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Saturday, August 29, 2009

LA Times Article About Estate Battle In India Following Death of Legend Gayatri Devi From Wealthy Royal Indian Family


Estate lawsuits are not limited to the United States. On August 27, 2009, the Los Angeles Times had an interesting article about the fight for the estate of the glamorous Gayatri Devi of Jaipur, India, estimated at $470 million -- which includes palaces, antiques, jewels and stuffed tiger heads from royal hunts.

The article shines a light on the reversal of fortunes seen by a once-privileged class in India and the estate fight that is brewing and fueled by the fact that she was her husband's third wife and the survivors are four sons by 3 different wives.

Gayatri Devi lived a charmed life. Born wealthy, she married the maharaja of Jaipur, and became his third wife. Her husband's family was one of India's wealthiest royal families. Earlier generations of the family used solid gold tongue scrapers, kept parrots trained to ride little silver bicycles and had a live turtle encrusted with diamonds and rubies as a good-luck charm.

When she died in late July at age 90, the woman once described as one of the most beautiful in the world had outlived her husband by nearly 40 years, and outlasted his other wives too. But as estate lawyers have observed any family with four sons by three wives can have estate litigation.

For the Los Angeles Times article, go to:

Posted by Henry Moravec, III. Any questions or comments should be directed to: hm@moravecslaw.com or (626) 793-3210. The firm website is http://www.moravecslaw.com/

Friday, August 28, 2009

Advanced Health Care Directive: WSJ Article About "Preparing For The Final Hours"


Lately, there has been a great deal of discussion about health-care reform. The issue of living wills and health care directives has also come up. The August 18, 2009 issue of the Wall Street Journal has an article entitled "Preparing For The Final Hours."

The article notes that less than a third of American adults, and less than half of nursing-home patients, have filled out health care directives. There are a number of reasons for not doing so: (1) lack of understanding of the options or the consequences, (2) lack of understanding of the legalities, and (3) reluctance by people to discuss the subject of death.

The Advance Health Care Directive identifies the individuals that you desire to act for you if you become unable to make medical decisions for yourself. The most common decision involves when, and under what circumstances, extraordinary measures should be used to prolong life. There are also sections of the Advanced Health Care Directive which deal with whether or not you desire to be an organ donor. This is part of our basic estate plan package.

In order to prepare for determining your intentions, I would suggest that you read an Advanced Health Care Directive, and think about the following questions:

(1) Who do you want to make health care decisions for you when you can't make them?

(2) What kind of medical treatment do you want or don't want?

(3) How comfortable you want to be?

(4) How do you want people to treat you?

(5) What would you want your loved ones to know about your health condition?

A written Advanced Health Care Directive by itself does not ensure that your wishes will be understood and respected. Studies have shown that standard advance directive forms do little to influence end-of-life decisions without: (a) informed, thoughtful reflection about your wishes and values, and (b) communication between you and your likely or selected decision-makers before a situation occurs.

It is an excellent idea for those executing Advance Health Care Directives to speak openly and honestly with the person or persons they designate and go through the different situations that might come up. While no one can anticipate every medical situation, a thoughtful and reasoned discussion can cover the more likely scenarios.

The Wall Street Journal article can be found at:
http://online.wsj.com/article/SB10001424052970204044204574356423438598710.html

Posted by Henry Moravec, III. Any questions or comments should be directed to: hm@moravecslaw.com or (626) 793-3210. The firm website is http://www.moravecslaw.com/

Saturday, August 22, 2009

FAQ: What Is A Durable Power Of Attorney?


Planning for incapacity can be as important as planning for the distribution of your estate. Degenerative diseases such as Alzheimer's or serious accidents can rob anyone - old or young - of the ability to handle his or her personal and financial affairs. In addition, catastrophic illness or long-term custodial care needs can substantially deplete or even obliterate family resources.

If tragedy strikes, you may not have the time or the capability to ensure that things are taken care of and your wishes followed, unless you spell them out in advance. One estate planning tool that is used for incapacity or unavailability is the Durable Power of Attorney.

What Is A Durable Power Of Attorney?

The Durable Power of Attorney for Assets names the individuals that you desire to serve as your attorneys-in-fact, sometimes called your "agents," to deal with matters affecting your property. You are called the "principal." Your agents are given the power to transfer property to your Revocable Trust. Your agents are also given the power to act on your behalf, as if you were present and acting, with respect to your property, all as set forth in the Durable Powers of Attorney.

Executing a Durable Power of Attorney does not mean that you can no longer make decisions; it just means that another person can act for you if you cannot do so. For example, you may be hospitalized for a brief period of time or out of the country and need someone to deposit your checks in the bank or pay your bills. You can revoke the agent's authority under the power of attorney at any time if you become dissatisfied with what they are doing.

Being a "durable" power means that the agents are authorized to continue to act during any periods of time when you are incapacitated. The agent will still be obligated to act in your best interest, making decisions and using your money and property only for your benefit. If you do not establish a Durable Power of Attorney and you become mentally incapacitated, it may be necessary for a court to appoint a guardian or conservator for you.

Can I Execute A Durable Power Of Attorney When I Am Mentally Incapacitated?

No. In order to create a Durable Power of Attorney, you must know and understand what you are doing. A person who is mentally incapacitated is not capable of meeting these requirements.

Can I Use A Durable Power Of Attorney Form From The Internet Or Bookstore?

The form power of attorney forms prepared by Internet or do-it-yourself publishing companies often do not give adequate advice on gifting, long term care and estate planning. Ideally, a durable power of attorney is integrated with the rest of a person's estate plan and is specifically tailored to their choices (including, for example, their choices of executors and trustees).

Does The Durable Power Of Attorney Cover My Health Care Decisions?

The Advance Health Care Directive identifies the individuals that you desire to act for you if you become unable to make medical decisions for yourself. The most common decision involves when, and under what circumstances, extraordinary measures should be used to prolong life. There are also sections of the Advanced Health Care Directive which deal with whether or not you desire to be an organ donor.

Posted by Henry (Hank) J. Moravec, III, a partner at Moravec, Varga & Mooney, A Partnership. For a free 30 minute consultation (telephonic or in person), you can e-mail Hank Moravec at hm@moravecslaw.com or call him at (626) 793-3210 or (818) 769-4221.

He focuses his practice on Estate Planning, Trust and Probate Administration, Beneficiary and Trustee Representation, Probate Litigation, Tax Law, and Nonprofit Law. He represents clients throughout Southern California and his offices are conveniently located for clients in the Los Angeles, Santa Barbara, Orange, Riverside and San Bernardino Counties.

With respect to probate, Hank Moravec has over 20 years' experience as one of the best Los Angeles probate attorneys and Los Angeles probate litigation attorneys and is available should you need legal advice regarding your own or a family member's situation. For a consultation, You can e-mail Hank Moravec at hm@moravecslaw.com or call him at (626) 793-3210 or (818) 769-4221 to request a consultation.

The firm website is http://www.moravecslaw.com/. The firm has two offices and consultations and meetings can be held at either office.

