A California appeals court has ruled that intentional interference with an expected inheritance is a valid cause of action in Beckwith v. Dahl, becoming the first California Court of Appeal to do so.

In the case, a dying man named Marc MacGinnis drafted a will that left half his estate to his partner, Brent Beckwith, and half to his sister, Susan Dahl.  MacGinnis drafted the will on his personal computer and showed the draft to Beckwith.  While seriously ill and awaiting surgery, MacGinnis instructed Beckwith to print out the will so he could sign it.  Beckwith could not find the will, so he drafted a new one using online forms.  Beckwith then showed the draft will to Dahl.  Dahl, who knew that absent this new will she would inherit the entire estate, told Beckwith not to have MacGinnis sign the will and that she would instead have an attorney draft a more tax-advantaged trust.  Dahl never had the trust drawn, and MacGinnis died a few days later.  Because MacGinnis died with no will, Dahl inherited the entire estate.

Beckwith then sued Dahl for his share of the estate and citing the facts of the case, the Fourth Appellate District California Court of Appeals ruled that “it is time to officially recognize” intentional interference with an expected inheritance (IIEI).  The court laid out the five elements necessary for a plaintiff to bring a valid cause of action using IIEI:

1. An expectation of receiving some beneficial interest via inheritance;
2. Causation, meaning that there must be reasonable proof that the bequest would have been in effect at the testator’s death if there had not been an interference;
3. Intent, meaning that a defendant knew of the plaintiff’s expected interest and deliberately interfered with it;
4. The interference must be independently tortuous;
5. The plaintiff must allege damage by wrongful interference.

The Court also set limitations on IIEI action, including that a plaintiff must have no other remedy in probate, the defendant’s tortuous action must be the reason that probate does not offer an adequate remedy, and the plaintiff must show with reasonable probability that he would have received the inheritance if there had been no interference.

Our Newport Beach 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.

When a loved one passes away, there are many details that need to be handled. Unfortunately, these tasks require time and attention, despite the fact that this is an emotional time for everyone involved.

In most cases, there is no need to rush, although some tasks are time sensitive. While you are planning your final farewell and informing others of the death, there are some practical matters that can be understandably overlooked.

Remember that you will need copies of the death certificate to get life insurance benefits and prove to various institutions that your loved one has passed on. It is a good idea to order five or six copies so you have enough on hand.

If your loved one is collecting a Social Security Check, you need to inform the Social Security Administration within a month of the death to avoid problems with checks issued after the person has died. The same holds true for pension funds and any other sources of monthly income.

Locate important papers; if you are fortunate, they are organized and in one place. These include bank accounts, mortgage papers, loans, insurance, credit card accounts, and other financial documents.

If there is a Last Will and Testament or Living Trust, it should state who is in charge of handling all the paperwork and legal matters; this person is called an executor or personal representative. The personal representative must file a petition for probate with the probate court within 30 days of the notice of death. If there is no will, the court will appoint someone – usually the surviving spouse or an adult child – to be in charge.

If someone is not already specified as an executor in the Last Will and Testament and there are doubts as to who should handle the probate process, then it may be necessary for the heirs or beneficiaries to seek help from a California probate attorney. This is an overwhelming time, and a person who has daily experience handling probate matters can be a welcome ally.

Deborah Jacobs, who writes about personal finance for baby boomers at Forbes.com, says she is wagering all her Apple stock that the estate of Steve Jobs will not owe the IRS a penny of estate tax.

Since he died worth an estimated $7 billion, some people may find that surprising.  But, as Jacobs notes, for estate planners “it’s all in a day’s work”.  She hypothesizes in a post this week that some of the estate planning tools Jobs may have employed include:

Spousal transfer – Due to the unlimited marital deduction, assets that pass to a spouse (who must be a U.S. citizen) carry no estate tax.   Jobs could have left everything outright to his wife, or put their assets into a marital trust.

Gifts to charity – While Jobs was never known for his charitable nature – he famously shut down the Apple Foundation upon his return to the company – he may have given gifts anonymously in a way that would provide estate planning benefits.

Portability – Jobs could transfer up to $5 million tax-free to his wife. Portability allows her to utilize any of his unused exclusion amount, meaning she could transfer up to $10 million tax free.

