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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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    Category Archives: Asset protection

    Why Your Old Trust May Lock Your Family Into Nightmare Scenario!

    Last week, I was talking with a couple at my son’s baseball game, when the wife mentioned that they had set up their revocable living trust up back in worried couple2005. The couple said they were concerned it needed to be updated.

    Aside from the major life changes they’d had since then, including having more children, and moving out of state, there was a larger red flag that went up for me when I heard the date of the trust.

    Basically, for many years, including 2005, the common structure for trusts for married couples was called the A/B Trust. This meant that upon the death of the first spouse, the trust was divided into two sub-trusts: Trust A for the surviving spouse, and Trust B for the late spouse.

    The main reason for this mandatory split structure was to mitigate estate taxes, a likely problem for couples back then because the amount of money the government would allow you to pass at a death without triggering estate tax was significantly less than it is today. Due to changes in law and changes in the tax exemption, the need for the A/B Trust as a tax avoidance strategy became less necessary.

    The other problem is that for the assets and real property put in Trust B, the family will not receive a “step-up” in basis for capital gains tax purposes upon the death of the surviving spouse. This means the beneficiaries of a Trust B can be stuck with significant capital gains tax on assets or real property if there was significant appreciation between the death of the first spouse and the death of the surviving spouse.

    There are however some benefits of having an A/B Trust, such as asset protection for the late spouse’s assets and real property in Trust B, and a guarantee those assets and real property will only pass upon the surviving spouse’s death to the beneficiaries the couple had chosen together.

    New laws and planning techniques such as the Clayton Election Trust, now afford couples many benefits of the A/B Trust without the negative tax consequences, or at least provides them a choice between realizing tax advantages versus asset protection depending on what’s right at the time. Talk to your Newport Beach Family Estate Planning Lawyers about replacing your old A/B trust with a Clayton or Disclaimer trust today. It literally may save you hundreds of thousands of dollars in the long run!

    Meier Law Firm is now offering a free trust review of any trust as long as you contact our office by May 1, 2017 to schedule your appointment.   Be sure to mention this article to receive the free review.  Call (949) 718-0420.

    6 Cases When a Trust is Better Than a Will in Orange County

    A will is one of the most basic estate planning documents, and everyone should have one to make sure that there is no question about what would happen to your assets and kids if something happens to you.  But there are some cases when having a trust in addition to a will is imperative; here are six of them: decision

    Avoiding probate or conservatorship.  A trust will bypass the probate process, saving the people you love time and money.  To carry out instructions in a will, a probate must be opened in the county court and that means your family is stuck dealing with the Court if you get hospitalized or after you die.

    Providing for a person with special needs.  If you have a child or another dependent with special needs, a trust commonly known as a Special Needs Trust can protect assets for a special needs person without jeopardizing their qualification for government benefits.  A will allows you to transfer assets to a special needs person, but will not protect those assets.

    Privacy.  Since a will undergoes probate in Orange County, it becomes public record.  A trust is private.

    Blended families.  If you are part of a blended family, a trust can give you the flexibility you will want to make sure that children from prior marriages are provided for in the way you want.

    Out-of-state property.  If you own property in another state besides {city/state}, you can more easily transfer ownership via a trust than a will.  Transferring out-of-state property in a will usually means additional legal expenses because you could have probate in multiple states and that is no fund for the people you love.

    Asset protection.  If you want to protect the assets you leave your loved ones from creditors (including bankruptcy and divorce) a trust is the way to do it. It’s a gift you can give your loved ones that they could not easily (or at all) give themselves.

    If you would like to learn more about the use of trusts to pass on what you care about to the people you love, call your Newport Beach Estate Planning Attorneys at the Meier Law Firm today to schedule an Achieve Your Dreams Planning Session!

    How to Reduce the Risk of Identity Theft When a Loved One Dies

    A new trend in identity theft – afterlife identity theft – is on the rise, with thieves scouring obituaries for personal information to steal the identities of those who have passed.  When you lose a loved one, it is important to take quick action and notify a number of institutions and government agencies about the death to help prevent afterlife identity theft. Internet security

    The National Funeral Directors Association provides a list of government and credit reporting agencies, creditors and banks for notification, including:

    • Social Security Administration
    • Veteran’s Administration (if the decedent formerly served in the military)
    • Defense Finance and Accounting Service (military service retiree receiving benefits)
    • Office of Personnel Management (if the decedent is a former federal civil service employee)
    • S. Citizen and Immigration Service (If the decedent was not a U.S. citizen)
    • State Department of Motor Vehicles (If the decedent had a driver’s license)
    • Credit card and merchant card companies
    • Banks, savings and loan associations and credit unions
    • Mortgage companies and lenders
    • Financial planners and stock brokers
    • Pension providers
    • Life insurers and annuity companies
    • Health, medical and dental insurers
    • Disability insurers
    • Automotive insurer
    • Mutual benefit companies
    • All three credit reporting agencies: Experian, Equifax, and TransUnion
    • Any memberships held by the decedent (ex: health clubs, professional associations, clubs, library etc.)