The San Gabriel Valley office is located at 2233 Huntington Drive, Suite 17, San Marino, California 91108. There is ample free parking adjacent to the firm's office.

The San Fernando Valley office is located at 4605 Lankershim Boulevard, Suite 718, North Hollywood, California 91602-1878.


Friday, August 21, 2009

Why Should A Parent Name A Guardian For Minor Children?


The Wall Street Journal's blog has an article entitled "Michael Jackson's Kids: The Tough Task Of Naming A Guardian." As noted in the WSJ blog, the press surrounding the guardianship of Michael Jackson's children has highlighted an important family planning issue: "every parent should name a guardian, in writing, for their children, in case the unthinkable should happen."

To view the article, go to:
http://blogs.wsj.com/juggle/2009/08/05/michael-jacksons-kids-the-tough-task-of-naming-a-guardian/

What is a guardian? A guardian is an individual, typically a family member or close friend, who can handle the responsibility of raising your child if you and your spouse (or ex-spouse) die or become severely incapacitated before your kids reach adulthood.

What is a Nomination of Guardians? If a person or couple has minor children it is very important to prepare a Nomination of Guardians to serve if both parents are deceased or incapacitated. A court proceeding in the Family Law court is required to formally approve a guardian but the court affords the written nomination of the parents great weight in making its decision. Guardianship is a court proceeding in which a judge gives someone who is not the parent: custody of a child, or the power to manage the child's property (called "estate"), or both.

Naming a guardian is a difficult but necessary estate planning tool. As demonstrated by the Jackson case, it is also a task that should be revisited on a periodic basis. Naming a guardian is an easy project to put off since for those of us with children it is practically unfathomable that we will not be alive or fully functioning while our children are under the age of 18. However, it is our experience that the estate planning and guardian nomination process gives parents peace of mind reagrding their children's future.

Having a pre-executed Nomination of Guardians can also help avoid a "tug of war" between well-meaning family members. A properly drafted Trust will also provide for the management of your estate until such time as you deem your child is mature enough to receive a distribution.

Posted by Henry Moravec, III. Any questions or comments should be directed to: hm@moravecslaw.com or (626) 793-3210. The firm website is http://www.moravecslaw.com/

Thursday, August 20, 2009

The Swiss Connection and FBAR


At the top of the list of current events in Washington these days is the just announced UBS settlement, where some 4,000 names of U.S. citizens with Swiss bank accounts will be disclosed to the Internal Revenue Service. This settlement raises some fascinating issues of public policy and how it is always what you don't know about the Internal Revenue Code that hurts you.

As the comments to yesterday's New York Times article on the settlement revealed, there is quite a bit of anger among people who think that others may be evading taxes. However, I suspect that a good number of the people who have these Swiss accounts are not captains of industry but relatively ordinary people seeking some international diversification who may now be caught up in the enforcement plan described below. As you will see, although taxpayers are in theory offered a break if they engage in voluntary disclosure, the penalties, like many in the international trust and account area, are fairly severe.

As a bit of background, it is common for clients who engage in estate planning to inquire about foreign accounts and foreign trusts. After all, who has not seen The Bourne Identity and imagined himself or herself showing up in Zurich with money already waiting? However, the reality is that the United States is not Belgium or some other small member of the European Union, where the majority of citizens may have business dealings in other countries. U.S. tax law has never approved of U.S. taxpayers moving money or assets offshore, and because of the size of the United States it is not common for people to need to do so.

Somewhat less common are clients with foreign business interests or dual citizenship, who maintain residences in foreign countries and bank accounts there. Typically, these clients already have good accounting advice which helps them navigate filing obligations in two countries. In some cases, we even have to examine the applicable Estate Tax Treaties while drafting their documents.

Set against this background of a country where the vast majority of citizens have no foreign financial interests at all, you can see why the initial reaction to the UBS settlement might be "track down every last one of those rich guys!" But some people, who are not actually very rich, may be in for a big shock.

Most people don't give it much though when they get their annual Form 1099s from their banks and financial institutions. You simply attach them to your tax return and file it. However, those forms are of course also disclosed to the IRS, and it then uses them to cross check the income reported on the return. U.S. banks however, would usually have no way of knowing whether a customer was a dual citizen or resident and had a filing requirement in another country, or what that filing requirement would be.

This is why a knee jerk reaction to the "secretive Swiss banks" is a bit off the mark. Even though a large amount of the money in Swiss banks is from people or companies who are not Swiss, its not up to the Swiss to report to the IRS, is up to the taxpayers.

If a taxpayer reported the income from their Swiss accounts on their form 1040, they are sleeping through the night these days. They may even have gotten a credit for taxes paid in Switzerland.

However, many ordinary, non-sophisticated-secret-agent-types might not have known about the U.S.'s foreign account equivalent to the 1099, the Report of Foreign Bank and Financial Accounts, Form TD F 90-22.1 (the "FBAR" for short). Its a simple form, but because it does not apply to the vast majority of U.S. filers, it is not filed with a Form 1040 income tax return, but is filed separately to a separate IRS department dealing with foreign accounts.

Perhaps the worse case to be in is if you had a foreign account, did not disclose the earnings (because perhaps you thought the foreign withholding was the only tax owed) and did not file the FBAR.

Then, you have until September 23, to file the FBAR and pay the tax, an extra 20% of the tax, interest on both, and another penalty of 20% of the largest account balance over the last six years. For a $50,000 account, which have netted the client three figures of interest income per year (hardly Bourne territory) the penalty could near $15,000. The alternative could be even higher penalties and theoretical criminal prosecution.

Of course, in my example the U.S. treasury might not actually be out any money. Perhaps a couple of hundred dollars. Fifteen thousand for failing to report a few hundred. This is all you need to know about the U.S. view of foreign accounts -- be careful!

Posted by Henry Moravec, III. Any questions or comments should be directed to: hm@moravecslaw.com or (626) 793-3210. The firm website is http://www.moravecslaw.com/

Sunday, August 16, 2009

What Happens When Someone Dies With A Will, But No Trust?

Yesterday I addressed the issue of "What Happens When Someone Dies Without A Will Or Trust?" Today, the question is: What Happens When Someone Dies With A Will, But No Trust?

If the Decedent has a Will but no Trust, even if Trust terms are spelled out in the Will, the Will must be administered through the Probate Court (unless the Small Estate exception discussed above applies). The terms of the Will govern the division of the estate. The Will usually dictates who will be the Executor (the person in charge) of the Estate.

If an Executor is not named, is deceased or is unwilling to serve, the nearest living blood relative will have the right to be named as Executor.

The Executor will have to file the original Will with Probate Court as well as a Petition for Probate to begin the proceedings.

Posted by Henry Moravec, III. Any questions or comments should be directed to: hm@moravecslaw.com or (626) 793-3210. The firm website is http://www.moravecslaw.com/

Saturday, August 15, 2009

What Happens When Someone Dies Without A Will Or Trust?


In California, everyone has an estate plan even if they have no Will or Trust. That is because California law provides a set of detailed rules which determine who is entitled to your property when you die.

