Palm Springs Estate Planning Lawyer Blog

Palm Springs Estate Planning Attorney Discusses New California Laws 2015

Published on: January 5, 2015 | by Burt + Clerc

California has roughly 900 new laws that will go into effect in 2015. Some of the highlights are: Immigrant Driver’s Licenses The DMV will now issue driver’s licenses to undocumented immigrants if they meet every qualification including passing a driving test.
Plastic Bag Ban Grocery stores will stop using single-use plastic bags and stores will be allowed to charge $.10 for paper bags. Residential Care Facilities The state may block admissions to residential care facilities that have been cited for violations. Facilities for the elderly must have at least one (1) carbon monoxide detector installed Residential care facilities have only 10 days to remedy license deficiencies. State Amphibian For the first time, California has an official state amphibian. It is the red-legged frog who was popularized in Mark Twain’s “The Celebrated Jumping Frog of Calaveras County.” Absentee Voting Absentee ballots mailed on election day will be counted if they arrive within three days. Previously, absentee ballots had to be mailed before election day. You can read about more important new laws in the LA Times here.

Palm Desert Estate Planning Attorney Discusses the A/B Trust

Published on: December 15, 2014 | by Burt + Clerc

We have previously discussed the importance of keeping your estate plan up-to-date. It’s a good rule of thumb to have an experienced estate planning attorney review your documents at least every five years. Out dated documents may have unnecessary provisions that can be very detrimental.

Recently, we are seeing a lot of clients who have an A/B split trust which may be unnecessary for their current situation. Back in the days of low estate tax exemption amounts, A/B Trusts were a convenient and effective way of reducing estate tax liability. However, the current estate tax exemption amount is $5,340,000 in 2014 and will rise to $5,430,000 in 2015. This means that you won’t pay a penny in estate taxes if your estate is less than the exemption amount.

Not so long ago, the estate tax exemption was only $1,500,000 (in 2005) so many trusts had A/B split provisions automatically placed in the document. This is great for reducing estate tax liability but can restrict the use of Trust funds for the Surviving Spouse. Under a trust with a A/B split, when the first spouse dies, 50% of the assets are transferred into a Decedent’s Trust (also called a Trust B) which usually cannot be amended or revoked by the Surviving Spouse. Also, the Surviving Spouse generally does not have access to principal and can only receive the income from the assets in this Trust. It can be difficult explaining to a Surviving Spouse that she doesn’t actually have use of all of the Trust funds when her spouse dies.

However, a benefit of the A/B split is that your Surviving Spouse cannot disinherit your beneficiaries. This is important especially in blended families where both spouses have children from prior marriages. Under the A/B split a Surviving Spouse cannot change the provisions of the Decedent’s Spouses’ Trust and therefore cannot disinherit step-children.

If your assets have changed significantly since your trust was initially created, or you no longer believe that an A/B split Trust is right for you contact an experienced estate planning attorney.
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401(k) Beneficiary Problems for Palm Springs Residents

Published on: April 8, 2014 | by Burt + Clerc

As Palm Desert estate planning attorneys, we frequently see clients with beneficiary designation issues. A recent article in the Wall Street Journal highlights this integral part of estate planning. A Will or Trust is very important but will not work for assets with beneficiary designations. Every year you should check your beneficiary designations to confirm they are valid and accurate.

Estate Planning Lessons from the Rich and Famous

Published on: March 10, 2014 | by Burt + Clerc

Some celebrity estates are embroiled in the media and legal battles while others remain private and relatively peaceful. Here are some lessons learned from the estates of the rich and famous.

Fund Your Revocable Trust

Recently deceased Paul Walker set up a trust for the benefit of his minor daughter. However, he failed to fund it so it will eventually be funded under the terms of his pour-over will when the probate is closed. His will and his reportedly $25,000,000 in assets is now public record through the probate court proceedings in Santa Barbara, California.

Bankruptcy Can Spoil Your Estate Plan if You Deed Property to Children

Published on: March 7, 2014 | by Burt + Clerc

As estate planning lawyers in Palm Springs, we frequently get asked by clients to prepare deeds transferring property to children. As we have previously discussed, using deeds as an estate plan is very risky and not recommended. A recent bankruptcy ruling in Oklahoma highlights this problem:

Whether for carpentry or estate planning, it is usually a good idea to use the right tool for

the job. Unfortunately, when it comes to estate planning and asset transfer, people are

A Trust Administration Guide for Beneficiaries in La Quinta

Published on: November 4, 2013 | by Burt + Clerc

As Estate Planning attorneys in La Quinta, we frequently get calls from beneficiaries who have just received notice that they are named in a trust. Sometimes they require our services; sometimes they do not. Below is a guide to help trust beneficiaries through the murky waters of trust administrations.

Step 1: Read the entire Trust and all amendments

If you do not have a copy of the trust, request one. In California, all beneficiaries are entitled to a copy of the trust instrument and all amendments. If something is unclear in the trust, ask questions. You may be able to get satisfactory answers from the Trustee or the Trustee’s attorney. If you don’t you may need to contact a lawyer.

Tax Issues for Palm Springs LGBT community

Published on: September 9, 2013 | by Burt + Clerc

The IRS recently declared that same-sex married couples will enjoy the same tax treatment as straight couples beginning on September 16, 2013. This is an important decision since the practical realities of life post-DOMA were uncertain. Now, same-sex married persons can file joint returns, amend previous returns and request refunds for the past three years. Additionally, the IRS explained that it will recognize any legal marriage irrespective of the state of residence of the filers. This means that a gay couple in Kansas could travel to Washington and get legally married and this marriage would be recognized by the IRS. When the Kansas couple returns to their home state they must file as a married couple on their federal income tax returns. (They would not be able to file as a married couple for their state tax returns, however.)

Estate Planning Issues for Gay and Lesbian Couples in Palm Springs

Published on: August 28, 2013 | by Burt + Clerc

While the end of DOMA is wonderful, it doesn’t solve all problems for same-sex couples. The lifting of DOMA restrictions only applies to married same-sex couples. Unmarried same-sex, and also opposite-sex, couples have unique issues and concerns when creating an estate plan. Various techniques and tax saving vehicles are unavailable to unmarried partners.

Joint Trusts

Joint trusts are unadvisable for unmarried partners since the couple does not enjoy marital exemptions in gifting. Unmarried partners may choose instead to have separate trusts with identical provisions. For example, when one partner dies the other inherits everything.

Life After DOMA for Estate Planning

Published on: July 2, 2013 | by Burt + Clerc

There are numerous tax and other important consequences of the Supreme Court’s decision to overturn the Defense of Marriage Act (DOMA). Also, estate planning for same-sex married couples will be easier and less cumbersome than ever before. Some of the effects of the recent decision are discussed below.

“Married” Filing Status for Federal Income Taxes

Same-sex married couples will now file their annual federal income taxes as married, either jointly or separately. Tax preparation should be less expensive and simpler than under DOMA. Married same-sex couples will no longer have to decide which spouse takes which deduction or who claims which dependent child.

Palm Springs Same-Sex Estate Planning Attorney discuss the death of DOMA

Published on: June 26, 2013 | by Burt + Clerc

The Supreme Court ruled that the Defense of Marriage Act (DOMA) is unconstitutional. The act defined marriage under federal law as between a “man and a woman.” That definition is no longer valid. This means that same-sex couples who are legally married will be treated like any other married couple under federal law.

This does not mean that all states must recognize same-sex marriage. This decision only means that where same-sex marriage is already legal, these couples will be recognized as married under federal law. However, this decision can vastly affect estate planning opportunities and tax advantages for same-sex married couples.