California Estate Planning Attorney Blog

The July 2010 issue of the California Bar Journal discussed the continuing effort to protect the public from lawyers who take advantage of distressed homeowners. The State Bar prosecutor's office secured orders of involuntary inactive enrollment for three Southern California attorneys and obtained the resignations of 13 attorneys involved in foreclosure misconduct since creation of the Loan Modification Task Force in April 2009. Five loan modification trials and 2,000 related investigations are pending.

It is news like this that makes people think twice about hiring a lawyer to assist in foreclosures, bankruptcies, or estate planning. Lawyers are specially trained in the law and court system, but not all attorneys have the best interests of clients in mind when handling their estate planning, bankruptcy, or foreclosure concerns.

The State Bar of California web site provides tips on how a person in or about Fairfield, Sacramento, San Francisco, Oakland, Walnut Creek would go about hiring a lawyer. Some lawyers take on a volume of cases in hopes of profiting on legal fees with little care for the requests of clients, and when the clients disagree on settlement or case resolution, the lawyer may threaten to withdraw leaving the client at a critical moment with no attorney or the burden of having to find another attorney to come up to speed. Without knowing that this may be an ethics violation, the client may go along with the attorney's decision to earn trust or to have what little legal protection he can get.

In bankruptcy, foreclosure, or estate planning, it is easy for an attorney to take on a quantity of cases even when the attorney does not have offices where the client lives. These attorneys generate business through seminars on financial or estate planning topics. These attorneys may take their fees upfront and then leave their clients' phone calls unanswered or directed to a secretary or non-attorney for the remainder of the case. For court hearings, the attorney may send a special appearance attorney who does not have depth in the case, and can only take notes. Sometimes the trustee during a bankruptcy 341 hearing even asks why a debtor chooses an attorney that is so far away that the debtor cannot meet the lawyer in person.

Though many attorneys give free initial consultations for estate planning, bankruptcies, or foreclosures, few attorneys desire to give free legal advice for fear of malpractice. When thinking of hiring an attorney, a potential client may be more prepared to be informed at an initial consultation by first researching legal issues on his own through consumer books like Nolo Press publications or on the Internet so he is prepared on what he wants to accomplish and the facts to gather for his case.

While a lawyer can help people understand their rights, a lawyer is not a friend. Sometimes with the duty to protect confidential information, people mistake a lawyer to be a buddy, but the lawyer is a professional who sees a case as work to be done. The relationship might turn into a friendship, but attorneys look to close matters and move on to the next so do not expect an attorney to help much during an emotional breakdown. Call the police if there is potential violence or stalking from the opposing party, not the attorney. Most attorneys care about the representation they are paid to handle, but attorneys are human too, with other work on the plate and their own family and personal problems.

Continue reading "Hiring A Lawyer - Fairfield" »

Legal guidance in estate planning requires an attorney who follows principles of professional responsibility. For instance, an attorney should not do a will for someone who appears incompetent. This creates havoc for the attorney in possible malpractice, and the family in a possible lawsuit from a beneficiary in a will contest.

California Probate Code Section 812 details evidence of a person's incapacity. Factors include: arousal, alertness and attention, orientation to time, ability to concentrate, immediate recall, recognition of objects, ability to appreciate quantities.

Mental competence to make a will is determined by looking to the time the will is executed to see if the individual understands the nature of the testamentary act, the person's property, and the person's relations with his/her spouse, parents, and others with interests in the will.

An attorney who takes on estate planning matters must maintain confidentiality by not disclosing client information to other people including the family relatives and friends of the client. The attorney-client privilege is detailed in California Evidence Code Section 952. Unless there is a law that requires an attorney to reveal a client's confidences, the attorney cannot disclose client communication. The duty of confidentiality stems from the duty of loyalty to protect a client from adverse interests.

An attorney-client relationship does not require any formality or fee. It may be formed by the exchange of confidential information by the client, and the rendering of advice by the lawyer.

Continue reading "Ethical Issues in California Estate Planning" »

A conservatee is someone who lacks capacity to contract. The person may have financial problems in not being able to manage resources or not resisting fraud or undue influence. For someone disabled, he might be an endangerment to himself or others. The proposed conservatee has a right to be represented by legal counsel according to California Probate Code. If he/she does not have an attorney, the court may appoint a Public Defender, or a private attorney from a panel.