If the Decedent dies without a Will or a Trust what happens next depends on the facts of each particular case. If the Decedent’s estate is worth less than $100,000.00 and does not consist of real property (considered a "Small Estate”) no formal probate court proceeding is required and the heirs may simply collect the Estate through the use of a declaration (a “Declaration of Small Estate”). Most banks, as well as the DMV, will accept a Declaration of Small Estate to obtain access to the Decedent’s accounts and/or property.

For Los Angeles County, you can obtain a Declaration of Small Estate from the following court website: www.lasuperiorcourt.org/probate/pdf/TransferForm.pdf

A second possibility is that all or a portion of the Decedent’s estate, whether real or personal, passes by contract. Examples of property passing "by contract” include assets held in joint tenancy, assets held in a “pay on death account” or, as in the case of an insurance policy or retirement account, assets payable to a designated beneficiary. There is no monetary limit on the size of an estate which could pass by contract. However, if neither of the first two scenarios are applicable (or if the heirs wish to take advantage of a formal proceeding to negotiate with the Decedents’ creditors) an action will need to be filed in the special court which administers matters concerning trusts and decedent’s estates, known as the "Probate Court.”

If a Probate proceeding is required, someone, usually the nearest living blood relative, will have to file a Petition for Probate with the Probate Court to begin the proceedings. Essentially, the Probate Court is set up to help the relatives of the Decedent determine who gets the estate. Because, in this scenario, the Decedent left no Will or Trust, the estate goes to the Decedent’s heirs at law (nearest living relatives in order of lineage). The division of assets can be found in Probate Code Section 6401, which can be viewed by following the link to the Probate Code at: www.leginfo.ca.gov/calaw.html

Because California is a community property state, all community property (not otherwise disposed of by Will) goes to the surviving spouse. However, separate property can go all to the surviving spouse or be split between the surviving spouse and children. While you can represent the estate in Probate Court on your own, it is advisable that you to retain an experienced probate attorney.

There are a vast array of rules and deadlines that may be extremely complicated for the average person to navigate. Both the Probate Fees and Attorneys’ Fees are set by law and are based on the value of the estate that goes through Probate Court.

Posted by Henry (Hank) Moravec, III, a partner at Moravecs, A Professional Law Corporation. This firm has some of the best Los Angeles probate attorneys and Hank Moravec focuses his practice on Trust and Probate Administration, Estate Planning, Beneficiary and Trustee Representation, Tax Law, and Nonprofit Law. Any questions or comments regarding this post or your own situation should be directed to: hm@moravecslaw.com or (626) 793-3210.

The office is located in San Marino, California, a suburb of Los Angeles in the San Gabriel area. The firm, however, represents clients throughout California and the office is easily accessible to Los Angeles, Orange, Santa Barbara, Riverside, and San Bernardino Counties. San Marino is a short drive from Los Angeles, Pasadena, Arcadia, Alhambra, Glendale, Burbank and the surrounding cities. The firm website is http://www.moravecslaw.com/

Wednesday, August 12, 2009

What Are Some Examples Of Bad Estate Planning Or Trust Administration That Increase The Risk Of Probate Litigation?


We have written before about how to prevent probate litigation or disputes among heirs which do not proceed to a full-blown court proceeding but could be avoided.

Below are some examples of estate planning and trust administration decisions that are relatively common, and the possible unintended consequences.

(1) A person writing his or her own will or codicil (unless the instrument is a handwritten codicil that disposes only of personal effects) or using an online or form document. The classic mistake here is not that it is not possible to compose a document on your own, but that "homemade" documents often tend to give specific assets to people (see note 11), and do not take into account the passage of time which results in huge differences in the value of assets which were equal when the document was drafted.

(2) Having a customized estate plan prepared by an attorney who lacks the necessary expertise to draft nonstandard provisions. Most examples of this are fairly technical, but a common mistake is when a trust or Will contains a proviso that "When I die, I direct that all my assets be sold and . . . . . . ." Typically this is inserted in an effort to avoid arguments over assets. The actual result is an argument over timing and price of the now mandatory sales. Is now, for example, the best time to sell the family home in San Bernardino? Or should the Trustee have the flexibility to wait a year or so?

(3) Creating a group trust for adult beneficiaries (that is, one trust out of which the trustee can make distributions currently to any of several persons). This can work, but should only be done after some serious consideration of the assets and who the Trustee will be that will be charged with making these decisions.

(4) Appointing one child as the trustee over another child’s trust. Depending on the situation, this could be either no problem or a disaster.

(5) An executor, trustee, or agent (“fiduciary”) not hiring an attorney to represent and advise him, at least initially. Many of the easiest mistakes to avoid are made in the first several months of an administration.

(6) An executor hiring a lawyer who lacks the necessary expertise to help with the postdeath matters when the will contains tax and other “sophisticated” estate planning. This is related to point (5), obviously, but its worth mentioning since many of the "traps for the unwary" which occur after death are highly technical in nature. Asking a civil litigator for some help who is a friend of the family is typically a bad idea for both parties.

(7) A fiduciary or trustee failing to file required tax returns affecting the estate, trust, and/or the beneficiaries. Most non professional fiduciaries are simply unaware of the various filings. They are also unaware that in many cases they are personally liable for payment of the decedent's taxes.

(8) A parent not explaining or discussing his estate plan (at least in general terms) with his children. This is a highly personal decision, and many parents prefer to maintain privacy, but explaining some decisions in advance, such as treating children differently, can go along way towards smoothing feelings later.

(9) A person naming a minor (a person under age 18) as the direct beneficiary in a will or living trust or as the beneficiary of life insurance, IRAs, retirement plans, and so on. Avoiding a large distribution to an 18-year-old is one of the main reasons for estate planning in general.

(10) Arranging for the complete disposition of assets in a nonprobate manner by using “multiparty accounts,” leaving the executor with no funds to pay debts, taxes, and expenses after death. This may be the most common mistake on the list, and the most difficult to clear up. Also, this method usually fails to take into account changing asset values over time.

(11) Attempting to dispose of all assets individually, rather than using percentages (at least for the bulk of the estate). As mentioned above, this almost never works out the way the decedent intended.

I had a much longer list to start, but ran out of time to discuss them all, so these are just some common examples. Each estate and family is different and presents unique issues. You want an estate plan that is customized and planned for you. Not all probate litigation can be prevented, of course, but a large portion of probate litigation can be prevented by good planning and hiring experts during the planning, trust administration and probate phases.

Posted by Henry (Hank) J. Moravec, III, a partner at Moravec, Varga & Mooney. For a complimentary 30 minute consultation (telephonic or in person), you can e-mail Hank Moravec at hm@moravecslaw.com or call him at (626) 793-3210 or (818) 769-4221.

He focuses his practice on Estate Planning, Trust and Probate Administration, Beneficiary and Trustee Representation, Probate Litigation, Tax Law, and Nonprofit Law. He represents clients throughout Southern California and his offices are conveniently located for clients in the Los Angeles, Orange, Santa Barbara, Riverside and San Bernardino Counties.

The firm website is http://www.moravecslaw.com/. The firm has two offices and consultations and meetings can be held at either office.