    The NFDA recommends that you notify these entities first by phone followed by a written confirmation, where you will need to provide a certified copy of the death certificate, the decedent’s Social Security number and, if you are the executor or administrator of an estate, the verification of your appointment by a probate court.  Be sure to ask the funeral home you are using if they can provide notification services for you, as many do.

    If you would like to have a talk about protecting your loved ones through estate planning, call your Newport Beach Estate Planning Attorneys at the Meier Law Firm to schedule an Achieve Your Dreams Planning Session We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article.

    10 Tips to Ensure Family Harmony Over Your Estate Plan

    When your children were small, you no doubt suffered the challenge of keeping peace in the family.  We see this same scenario play out time after time among adult siblings when a messy estate causes family rifts. Here are 10 tips to help prevent your children from fighting over your estate: meier family

    1. Talk to children about your estate plan. It may be a difficult discussion to have, but you need to have it. If you find it too difficult, enlist the help of your estate planning attorney to go over the details of your estate plan with your children and answer their questions.
    2. Write your children a letter. If you can’t face a face-to-face discussion, put it in writing with as much detail as you are comfortable providing to your children. You can frame the discussion in general terms and ask for their input.
    3. Email your children your estate plan summary. Your estate planning attorney will usually provide you with a summary of your estate plan that doesn’t disclose actual dollar amounts. Ask your estate planning attorney to copy your children on an email with the summary and ask for their input.
    4. For complex estates, consider a mediator. If you have a complicated estate that may include valuable collections or a family business, consider engaging the services of a professional mediator who can meet with you and your children separately to identify any potential issues and then meet with you together to iron out those issues.
    5. Use equal treatment. If possible, leave your children an equal inheritance outright; most family fights result from children being treated unequally.
    6. If you establish a trust for children, name each child as a co-trustee of their own trust at a certain age. Choose a reasonable age for when you feel a child will be able to participate in managing their own trust so they can learn about handling an inheritance with the help of the main trustee.
    7. Consider staggered distributions from a trust. To help a child learn how to manage a substantial inheritance, estate planning experts often advise staggering distributions over a period of time (i.e., age 25, 30, etc.).
    8. Provide children with option to remove or replace main trustee. Similar to arranged marriages, you never know if children and trustees will make a go of the relationship. Give children limited power to remove and replace a trustee with another qualified trustee.
    9. Allow children to name their own co-trustee. If your children are competent adults, give them the power to name the independent co-trustee of their trust.
    10. Include mediation instructions in your estate plan. Your estate planning attorney can add mediation language so that if a dispute arises, your children will not be tied up in emotionally and financially draining litigation.

    The best way to ensure your estate plan doesn’t lead to a family feud is to meet with your Newport Beach Estate Planning Attorneys at the Meier Law firm for an Achieve Your Dreams Planning Session, where we can identify the best strategies for you to provide for and protect the financial security of your loved ones.

    How to Secure Your Personal Information Online

    Most of us conduct a lot of our personal business online these days, so the necessity of being savvy when it comes to security has never been greater.  Hackers are becoming much better at scouring our online lives – including social media networks – to get the information they need to compromise our security.

    Here are some steps we should all take to secure our information online:

    Create strong passwords.  Yes, it’s a major pain to create different passwords for each of our online accounts, but it is one of the most effective ways to stop hackers in their tracks.  Experts say passwords should be at least 10 characters long and include a mix of upper and lower case letters, numbers and characters.  Never use your name or initials in your password.

    Security question switch-up.  Many sites now require you to answer security questions, like where you were born.  Instead of answering correctly, choose a place that has meaning to only you that is unrelated to your birthplace.

    Choose double-verification.  If you have a Google account, you know about double verification: anytime you try to access your account from an unfamiliar computer, Google asks for your password and also sends a one-time password that they generate to your cell phone.  Whenever a site you regularly use offers you this option, use it.

