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Sacramento Estate Planning Law Blog

A California pet trust can ensure care for a beloved companion

Trusts are a popular estate planning vehicle in California. But trusts can be used for many purposes besides managing financial assets for the benefit of loved ones. In fact, California's Probate Code specifically says a trust can be established for any purpose that is not illegal or contrary to public policy. A good example of a specialized trust is the pet trust.

The purpose of a pet trust is to ensure that one or more pets are cared for when their owner is incapacitated or deceased. The person who creates the trust, known as the settlor, transfers funds to the trustee, to be used to care for the animals. The trustee can be instructed to care for the animal, or the trust can designate a separate caregiver to whom the trustee will make periodic payments for the animal's care.

When a loved one's death leads to trust or probate litigation

In California most wills go through probate proceedings without a significant dispute. Similarly, most trusts are administered without any controversy. But occasionally a conflict arises among family members, between family members and an executor or between family members and trustees. When this happens it is critical for a party to the dispute to knowledgeably assert their rights under the law.

Hurt feelings can arise when family members believe they were not treated fairly in their loved one's will or trust. If there is evidence the unfairness resulted not from the testator's or settlor's wishes, but from the undue influence of another person, it may be necessary to pursue probate or trust litigation. Family members may be able to prove that an outsider cultivated a confidential relationship with the decedent and took advantage of that relationship to influence the decedent to make a bequest to them.

Is it possible to modify an irrevocable trust in California?

In this blog we have on several occasions discussed the advantages of a revocable trust for estate planning purposes in California. A revocable trust is what the name implies: it can be modified or terminated at any time during the settlor's lifetime. But what about an irrevocable trust? Can it ever be modified or terminated?

Irrevocable trusts have more limited and specialized purposes than revocable trusts. They often have advantages in terms of protecting assets from creditors or avoiding unnecessary estate taxes.

New rules would affect estate planning for farm, business owners

The IRS has proposed new regulations that, if enacted, could drastically affect estate planning for small business owners and farmers in California's Central Valley. Under the new regulations, the long-established practice of discounting shares of a family-owned business, including an agricultural business, would be curtailed.

Currently, individuals have a $5.45 million lifetime exclusion from federal estate and gift taxes. The exclusion is portable between married couples, meaning that each couple has a combined exclusion of $10.9 million. Estates that are smaller than the exclusion amount are not subject to federal estate and gift tax. But for a substantial estate, any assets over the exclusion amount will be taxed at the rate of 40 percent.

How often should an estate plan be reviewed?

In this California estate planning blog, we've written many posts about the importance of having an estate plan and of not postponing the estate planning process. But the process isn't necessarily over when the will or trust has been drafted, signed and witnessed. Every estate plan should be reviewed periodically to make sure it is up to date, and still reflects the testator's wishes.

There is no set rule as to how often an estate plan should be reviewed. Some financial advisors suggest a thorough review at least every five years. Those with large estates may want to do an annual review. More importantly, an estate plan should be reviewed whenever there has been a major change in the law or the testator's life.

Guiding clients through the estate planning process

We all want what is best for our family; however, in order to accomplish such a task, we need to think about the future and the what-ifs. For some California residents, this process is not always easy, but the reality is that estate planning can accomplish essential and major decisions that individuals of all ages and families of all sizes need to make.

At Michael A Sawamura Attorney at Law, our legal team is dedicated to aiding and guiding our Sacramento clients through the estate planning process. For some, this is an emotional and often difficult process, but with a strong and positive bond, we draft durable documents that accomplish the many goals of our clients.

Should children always receive equal shares in an estate plan?

It's probably safe to say that the majority of people who prepare estate plans in California leave their children equal shares of their estate. But, is this always the best way to do it? Are there times when it is actually fairer to leave unequal shares to the kids, and perhaps even leave nothing to a child?

There are situations in which one can leave a larger share to one child without causing resentment among the other children. One example is when a child has special medical needs or is mentally or physically handicapped. In that scenario, many parents choose to leave a larger share to that child, usually in trust so that a trustee can manage the expenditures.

Alternatives to guardianship for an incapacitated loved one

As the baby boom generation ages, many people in California are dealing with the issue of elderly relatives who can no longer make decisions on their own behalf. When a loved one becomes incapacitated due to dementia, illness or injury, it is sometimes necessary for the court to appoint a guardian for that person.

A guardian is a person designated by the court to make decisions on behalf of another person, usually called the ward. Among other decisions, a guardian can give or withhold consent for medical treatment; manage the ward's financial affairs; and arrange for the purchase of necessities including vehicles, groceries and other items.

Transferring assets is key to a California trust

The revocable trust is a popular estate planning vehicle in California. With a revocable trust an individual can avoid probate, protect the person's privacy, and provide for management of assets both during the person's lifetime and after death. To establish a trust, the first major step is to prepare and sign a trust document which sets out how the assets in the trust are to be managed, and under what circumstances income and principal are to be distributed to the beneficiaries.

But, drafting and signing the trust document is not the end of the process. A trust does not become effective until assets are actually transferred into the trust, and most of the advantages of a trust stem from the fact that it is the trust -- not the person who created it -- who owns the assets.

New California law eases the bite of Medi-Cal recovery

Many people in California depend on Medi-Cal for their health care coverage. When a Medi-Cal recipient dies, the state has the legal right to recover from the recipient's estate the medical expenses made on their behalf. The state cannot seek reimbursement, however, if the Medi-Cal recipient left a surviving spouse or a minor, disabled or blind child.

Recently, Governor Brown signed into law a significant reduction of Medi-Cal's right to seek reimbursement from estates. Under the new law, which is part of the state budget legislation, the state's Medi-Cal recovery right is limited to the minimum required by federal law. Thus, under the new law the state may only make a claim against the estates of recipients who received Medi-Cal benefits while in a nursing home or while over the age of 55.

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