The San Gabriel Valley office is located at 2233 Huntington Drive, Suite 17, San Marino, California 91108. Telephone: (626) 793-3210.

The San Fernando Valley office is located at 4605 Lankershim Boulevard, Suite 718, North Hollywood, California 91602-1878. Telephone: (818) 769-4221.


Monday, August 10, 2009

L.A. Times Article: Fight Over Michael Jackson's Estate Is Increasing Business For Online Will Companies


The Los Angeles Times ran an article on July 14, 2009 about how the Michael Jackson estate battle could increase the number of people who use online will companies. The article discusses some of the reasons why doing it yourself is not for everyone. To read the article, go to:
http://www.latimes.com/business/la-fi-wills14-2009jul14,0,266613.story

The article gives some examples of when it is best to see a lawyer for estate planning:
--if there are "interwoven business assets" or wealth,
--if you want to "leave a close relative out of your will or impose conditions,"
--if you want to disinherit your wife or child,
--if you want to set up contingencies such as "your daughter gets the money if she gets married" or "she gets the money if she divorces her current husband," and
--if you want an attorney to be able to attest you were competent when the estate planning documents were created.

Although we can understand why people who do not have any estate planning documents would be tempted to use the online form wills, we recommend against them for a variety of reasons. Often they are not executed properly, do not properly consider tax issues, do not consider state law, do not provide for the appointment of guardians for children, do not address the various issues when creating a trust, and so on and so on.

The money saved now in an online will can cost the estate significantly more later. We can provide many war stories where online or improperly drafted "do it yourself" wills and trusts created more problems than they solved. In addition, they cost the estate many times more than a properly executed trust and pourover will would have in the first place.

Any questions or comments should be directed to: hm@moravecslaw.com or (626) 793-3210. The firm website is http://www.moravecslaw.com/

IRS Addresses Tax Consequences of Reformation Of Trust

In Private Letter Ruling (PLR) 200927013, the IRS ruled that the judicial reformation of two trusts constitutes a qualified reformation under section 2055(e)(3) and that an estate tax charitable deduction is permissible under section 2055(a) for the present value of the charitable remainder interests in the trusts passing to an institution. A copy of the PRL can be found at:
http://www.irs.gov/pub/irs-wd/0927013.pdf

For those that are unaware of the concept of reformation, a simple explanation is as follows. Sometimes there is a mistake or ambiguity in the will or the trust that is not discovered until after the testator or grantor has passed away. There is a process to correct mistakes or ambiguities under state law and through the Internal Revenue Service (IRS) through a process known as reformation. Sometimes reformation is needed even where there is not a "mistake," but good and experienced estate planning can help avoid the need for a reformation.

Any questions or comments should be directed to: hm@moravecslaw.com or (626) 793-3210. The firm website is http://www.moravecslaw.com/

Sunday, August 9, 2009

Estate Planning For Second Marriages: His, Hers and The Children From Prior Marriages


In a prior article, we discussed that second or multiple marriages are a factor in increasing the risk of probate litigation after either the husband or wife passes away. Married persons with children from a prior marriage must plan carefully if they want to minimize the risk of probate litigation and ensure that those children receive the assets intended for them.

As we mentioned before, as estate lawyers, we have an optimistic attitude that our clients’ marriages will work out. However, we have a pessimistic attitude when it comes to death since all of us will die someday. At that point, what happens to the estate if the surviving spouse remarries? What happens if the entire estate is left to the surviving spouse and he or she leaves the estate to only his or her children and disinherits your children? This is where good estate planning can be useful.

What are potential solutions to these issues in estate planning? Remember that each case is different and there are no cookie cutter or form solutions that work for every family. To create a legal and financial safety net for your family while honoring your choices is what we help our clients achieve.

1. Prenuptial/Premarital Or Postmarital Agreement. The prenuptial agreement (pre-nup) is one of the best ways to avoid probate litigation on death. If you are already married, a postmarital agreement can also be drafted. These agreements can also help avoid an expensive “forensic accounting” on the death of the first spouse.

Many people mistakenly believe they own certain assets as their separate property (perhaps simply because the asset was in existence before the marriage and/or is titled solely in their name) when, in fact, their property may have become community or marital property, in whole or in part, during the marriage. It is better for living persons to create the necessary documentation regarding the ownership of their assets, even if it involves a pre- or postmarital agreement, than to have family members fight over these matters on the death of their spouse or parent.

Although it is a personal decision, it may not be wisest financial decision for persons who own any significant assets to enter into a second marriage without a pre-nup. Even if the spouses in a second marriage are themselves happy to treat all assets on hand on the death of the first spouse as joint or community property, unless the proper legal documentation is in place, there is nothing to prevent one or more children of the deceased spouse from claiming otherwise after the death of their parent.

This is the classic probate court litigation case: children of the first marriage versus the spouse of the second marriage. If assets are not cleanly divided between the surviving spouse and the children from the prior marriage, problems can arise. Life insurance can sometimes be the best way to separate the interests of the deceased spouse’s children from the surviving spouse and provide for both of them. The use of trusts can help, but the trust must be carefully structured.

2. Use Life Insurance To Fund Children's Inheritance. One way to address this issue is to give the children of the first spouse to die a significant portion of their inheritance at the first death. In some cases, this benefit is funded by life insurance. The survivor can then leave all or most of their estate to their own children.
There may be reasons not to use this method where there are not enough assets in the estate to care for the remaining spouse for their lifetime or where there are estate tax issues at the death of the first spouse.
3. Trust For Surviving Second Spouse and Children
One method is to create a trust for the surviving second spouse which has significant assets. There are safeguards to prevent the trust from being depleted during the surviving spouse's lifetime.
The problem here is that the children and second spouse are both beneficiaries. Often, the surviving spouse is made the trustee or given the power of appointment of the trust. Probate litigation is more likely with plans that create a trust for the surviving second spouse:
(1) with the children of the first marriage as permissible current beneficiaries of the trust along with that spouse;
(2) that gives the surviving spouse a power of appointment over the trust, especially if the trust assets can be given to beneficiaries other than the decedent’s children; and
(3) in which either the surviving spouse or a child of the deceased spouse (or both together) is the trustee(s).
The stepchildren in these types of trust are generally unhappy unless the family relationship is harmonious and the planning and communication are idea. It is not an ideal to create a situation where the stepchildren are waiting around for the stepparent to die in order to receive their inheritance. If there is this type of trust, it is usually better to have an independent trustee, such as a bank or trust company, appointed rather than the second spouse or one of the children.
4. Other Solutions
We have created a myriad of solutions for our clients. The key is to have the plan that suits your personal family situation, your financial picture and takes into account your children and the new spouse. It is your choice on how to create a financial and legal safety net for your spouse and children from a prior marriage. We can help advise you on how best to achieve those choices while minimizing any future family infighting or the risk of probate litigation.
Any questions or comments should be directed to: hm@moravecslaw.com or (626) 793-3210.