    Password-protect your Wi-Fi.  Never use an unsecured network in your home – hackers can break in, control your computer and even break into your bank account.  Create a strong password for your home Wi-Fi network.  And if you are using public Wi-Fi, always log out of your accounts when you are finished.

    Never click on questionable links.  Ever get an email from a friend’s account that you know just doesn’t sound quite right?  That friend’s account has been hacked, and their contact list is being used to send spam.  If you get an email with just a link from a friend, ignore it.  Then let your friend know he or she has been hacked.

    Back up your data.  Get an external hard drive to back up your data or store your files in the cloud via applications like Dropbox or Apple iCloud.

    If you’d like to learn more about protecting all your assets, including digital assets, 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.

    5 Things We Should Learn From Our Parents About Retirement

    When we talk about retirement, most of us are still thinking about our parents’ retirement and how they did – or did not – plan properly for it.  It’s no big stretch to think that our retirement will differ significantly from that of our parents, but there are still lessons to be learned from them in preparing:retirement

    1.  Seek out a pension plan.  If you are considering a career change or job move, look for companies that offer traditional pension plans.  Having a pension can make an incredible difference in retirement security.

    2.  If you don’t have a pension plan, compensate.  Start investing now in a 401(k), an IRA or other defined contribution plan early and keep investing in it throughout your working life.  Figure out what you could have made if you had a pension plan, and contribute that amount to your own plan.

    3.  Save for a long life.  None of us lives forever, but that doesn’t mean you shouldn’t save as if you would live forever.  Running out of money in your 80s or 90s should you live that long is a frightening prospect; medical advances are extending life spans and you need to save for a long life.

    4.  Plan for health care expenses.  It is estimated that most Americans will spend at least $240,000 on health care in retirement, and you will either need to save that amount or have a health coverage plan in place to cover your retirement medical costs.

    5.  Start early and stay the course.  As soon as you start working, aim to save at least 10 percent of your income every year – 15 percent is even better if doable.  And keep saving throughout your working years.  As your salary increases, try to set aside even more so the comfortable retirement you envision can become a reality.

    If you’d like to learn more about retirement planning strategies for your family, 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.

    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.

    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.

    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.

    Unconditional Love Doesn’t Have to Mean Unconditional Inheritance

    Most parents love their children unconditionally and want to do whatever they can to smooth life’s rough road for them. But that unconditional love doesn’t necessarily mean that unconditional trust exists when it comes to leaving children with a hefty inheritance.

    A recent Forbes article looked at smart ways that parents can pass the love along while still protecting the wealth they have spent their lifetimes working hard to accumulate:

    Annual exclusion gift test. A parent can gift up to $14,000 every year to each child without incurring gift taxes; both parents together can give a total of $28,000 to each child. You can use this annual exclusion gift to test the waters on how your children will handle a financial windfall. Do they pay off debt, save it or place it on the ponies? Their actions can give you insight into how they might handle their inheritance.

    Incentive trust. Parents that have worked hard to accumulate their wealth often worry that a large inheritance may harm a child’s ambition to succeed on their own. If that is a worry for you, an incentive trust allows you to set goals or milestones for your children to achieve before distributions are made.

    Staged distributions. Parents can create a trust with the distributions tied to different age stages or events (graduating college, starting a business) so the inheritance is doled out over time.

    Leave a legacy. Creating a personal foundation to support the causes you believe in, and involving your children early on in that foundation, will help them learn about the responsibilities that come with wealth and create empathy for a world outside their own.

    Hold the cash. Instead of giving cash directly to your children, consider alternative giving strategies, like paying down their college or home loan mortgage debt. This will make a big difference to their financial future without tempting them with large amounts of cash.

    Wealth creation trust. As mentioned in a previous post, one of the best ways your unconditional love can be expressed to a child or grandchild is through the establishment of a wealth creation trust to commemorate a birth or a milestone birthday or event, and then directing monetary gifts to the trust over time.

    When your child gets to be an age specified in the Trust, he or she can step into the role of Co-Trustee of the Trust, learning how to operate the trust and best utilize the funds in the Trust.  He or she will be trained on the best types of investment for the Trust, learn the purpose of the Trust (to encourage the creation of wealth from one generation to the next, rather than the squandering or wasting of assets); how to protect it (keep the investments in the name of the Trust, regardless of how funds are used, so always title investments properly and sign on behalf of the Trust); and how to create more wealth in the future using the Trust assets.

    One of the main goals of our law practice at Meier Law Firm is to help families like yours plan for the safe, successful transfer of wealth to the next generation. Call our Irvine Estate Planning Law Firm 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.




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