THE ANSWERS TO THE QUESTION

"WHAT DO I DO NOW?"

© 2009 By M. Lorin Castleman, Esq. All rights reserved.

THE CASTLEMAN LAW FIRM
A Professional Corporation

5870 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 tools to achieve your goals.
    
• 2. The estate planning process. Recognize that there are three primary processes in operation but not necessarily connected.
  • Who makes the 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 a will administered by a Probate Court
    • Directions in a trust managed by the 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 a plan for the production of income for the rest of your life.
  • You should review the estate plan established by you and your spouse to decide if any changes need to be made. This includes determining if you should make any qualified disclaimers, if you should make changes to your Advance Health Care Directive and your Durable Power of Attorney for Asset Management to ensure that the person 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 $3,500,000 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 an orderly transition at the time of death.

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