The 2010 tax laws that increased the lifetime gift tax exemption from $1 million to $5 million still have many wealthy Americans reassessing if it is better to transfer their wealth while they are still living or after they are gone.

Before the 2010 tax laws were passed, it made more economic sense to transfer wealth after death since the gift tax exemption was considerably less than the estate tax exemption. However, the best plan may be what works best for you and your family now.

Some of the advantages of gifting now include:

• The ability to help cash-strapped beneficiaries now when it may be needed most;
• If Congress rolls back the gift tax exemption in 2013 — and decides not to grandfather gifts made in 2011 and 2012 – a gift made now would still eliminate the future appreciated value of the gift from an estate.
• To protect assets, professionals with high malpractice claim risk can transfer up to $5 million into a trust.
• Unmarried couples have the opportunity to move assets without the tax burden.

Our Newport Beach estate planning and asset protection law firm has been helping California families protect and grow their assets for more than 35 years.  Contact us today for asset protection and estate planning strategies to meet your unique needs.

As much as none of us like to think of planning for our own death or that of a loved one, doing so becomes even more important when you realize that funerals are one of the most expensive purchases you will ever make.

This infographic explains it in graphic detail:

by killerinfographics.

For tips on how to cut funeral costs, see our previous post on how to plan a thrifty funeral.

For tips on how to plan for a healthy financial life for you and your loved ones, contact our Newport Beach estate planning law firm.

Estate planning is universally recognized as the most efficacious way to pass down wealth to your heirs, but it has another equally important role: protecting assets from creditors.

A Newport Beach estate planning attorney shares several ways you can protect assets from creditors using legally sound estate planning techniques:

Family Limited Partnership (FLP) – an FLP protects assets by limiting the ability of a limited partner’s creditor from accessing partnership assets to satisfy a debt.  Even if a creditor gets a charging order against a limited partner’s interest, the creditor would only be able to receive distributions if they are made – and a general partner could elect not to make any distributions.

Irrevocable Life Insurance Trust (ILIT) – the cash value of the policy is protected from creditors while you are still living, and the proceeds that go to beneficiaries are also protected when you die.

Inter Vivos Qualified Terminable Interest Property Trust (QTIP) – this spousal trust protects assets from creditor claims for both spouses.

Qualified Personal Residence Trust (QPRT) — allows an individual or married couple to gift up to two homes to their children and continue to live there. The purpose of a QPRT is to remove the value of a grantor’s primary or secondary residence from their taxable estate, and insulating it from creditor claims.

Our Newport Beach estate planning and asset protection law firm has been helping California families protect and grow their assets for more than 35 years.  Contact us today for asset protection and estate planning strategies to meet your unique needs.

California is one of 12 states that recognizes a POLST (Physician Orders for Life-Sustaining Treatment) form, an official medical order that spells out in detail specific instructions for end-of-life care.

Broader than a Do-Not-Resuscitate (DNR) order, a POLST form can be used to specify to healthcare providers whether or not you would want a feeding tube, intubation or any other artificial means of extending life.  It must be signed by your doctor and remains a part of your medical record, accessible by any healthcare provider who may be caring for you.

However, a POLST form is not a substitute for a California advance healthcare directive, which provides much more information and instruction to family members and healthcare providers, including the naming of a healthcare agent in case you are unable to make your wishes known.

POLST programs were initiated to help healthcare providers discuss end-of-life treatment options with patients, as studies show that over 75 percent of Americans will be unable to make at least some of their own end-of-life medical decisions.  They also help remove a common burden of guilt on family members who are often left to decide what to do without any input from a terminally ill family member.

Executing a POLST form as part of your advance healthcare directive is a good way to ensure your end-of-life wishes are known and respected.

For more information on California advance healthcare directives, contact our Newport Beach estate planning law firm.

In 2008, California passed pet trust legislation that clarified and added enforcement provisions to California pet trust law.   Your first step in establishing a California pet trust should be to consult with a California estate planning attorney so your trust will be executed properly and will be legally enforceable after you are gone.

In establishing a California pet trust, you should:

• Determine who will act as the trustee and gain their permission to name them in your trust documents.  You will need to provide their name and address.
• Determine a successor trustee in case your primary trustee is unable to fulfill his or her role according to your pet trust.
• If different from the trustee, name a primary caregiver and a successor caregiver for your pets.
• Furnish photos and microchip ID numbers for each pet included in the trust to prevent fraud.
• Outline the care of each pet in detail, including a requirement for veterinary visits, nutritional needs, health care needs, etc.
• Determine how much cash or assets are needed to properly care for your pet(s).  Be realistic, as your heirs could challenge an excessive amount left for the care of pets.  Include the costs of administering the trust as well.
• Select a beneficiary to receive any funds that are left over after the last pet provided for in the trust has died.
• Provide instructions for the burial or cremation of your pet(s).

If you have a beloved pet that you want to provide for in a pet trust, contact our Orange County estate planning law firm.

Just about everyone dreams of winning the lottery, especially in dramatic fashion like Louise White, the 81-year-old Rhode Island woman who sent a family member to the store for rainbow sherbet and a Powerball ticket that turned out to be worth $366 million last month.

And if you were ever to be as lucky as Ms. White, you would do well to follow what she did next: engage an estate planning attorney before claiming her prize in order to protect those winnings.