The conservatorship proceeding may start with Judicial Council Forms to petition the appointment of a conservator. Who to choose as a conservator depends on the duration of a disability, the nature of the family relationship, the size and complexity of the estate, the attitude of the disabled person. A proposed conservatee may nominate a conservator in writing according to the California Probate Code, and the court will appoint the nominee unless the court finds the appointment not in the best interest of the proposed conservatee. All relatives within a second degreed are notified of the appointment hearings.

If the proposed conservatee does not nominate anyone to be a conservator, California statutes give preference to the following persons to serve as conservator: spouse, adult child, parent, sibling.

Once appointed, the conservator gets a handbook on his duties and liabilities. Some rules for the conservator are: he should not pay fees without a court order, he should not pay himself, he should not borrow funds from the conservatee. No fees are paid to the conservator without a court order.

The court may require the conservator to give a bond conditioned on the conservator following his duties.

The conservator has to file an accounting of the conservatee's estate after one year, and then biennially. The accounting is the job of the conservator not his attorney. Attorneys cannot get legal fees for doing the accounting. It is the conservator's responsibility to keep accurate records.

The conservatorship terminates upon the conservatee's death or court order when the conservatee regains capacity.

Continue reading "Conservatorships in California" »

Rinne Legal offers a free initial consultation on estate planning to individuals in and around Walnut Creek, San Francisco, Fairfield, Oakland, and Sacramento. To prepare for a consultation, it helps to gather information on the three Ps: People, Property, Plan.

Who are the people in your life? First there is yourself, then your spouse if you are married. If your parents are alive, you might count them in on your estate plans. If you have brothers and sisters, you might want to take care of them. Besides individuals, you might want to leave some of your assets to charities, colleges, or churches. There are your children and grandchildren if you have any.

In California, non-marital children may inherit from the mother when there's parent-child relationship by the mother giving birth and from the father only if father acknowledged the child, subsequent marriage to the mother, or court decree of paternity. Laws allowing non-marital children to inherit from mothers and not fathers violate the US Constitution's equal protection clause.

If you die intestate, foster children and stepchildren are treated likewise if it's established the parent would've adopted but for a legal barrier. Non-marital children as a general rule may inherit from and through the mother but only from and through the father if paternity established by subsequent marriage of the parents, adjudication of paternity during father's lifetime or proof of paternity.

Next, make a list of the assets you own or control. Identify insurance policy numbers and exact dollar values. Write down notes on the cash, stocks, bonds, death benefits, real estate. Knowing the property allows someone to create special asset distribution mechanisms such as a life insurance trust where the trustee holds life insurance policy proceeds for beneficiaries. California allows a settlor to name the trustee of a life insurance policy in a will.

Finally, consider the plans you would make for the important people (including yourself) and the property inventoried in the event of incapacity or death. Who would you name to make decisions for you if you could no longer do so yourself on your medical and finances? Who would care for your children? How would you distribute your assets to heirs? Would you prefer to spare your heirs probate costs and time? Would you like to minimize the impact of estate taxes or gift taxes? Do you want the beneficiaries to know what you are leaving them or keep it a secret?

Continue reading "Initial Estate Planning Consultation - Walnut Creek" »

When a devisee or legatee dies after the testator executes his will but before the will becomes effective, the gift to him fails or lapses. For example, when a Beth, a testator's sister, predeceases the testator, the gift to Beth lapses, and goes to the residue.

In California Probate Code Section 21110, the antilapse statute applies if the devisee who predeceases the testator was kindred of the testator or the testator's spouse. Section 21110 provides if: "a transferee . . . fails or is treated as failing to survive the transferor . . . the issue of the deceased transferee take in the transferee's place in the manner provided in Section 240." For purposes of Section 21110, "transferee" is limited to "a person who is kindred of the transferor or kindred of a surviving, deceased, or former spouse of the transferor."

For example, Beth, the testator's sister, dies leaving a child, Norm. Since Beth was kindred to the testator, the gift would pass to Norm, Beth's issue.

An antilapse statute protects attempted devises from otherwise lapsing and the property passing instead by intestacy. Antilapse statutes prevent unintended disinheritance of one or more lines of descent, by presumptively creating an alternative gift in favor of the descendants of certain of the decedent's predeceased relatives.

If you have any questions with regard to estate planning, please contact our office at 1-800-303-2964. Rinne Legal is located at 1990 North California Blvd., Walnut Creek, California 94596, with additional offices in Fairfield, Oakland, and Sacramento. Rinne Legal offers free initial consultations.

