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    Joshua and Laura Meier Newport Beach Trust and Estate Planning Attorneys Focused on Helping Families with Young Kids
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    Monthly Archives: August 2014

    Congratulations! It’s an Estate Plan! Protecting Your Newborn From Birth

    Congratulations! It’s an Estate Plan!  Protecting Your Newborn From Birth

    In the process of becoming new parents, many couples become experts at planning – scheduling the birthing classes, planning the new nursery, even picking out a preschool. There is so much to think about before you welcome your new child.baby

    Unfortunately, one of the most important things you can do to protect your child is often overlooked:  an estate plan.  Here are five important considerations you need to discuss with your Personal Family Lawyer® when setting up an estate plan once your new baby is born:

    Guardians and trustees.  Parents who delay choosing a guardian for their children usually do so because they cannot agree on that “perfect” choice.  Get comfortable with the fact that there is no perfect choice – and if you don’t choose, a court will choose for you.  You can always amend your choice if you change your mind.  When choosing a guardian or trustee, you need to think about choosing someone who shares your beliefs and who will naturally be a part of your child’s life.  And you need to make sure whomever you choose is willing to take on the responsibility of raising your child if you are unable to do so.

    As your neighborhood Personal Family Lawyer, I offer a unique process for families with young children at home. Contact me to discuss how a Kids Protection Plan® can ensure your children are always cared for by people you know, love and trust if anything at all happens to you.

    Education.  The cost of college is already sky-high; can you imagine what it will be like in another 18 years?  You probably want to start saving right away, either through a 529 plan or an educational trust so you can realize some tax benefits while you save.

    Passing on your assets.  Assets cannot pass directly to children under the age of 18, so you will need to think about setting up a trust and naming a trustee to manage the assets you would leave your children.  You also need to examine your beneficiary forms for retirement accounts and insurance policies to be sure your new child is included as a beneficiary.  Even if you name them in a will, a beneficiary form for these accounts will determine who inherits.

    Avoiding probate.  Talk to your attorney about setting up a living trust so your heirs can avoid probate and assets can pass directly to them.

    Asset protection.  If you have an estate of more than $10.5 million, you will want to discuss asset protection strategies that will help you minimize taxes and protect assets for your heirs.

    Call our office today at 949.718.0420 to schedule a time for us to sit down and talk about an Achieve Your Dreams Planning Session, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security.

    Robin Williams: A Lesson in Deeds, Not Words + One Error in Planning

    One of the most eloquent responses to Robin Williams’ death came from his best friend Billy Crystal, who posted on Twitter simply:  “No words.”

    When someone close to us dies — especially in a sudden and tragic way — the grief is so deep that we truly don’t have any words to describe it.  And while Robin Williams may have lost the battle to take care of himself, it appears that he did take care of his family through a number of sophisticated estate planning strategies that will at least spare them the pain and cost of a public probate court proceeding.

    According to a Forbes article following Williams’ death, Williams had significant real estate holdings, including a 653-acre Napa Valley estate and a waterfront home in Tiburon, California.  The Napa Valley estate has been for sale since April with a price tag of $29.9 million; the Tiburon home has been valued at $6 million. According to public records, the equity in the properties totals approximately $25 million, depending on the final sale price of the Napa estate.

    Both properties are held in the name of a real estate holding trust, which can remove the value of the properties from Williams’ estate and result in significant estate tax savings for his family.

    Williams also set up a trust for his three children that splits the fund into equal distributions for each child once they reach the ages of 21, 25 and 30.  This trust was established during his 2009 divorce from his second wife.

    This is the one place we see Williams could have done better.  Leaving assets to children outright when they reach specific ages is a common strategy of estate planning attorneys, but isn’t the best strategy.  Instead, Williams could have left the distributions in lifetime asset protection trusts that his children could have controlled as co-trustees or trustees, but would have been protected from lawsuits, divorce, bankruptcy or any other type of creditor and future estate taxes for generations.

    What has not been determined is whether Williams had a life insurance policy.  If the policy was older than two years or so, it should pay out.  Newer policies would probably be void since the cause of death was suicide.

    Of course, the most valuable part of Williams’ estate is likely to be the ongoing royalties for his roles in movies and television as well as his comedy material.  It is unclear whether the estate will be responsible for managing these or if Williams established a trust or corporate entity for this purpose.