A Wall Street Journal article recently noted that while a vast majority of us will not win the lottery, there is a much greater likelihood that we will come into a financial windfall via inheritance.  A survey of financial advisers recommend that, to protect a windfall, you:

• Create goals for what you want to do with your windfall before spending any of it;
• Consult with a financial planner and/or estate planning attorney before making any investments;
• Be sure to subtract taxes and current debts from the windfall before making a spending plan;
• Update your estate plan and considering establishing trusts to protect assets;
• Consider donating to charity via donor-advised funds that allow you to invest, receive a deduction and make donations on your own schedule.

Our Orange County estate planning and asset protection law firm has been helping California families protect and grow their assets for more than 35 years.  Contact us today for asset protection and estate planning strategies to meet your unique needs.

The April 17 tax filing deadline is a little more than five weeks away, and many taxpayers are  researching every possible deduction and credit to save money on taxes.

This infographic details the most overlooked tax deductions and tax credits so you don’t pay any more than you have to on your 2011 taxes:

by Column Five Media.

Protecting your assets needn’t be a taxing burden.  Our Orange County asset protection and estate planning law firm has been a trusted source for estate planning, asset protection and business transactions for more than 35 years.  Contact us today for asset protection and estate planning strategies to meet your unique needs.

According to recently released statistics from the IRS, California is home to the most multi-millionaires (those with a net worth of over $2 million) — adding further luster to our nickname as “The Golden State”.

Here is the Top 10 list:

1. California – 329,000 (1.2 percent of total adult population)
2. New York – 160,000 (1.1 percent of the adult population
3. Florida – 155,000 (1.2 percent of total adult population)
4. Texas – 100,000 (.6 percent of total adult population)
5. Illinois – 83,000 (.6 percent of total adult population)
6. New Jersey – 71,000 (1.1 percent of total adult population)
7. Pennsylvania – 57,000 (0.6 percent of total adult population)
8. Massachusetts  – 51,000 (1.0 percent of total adult population)
9. Ohio – 50,000 (.6 percent of total adult population)
10. Virginia – 49,000 (.8 percent of total adult population)

Beyond the obvious advantages, being a multi-millionaire means you also have a responsibility to protect what you have accumulated, which is why it is important to consult with a California estate planning attorney.  Here are five very good reasons you should not delay in creating an estate plan:

1. California has a plan for your estate if you don’t – and it entails a lengthy and expensive probate process.
2. If you don’t make a plan for your minor children, California will make that for you as well.  They could end up with a relative or whoever volunteers…or, in a worst case scenario, they could be placed in foster care.
3. Depending on estate tax law at the time of your death, Uncle Sam will happily take a big chunk out of your estate for taxes if there is no plan to protect assets.
4. Your ex stands to benefit if they are still listed as a beneficiary for your retirement accounts or life insurance policies and you haven’t changed those in years.
5. Your private financial information becomes very public once it enters the probate process.  You can prevent this through careful estate planning.

Our California asset protection and estate planning law firm has been a trusted source for estate planning, asset protection and business transactions for more than 35 years.  Contact us today for asset protection and estate planning strategies to meet your unique needs.

According to 2010 U.S. Census figures, unmarried couples comprise 12 percent of U. S. couples, a 25 percent increase in just one decade.  When it comes to retirement benefits, couples that are not married can use estate planning to ensure partners receive benefits and avoid taxes as follows:

Beneficiary Designations.  Listing your partner as beneficiary on the formal beneficiary designation forms for retirement accounts will ensure that partner receives those benefits.  Beneficiary forms must be kept up to date, as they take precedence over a will in determining who will receive retirement assets.  The same holds true for life insurance policies.

Rollovers and Distributions.  Unfortunately, many companies do not allow an unmarried partner to roll over a deceased partner’s retirement plan assets into an IRA.  Instead, they may require the surviving partner to take a lump sum distribution of the entire amount, which can carry a heavy tax burden.  When you leave your company, consider rolling over your retirement account into an IRA and name your partner as beneficiary.

Inherited Roth IRA.  The Pension Protection Act of 2006 made it possible for unmarried participants to roll over inherited retirement plan assets into an inherited Roth IRA, if the employer plan allows it.  A direct transfer is necessary in order for the partner beneficiary to take advantage of the Roth IRA, either via direct rollover or trustee-to-trustee transfer.  The beneficiary will have to pay taxes on the distribution upfront as well.

Our California asset protection and estate planning law firm has been a trusted source for estate planning, asset protection and retirement planning for more than 35 years.  Contact us today for asset protection and estate planning strategies to meet your unique needs.

A Wall Street Journal article last Friday noted that the art of passing down art is an art in itself, requiring a collector to do some planning that includes the assistance of a qualified California estate planning attorney and a frank conversation with family members.

It is often true that other family members may not value an art collection as much as the original collector – or if they do, fear that part of the collection will need to be sold off to pay estate or gift taxes.  Here are some options to consider while planning for what to do with a valuable collection:

Putting the art in a trust will get it out of your estate and still allow your heirs to inherit the artworks as well as the appreciated value of the art.

Have a frank discussion with beneficiaries to determine if they really want the art, or if they will sell it after you’re gone.   If you have a large collection, you may wish to have each heir choose a favorite piece, and settle any disparities in value with cash from the rest of the estate.

If your collection is worth more intact than it would be if sold separately, you may want to donate the entire collection to charity.

Finally, be sure that whatever your decision is on what will happen to your art collection after you’re gone, that you discuss it with your family.  This will help eliminate any family squabbles over the disposition of the collection.

Our California asset protection and estate planning law firm has been a trusted source for estate planning, asset protection and business transactions for more than 35 years.  Contact us today for asset protection and estate planning strategies to meet your unique needs.