A settlor is the person who makes a trust. To place property in a trust, the settlor transfers property title to the name of the trust. If the property is not in the name of the trust, the property falls to the residuary beneficiary of a will, or if there is no will, it will pass by intestate laws.

When someone dies, the trust cannot be altered or revoked. The person who serves as successor trustee should be trusted. If there is no one who can be named as a successor trustee, then a living trust is not the right estate planning mechanism.

If a person has many debts, probate may be a way out of paying creditors. Probate provides a cut-off time for creditors to file claims against an estate. A living trust provides no cur-off time for beneficiaries to take property free of creditors.

A settlor may attempt to protect a beneficiary against improvidence by including spend-thrift clauses in a trust to prevent a beneficiary from transferring a right to future payments of income or principal, and creditors from attaching the beneficiary's right to future payments of income or principal.

There are exceptions to spendthrift provisions for preferred creditors, who can attach the beneficiary's right to future payments subject to the public policy that the attachment does not cause the beneficiary to become destitute. Preferred creditors include government creditors, child and support, tort judgment creditors, or those who provide the necessities of life to the beneficiary.

With a spendthrift trust, the trustee should be a different person from the beneficiary. Once the trustee gives money to the beneficiary, the control over the money is gone and the beneficiary may do what he wants with the funds. The trust can give the trustee power to cut off funds for the beneficiary so the beneficiary does not self-destruct with money. Income withheld can be left in the trust to be paid at a later date or to another beneficiary.

Continue reading "Spendthrift Trust" »

Estate planning is about creating income for financial security. Gather these facts for estate planning:

1. What are the assets?
2. How is each asset titled?
3. What are the debts, such as mortgages, home equity loans?
4. What are the sources of income, like salaries, investments?
5. What are the expenses like rent, taxes, insurance?
6. What kind of lifestyle like travel, entertainment?
7. What are long term expenses like tuition, long term care?

Only by assessing the facts can someone plan for retirement, and figure out if there is enough money for loved ones.

Estate planning is also about naming people to care for young children. If there are no parents capable of raising a minor, the child can be taken care of by a personal guardian. The court appoints the personal guardian. The estate planning document can name a personal guardian, but the court will not automatically appoint the person if another person is more fit. Generally, a court prefers to appoint a biological parent.

Finally, estate planning includes giving power to others to make medical or financial decisions when mental or physical incapacity prevents people from doing so themselves. On medical decisions, the person may appoint a power of attorney to decide on life-sustaining medical technology. Similarly, the person may use a health care declaration, which states the person's wishes about medication, blood products, surgery, life support. Local senior centers, hospitals, and medical associations usually provide sample forms for healthcare instructions. On finances, the person may appoint an attorney in fact for finances, where the agent makes financial decisions on investments, taxes, business operations, and expenses, when the person is unable.

If you have any questions with regard to estate planning, please contact our office at 1-800-303-2964. Rinne Legal is located at 1990 North California Blvd., Walnut Creek, California 94596, with additional offices in Fairfield, Oakland, and Sacramento. Rinne Legal offers free initial consultations.

A pretermitted heir describes a person who would likely stand to inherit under a testamentary instrument, except the testator did not know of, the heir at the time the instrument was written. With the pretermitted child, the testator might not know of the child because the child is born after the execution of the testamentary instrument.

In California, under California Probate Code § 21620, a pretermission statute designed to protect children from being unintentionally omitted from the testator's will, a pretermitted heir receives share in the estate equal in value to that which the child would have received if the testator died intestate, unless proof of intent to disinherit appears on the face of the will. However, a child does not receive the share (a) if the testator provides for the child by transfer outside the will, and such intention is shown by statements of the testator or other evidence, (b) if when the will was executed, the testator had one or more children, and devised substantially all the estate to the other parent of the omitted child, (c) if the testator's failure to provide for the child in the will was intentional, and the intent appeared from the will.

For example, let's say Wendy and Aaron get divorced, but while they are married, they conceive Carl. Wendy never tells Aaron about Carl so when Aaron wrote his will a year after his divorce, he left Carl out. Aaron's will gives half of his property to his mother and the other half to his two other children with Wendy, to share equally. Carl is an omitted child, and his interest affects every disposition under the will. When Aaron executed his will, he was unaware of Carl's birth. Thus, Carl should receive his intestate share, which is 1/3 of Aaron's estate. Carl's share would first be taken from Aaron's estate not disposed of by will. However, if the distribution defeated an obvious purpose of Aaron, the court could distribute differently to achieve Aaron's intent. Aaron's directions might have indicated he wanted to give his mother half, and he wanted the children to share equally. The court might give the mother half of Aaron's estate, and make Carl share equally the other half of the estate with the other children.