    While most of us do not have the wealth that Robin Williams enjoyed during his lifetime, we can all protect what we do have and ensure it passes to our loved ones using estate planning devices like a revocable living trust.  A trust allows our assets to pass outside probate so our families will not have to endure a court proceeding or have assets frozen during the probate process.  This can be a lifeline for grieving families in trying times.

    One of the main goals of our law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation.  Call your Newport Beach Estate Planning attorneys today to schedule a time for us to sit down and talk about an Achieve Your Dreams Planning Session, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security.

    Striking a Balance Between Funding Your Retirement and Your Child’s Education

    Many parents perceive a conflict between funding a child’s college education and building their own retirement nest egg.  The conflict usually arises from the lack of financial resources to do both while funding daily living expenses, so parents become stuck between priorities and usually wind up doing nothing at all.going to college

    One of the things Meier Law Firm can help you do is sort out your priorities in a way that supports your family for the long-term.  With that in mind, here are some guidelines on striking a balance between saving for your retirement and your child’s education:

    Build an emergency fund first.  This should be 3-6 months of living expenses that you have saved to fall back on in an emergency.  If you don’t have it, you will likely be forced to raid your 401(k) or other retirement account, spending more for penalties and taxes to cover the cost of the emergency.

    Save for your retirement or build a business to fund your retirement second.  It is difficult for many parents to accept that they may not be able to fully fund a child’s college education, but consider the alternative.  You aren’t being “selfless” if you spend what you should have saved for retirement or to create a business to fund your retirement on a child’s education, and then run out of money right when your kids are having their own families and trying to save for their own retirement.  Then you will be financially dependent on them – just what you (and they) don’t want.  There’s a reason there are loans for education but not for retirement.

    Save for your kids’ college education last.  Only after you have funded your emergency stash and your own retirement accounts (or built a business to fund your retirement) should you funnel cash to a child’s education fund.  If you invest in a 529 college savings plan, the earnings grow tax-free.  Also, other people in your child’s life — like grandparents and generous aunts and uncles — can contribute as much as $14,000 per year (annual gift tax exclusion) to a child’s 529 plan.

    If you would like to learn more about strategies for getting your financial future in balance, call our office today to schedule an Achieve Your Dreams Planning Session time for us to sit down and talk at 949.718.0420.

    How to Protect Your Real Estate Assets

    If you own real estate, chances are you have purchased insurance to protect your assets against damage or loss.  But have you taken the necessary steps to protect your assets against lawsuits or probate?

    If you own rental properties, there is likely a nagging fear in the back of your mind about being sued by one of your tenants.  And if there isn’t, there probably should be.  It’s a major risk.Real estate

    And while it may be heartbreaking to think about, there is always a chance your death could trigger a family feud over your home, vacation home or other real estate investments.

    Two common estate planning tools for real estate asset protection are limited liability companies (LLCs) and trusts:

    LLC

    If you have income-producing property, then an LLC probably makes sense for you, since it protects your personal assets from lawsuits or claims that result from your ownership of the real estate.  LLCs may also offer owners privacy since the property can be listed in a company name, not in your name directly.  However, you must be sure you maintain the LLC properly so the planned for protections remain intact.  It’s not too difficult though, especially with counsel.

    Trusts

    If you own vacation home property that you do not rent out on a regular basis, then a trust may be a better choice for you.  There are several options:  a Qualified Personal Residence Trust (QRPT) is an irrevocable trust (meaning it cannot be changed without the consent of the beneficiaries) that allows an owner to use the property for a fixed term, and then pass the property on to heirs.  This is a commonly used structure to reduce the size of your estate for estate tax purposes.

    A revocable trust (which can be changed without consent of the beneficiaries) is more flexible and, if you choose a dynasty trust, can last for multiple generations.  The major benefit of the revocable trust, besides control of what happens to the assets after the death of the grantors, is that it keeps your assets out of the hands of the Court after your death, and totally within the control of your family.

    You can also use a combination of LLCs and trusts to protect real estate assets if you have a combination of primary residence and rental properties.  We can help you decide on the best course of action for your individual circumstances.

    Call our office today at 949.718.0420
    to schedule a time for us to sit down and talk about an Achieve Your Dreams Planning Session, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security.

