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San Mateo California Estate Planning Law Blog

Mediating through complex divorce issues can be beneficial

Many people are aware that one way to resolve disputes is by going to court and pursuing litigation. What California residents may not know is that litigation is not the only way to get a determination of one's legal matters-mediation is also an option that is not highlighted as much. One area where collaborative law and mediation have proven to be effective, even when there is a high level of conflict between the parties, is in divorce cases.

Unlike litigation, mediation offers a non-adversarial setting for resolving disputes. The reality is that high-asset divorce cases often involve so much information and so many issues to be resolved that parties find themselves in court again and again over every little point.

What trusts can I create?

One of the estate planning tools California residents can utilize to protect their assets and distribute to the heirs and beneficiaries of one's wishes is a trust. A trust creates a fiduciary relationship between the trustor and the trustee, giving the trustee the right to hold the title to assets or property for a beneficiary's benefit. The beneficiary is the third party.

Trusts have many advantages, such as ensuring assets and property are distributed according to the trustor's wishes, saving time and reducing paperwork, avoiding or reducing taxes and probate and providing legal protection for the assets in the trust. Assets and property in a trust is protected from creditors.

Are you appointing your POA casually?

Planning for the future is for everyone. However, when California residents hear about celebrity estate plans gone wrong, they may dismiss the news, thinking it doesn't matter to them because they do not have as much wealth that needs to be planned for. Nonetheless, whether one is a business owner, a celebrity or someone working hard to make ends meet, one wants to preserve their legacy for their beneficiaries and ensure their assets are protected. This means an estate plan should not just be a will and final testament-it should also take into account scenarios in which one's cognitive abilities decline and one is unable to make important financial and medical decisions for oneself.

A power of attorney then becomes an important end-of-life document to have in one's estate plan. However, establishing a power of attorney is not enough-certain steps should be taken to ensure one's POA is not exploitable and one's estate is not left for disarray.

Estate plans benefit from a professional's help

When children are young, California residents take every step possible to ensure their safety, well-being and happiness, such as getting them the best possible education. However, as they grow older and parents continue to provide advice and act as a sounding board, they often forget to create provisions to ensure children and loved ones are taken care of after their own demise. Protecting one's legacy and ensuring beneficiaries inherit what is rightfully theirs is an important aspect of safeguarding a loved one's well-being and is something California residents often neglect to do.

Making end-of-life decisions is not easy, which is why people often postpone having difficult but necessary conversations with their loved ones. Asking questions, such as what happens if I am involved in a car accident, who lives in the house, who will manage my investments and who will take over my business, is essential but reminds one of their mortality, which is why they avoid it. However, without proper estate planning, one's estate can be left in disarray and disputes surrounding a will can tarnish a relationship.

Do you believe that a trustee is stealing assets from the trust?

Those with significant assets, large families or a desire for a specific legacy often put a lot of effort into creating an estate plan. Deciding how to divide assets and allocating them to the right people is an important step toward creating a legacy that people remember someone by.

Unfortunately, it is often a complicated process. The more assets an individual has to leave behind, the more likely their family members, loved ones and heirs are to squabble over the assets. Creating a trust is often a perfect solution for those with significant assets and complicated wishes. The trust creator can designate someone to serve as trustee to carry out their wishes and administer the trust.

Pets no longer considered property in divorces in California

The New Year is bringing some good news to California pet owners going through a divorce by giving them a legal leg to stand on when disputing the pet's ownership in court. Previously, pets had been treated like property in divorce cases, similar to vehicles, and orders had been given to sell pets and divvy up the proceeds between the divorcing couple. But as pet owners very well know, pets are not like property-they are more like children and divorce is stressful for them as well.

The new law will now change the way courts treat pets. Sponsored by a dog owner and state assembly member, the measure allows judges to create shared custody agreement by considering the care of the pet in question. Now judges can take who takes the pet for walks and feeds them into account when making decisions on whom the dog should live with.

Couples rushing to divorce before the end of the year

While couples usually wait until the end of holiday season in January to file for divorce, allowing families spend the festive season together, new laws have pushed couples to hurry to file for divorce before the end of 2018. California residents might be aware that the Tax Cuts and Jobs Act change the way payments between ex-partners are taxed.

According to experts, there has been a four-fold increase in their workloads, and courts are staying open longer to accommodate the traffic of couples trying to finalize their divorce so they can take advantage of the previous tax rules. Under the old law, alimony was taxed in such a way that the higher earning spouse, usually the one paying alimony, can deduct alimony from their income while the one receiving alimony, typically the lesser earning spouse, pays tax on that sum. Under the new law, the tax burden will fall on the person writing the check.

When can a trustee's actions lead to trust litigation?

Being named a trustee is an honor, but it also comes with many duties, both in the administration of the trust as well as a fiduciary duty towards the trust and trust beneficiaries. If a trustee in California fails to properly execute their duties, it could give rise to trust litigation. Therefore, it is important for beneficiaries to understand what a trustee's role is with regards to the trust, so they can recognize when the trust is being mishandled.

Trustees have numerous duties that they must fulfill on an ongoing basis. If applicable, they must invest trust assets. These investments should be made in a way that preserves trust assets and makes the trust a productive vehicle for the trust beneficiaries. Trustees must also distribute trust assets to the beneficiaries of the trust per the terms of the trust. Depending on the trust, a trustee might need to use his or her good judgement over when to distribute payments to a trust beneficiary. Trustees are responsible for preparing any necessary tax returns. Trustees must keep the trust beneficiaries up-to-date on the health of the trust, providing them with any necessary account statements and tax reports. If the trustees have questions about the trust, it is up to the trustee to resolve them.

Mediation may be an alternative to estate litigation for some

When it comes to a dispute regarding a loved one's estate plan, is estate litigation the inevitable result? Not necessarily. It is possible to address disputes regarding a loved one's estate plan through forms of alternative dispute resolution, including mediation. Mediation can be a way for families in California to put their differences aside and work together to come to a resolution that meets everyone's needs.

Mediation can be preferable to estate litigation, because it allows all parties, including the elder person whose estate is the subject of the dispute if he or she is still alive, to communicate their concerns and preferences. It is a way to preserve relationships and encourage healthy communication. Mediators may also connect parties to community resources that could help them.

Divorce is a great time to revisit your will and estate plan

At the end of your marriage, one of the last things you likely want to think about is the potential for your death. However, it is extremely important to review your estate plan during any major life change. If you don't, you could end up leaving people on your will as beneficiaries when you no longer welcome them in your life.

You may also have appointed guardians or a health care proxy. If that was your ex-spouse, for example, you may want to change the guardian or proxy to a sibling, parent or child.

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