Henry (Hank) Moravec is a partner at Moravecs, A Professional Law Corporation, in San Marino, California. He focuses his practice on Estate Planning, Trust and Probate Administration, Beneficiary and Trustee Representation, Tax Law, and Nonprofit Law. He represents clients throughout Southern California and his office is conveniently located for clients in the Los Angeles, Orange and San Bernardino Counties. The firm website is http://www.moravecslaw.com/

Saturday, August 8, 2009

How And Why Does Probate Litigation Arise? Can You Plan To Avoid Probate Litigation?


How and why does probate litigation arise? Some people think that it is solely due to greed. In the case of family situations, there is sometimes more at issue. Some family members, especially children, have long standing resentments that may go back many years. That resentment may be based on perceived or actual unfair treatment.

Sibling rivalry has been around since biblical times and has not gone away. In addition, often the last living parent is the only thing holding the family together and when that parent passes away, the conflicts come out in the open.

If you are involved in probate litigation or think you may become involved, you are not alone. If you are in the estate planning stage, you can take action to help minimize the risk of probate litigation.

What are some types of situations that tend to lead to probate litigation?

1. Sibling rivalry and/or treating children differently

Family relationships can be fulfilling, but they also can be very hard. It appears that many misunderstandings arise because of the fact that people do not always communicate clearly with each other (often for years), leading to unresolved issues. Sometimes it is just too painful for people to address issues that really should be addressed.

Estate planning lawyers are not psychologists, but they understand the difficult situations some families are in and are able to help clients deal with difficult family issues in a proactive way.
For example, estate plans that "cut out a child" or "treat children differently" need to be planned and documented well in order to minimize probate litigation.

2. Second or Multiple Marriages

Some people marry for a second (or even third or fourth) time without signing a premarital or prenuptial agreement (pre-nup) before the marriage. Many people mistakenly believe that the sole purpose of a pre-nup is to specify how their assets will be divided on divorce. Although such matters can be addressed in a pre-nup, estate planning lawyers are more concerned with the “messy issues” that develop on death.

Estate lawyers have an optimistic attitude that their clients’ marriages will work out; they have a pessimistic attitude when it comes to death, however—all of their clients will die someday. The pre-nup is one of the best ways to avoid probate litigation on death. It can also avoid a very expensive “forensic accounting” on the death of the first spouse.

Pre-nups and how to address a subsequent marriage in estate planning will be addressed in a separate article.

3. Creating a “Nonstandard” Estate Plan

Some examples included estate plans that create overly detailed trusts attempting to “control from the grave and make gifts to mistresses. It may not not matter if the person creating the plan has “good reasons” for doing what he is doing. A nonstandard estate plan increases the odds for probate litigation after death.

4. Not Appointing the Right Fiduciary

Serving as the executor of an estate, the trustee of a trust, or an agent under a financial power of attorney requires a huge commitment of time and effort and absolute honesty. When determining who should be named in these important fiduciary positions, the personality traits and skills of the appointee should be carefully considered.

It would be a mistake to name someone in one of these fiduciary positions who does not communicate well with the beneficiaries, does not read (or listen to) and follow the instructions of the attorney advising him or her, procrastinates in getting things done, is not 100 percent trustworthy, may be susceptible to the (bad) influence of his or her spouse or someone else, is arrogant, conceited, or a “know it all,” is disorganized and/or loses things, and is lacking in common sense.

Further, it is often a mistake to name two people to act together as co-fiduciaries (unless both individuals are extremely mature, sensible and well-adjusted, good communicators, and good at coordinating their efforts).

5. Ill-Conceived or “Faulty” Planning

There is a range of what would qualify as “bad estate planning.” Some bad estate planning is the result of incompetence and/or lack of experience on the part of the attorney who prepared the plan. Others are the result of individuals trying to do things themselves that are not well thought-out. Examples of this type of poor planning will be addressed in a separate article.

6. Failure to Follow Up

This category includes the situations where the client (or his or her attorney):

(1) fail to review the estate plan on a periodic basis (estate plans become outdated very quickly now);

(2) fail to do the necessary “homework” incident to the estate plan (such as retitling accounts and completing beneficiary designation forms as instructed so that nonprobate assets are coordinated with the client’s estate plan in his will or trust);

(3) fail to change the will, account titles, and beneficiary designations after marriage or divorce; and

(4) fail to retitle all the assets in the name of the living trust before death if the intention is to avoid probate completely.

Not all probate litigation can be prevented, of course, but a large portion of probate litigation can be prevented by good planning. Good planning is what estate planning is all about. Good planning and goal setting is important in probate litigation as well.

With respect to probate, Hank Moravec has over 20 years' experience as one of the best Los Angeles probate attorneys and Los Angeles probate litigation attorneys and is available should you need legal advice regarding your own or a family member's situation. For a consultation, You can e-mail Hank Moravec at hm@moravecslaw.com or call him at (626) 793-3210 to request a consultation.

The firm website is http://www.moravecslaw.com/. The firm is located at 2233 Huntington Drive, Suite 17, San Marino, California 91108. There is ample free parking adjacent to the firm's office.


Tuesday, August 4, 2009

As A Business Owner, What Do I Need To Consider When Planning My Estate?


Many business owners have a well thought out business plan as it relates to operating their business, but neglect to plan for contingencies such as death or loss of competence.

When an individual owns a business, estate planning requires a more sophisticated look at the entire picture. The initial focus is on the underlying documents of ownership (do they accurately reflect the ownership interest) and the form in which the business is held (corporation, LLC, partnership, etc.). For example, two of the issues we analyze -- among many others -- are:

■ Is the business held in the best possible way to reduce the imposition of estate taxes?

■ Should minority ownership interests be gifted to family members during the business owner’s lifetime in an effort to reduce the estate tax bite upon death? Such lifetime gifts can reduce the value of the business for estate tax purposes by up to 35 percent.

There are a vast array of issues that are factually specific to your situation and your needs. One size plan will not fit all. For example, many couples have premarital and post-marital agreements, which require specific distributions upon death. As estate and trust attorneys, we ensure that the terms of your Trust effectively reflects the terms of these contractual agreements.

On the other hand, if you are one of the very few that have a contingency plan, ask yourself the following questions:

■ Has it been updated since the Tax Reform Act of 2001?

■ Have you taken advantage of new estate planning vehicles that may
significantly reduce estate taxes for your family?

■ Has your family situation changed? Have you remarried or divorced or had more children?

■ More importantly, was your existing plan properly drafted?

Just as we have health checks, our estate plans should be revisited periodically.

For a detailed article on "Estate Planning For The Business Owner," go to the following link from our website:

Even though none of us like to think about the fact that we will not live forever and that when we die the taxman will always be standing at the head of the line -- this is a fact of life. In addition, family disputes and probate litigation arise more often when estates are not well-planned.

If you want to ensure that your family is properly cared for and that all the facets of your business, its succession and its impact on your estate plan are well-planned, you should address these issues sooner rather than later. It is common to put these type of projects off and we are skilled at helping our business owner clients begin and go through the estate planning process whether there is a small family business or there are numerous corporations, real estate holdings and limited partnerships involved.

