times. This may be another avenue of raising revenues on the wealthy. For example, Code Section 2704(b) provides that valuation restrictions which are more restrictive than state law should be ignored. State laws have been intentionally changed, e.g. Nevada, undermining the intent of this provision by incorporating into state law the restrictions that support valuation discounts.  This might be viewed as a loophole appropriate to close. Other anti-FLP provisions might mandate that certain restrictions be ignored. This could include certain categories of restrictions, such as the lack of a definite term in an agreement, the creation by transfer of only an assignee interest, inability to withdraw capital, and so forth. Lock in features might be ignored
  • Restrictions to multi-generational dynasty trusts could be significant if President Obama’s proposal to limit the allocation of GST exemption to 90 years is enacted.
  • Other restrictions to intra-family transfers may be proposed.

The collective effect of several, or perhaps all of these types of changes, could change the face of estate planning in a profound manner. The effective date could wreak havoc with 2012 planning that may still be in process if changes are enacted before year end.    We may wake-up on January 1, 2013 to find an empty estate planners toolbox.”

A lot of the above is self-explanatory I think.  The tax exemption will likely be lower, tax rates likely higher and planning is important. However, focus on a couple of the above shows that the government is cutting into the planning options for the wealthy but they will likely be grandfathered in. This tells me you need to plan NOW. The loss, or restrictions, on valuation discounts could be huge for families utilizing planning vehicles like the Family Limited Partnership (or family LLC).  Likewise the restriction on avoidance of the generation skipping tax could be huge down the road. It’s not likely to have a large impact during our lifetime but future generations will notice a difference  Thus, the wealthiest of us need to be taking action NOW! Not next week or next month but TODAY! Call you estate planning attorney right now and get your planning started!

Community Property in California

California is a community property state, a distinction that may have significant estate planning consequences for couples who live here. When dealing with specifics assets, the first thing that must be determined is the classification of the property, whether it is community or separate. According to California Family Code § 760, community property is everything that the spouses bought or received during their marriage while living in California. It does not, however, include an inheritance or a gift made only to one spouse so long as the property is not co mingled. Separate property is everything that was purchased or received by either spouse prior to the marriage. It also includes inheritances or gifts made to only one spouse.

Once a classification of property has been made, the next question is how that classification will affect a couple’s estate-planning goals. Families are now more blended than ever. Individuals divorce and get re-married all the time. When one spouse is planning for their passing, they may want to leave certain items to a child from a previous marriage. Before a couple can finalize a plan distributing their estate, each spouse will have to consider the state’s law on property characterization due to the limits the law imposes on the transfer of marital property.

Although the distinction between community and separate property may be easy to understand, several decisions from California courts have muddied the legal waters. These decisions indicated that there are some ways in which separate property can become community property.

  1. Commingling. One way that separate property can become community property is through commingling. This occurs when separate property becomes so entangled with community property that it is difficult to separate the two. The most common example of this is a separate bank account that then becomes a community bank account. Most of the time it is difficult to tell what funds existed before the marriage and what has been added to the account since the marriage. For this reason, most California courts would say that the accounts have been commingled and therefore the entire account would be classified as community property.
  2. Payments to maintain separate property. Many times, spouses come to the marriage with separate property, like a residence. If, after the marriage, the other spouse contributes to the mortgage or upkeep of the house, most California courts will hold that a portion of the house has been transformed into community property.
  3. Income from separate property businesses. In most cases, income generated from separate property is also classified as separate property. However, in some cases, that income can be transmuted into community property if, after the parties are married, the spouse continues to work with that income-generating asset full time during the marriage. For example, if one spouse owns a restaurant prior to the marriage, then marries, and still works full-time in the restaurant, any income that the restaurant generates may be determined to be community property.

Couples can, by agreement, circumvent the community property laws. This is usually done by prenuptial agreement. As long as the agreement is valid, family courts will honor the parties’ decision. If you have questions about the impact of California property laws on your estate, you should discuss your case with a California estate-planning attorney. Estate-planning attorney John Palley at Meissner, Joseph & Palley, Inc. is a Certified Specialist in Estate Planning, Trust, and Probate Law. His office will be happy to assist you with any of your estate planning needs. Call today at 1-888-920-5983.

How to Avoid Probate in California

With a little careful planning, you may be able to avoid the probate question, or probate “problem,” all together. Avoiding probate saves money and greatly reduces the strain placed on your family by time in court. A meeting with an estate-planning attorney can help you figure out how to structure your estate so that probate is not necessary, no matter how large the value of the estate. The following is a list of estate-planning tools that can help you avoid having to go through the probate process.

