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I recently read two articles regarding the rumors about Amy Winehouse updating her Will to ensure that her ex-husband Blake Fielder-Civil would not inherit any of her estate. One article was in Forbes and the other in Elder Law Answers. Was the troubled singer really that organized? It turns out she wasn’t. Winehouse died intestate, in other words without having executed a will.

Like many other celebrities, Winehouse procrastinated with her estate planning, leaving it up to the courts to distribute her millions.

The moral of the story: It’s never too early to plan your estate. If you have accumulated some assets (it doesn’t have to be Winehouse’s millions) or if you have young children that will need a guardian, then it is time to start thinking about an estate plan. Planning your estate with a will or trust is the best way to ensure your estate is distributed in the manner and to whom you want.

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.

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. 

Filing fees for probate first filings for the last eight months of 2008 were $320.00. As of January 1, 2009, those probate filing fees were raised to $350.00.

Prior to March 28, 2008, the initial filing fee paid at the time of filing a Petition for Probate was based on the estimated value of the estate. If the value of the estate was overestimated and a higher probate filing fee was paid at the time the Petition for Probate was filed, the estate would receive a refund at the end of the probate when the value of the estate was definitely determined.

If the value of the estate was underestimated causing a lesser probate filing fee being paid at the time the Petition for Probate was filed, the estate would owe the difference to the court. This method of calculating the probate filing fee was referred to as a graduated filing fee and was only utilized in probate cases.

In October of 2008, the Federal Deposit Insurance Corporation (FDIC) raised the deposit insurance coverage provided by at qualifying banks from $100,000.00 to $250,000.00 per depositor. This increase in coverage is temporary and will expire in December 29, 2009 at which time the limit will return to the $100,000 amount. However, the increase will be permanent as to some retirement accounts.

FDIC is the insurance that protects your deposits in any given bank, up to the coverage amount in the event your bank fails.

The $250,000 limit applies separately to certain types of accounts held at the same institution.

  1. The sums of all accounts an individual owns at a bank that are in that individual’s name alone are insured up to the $250,000 limit.
  2. Joint owners of accounts are insured up to $250,000 for each joint owner.
  3. The aggregate of certain types of retirement accounts and IRAs are insured up to $250,000.
  4. The $250,000 coverage for revocable living trusts (RLT) is applied to each beneficiary.
Scenario Coverage
An account or accounts in Husband’s name alone $   250,000
An account or accounts in Wife’s name alone $   250,000
An account or accounts Husband and Wife own jointly $   500,000
An account or accounts owned by Husband and Wife’s RLT $1,000,000
Total $2,000,000

As you can see, coverage is increased and exposure to loss is diminished when deposits are spread over the different categories of coverage and the above example does not take into consideration IRA or retirement account insurance coverage.

Calculating the Revocable Living Trust FDIC Coverage*

FDIC coverage for Revocable Living Trusts is $250,000 per beneficiary. To determine the amount of coverage as to the Revocable Living Trust account, you will take the number of grantors multiplied by the number of beneficiaries and multiply that amount by the $250,000 coverage limit.

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