Any questions or comments should be directed to: hm@moravecslaw.com or (626) 793-3210. The firm website is http://www.moravecslaw.com/

Henry (Hank) Moravec is a partner at Moravecs, A Professional Law Corporation, in San Marino, California. He focuses his practice on Estate Planning, Trust and Probate Administration, Probate Litigation, Beneficiary and Trustee Representation, Tax Law, and Nonprofit Law. He represents clients throughout Southern California and his office is conveniently located for clients in the Los Angeles, Orange and San Bernardino Counties.

Monday, August 3, 2009

Do I Need To Hire A Probate Litigation Attorney?


What Is Probate Court Litigation?

Probate Court is the court that handles matters concerning wills and estates, such as the distribution of property or money to those named in a will. In California, the Probate Court also handles guardianships and conservatorships.

The terms “contested matters” and “litigation” are often used interchangeably. Both refer to situations that may require the Probate Court's action to resolve a dispute or fix a problem. Some contested matters do not involve animosity between the parties, while others do. If the matter surfaces because of a person's death or mental incapacity, then any necessary court proceeding will usually be filed in a court that has “probate jurisdiction.” Most of the matters handled by probate courts, such as admitting wills to probate and appointing executors, are routine and not contested.

Routine probate matters can be handled very efficiently. “Contested matters” handled by probate courts (also known as “probate court litigation”) is a broad term that includes a variety of situations, including, but not limited to:

■ Will contests (a challenge to the validity of a will);

■ Will and trust construction suits (a request that the Probate Court make a determination regarding the legal meaning or effect of particular wording used in a will or trust);

■ Guardianship contests. An example includes a fight over:

(1) whether a guardian should be appointed for a particular individual who allegedly has lost his mental capacity (and did not do any advance planning, such as executing powers of attorney), and (2) if so, who should be appointed as the guardian to make medical decisions and handle financial matters for that mentally incapacitated person);

■ Trust modification and trust reformation suits. This is a proceeding that requests the Probate Court to change (or "fix") the terms of a trust because something is wrong with the way the trust is worded);

■ Trust termination suits. This is a legal action brought to terminate a trust because the purpose of the trust has been fulfilled or can no longer be fulfilled; and

■ Breach of fiduciary duty actions. These are lawsuits by beneficiaries against an executor, trustee, guardian, or agent alleging that the fiduciary failed to act in accordance with the law and/or the instrument appointing her and thereby caused damage to the beneficiaries).

Do I Need To Hire A Probate Litigation Lawyer?

If you think you need a probate lawyer, it's probably because a relative or someone close to you has passed away (called the "decedent"). This is not an easy time to try to find a lawyer, but it must be done.

If you're involved in a lawsuit over an estate -- or if you think you may end up in a lawsuit -- look for a probate attorney who also handles litigation. There are basically three types of probate lawyers:

(1) those who only handle the administrative side of probates and drafting of will, trust and estate documents (who can loosely be called transactional lawyers);

(2) those who only represent clients in fights over who gets the estate (called probate litigators); and

(3) those estate and trust firms which do both.

Our firm, for example, does both. If you anticipate litigation, it is not a good idea to hire only a transactional attorney since at some point you will need to bring in another attorney who will need to get up to speed and this can increase your or the estate's legal fees. A probate litigation attorney may also be better at positioning you or the estate for the anticipated lawsuit.

Needless to say, the best way to prevent most probate litigation is by good planning. Good planning is what estate planning is all about. We will address ways to prevent probate litigation in other articles in this blog. The old statement "an ounce of prevention is worth a pound of cure" is especially true in estate planning and probate litigation. All litigation, however, cannot be prevented even with excellent planning. In those circumstances, you need a probation litigation attorney.

Posted by Henry (Hank) J. Morevec III. Hank Moravec is a partner at Moravecs, A Professional Law Corporation, in San Marino, California. He focuses his practice on Estate Planning, Trust and Probate Administration, Beneficiary and Trustee Representation, Tax Law, and Nonprofit Law. He represents clients throughout Southern California and his office is conveniently located for clients in the Los Angeles, Orange and San Bernardino Counties.

With respect to probate, Hank Moravec has over 20 years' experience as one of the best Los Angeles probate attorneys and Los Angeles probate litigation attorneys and is available should you need legal advice regarding your own or a family member's situation. For a consultation, You can e-mail Hank Moravec at hm@moravecslaw.com or call him at (626) 793-3210 to request a consultation.

The firm website is http://www.moravecslaw.com/. The firm is located at 2233 Huntington Drive, Suite 17, San Marino, California 91108. There is ample free parking adjacent to the firm's office.

The office is located in San Marino, California, a suburb of Los Angeles in the San Gabriel area located 20 minutes from downtown Los Angeles. The firm represents clients throughout California and its attorneys appears in probate court throughout Southern California (Pasadena probate attorney, Los Angeles probate attorney, Santa Monica probate attorney, Pomona probate attorney, Torrance probate attorney, Long Beach probate attorney, Van Nuys probate attorney, Santa Barbara probate attorney, Orange County probate attorney, Riverside probate attorney, San Bernardino probate attorney).


Sunday, August 2, 2009

Can My 401(k) Or IRA Be Part Of My Estate Plan? Can I Designate My Trust As A Beneficiary?


No longer are traditional pensions the norm. Today is the age of the 401(k), Roth 401(k), 403(b), 412(i), the SIMPLE, the SEP, the IRA, and the Roth IRA, among others. In our practice, we help our clients incorporate their varying investment vehicles into their estate plan and understand how to designate and change beneficiaries to be consistent with their estate and trust plans.

Common Question: Can I designate my trust, multiple individuals or favorite charity as a beneficiary in my 401(k) or IRA?

Answer: Yes, but each designation comes with separate issues which are discussed below. In addition, designations set forth in a will or trust are generally ineffective unless the proper designation forms have been completed with and submitted to the investment company.

What Do I Need To Bring To My Estate Planning Session Regarding 401(k), IRA And Similar Plans?

1. Bring copies of current 401(k), IRA and related investment plan statements. All the information you provide to us is confidential and attorney-client privileged. We need the statements so we can obtain:

(1) the present value of 401(k) or similar assets;

(2) the name of their managing institution;

(3) the name of the investment representative, if any; and

(4) respective contact information.

In addition, this helps us educate our clients about the true nature of their investment vehicle. Sometimes a client may believe they have a 401(k) but it is really an annuity, IRA or other investment vehicle, and possibly subject to different rules.

2. Contact your plan manager prior to our planning session and determine the current primary and alternate beneficiary of record. The proper contact is usually found in the upper right or left portion of the 401(k) statement.

3. Begin the process of determining the percentage of assets you want to allot to each beneficiary. This information will be finalized and provided before the estate plan is finalized.

Beneficiary Designation Form

If you recall, as a participant in a 401(k) or other plan, you probably designated a beneficiary using a "beneficiary designation form." Forms typically require the name, relationship and date of birth of the beneficiaries. Designating individuals, estates, trusts and charities is permissible.