Bypass Trust – Jobs may have been advised to put his $5 million generation-skipping transfer tax exemption into a bypass trust, to pass to his grandchildren and subsequent generations free of the GST tax.

GRAT – It is possible that Jobs, knowing he had a reduced life expectancy, set up a series of grantor retained annuity trusts with different terms as a hedge against the mortality risk – if you die during a GRAT term, a portion of the trust is included in your estate.

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.

Apple co-founder Steve Jobs, who died last week at the age of 56, placed at least three properties owned by him and his wife into trusts in 2009 and legal experts are speculating the move may have been made to keep his assets from being disclosed upon his death, according to a Reuters article.

By placing real estate and other assets into a trust, one can keep them from being publicly disclosed during probate as well as minimize estate taxes.  If it is done correctly, both those goals can be accomplished.  Placing assets into a trust can also help shield them from creditors, although that is an unlikely unless done by a competent firm such as Wealth Strategies Counsel.

Reuters reports that Jobs and his wife co-owned their Palo Alto home as well as two other properties in nearby Woodside.  These properties were transferred to two different trusts in March of 2009, two months following Jobs’ second medical leave of absence from Apple.

In addition to his holdings in Apple, Jobs received 138 million shares of Disney stock when he sold Pixar to Disney in 2006.  Last month, Forbes estimated his total wealth at $7 billion.

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.

The IRS has just announced an extension of the Nov. 15, 2011 filing deadline it unveiled in August on large estates ($5 million+) of those who died in 2010.  The new deadline is now Jan. 17, 2012.

The estate and generation-skipping transfer taxes that were repealed for 2010 were reinstated retroactively to Jan. 1, 2010 when President Obama signed the 2010 Tax Relief Act into law last December.

However, the new law also gave the estates of those who died in 2010 a special tax break:  they could elect to opt out of the default estate tax regime and receive a full step up in basis on estate assets.

Last month, the IRS finally published guidance for the executors of estates of individuals who passed away in 2010, explaining how executors can opt out of estate taxes and the tax rules that apply.

Unfortunately, the form that needs to be filed with the IRS to opt out of the estate tax has not yet been issued.  Hence, the extension.

According to a New York Times article, for many estates the decision will be easy, but there are some executors who are finding it anything but simple.  Here’s why:  if heirs opt out of the estate tax, the estate assets will not be valued based on the date of death, but at the original value – making beneficiaries eligible for what could be considered a tax credit ($3 million for a spouse and $1.3 million for any other heir) against the assets’ appreciated value.  The problem lies with determining who benefits from the $1.3 million credit.

Thankfully, executors who find themselves in this situation now have another two months in which to make a decision – providing more time to consult with a California estate planning attorney for guidance in navigating these unique circumstances.

Most people who are asked by a family member or close friend to act as the executor of an estate consider it an honor, the ultimate symbol of the trust that person has in you.  However, that warm feeling can soon vanish once the reality of the job of executor kicks in, as detailed in a Wall Street Journal article earlier this week.

As the article notes, the job of executor comes with a long list of tasks that must be handled, and there can be legal repercussions if those tasks are handled incorrectly.

Once you have been appointed the executor you are considered the responsible party during the probate process and can be held accountable by the beneficiaries. As the executor, the following is a partial list of your responsibilities:

• Reviewing estate assets.
• Creating an accounting of the deceased’s assets and liabilities.
• Giving notice to potential creditors.
• Settling outstanding debts.
• Making distributions for estate taxes.
• Making distributions to heirs.
• Filing a final accounting with the court to close the probate process.

In addition, it will also be your responsibility to make sure the mortgage and other fees to keep the estate viable continue to be paid during the probate process. Probate can often be a lengthy process, so you may petition the court to release short-term supply funds for this purpose while proceedings continue.

These are all standard duties of an estate executor.  However, if the estate is large or complex, the executor may be tied up for years with depositions and court appearances.

Most people find the executor process overwhelming, but the good news is that you don’t have to go through it alone. You can ask the probate court to appoint someone to oversee the process or find a California probate attorney to help.

Our Orange County probate law firm has been a trusted source for estate planning, asset protection and business transactions for more than 35 years.  Contact us today for probate assistance.