Continue reading "Pretermitted Child" »

Essential part of any estate planning effort is a diligent assessment of your legal relations. No matter if you are rich or not so well-off there are plenty of those. Every ordinary person has obvious ones, like employment contracts, family ties (married?) or partnerships in business enterprises. Each single legal relation comes with certain rights and/or obligations. There is also a relationship to assets, called ownership. Owners have also rights and obligations, e.g. the right to sell an asset or the obligation to pay property taxes on real estate.

Normally the owner knows that he or she actually owns something. Usually the owner is also aware of the respective rights and obligations that come with ownership of assets. Imagine now the unhappy event that you die from one day to the other. You would normally expect your heirs to take over, but heirs are not visionaries. The heirs would need to figure out what assets you have owned to know their rights and obligations.

Therefore, it is a good idea to create an inventory of all assets - tangible (like a car or a house) or intangible (like bank accounts, royalties or patents), so you heirs will get an overview of your estate. Often assets come with a document of title that expressly states your ownership (like the deed to a house). Inventory and documents of titles are essential when it comes to the distribution of an estate. Therefore those papers should always be held in an order and accessible in a way that somebody who is not familiar with your financial situation could get on overview if need arises.

The same applies to the usual instruments of estate planning, which are expressed in documents as well. Those essential documents encompass the last will, your living trust document, your health care directive and the durable power of attorney. Your heirs will need those documents to figure out who is entitled to your estate. It will avoid confusion if you keep those documents accessible. You should also let your intended heirs know where you keep your papers. In addition a safe backup - either digitally or hardcopy is advisable for worst-case scenarios (like a disastrous fire). Keeping your documents in order and safe will provide you with ultimate peace of mind.

Continue reading "Before You Die - Get Your Paperwork in Order" »

According to an Article on Forbes.com (see here) a recent survey showed alarming numbers when it comes to estate planning.

Roughly 65 % of 1,022 Adults asked do not have a will, that directs who inherits their assets in the worst case. 71 % lack an advance health care directive (living will), a legal instrument that is designed to direct critical health decisions if someone looses the mental capacity to decide on his own. No numbers were mentioned regarding the existence of a durable power of attorney but it can easily be assumed, that the results would have been similar terrifying.

Conductors of the survey also asked for the reasons, why people would not plan. Many individuals mentioned that estate planning were not their prime focus, especially in midst of recession. And 19 % thought, that estate planning was only important to the rich. These reasons are popular misconceptions of estate planning, which I have already highlighted (among others) in a post last year (see here).

I cannot stress enough that nearly all aspects of estate planning are of paramount importance to most people, even to those who struggle to cope with daily life. Information about estate planning are available for free, e.g. in our firm's learning center. If you're reading this post and you have not yet started your estate plan, it is time to do it now.

Continue reading "65 % of Americans Do Not Have a Will" »

A recent article in the Wallstreet Journal Blog Section covered the possibilities to plan for the future of a pet that outlives its owner (see here).

If you'd like to ensure that your pet receives the proper care after you die you should follow these important steps:

• Appoint a "Pet Guardian" and leave instructions for the caregiver (This is simply a non-enforceable nomination of a trusted person, that you believe will take loving care of your pet). You can use your will or any other document for this.


• Make sure the financial needs of your pets a covered. A already existing living trust may be used for that purpose but need to be adjusted to set aside the necessary funds for your pet. In average a dog costs $1,400 pa and a cat $1,000 pa. Depending on the age of your pet, the trust might require funding for up to 20 years pet care. You should also implement a clause into your trust that governs the use of the pet funds for the case that not all funded money is used. Such a clause should name an alternative beneficiary.


• Make sure that the appropriate legal instruments are also implemented for the case that you become incapacitated. You should draft your durable power of attorney in a way that enables your agent to financially cover the needs of your pet. The agent does not necessarily have to be the nominated caregiver.

If you'd like to learn more about living trusts, which can be used to cover the financial needs of your pet, you will find further information on Rinne Legal's website (see here).

Continue reading "Estate Planning for Pets" »

Any estate plan should be reassessed and if necessary updated at least once a year. Usually the arrival of the new year is a good time to tackle this little task. If you don't plan a full overhaul of your estate plan, there is generally not very much to do.