  1. Living Trusts: Living trusts (also called an “inter vivos” trust) is a trust that is created while you are alive, rather than one created upon your death. Living trusts are great vehicles to avoid the lengthy and expensive probate process.
  2. Joint Tenancy: An asset that is owned by two or more people in joint tenancy is not required to go through probate. These assets are easily spotted because the joint tenancy is only created with the following specific language: “as joint tenants,” “in joint tenancy,” or with the initials “JT TEN,” or something similar. It has to be clear from the language that the ownership as joint tenants is what was contemplated. The benefit of joint tenancy is that when one of the joint tenants passes away, the other joint tenant(s) own the entirety of the asset.  The language of the will of the deceased joint tenant becomes irrelevant and the property immediately moves into the other joint tenant’s possession.
  3. Small Estates: According to the California Probate Code, estates that are valued at less than $150,000.00 do not have to be probated. The assets that can be used to determine the value of the estate are limited so it is possible that the small estate law can be used even though the total value of the estate is greater than $150,000.00. Life insurance, pension accounts, living trusts, and joint tenancies are all assets that are not considered part of the estate. The value of the estate is determined as of the date of the decedent’s death.
  4. Spousal Property Petitions: If the decedent leaves a spouse behind after death, the spouse can submit something called a spousal property petition with the Court. The petition asks the court to change the ownership of assets from the decedent’s name to the name of the surviving spouse. In reality, it is a simplified version of probate, meaning that it is cheaper and takes much less time. These types of petitions are usually used when the decedent died intestate (without a will) and the spouse and the decedent owned property together, or when the spouse is the main beneficiary under the decedent’s will.

If you are deciding how to structure your estate so that you can avoid probate in California, it is important that you consult an attorney experienced in estate planning. California estate-planning attorney John Palley at Meissner, Joseph & Palley, Inc., is a Certified Specialist in Estate Planning, Trust, and Probate Law. His office will be happy to assist you with any of your estate planning needs. Call today at 1-888-920-5983.

Estate Attorney Video

Several years ago I had a video professionally made. It was through our yellowpages.com advertisement which we don’t even do anymore. I felt the video was too canned and just not who I am.  I wanted my clients and potential clients to know ME.  Please check out my video on my Youtube channel and let me know what you think.


For more information about California wills, trusts, probate and trust administration please contact me directly or visit our website at www.californiaprobate.info


Family Time

Sunday is a nice day to spend with family. My family often goes to breakfast at our favorite restaurnt, the Original Pancake House in Roseville, California.  We often see friends there which is nice.  Of course when you spend this time with family it can make you reflect on the importance of planning for your family. Ok, so being an estate planning attorney and having lost my dad when I was 14 I am more aware of this than average I admit.

However, next time you are spending some quality moments with your spouse and kids think about your family.  Have you done all you can do to minimize taxes, avoid probate, ensure your wishes are followed, make sure your kids money is there for them when they go to college, increase the chances of there still being money when they get married, and the list goes on.  All of these things and so much more can be accomplished by proper estate planning with a licensed California attorney.

Being a Certified Specialist in estate planning, trust and probate law I encourage you to only work with a Certified Specialist. Work with someone who has dedicated their professional life to this area of law. Work with someone dedicated to making your wishes a reality.

Contact me with any questions. Also, feel free to browse our main probate and estate planning web page at www.californiaprobate.info

Happy Sunday.  -John

Learning what you don’t know

Like most things in life preparing wills and trusts is something you can not learn in one day. In fact, you can’t learn it in one year.  I was reminded of this last week at a continuing education seminar I attended. I have been doing this type of work since 1994 and, in fact, been practicing exclusively in this area of law for the majority of the time. However, I still learn new things! I go to continuing education to learn about the latest laws, the latest ideas, but also to go a level deeper in my knowledge. I want to dissect detailed areas of the law and understand them!

Each time I go to a new deeper level I realize how unfair it is, to you the general public, for attorneys to dabble in an area of law. Wills and trusts looks so easy on the surface level but it is so deep and involved and so easy to mess up! The problem is the attorneys that dabble just don’t know what they don’t know. They, in fact, have no clue what they don’t know!

Sure there are in-depth classes they can take, books they can read, and some of them do all that.  A few new estate planning attorneys, like I did in about 1995 or 1996, will go to Wisconsin for a week of intense estate planning training through ALI-ABA which presents an incredible estate planning boot camp at the University of Wisconsin. It rotates each year; one year beginning, the next intermediate and the last advanced.  I went to a beginning year as that was the level of my knowledge back then. Hopefully one of these years I can go back for the advanced course of study because though I could teach most of the classes being offered I also know I will learn something if I do!