And married participants designating someone other than their spouse will require spouse approval. However, each designation comes with separate issues, some of which are discussed below. Additionally, designations set forth in a will or trust are usually ineffective. Investment companies require original signatures and often signature guarantees from a financial institution (i.e., bank or brokerage); notarization may not be acceptable.

If you "never" received a beneficiary designation form should contact your investment representative for assistance. Beneficiary designation forms are often available online. However, execution in the presence of a professional (or review by a professional) prior to submission is highly recommended to ensure proper execution.

What Are The Default Rules In Your 401(k), IRA Or Other Plan?

Sometimes clients have simply not completed a designation form and relied upon the plans' default rules that are in place in each plan. General rules place the spouse first, children second and the estate third. Still, each client should research his or her plan's hierarchy before relying upon defaults. An uninformed decision could wreak havoc upon the estate and estate plan.

When relying on default provisions, we educate our clients so they understand both the legal and practical effects. For example, the definition of "spouse" affects plan participants differently. Someone in a long-term relationship or same-sex relationship (or marriage) may not benefit from a default definition, unless it specifically encompasses his or her set of circumstances.

Likewise, a perceived husband in a "common law marriage" might not receive his wife's assets if the default definition does not consider him a spouse. In either event, plan assets could pass from the deceased owner to someone other than the "intended" beneficiary. Thus, we help our clients understand default provisions before using them.

Multiple Beneficiaries, Allocations And Contingent Beneficiaries

One thing that can happen is that clients have designated less or even more than 100% of their IRA or 401(k) plan's assets. Active designation of beneficiaries requires disposition of 100% of the assets. Allotment in excess of 100% often results in the payment of proceeds in proportion to the proposed allocations.

For example, when two primary beneficiaries are named and each is supposed to receive 100% of the assets, each ultimately receives 50%. Also, when two or more primary beneficiaries are named and one predeceases the plan owner, all assets should pass to the survivor beneficiary.

Clients often do not know, or understand, this possibility. Therefore, clients looking for relief from the contractual standards should consider the use of estate-planning instruments.

In addition, failure to name contingent beneficiaries results in distribution pursuant to default provisions. Without designations, assets are paid to the deceased participant's estate unless otherwise determined by law. Allocations up to 100% are required. Also, the death of one of the two or more contingent beneficiaries leaves the survivor receiving all assets.

Designating Your Trust As A Beneficiary

Participants with a trust, of any kind, can designate it as the beneficiary by inserting the trust name in the form. Designating a trust allows the plan participant to:

(1) avoid probate or administration delays and expenses;

(2) possibly enjoy creditor protection of assets; and

(3) further the trust's stated purpose using additional funds.

Depending on the terms of the trust a lump sum distribution may be required, causing a taxable event. Each situation differs.

A trust holding net, lump sum proceeds will have flexibility in management and investment. Alternatively, a trust that is eligible to continue the plan or roll it over may defer taxable gains, albeit while investing in the respective plan's products.

Conclusion

Clients participating in 401(k), IRA and other plans must make informed decisions when designating their trust, estate, charities or individuals as beneficiaries. At our firm, we take the time to review the effect of beneficiary designations with our clients.

We inform them of the positives and negatives of defaults, specific designations or using a combination of both. We discuss what happens, for example, if beneficiaries predecease the plan owner, under certain default situations, or if specifically named. We review distribution under those circumstances. We remind our clients of the ability to name trusts and charities as beneficiaries.

We handle the technical and legal aspects. Our clients do not need to become expert in these issues or feel bogged down in them since we are the experts. Instead, we focus our clients on their intent and provide them with the methods of achieving their goal.

Any questions or comments should be directed to: hm@moravecslaw.com or (626) 793-3210.
Henry (Hank) Moravec is a partner at Moravecs, A Professional Law Corporation, in San Marino, California. He focuses his practice on Estate Planning, Trust and Probate Administration, Beneficiary and Trustee Representation, Tax Law, and Nonprofit Law. He represents clients throughout Southern California and his office is conveniently located for clients in the Los Angeles, Orange and San Bernardino Counties. The firm website is http://www.moravecslaw.com/

Saturday, August 1, 2009

The Lighter Side: Unusual Will Bequests

For a humorous look at estate planning, the July 2, 2009 edition of the London Times' online blog Money Central has an article entitled "10 Strangest Will Bequests Ever." Among the bequests mentioned are:

Gene Roddenberry (creator of Star Trek): Ordered that his ashes be blasted into space on a satellite and distributed as it orbited the earth.

Charles Vance Miller: Left three men -- who were known to despise each other -- joint lifetime tenancy in Millar's Jamaican holiday home.

Samual Bratt: Left $30,000 to his wife who never allowed him to smoke on the condition that she smoke five cigars a day.

Juan Potoachi: Left 200,000 pesos to a Buenos Aires theater provided his skull be preserved and used as Yorick (the deceased court jester) in Hamlet productions.

For more, go to:
http://timesbusiness.typepad.com/money_weblog/2008/07/the-top-10-most.html

Any questions or comments should be directed to: hm@moravecslaw.com Henry (Hank) Moravec is a partner at Moravecs, A Professional Law Corporation, in San Marino, California. He focuses his practice on Estate Planning, Trust and Probate Administration, Beneficiary and Trustee Representation, Tax Law, and Nonprofit Law. He represents clients throughout Southern California and his office is conveniently located for clients in the Los Angeles, Orange and San Bernardino Counties. The firm website is http://www.moravecslaw.com/

Am I Responsible For Filing Estate Or Decedent's Tax Returns?


Executors or administrators are responsible for estate and income tax filings. In the year of death, the executor or administrator must file the decedent's federal and state income tax returns (Form1040). The executor or administrator should also verify that the decedent's federal and state income tax returns from previous years have been filed, making sure to take corrective action if deficiencies are found.

The executor or administrator should file for a federal employer identification number (EIN) for the estate if estate tax or income tax filings are required. Estate taxes are filed on Form 706 while income taxes are filed on Form 1041. Further, all outstanding tax liabilities of the decedent that may arise during administration, including property and business taxes must be paid.

Importantly, federal and state law holds the personal representative personally liable for income and estate taxes where funds have been distributed without reserving enough to pay the various taxes. As such, the representative should be sure to create a reserve sufficient to pay the various taxes. Obtaining expert legal advice regarding the preparation and filing of these returns is important so you are not liable if there are any mistakes made.

Many of the decisions a client needs to make in the areas of estate planning and probate and trust administration are governed by the application of the California Revenue and Taxation Code and the Federal Internal Revenue Code. We advise clients in many areas of estate gift, income, and real property tax law, and regularly prepare formal requests for specific rulings from the taxing authorities. Our expertise extends to preparation of estate tax returns (which is a specialized return many accountants do not regularly prepare), and representation of estates in tax audits.

Posted by Henry (Hank) J. Moravec, III, a partner at Moravec, Varga & Mooney, A Partnership. For a free 30 minute consultation (telephonic or in person), you can e-mail Hank Moravec at hm@moravecslaw.com or call him at (626) 793-3210 or (818) 769-4221.

