Marissa Sirota Law, PLC

Estate Planning, Trust Administration and Probate in Yolo, Solano, Sacramento and surrounding counties

Marissa Sirota Law
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Archives for October 2017

A quick primer on adding trusts to your estate plan

October 25, 2017 By Marissa Sirota

Estate plans come in many shapes. They have to take your unique situation and needs into account. Each estate plan has to reflect your wishes and should make things as easy as possible for the people who are included in the plan.

At a minimum, you will need a will. You might also need to have trusts set up to make the transfer of assets easier. There are a host of different types of trusts, and each of these has a different purpose. Before you jump into the estate planning process, you should understand a few points about trusts.

Revocable versus irrevocable

Trusts are set up as revocable or irrevocable. Some types of trusts can only be set up in one of these manners. For example, a special needs trust is always irrevocable. This is an important consideration when you are getting your estate plan together.

A revocable trust is one that can be changed. These are useful for some people because the terms can be altered or revoked if there is a need to do so. You set up this type of trust with the goal of helping your loved ones to avoid probate when you pass away. Also known as a living trust, this type of trust doesn’t offer any type of protection from creditors who might come after your assets to satisfy debts.

Irrevocable trusts can’t be changed once they are established. These help your loved ones to avoid probate. Unlike revocable trusts, irrevocable trusts offer asset protection. Once assets are placed in the trust, creditors can’t come after them if you have a debt that you are unable to pay. Even though you created the trust, you can’t pull the assets out if you decide that you don’t want them to remain there.

Trusts for specific purposes

Some trusts have specific purposes and can only be used for those reasons. One example of this is a special needs trust. This safeguards the rights of individuals with special needs to qualify for needs based programs. Another example is a life insurance trust, which can transfer the proceeds from a policy to one or more beneficiaries when the insured person passes away. A spendthrift trust is one that doesn’t allow the beneficiaries of the trust to give away or sell one’s interests in the trust. Charitable trusts help you to pass assets on to favorite charities when you die. Other types of trusts are also available, so make sure that you discuss your needs to determine what types of trusts can meet your goals for the estate.

Filed Under: Blog, Uncategorized

Hugh Hefner’s estate planning simplified matters for his heirs

October 25, 2017 By Marissa Sirota

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

Filed Under: Estate Planning, Uncategorized

Don’t forget about Spot: Protect your animals in your estate plan

October 19, 2017 By Marissa Sirota

Pet owners in California understand that their four-legged friends are more than just animals — they are family. For how much love most people shower on their beloved pets, many fail to adequately prepare for their future care. A comprehensive estate plan can provide necessary instructions and finances for a pet after his or her owner has passed away.

Pet trusts are one of the most common ways that individuals incorporate their pets into their estate plans. Like other trusts, a trustee who will oversee how the funds are distributed and invested must be named. This is usually not the same person who will actually be taking ownership of the pet.

The pet trust should contain a few important things. Both the trustee and owner should have access to a pet budget that includes the expected cost of food, regular vet visits and other basics. The animal’s medical history should also be included, and many owners also choose to include favorite toys and other pet-specific quirks to help with the transition to a new owner. In some cases, owners also leave some funds to the person taking ownership of the animal.

Having a verbal agreement about who will take care of an animal after the owner has passed might seem like enough, but this provides no legal security for the pet. A person might have the best intentions to take the pet, but discover that they do not have the financial stability to do so or that they have simply changed their mind. California pet owners can best protected their beloved animals by including them in their estate plan.

Source: wilmingtonbiz.com, “What About Bam (Or Fido)?“, Susan Willett, Oct. 16, 2017

Filed Under: Trust Administration, Uncategorized

Have you updated your health care directives?

October 10, 2017 By Marissa Sirota

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

Filed Under: Estate Planning, Uncategorized

Estate planning in the digital age

October 5, 2017 By Marissa Sirota

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

Filed Under: Estate Planning, Uncategorized

Marissa Sirota, Attorney

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    • • Do I Need A Will Or A Trust?
    • • Understanding Advance Health Care Directives
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    • • Probate Alternatives
    • • Is Probate Necessary?
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