1. You should look for your estate planning documents and see if they are still in the place where you left them. There is nothing more painful for your heirs if they know that you have an estate plan but they cannot find the according documents if they need to.

2. Think about the year that passed. Have you acquired any substantial assets? If yes, you should make sure that those assets are transferred to your living trust. If not, those assets could trigger probate even though you have a living trust in place which is supposed to avoid this. For assets of daily use (e.g. an expensive TV, Art, Furniture) it might be necessary to draft a new declaration of assignment to move those newly acquired assets to your living trust. Within the firm's learning center we have outlined the basics how you move different kind of assets into your living trust.

3. Check your insurances. Does a live insurance still cover the amount that would be necessary to support your family or did the requirements raise in the past year? If you need more live insurance contact your insurance provider.

4. Think about your asset distribution in your living trust. Does your living trust still reflect your wishes of how you would like to distribute your wealth when you die? If not, your will or your living trust may have to be amended.

5. What about your chosen trustee? Is he or she still willing to take over the duty of a successor trustee? If you have any doubt about it, you should talk to the nominated trustee and if necessary choose a new one.

6. Are there any other concerns regarding your estate plan? You will have more peace of mind during the year if you find a solution for your concerns early on. If you don't know the answer to your special situation, speak to a lawyer. He or she will be able to solve your problems and make sure that your loved ones are save if something bad happens to you.

Continue reading "A New Year - Time to Update Your Estate Plan" »

On January 8th the reputable New York Times featured an article of Paul Sullivan about the 2010 repeal of the federal estate tax (see the article here).

I have already discussed the issue within another blog entry (see here), but Mr. Sullivan's article provides some additional detail to the matter. The article especially sheds some light on the estate tax repeal's impact on capital gains tax. Mr. Sullivan is concerned that changed property evaluation standards could finally lead to some tax dues despite the repeal. If you think, that you inherit a property in 2010, which was held for a long time and increased in value over time, the article is well worth reading.

Continue reading "New York Times Coverage of Estate Tax Dilemma" »

Some may wonder if it is possible to direct their own Interment. The answer is yes, legally binding arrangements regarding the choice in between burial and cremation and the kind of ceremony that is to be conducted can be made either in a last will, in an advance health care directive or within any other document as long as it is in writing.

While many leave some last instructions to their survivors only a few know, that those instructions are only legally binding under the California Health and Safety Code if two conditions are met:

• First the directions must clearly, unambiguously and completely state the final wishes of the decedent in sufficient detail and


• second the decedent must have provided the financial means to cover the selected disposition of his or hers remains and the ceremony. The finances can be provided by either trusts, insurance, commitments by others or by any other effective and binding means. (California Health and Safety Code Sec. 7100.1.)

Especially the second condition requires that the whole estate plan takes the interment instructions into account. It is not enough to simply state that the final ceremony is to be held in a certain way as long as the costs are not covered. There are some options to cover the costs. One could include respective arrangements within his living trust. Alternatively there are special trusts that cover funerals - be warned: the costs for those trusts may be very high (see the respective blog entry from last year).

However the costs are taken care of, it is important that you do take care of it, if you want your final instructions to be binding.

Continue reading "Binding Funeral Instructions in California" »

I found a very interesting statement on a website that is targeting sales agents. The website http://insurancenewsnet.com is promoting a webinar, teaching sales agents how to double their income by selling funeral trusts. The stunning fact in the article is that sales agents get as much as up to 16% commission for the "sale" of "Irrevocable Funeral Trusts". In my opinion, that is a lot of money for an agent who has nothing else to do but to sell a ready-made-legal-document combined with a life insurance.

Funeral Trusts are an legal instrument designed to shield your final expenses from nursing home-claims. In 2007 Chuck Jaffe of Marketwatch has criticized the sale of those funeral trusts in an detailed article that also explains what funeral trusts are and why they can be useful in some cases. He also stresses that from the viewpoint of a financial planner those trusts are commonly underperforming. I don't want to repeat Chuck here. So if you need further information on the issue of funeral trusts read the article.

Irrevocable Funeral Trusts can also be set up by your trusted estate planning attorney. That way you could choose the trustee yourself and you wouldn't have to trust an insurance company (that actually pays up to 16% commission out of your last expenses!) to administer your trust. A lawyer would also perform a legal check and explain other options to you. Therefore sales-persons, who are truly experts in making their product seem perfect for you should be treated with care. Think twice and if in doubt, consult a lawyer, who is the professional with regard to legal instruments like Funeral Trusts.