In August 2010, SB 105 was passed by the legislature. There is a new Probate Code Section (21362) updating the previous definition of “care custodian.” This Section addresses gifts that become irrevocable after January 1, 2011.

This Code states that a care custodian will no longer include “a person who provided services without remuneration if the person had a personal relationship with the dependent adult (1) at least 90 days before providing those services, (2) at least 6 months before the dependent adult’s death, and (3) before the dependent adult was admitted to hospice care, if the dependent adult was admitted to hospice care.”

And if all this is too confusing, or you are not certain if a gift will be disqualified under the statute, an independent attorney can provide a Certificate of Independent Review.

As 2010 looms near, our law office has received multiple inquiries about the status of the federal estate tax exemption for the upcoming years. Generally, federal estate taxation pertains to the amount of tax your estate will be liable for at your death.

Over the years, the federal estate tax exemption amount has been subject to a graduation system that provided for the federal exemption to increase while decreasing the estate tax rate.

Under the Economic Growth and Tax Relief Reconciliation Act of 2001, for this year (2009) each individual enjoys a 3.5 million dollar exemption as to federal estate tax. Assets over $3.5 will be taxed at 45% (compared to 55% in past years). Basically, this means that the first $3.5 million of your assets will escape estate taxation at the federal level.

Recently, the Wall Street Journal contained an article about the benefits of naming a trust as the beneficiary of an IRA.

When drafted and implemented correctly, beneficiaries could be recipients of more wealth as the IRA will be ‘stretched’ and the beneficiaries will also benefit from the protection provided by the trust from creditor’s, divorces, lawsuit judgments, etc.

Recent events regarding the custody and guardianship of Michael Jackson’s children have garnered increased interest from parents with minor children.

The most common manner in which a guardian is nominated is the inclusion of such a provision in one’s Will. However, California recognizes other methods of accomplishing nominations of guardians.

Not nominating a guardian may have unwanted or intended circumstances. Who a parent chooses as potential guardian is of tantamount importance and can present numerous challenges. Some considerations a parent might take into account while choosing a guardian would be a person who possesses similar values, shares religious or spiritual practices, has room in their home and their lives for your children and in some instances, has sufficient resources to provide for you children.

David Colker wrote an interesting article this week in the Los Angeles Times. The article addresses the benefits of advance planning but warns against some of the pitfalls an unwary consumer may experienced when creating a do-it-yourself Will or when utilizing the services of an online document preparation company to draft Wills.

When using form driven services, most problems may arise when the estate is not simple and straightforward or where the estate contains taxable aspects not considered by the client or where there the possibility exists of someone contesting the Will.

Even though a consumer might shy away from paying for the expertise of a qualified estate planning attorney, often the old adage rings true – “you get what you pay for,” and after all is said and done, a comprehensive solid plan in most cases should very well save you money.

It has been a long time since I have posted. The long lay off was due to a sports related injury that affected my right arm. Just imagine the things you can’t do without the use of your dominant limb. It gave me a whole new respect for the disabled.

Now that my arm is practically back to new…….or rather is restore to how it was prior to the injury, I can return to the blog.

It is an interesting time for estate planning issues. Especially considering the legal machinations occurring since Michael Jackson’s passing as well as changes in tax laws and cutbacks in the courts.

Who receives your property if you die without an estate plan, if your designated beneficiary(ies) predeceases you, disclaims their interest in your gift or is found to be a disqualified transferee?

Following our example in related postings on March 11,2009 and April 4, 2009 regarding California’s Custodian Care statute (California Probate Code Section 21350), Ken was found to be a disqualified recipient of his friend’s property and was not allowed to accept any property left to him by Bob, in Bob’s Last Will and Testament.  

Who then would receive Bob’s property?  Let’s assume Bob only provided for Ken and did not provide for a contingent beneficiary in the event Ken predeceased Bob.  Or alternatively, Bob’s contingent beneficiary properly disclaimed any interest that the beneficiary might have in Bob’s estate.  

How could Ken be disqualified as Bob’s beneficiary?

In our example posted on March 11, 2009, the contestant of Bob’s Will (Bob’s second cousin) who is attempting to circumvent Bob’s gift to Ken, will attempt to convince the court that Ken is a Care Custodian as described under Probate Code Section 21350 and invalidate Bob’s intent to bequest Bob’s property to Ken.  

Should the cousin prevail, it is logical to infer this to be an unfair resolution and that Ken logically should be able to receive Bob’s property as both were such good friends.  It is apparent that Bob appreciated Ken, especially in light of all Ken’s assistance during those last months of Bob’s life.  It also makes sense that without other family, Ken would be the logical choice as a beneficiary of Bob’s estate.

California’s Custodian Care Statute – Probate Code §21350

Do you think there are any restrictions or limitations on whom you choose to receive your property at your death? Often when people execute a Living Trust or Will to designate who is to receive their property when they die, they don’t give a second thought to the possibility that the intended recipient will not be allowed to take delivery of the property.

After all, isn’t it logical to believe you can give what you own to whomever you desire? It’s your property, you worked hard for it and you should be able to give it to anyone you want, right?

The Metropolitan News-Enterprise reported last week that Charles McCoy, Los Angeles County Presiding Judge, speaking to a group of attorneys, espoused the importance of ensuring the court’s long-term fiscal survival. The article stated that Judge McCoy told the attorneys that so far, the court has not had to invade too much of the court’s accrued reserve, but he warned that this year some moves needed to be made.

The article went on to state that resources will be shifted to the Los Angeles probate and family law departments resulting in the central civil section judges at the Stanley Mosk courthouse experiencing an increase in caseload.

In a related editorial, the National Law Journal recently reported that due to the state’s budget crisis, courts will be shortening their hours and furloughing employees.  This attorney has experienced first hand the shortened hours introduced in both the Riverside and San Diego County courthouses. 

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