Archives for October 2017

Celebrity deaths tend to bring out mixed emotions in people. Some mourn the death of a beloved role model or icon, while others acknowledge a celebrity’s passing without much emotion. However tragic the death of a high-profile individual might be, the celebrity’s estate plan — whether good or bad — usually serves as an example of the importance of proper estate planning. The late Hugh Hefner is no exception.

Fights over inheritance are not as uncommon as some in California might think, especially when there is a significant amount of money involved, or a parent remarried later in life and earmarked some of his or her estate for the surviving spouse. However, experts believe that fighting over inheritances in the Hefner estate will be unlikely. Hefner left half of his estate to be divided among his four children. The other half of his estate is to be spent on charities.

Hefner’s wife, Crystal Harris, was not left out. Reports indicate that Hefner made sure to leave her enough of his estate for her to live comfortably, but without jeopardizing any of his children’s inheritance or the money intended for charity. Estate taxes are also unlikely to be a significant issue, as the magazine mogul utilized trusts and charitable planning.

Although unclear which types of trusts Hefner utilized, his estate should pass directly to his beneficiaries. This is a common tool utilized by those who hope to avoid probate and minimize the impact of estate taxes. Careful estate planning can ensure that surviving heirs and spouses in California will have an easier time handling a loved one’s estate, even as they move through the grieving process.

Source: Forbes, “Hugh Hefner, Role Model? He Was When It Came To Estate Planning“, Danielle and Andy Mayoras, Oct. 9, 2017

Ask most people what an estate plan is for and you will get the same approximate answer — it is for dividing an estate after death. However, this is just one part of estate planning, and only putting in the bare minimum with a will leaves people in California vulnerable, particularly as they near the end of their lives. Although it can be uncomfortable to discuss end-of-life wishes, health care directives can provide guidance during emotionally strenuous times.

A living will is essential, especially for those who have strong feelings regarding certain medical interventions. This document is used to outline what kind of care a person would like to receive in their later years, and can even include preferences for residential or in-home treatment. It also makes sense to include useful information, such as primary and alternate physicians, insurance information, medical records and preferred hospitals.

Having a living will alone will not ensure that a person’s wishes are carried out. A medical power of attorney names a trusted individual to make these decisions on another person’s behalf when that individual is no longer able to make medical decisions on his or her own. It is common to name an alternative surrogate in the instance that the first is unable to perform.

In California, the living will and power of attorney come together to create health care directives. This is an essential part of estate planning that should be updated regularly to reflect changing wishes on medical care or dynamics with the named surrogates. By taking the time to review and update estate plans as needed, individuals in California can ensure that their final wishes will be respected.

Source: Investopedia, “Advanced Estate Planning: Healthcare Documents“, Stan Murray, Accessed on Oct. 10, 2017

Wills are valuable documents whether the testator intends to pass on a home, important family heirlooms or personal items of great value. While the role that a will plays in passing on physical assets is quite clear, many people in California are less certain about how their digital assets fit in. Because of licensing and terms of service, estate planning must be carefully utilized for digital property.

Much of what people own now exists in a purely electronic form. From music to digital books and electronic copies of movies, assets now exist in the cloud just as much as they do in the real world. However, many of these digital assets are not fully owned by users, and are instead licensed for their personal use. This prevents most people from transferring a digital book from their electronic reader upon their death. In many instances a digital asset will simply disappear even if otherwise outlined in a will.

This can be incredibly disconcerting for most people in California, as a significant amount of money is often spent on accessing these digital goods. Trusts typically cannot solve this problem, either, as a trust created to access electronic products would likely only allow for the trust — and not an actual person — to make use of them. One expert believes the best solution is to pass on login information and passwords through wills, or to bequeath the physical item that the digital assets are stored on, such as an e-reader or smart phone.

Estate planning for digital assets is still relatively new. This does not mean it is not as important or pressing as other aspects of an estate. Indeed, as digital assets can be relatively confusing for consumers to handle, it is important to address how they should be handled as early on in the process as possible.

Source: nj.com, “Bamboozled: Who gets your digital stuff when you die?“, Karin Price Mueller, Sept. 28, 2017