Unfortunately, most attorneys that dabble in wills and trusts do not go to many, if any, estate planning classes. They think they have some good forms and they “have the practice guides” if a tough problem presents itself. The problem is they do not know what a tough problem is since they don’t know what they don’t know!

Let me be clear this is NOT about how much money a client has. Certainly larger estates offer complexities but a lot of modest, and even small, estates create much more difficulty. Some small cases really require the knowledge of an advanced estate planning attorney.  Unfortunately many clients don’t know what they don’t know and they assume their case is easy.

The bottom line is hire an attorney with vast experience in estate planning. Do not hire an attorney who dabbles in estate planning just because you know him or he is giving you a good deal. Hire a trained professional!


Reviewing Your Estate Plan

The percentage of people that actually have a completed estate plan is pretty low.  I don’t know the exact number but it’s well under 50% and could easily be under 20%.  Of those 20-50% of the people who were organized enough to get your estate plan done in the first place should you review it at some point?

Well, the way it often goes is the client signs the estate plan, puts it away and forgets about it. Some people remember to put later acquired  assets into their trust but certainly not the majority of people. However, how many people have a document sitting on a shelf, collecting dust, that is simply not accurate anymore.  It may be inaccurate due to family change, asset change or changes in the law. The key is knowing when to talk to your estate planning attorney and, if in doubt, set an appointment to review things!

Times in life when you should review your estate plan:

– Changes in the law;

– New Marriage;

– Divorce;

– Kids or grandkids are born;

– Assets change drastically (up or down);

– Serious illness;

– Change in family business plans;

– Retirement;

– Change of jobs;

– Financial irresponsibility of a child;

and the list goes on and on.

Some of these can be more major problems than others. Getting married is probably one of the biggest. Let’s say you have a will or trust that leaves 100% of your assets to your children. Let’s say you get re-married to a lovely man. He is warm and sweet, loves your kids, puts a roof over your head and on and on the list goes of great attributes that this man has.  Then you die. Do your kids still get 100% of your will or trust?  Let’s say it was 100% “separate property” that you acquired years before marriage and you never co-mingled the assets with community property.  Still? Do your kids still get 100% of the assets?  What if you died on the honeymoon?  Still?  Do you still think your kids will get 100% of your assets?

The laws in California are very clear that your husband is a “pretermitted spouse.”  Simply put this means your hubbie can make a claim against your estate for his intestate share as if you had no will or trust!  If you have 2 or more kids that means he could make a claim for 33% of YOUR assets and if you only have 1 child he could go after HALF.  Let me say that again… HALF!

On the other hand you could revise your will and trust just before marriage to say you are contemplating marriage and still intend to give your children 100% of the assets.  Then you would do an amendment immediately after marrage stating you are now married but you still wish to give all (or whatever amount you decide) to your children.  By preparing proper, legally binding, amendments to your estate plan you have reviewed your estate plan and avoided the Gov-enator changing your estate plan for you!

This is just an example. I have more!

I encourage you to contact your estate planning attorney to review your estate plan. If you don’t have an attorney call me!


Probate/Trust Mediation

Your attorney has recommend you go to mediation to settle the dispute with your brother related to your mom or dad’s death.  Or maybe the probate Judge has ordered you to go to mediation before they will hear your case any more in Court.  Will mediation help you settle your dispute?  In this attorney’s opinion mediation will resolve most situations… but sadly not all. The reason many probate and trust disputes end up in Court is because tensions run very high after a parent’s death. Sibling rivalry issues from 65 years ago may come back to life. Issues related to the caretaking of one’s parents in their elder years may come up after death. In general, people just don’t act completely rationale when they lose a parent… AND then the other issue that clouds many people’s minds… MONEY.  Death and money combine to be a wicked force!

People end up in Court, and/or facing mediation, when they have a dispute which the two sides can not agree on a fair resolution of.  Maybe one person thinks they should get $250,000 of mom’s estate and the other person (usually their sibling) thinks that number is closer to $10,000… or zero! What’s right?  Well, most likely both sides have merit. Most likely the attorneys for each sibling have told them the good and bad to their case. Often a mediator can come in and solve the dilemna.

Let me first clear up a common misconception that the mediator comes in, says “let’s split it down the middle,” and you walk out 25 minutes later. No.  Mediation often takes all day or, in rare cases, multiple days.  In reality the mediator will generally listen to both sides present their case in a room (often a meeting room at a law firm).  Then the mediator might meet with each side alone to give their opinion of the good and bad of their case.  Yes, the mediator works hard to get a resolution but they can not force you to settle and the mediator does not make a “decision” like a Judge that is binding. A mediator trys to get both sides to see the light, agree and end the lawsuit!

