THE ANSWERS TO THE QUESTION
"WHAT DO I DO NOW?"
© 1997 By M. Kathleen O'Blennis, Esq.
THE CASTLEMAN LAW FIRM
A Professional Corporation
5970
Stoneridge Mall Rd., Suite 207
Pleasanton, CA 94588
(925) 463-2221
fax: (925) 463-0328
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- 1. Planning for the future is a multi-step process.
- First step is to understand the language of estate
planning.
- Second step is to identify your estate planning
goals.
- Third step is to utilize the available estate planing tool to achieve your goals.
- 2. The estate planning process. Recognize that there
are three primary processes in operation but not necessarily connected.
- Who makes decisions regarding finances and health
care if I am still alive but incapacitated?
- A durable power of attorney for personal property management allows a person
designated by you
to make financial decisions.
- An Advance Health Care Directive (formerly known as a durable power of
attorney for health care) allows a person designated by you to make health care
decisions.
- How does property owned by a decedent get
transferred to another person so that the law recognizes the new owner?
- Joint tenancy (to be used with extreme caution -
joint tenancy has many traps)
- Pay on death beneficiary
- Directions in will administered by Probate Court
- Directions in trust managed by trustee
- How do you determine who pays the tax on transfer
and how much the tax will be?
- Estate tax
- Depends upon the gross value of your estate,
including life insurance that is not in an irrevocable life insurance
trust. The amount of the tax is determined by federal tax law.
- Who pays the tax is determined by the terms of
the will or trust. If the will or trust does not contain specific
instructions as to who pays the tax, it will be determined by state law.
- 3. What you should know if your spouse is still
living.
- Use a personal data and an estate planing worksheet
to set out the details of your assets and your plan
- Write down the names, addresses, and phone numbers
of the people who may be needed upon death.
- Know where the documents with the necessary
directions are located.
- Know what your assets and liabilities are.
- Where are the assets located?
- 4. If you do not have an estate plan, what should you
do?
- Go back to item 1 and start getting organized.
- Consult an estate planning lawyer and develop an
estate plan that will achieve your goals and ensure distribution to the
persons or places that you wish.
- Take advantage of the ability to maximize estate
tax protection while both spouses are living.
- 5. What you should know if your spouse is deceased.
- If your spouse died within the last nine months,
you should be currently involved in the process of postmortem estate
planning.
- You should have a competent estate planning attorney and accountant review your
current situation and advise what steps (i.e., probate administration, trust
administration and tax obligations) must be taken to meet the immediate
needs of the estate.
- You should begin evaluating and planning for your
needs. This will include a calculation of the income needed, income
immediately available and long term plan for production of income.
- You should review the estate plan established by
you and your spouse to decide if any changes need to be made. This includes
reviewing the Advance Health Care Directive and Durable Power of Attorney
for Asset Management to ensure that the person(s) now named to handle your
affairs is the appropriate choice.
- 6. Planning for a single person. Many of the same
considerations as above but different tax planning tools may be utilized in
the absence of a spouse's $675,000 lifetime exclusion, such as gifts
involving:
- Outright gifts
- Irrevocable life insurance trusts
- Minor's trusts
- Retained interest trusts
- Qualified personal residence trusts
- Charitable remainder trusts
- Charitable lead trusts
- 7. The key terms to remember are plan, organize and implement. With the assistance of
competent advisors, you can achieve peace of mind and orderly transition at the time of death.
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