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ESTATE PLANNING BASICS

ESTATE PLANNING BASICS. What is Estate Planning?. Estate planning is a lifelong process in which you evaluate your situation and plan for the future. It includes; Wealth Transfer Reduction of Taxes Retirement Planning Planning for the possibility of disability, and for death.

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ESTATE PLANNING BASICS

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  1. ESTATE PLANNING BASICS

  2. What is Estate Planning? • Estate planning is a lifelong process in which you evaluate your situation and plan for the future. It includes; • Wealth Transfer • Reduction of Taxes • Retirement Planning • Planning for the possibility of disability, and for death. • The process generally has two parts. • One part involves planning for the management and disposition of your property both during your lifetime and after your death. • The second part is planning for your own personal and health care in the event that you are no longer able to provide for such care.

  3. What is Probate? • Probate is the formal court process to provide the necessary authorization for the transfer of assets upon one’s death. If a person dies without a Will, it is called Intestate, and their estate, unless otherwise disposed of by beneficiary designation, will be disposed of according to the succession plan set forth in the Probate Code. When a person dies, leaving just a Will, Testate, their assets, also not otherwise disposed of by beneficiary designation, shall pass pursuant to the instructions in the Will. The court’s approval of the disposition of the decedent’s assets takes the place of the decedent’s authority to affect the transfer of assets. If one has a living trust, there usually is no need for a probate.

  4. Advising Same-Sex Couples • California Registered Domestic Partners (RDPs) are couples who have registered with the California Secretary of State and may be same-sex couples or opposite sex couples where at least one partner is age 62. In California, RDPs are afforded the same rights, duties and responsibilities of spouses. Protected by the family court. • Same-Sex Married Couples include the 18,000 couples who married in California during the window of June 16, 2008 through November 4, 1998; as well as couples who have married in jurisdictions where it was legal to do so (such as: Massachusetts, Iowa, Vermont, Maine and the District of Columbia, Canada and also Mexico City), and have the same rights, duties and responsibilities of opposite sex spouses. Protected by Family Court. • Legal Strangers are couples who have not legalized their committed relationship and therefore have limited legal protections. May only have some cause of action in Civil Court under a breach of contract theory.

  5. Joint Representation and Conflict of Interest • Potential conflicts of interest may arise if an attorney meets with both parties in a couple and agrees to represent both parties. Therefore, an attorney will generally ask the couple to sign a conflict waiver acknowledging their understanding that by meeting with both parties there is no attorney-client privilege and that in the event a major conflict arises between the two, the attorney will not be able to represent either party.

  6. Property Tax • There will be no reassessment for property taxes for the transfer of property between spouses (including same-sex married couples and California Registered Domestic Partners). Transfers between parent and children may be free of reassessment for transfer of the personal residence and up to $1,000,000 in other property. Under certain circumstances, transfers between grandparent and grandchild may also be free of reassessment.

  7. Components of Basic Estate Plan Standard Will • Subject to Probate Court Administration • Names the Executor of the Estate • Provides for Guardians • Disposition of Assets • Public Document

  8. Revocable Living Trust • Will Substitute • Sets forth the dispositive wishes of the person/couple • Generally avoids probate • Private document

  9. Pour-Over Will • Pour assets over to the Revocable Living Trust • Names the Executor of the Estate • Provides for Guardians • Disposition of Personal Property • Public Document • Only requires Probate Court involvement if assets outside trust

  10. Durable Power of Attorney • Becomes Effective Upon Incapacity • Identifies Agent • Agent acts to continue to manage business and personal affairs

  11. Advance Health Care Directive • Directs Agent to follow wishes regarding health care decisions, life support, anatomical gifts, burial instructions. • Critical documents for same sex couples

  12. Adoption • 2ndParent Adoption • For non-registered or non-married couples • Adoption Services Provider First • DCFS must do full blown home study • Bio mom gives up partial rights • Approx $7,500 • 9 months – 1 year • Step Parent Adoption • For RDPs and married couples • Adoption Service Provider but no DCFS required • Approx $3,500 • 4-6 months

  13. Presented By: Wendy E. Hartmann, Esq. Bennett & Erdman 5670 Wilshire Blvd., Los Angeles, CA 90036 (323) 935-0041 weh@bennetterdman.com

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