A mediator is usually another attorney who practices in the area of estate and probate law (assuming your mediation is in this area of law of course). In some cases a retired Judge is used. In any event the person is an intelligent and level headed individual with knowledge of probate and trust law.  Mediators are typically paid by the hour and will bill for prep time for the mediation, travel time to the mediation, the mediation itself and any follow up work. They typically charge fees like most lawyers do; maybe $200 – $400 per hour as an estimate.

Let me clearly state a mediation is not Court.  However, you can generally get your case to mediation substantially faster than you can get to Court. Thus many people prefer mediation. Also, mediation tends to be substantially cheaper in attorney fees and I mean $UB-$TAN-TI-A-LLY!

So, let’s back up. Before the mediation your attorney will prepare a mediation brief outlining the case in their view. The other attorney will, likewise, prepare a brief showing their view. Often there is some overlap where the parties agree and then a lot of areas with no overlap.   Focusing on the issues with overlap is first to confirm the common ground. Then the mediator will delve into the dark side and try to resolve the OTHER issues!

The mediator will often put one person, and their attorney in one room, and the other in another room. The mediator will then go back and forth between the two rooms trying to narrow downthe differences and come up with common ground for a settlement.

If both parties agree the mediator might call them into the same room for a meeting to confirm the details. Then the attorneys, and the mediator, will walk over to a computer and start typing out a settlement document. The people do not leave until the settlement is reviewed and SIGNED!

In my experience mediation is a fabulous way to resolve disputes in the trust and estates arena. I encourage you to look into mediation to settle your disputes. If you need an attorney call me. If you need a probate and trust mediator call my associate, AMY RUGGLES, who has the training, patience and knowledge to help you!

The Importance of Specialty

If you drive a Lexus do you take it to the Ford dealer to get serviced?  Likewise, if you drive a Buick do you take it to Honda dealership for service? My guess is you don’t. My guess is you want someone who specializes in your type of car to fix your car.  What about food?  Do you go to a hamburger place and order fish?  Or maybe you go to a Mexican restaurant and order pancakes?  My guess you go to the type of restaurant you feel like that specializes in a certain type of food.  Doctors?

Well, you get the point.  How can the same not be true for your lawyer? If you get in a car accident do NOT call me because I do not know the in’s and out’s of personal injury cases. Likewise, if you get charged with a crime please do not call me with your “one call” because I do not know the first thing about criminal defense.  I know all about wills and trusts though!

When you are thinking of hiring an attorney look at their web site, look at the state bar website, and then ask the attorney. I can tell you 100% of my practice is dedicated to wills, trusts, probate and estate planning. ONE-HUNDRED PERCENT. I do not dabble in any other area of law.  When you are deciding who to hire to organize your family’s estate do some research! Check the other attorney’s backgrounds and find out if the dabble in estate planning or have dedicated 100% of their professional life to one area of law.

If their website says they practice a large list of areas that means they are a generalist who is probably not as knowledgeable at estate planning as someone like me who is a Certified Specialist in estate planning, trust and probate law as determined by the State Bar of California Board of Legal Specialization. This means I took a second bar exam… yes, I am that crazy! A one day exam only in these areas of law. Once I passed that I then underwent a deep background check where lawyers and Judges confirmed to the state bar that I know about trusts, probate and estate planning.  For you to hire anybody but a certified specialist is a mistake in my opinion!

Go to my website, go to lawyers.com, go to the state bar website. Every place you look it will say that I do wills, trusts, probate and estate planning. If you find a website that says I do anything else let me know so I can fix it!

If an attorney tells you (or their website shows) that they practice in several areas of law how can they be GREAT at it?  I know attorneys who think estate planning is just filling out some forms. It is NOT that simple. I promise.  The mistakes that can be made can be devastating and can cost your family huge amounts of money, can cause family strife and can usually be avoided!  Use an attorney who focuses their law practice on estate planning if you need a new trust. Do not make a mistake and let a slick talking salesman tell you anything different. You do need to use a specialist!  No, it’s not brain surgery but I know you wouldn’t want an orthopedic surgeon doing your brain surgery so don’t select a family law attorney to do your estate plan.  Select an ESTATE PLANNING ATTORNEY to do your estate plan!

In closing, if you need to know about wills, trusts, probate, estate planning, family limited partnerships, life insurance trusts, qualified personal residence trusts, QPRT’s, QDOTS, heggstad petitions, 850 petitions, probate court petitions, living trusts, loving trusts, revocable trusts, powers of attorneys, health care directives, Qtips, living wills, family LLC’s, family FLP’s, estate taxes, gift taxes, annual exemptions, generation skipping taxes, property taxes, capital gains taxes, and the list goes on then YES please call me!


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10.0John Bernard Palley
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