He focuses his practice on Estate Planning, Trust and Probate Administration, Beneficiary and Trustee Representation, Probate Litigation, Tax Law, and Nonprofit Law. He represents clients throughout Southern California and his offices are conveniently located for clients in the Los Angeles, Santa Barbara, Orange, Riverside and San Bernardino Counties.

With respect to estate tax returns and probate, Hank Moravec has over 20 years' experience as one of the best Los Angeles estate tax attorneys and Los Angeles probate attorneys and is available should you need legal advice regarding your own or a family member's situation.

The firm website is http://www.moravecslaw.com/. The firm has two offices and consultations and meetings can be held at either office.

The San Gabriel Valley office is located at 2233 Huntington Drive, Suite 17, San Marino, California 91108. Phonte: (626) 793-3210.

The San Fernando Valley office is located at 4605 Lankershim Boulevard, Suite 718, North Hollywood, California 91602-1878. Phone: (818) 769-4221.

What Does Estate Planning Cost?


Since we have specialized in estate planning and probate for over 20 years and have worked at large Los Angeles law firms, we have become very efficient at minimizing our client's legal fees while providing sophisticated and excellent legal representation. At the same time, we are not a mill and provide legal services that address our clients' individual circumstances and the complexity of documentation and planning required to achieve their goals and objectives.

We have prepared comprehensive estate plans for younger professional families with children and for affluent families worth over $10 million with significant real property and family businesses. The cost of an estate plan or estate planning legal services generally depends on your, your family's or your business's unique circumstances. The estate plan will save your family future legal fees and/or taxes that vastly exceed the cost of the plan.

For most estate plans, we charge a flat fee that includes the following:

■ All meetings to discuss your estate planning needs and answer questions and create a strategy and vision of what you want to accomplish and the financial goals you want to achieve;

■ Wills

■ A Revocable Trust,

■ Health Care Directives,

■ Powers of Attorney,

■ A General Assignment of Assets to the Revocable Trust,

■ Deeds transferring your home(s) to your Revocable Trust, and

■ Telephone calls, emails and correspondence regarding your estate planning needs.

Our firm's estate plan flat fee ranges from $3,000 to $10,000, depending on the size and sophistication of the estate. Most estate plans for individuals with a potential net worth of less than $5 million are done for a flat fee ranging from $3,000 to $5,000. In California, many homes are worth $1 million or more and individuals often have life insurance policies with values in excess of $1 million -- so it is easy for couples or individuals to have a potential net worth and estate worth protecting.

We can also charge our clients on an hourly basis and often do this for tax planning, probate litigation and other estate law issues.

Estates of all sizes benefit from thoughtful planning. Don’t put off protecting your family or partner now and into the future.

Posted by Henry (Hank) Moravec, III, a partner at Moravecs, A Professional Law Corporation. Hank Moravec focuses his practice on Estate Planning, Trust and Probate Administration, Beneficiary and Trustee Representation, Tax Law, and Nonprofit Law. Any questions or comments regarding this post or your own situation should be directed to: hm@moravecslaw.com or (626) 793-3210.

The office is located in San Marino, California, a suburb of Los Angeles in the San Gabriel area. The firm, however, represents clients throughout California and the office is easily accessible to Los Angeles, Orange, Santa Barbara, Riverside, and San Bernardino Counties. San Marino is a short drive from Los Angeles, Pasadena, Arcadia, Alhambra, Glendale, Burbank and the surrounding cities. The firm website is http://www.moravecslaw.com/

Do I Really Need An Estate Plan?


When the economy is suffering and when families and individuals are facing financial pressures, we often decide to "save money." The paradigm is that in order to best protect our remaining assets is by taking the time and spending the money to prepare a comprehensive estate and financial plan. It is thoughtful and preventative planning that helps us reap the advantages of the good times and weather the bad.

Why Have An Estate Plan?

You may have heard the old saying that if you do not plan your estate, the state will do it for you. I even heard a lawyer at a cocktail party last month telling someone that as if it were true estate planning advice. While this may not seem like bad advice when you have more debts than assets (which many of us do if you put our real estate mortgages into the equation), you should reconsider the wisdom of allowing the state to make decisions for you.

A comprehensive estate plan process considers whether your estate will be financially adequate to meet the needs of your beneficiaries and analyzes whether it is wise to purchase or increase your life insurance. The process should also consider the need for supplemental health, disability, and other types of insurance. Carefully analyzed and funded estate and financial plans will provide your survivors with the liquidity and flexibility to meet their needs.

A properly drafted estate plan will save you money because in making your choices clear you can avoid expensive disputes and lengthy court processes, ensuring you have created a financial and legal safety net for your loved ones.

When Do You Absolutely Need An Estate Plan?

So when can I say that you and your family would absolutely benefit from having an estate plan and that it is well worth the amount spent? I am not the hammer that looks at every person's estate as if it were a nail that needs hammering. There are cases where in my professional judgment an estate plan is important for financial and legal reasons:

■ If you have minor children, especially from a prior relationship, you need an estate plan. Even if you do not have significant assets, you must name a guardian for your children and direct which assets will provide for them in the event of your death.

■ If you have a blended family and want to ensure that adult children from a previous relationship are provided for, you need an estate plan.

■ If you or your spouse/partner have a life insurance policy where your children or spouse could receive a significant amount ($250,000 or more) at once. You may want to create a mechanism where the insurance proceeds can only be spent for certain items or ensure it is not all spent at once (the 21 year old son who might splurge on a Ferrari). Or you want to preserve the life insurance so that any new wives/husbands will not have access to the insurance proceeds and that it remains protected for the benefit of your children.

■ If you want to provide for your partner and are unmarried, you need an estate plan -- especially because the state law will not provide for that person.

■ If you want to choose who will make decisions about your finances and health care in the event you become unable to do so, you need an estate plan.

■ If you want to provide for a special-needs child, you need an estate plan.

■ If you want to provide a friend or family member (who is not a spouse, child or one who would receive your estate if you passed away without a will), you need an estate plan.

■ If you want to direct who should receive family heirlooms and other personal possessions, you need an estate plan.

■ If you do not want young adult children to inherit all your assets at once (and have the ability to spend it all over a few short years), you need an estate plan.

■ If you want to minimize expenses from your death or disability, you need an estate plan.

■ If you want to avoid probate, you need an estate plan.

■ If you are affluent and want to minimize estate taxes, you need an estate plan.

■ If you want to provide for a pet or other animal, you need an estate plan.

■ If you want to make charitable donations, you need an estate plan.

In sum, you can better protect yourself, your friends and family, and your assets by making an investment in your estate plan now.

Any questions or comments should be directed to: hm@moravecslaw.com or (626) 793-3210. Henry (Hank) Moravec is a partner at Moravecs, A Professional Law Corporation, in San Marino, California. He focuses his practice on Estate Planning, Trust and Probate Administration, Beneficiary and Trustee Representation, Tax Law, and Nonprofit Law. He represents clients throughout Southern California and his office is conveniently located for clients in the Los Angeles, Pasadena and surrounding areas. The firm website is http://www.moravecslaw.com/