    If You Don’t Trust Your Kids with Money, You Need a Trust

    While most parents have the best intentions when it comes to teaching their children about handling finances wisely, sometimes the lessons don’t take.  In addition to concerns about spendthrift behavior, some children experience problems with substance abuse or have mental issues that make giving them access to wealth a problem.  This is where a trust can be a parent’s best friend.

    Teenagers

    Trusts allow you to put controls on the distribution of your wealth.  For example, you could elect to make partial distributions at predetermined ages throughout a child’s life, or select a trustee who will make the decisions on regular intervals of asset distribution.  A trustee may also be a good choice to manage the assets and make investment decisions that are better suited for those with the professional capacity to do so.

    Trusts can also protect your heirs from a divorcing spouse or creditors.  In the case of a special needs child, a trust can be set up to provide supplemental financial support that doesn’t disqualify them for important government benefits.

    One of the most commonly used trusts is a revocable living trust, where you transfer assets into a trust that you control while you are still living.

    After your death, those assets pass to your heirs outside of probate (an unnecessary, expensive and totally public court process).  This helps your heirs avoid the hassle and cost of going to Court and doesn’t tie up the assets, which are generally frozen during the probate process unless protected by a trust.

    Since trust laws are changing all the time, it is best to get professional legal advice for the help you need in ensuring your assets are protected for the future benefit of all your heirs.

    One of the main goals of our law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation.  Call our your Newport Beach trust and estate planning attorneys at Meier Law Firm today to schedule a time for us to sit down and talk about an Achieve Your Dreams Planning Session, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security.

    Casey Kasem’s Estate Planning Not in Anyone’s Top 40

    Casey Kasem, the celebrity radio host who counted down America’s Top 40 popular songs for years, died on June 15 at the age of 82 and left behind an estimated $80 million fortune.  He also left a family feud of biblical proportions between his surviving spouse and his three children from a prior marriage.  This is why we do what we do — to keep your family out of court and connected in love, not conflict.

    Kasem married his second wife, Jean, who is 22 years his junior, in 1980.  Together, they had one child, Liberty Kasem.  Casey also had three children from a prior marriage: Kerri, Mike and Julie.  The family was apparently in discord prior to Casey’s death; in mid-May, Mike and Julie filed a missing persons case with the Santa Monica police department saying they could not locate their father.  At that time, Kerri was fighting with Jean over control of his care.

    After Kasem died, news broke that his body had been taken from the Washington state funeral home and a judge awarded Kerri a temporary restraining order preventing Jean from removing his remains or having him cremated before an autopsy had been performed.  Kerri hired a private investigator who says the body has been moved to Montreal, the hometown of a man that Jean has allegedly been involved with for the past two years.

    A mess, right?  And they haven’t even gotten to the money yet!                lawyer confused

    A little advance estate planning could have helped prevent this scenario, which is not uncommon when an older man takes a second wife who is significantly younger and has children from a prior marriage.

    A recent WSJ Marketwatch.com article outlined four estate planning tools that could have helped to head off this disaster:

    Revocable trust.  Placing assets in a revocable trust can help protect the trust owner’s wealth transfer wishes, and provides the flexibility to make changes as long as the trust owner has the legal capacity to make those decisions.  Upon the owner’s death, the assets are dispersed as outlined in the trust without having to go through probate.  A trust is also more difficult to contest than a will.

    Life insurance.   A life insurance policy can be a good way to provide for a surviving spouse while leaving the rest of the estate to children from a previous marriage, or vice versa.

    QTIP trust.  A qualified terminal interest property (QTIP) trust is used to set aside assets for a surviving spouse’s benefit while that spouse is alive.  After the surviving spouse passes, the remaining assets in the trust are passed on according to the trust terms.

    Family meeting.  Having a family meeting so that everyone knows their beneficiary status and what will happen to the estate after the estate owner dies is a good way to head off conflict.  An estate planning attorney can mediate these meetings, which is usually advisable when there is a potential for conflict.

    One of the main goals of our law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation without conflict or concern.  Call our office today to schedule a time for us to sit down and talk about a Family Wealth Planning Session, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security.




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    Meier Law Firm | 2103 Vista Entrada, Newport Beach, CA 92660
    phone: 949.718.0420 e-mail: office@meierfirm.com