What Does the Term Decedent Mean?

Many different terms and phrases are used in the context of estate planning, and these are not always completely clear. You may have heard the term decedent in the context of probate or estate planning in California, but you may feel unsure of what this means.

The term decedent is simply a formal way of referring to a deceased individual. Even when someone passes away, they may still have financial obligations, such as paying taxes or filing taxes. Trustees, executors, attorneys and other individuals may be responsible for carrying out the wishes documented by the decedent in things such as trusts or wills. In the event that a person passes away with no estate planning, these executors, trustees and attorneys may need to turn to state law to address administration of the estate.

In many cases, you will find the term “decedent” in official legal or policy language related to managing the deceased party’s affairs. In order to handle these aspects of estate administration, the appointed party will need proof of their role as personal representative, a copy of the death certificate, and information about the decedent such as date of birth and primary address.

Bear in mind that not all property owned by a decedent necessarily goes through the probate process. For example, in most cases, life insurance policies owned by the deceased are not considered part of the estate and are instead immediately distributed to the named beneficiaries on the policy rather than pending the closure of probate. If you have further questions about plans that you can take to help minimize difficulties for your loved ones when you pass away, you can speak to a Pasadena area estate planning lawyer.

Americans Stall Out When It Comes to Estate Plan Documents

A new study finds numerous shortfalls among American adults across generational wealth, age and gender lines. The study was conducted by Free Will and finds what it is about Americans’ attitudes on estate planning that makes them less likely to complete these important plans, strategies and documents, despite the fact that they wish for their loved ones to have an easier experience.

The lack of estate planning is a significant problem in the United States, especially given the $84 trillion expected great wealth transfer in the next few decades. Even people who work with financial advisors report failure to complete estate plans in high numbers with as many as 90%, saying they have no formal plan in place. With parents who have children aged 21 and above, half of them report that they provide significant financial contributions to assist their children. This could impact the parents’ overall estate plans and retirement planning strategies for themselves.

Conducting a revisit of your current financial and estate plan could help you to identify opportunities to do things more effectively. If you don’t have a documented estate plan, or if one was created so long ago that it’s no longer in line with your individual goals, consider this a formal reminder to set up a new plan now.

Our Pasadena estate planning lawyers work with individuals, families, and business owners regularly to document comprehensive plans related to medical decisions and care, financial management, and asset transfers.

Is There a Time Limit for Someone Challenging a Will in California?

Ideally, you will do everything possible to limit the chances of someone challenging or contesting your will after you pass away. Letters of instruction and advanced conversations with your family members, for example, could help clear up your actual intentions. However, a family member or friend who feels disgruntled by the decisions you’ve made with your estate planning may initiate a will contest.

In order to do this, they must have the standing to take such action. Children or other interested parties in California can challenge a deceased will validity in county probate courts.

These interested parties have a maximum of 120 days after the will has been admitted to submit an appeal. Grounds must be named in order for an interested party to challenge a will. This includes things such as incompetence, the existence of multiple wills, undue influence by a particular party, breaking laws in California or fraud.

A person is not eligible to challenge your California will simply because they have been left out of the estate plan. Legal grounds must exist, and this person must qualify as an interested party. Interested parties include any beneficiaries specified in the trust or will, the deceased’s heirs as recognized under California intestacy laws, and creditors owed money by the deceased.

If you’re concerned about what you can do to create a comprehensive estate plan that makes it more difficult for someone to issue a challenge when your estate enters probate, talk to our Pasadena estate planning attorneys now.

If you have further questions about structuring your own California estate plan, contact our office today to learn more.

What is Elder Power of Attorney Fraud?

Are you concerned about someone else who has recently started helping an elderly loved one manage their finances? You’re not alone. Growing concerns over elder financial abuse are common across the country, especially as it relates to power of attorney abuse.

A power of attorney is a document that allows someone else to make financial decisions or actions on your behalf. Unfortunately, elderly people may be more vulnerable to signing over powers of attorney to untrustworthy friends, family members or caregivers, and anyone else who may not need to have such powers.

Some states have taken proactive steps to write financial power of attorney laws designed to further educate elderly individuals about their rights and to cut down on the cases of fraud and abuse that occur. If you are a family member of an elderly loved one who has given financial power of attorney to someone else, you may need to watch for warning signs of potential fraud.

A power of attorney agent is legally obligated as a fiduciary to act only on behalf of the person they’re representing. But in many cases, no one is watching, which means that a dubious person could be taking negative actions that harm your loved one. If your loved one has no sense of their financial situation, is making significant financial transfers that don’t seem to make sense, or seems stressed out or unduly influenced by another person, you may need to be concerned about a financial power of attorney abuse situation.

Your ability to catch these signs early could help stop the depletion of your loved one’s financial assets. Having a solid estate plan with a financial power of attorney agent who is trusted can help to eliminate these problems. Talk to our Pasadena estate planning law firm about creating or revoking an existing power of attorney to ensure that you have someone you trust in place for these important decisions.

Have You Purchased Cryptocurrency for The Benefit of Future Heirs? Make Sure You Include Instructions in Terms of Passing It On

Your estate plan might incorporate many kinds of things that you pass on to loved ones, organizations, or other beneficiaries. Most people know that stocks, bonds, bank accounts, and real estate are included in many estate plans.

Coming up with a holistic list of everything in your estate ensures that it passes to who you want and in the way you want. If you overlook certain assets, they may not pass as you intended.

Many different types of assets can be included in your estate plan. More recently, these may include things such as cryptocurrency. If you have recently made the investment in cryptocurrency with the goal of passing it on to your children, you need to be prepared for passing this on in the future.

One analytics chain recently found that 1/5 of the total supply of Bitcoin in the world may be lost forever if the private keys are not properly passed on when the original owner passes away. This mistake can be easily avoided by thinking about the estate planning process in advance and working with experienced lawyers.

For example, you might use a trust for digital assets, which could name the trust as the main beneficiary for any crypto currency assets, such that these are pulled from your overall probate estate and instead are allowed to pass directly to beneficiaries who have been named in the trust. Name a trustee or a digital executor who is responsible for managing all of your digital assets after you pass away.

Don’t let your Bitcoin or other assets get tied up in the probate or other process. Make a full list of everything you own and note how you’ve currently planned for that asset transfer. This will help you stay organized.

Need help with the planning process? Let our Pasadena lawyers guide you through.

Is A Letter of Instruction a Legal Document?

Many different legal documents may form the basis of your California estate plan. But there is a good chance that you have a question about which ones meet the terms for qualifying as a legal document. Certain documents, including your will or a durable power of attorney, should meet the legal grounds for acceptance in the state of California in order to protect their legal validity. This ensures that someone is able to act with ease or carry out your wishes if something happens to you.

A letter of instruction, however, is your informal set of directions for your loved ones when you pass away. It generally accompanies your will and is used to express your personal decisions as well as directions about what is inside the will.

It may also include other instructions such as where to locate documents or your burial wishes. It is primarily most helpful for your family members and your executor to find this letter of instruction as soon as possible after you pass away. Although it is not an official legal document, it can be used in conjunction with it for this point in time, but it is recommended that you work with a Pasadena estate planning lawyer to help you with this process.

When Should I Use a Living Trust in California?

You may hear many terms referencing a living trust, such as an inter vivos trust or a revocable trust. The primary definition of this is that it’s a separate legal entity that you create to own property, such as investments or your home. The term living trust is used because this is meant to help serve you while you’re still alive. You control any property placed inside the trust and are eligible to change the trust terms and the trust or move property in and out of the trust during your lifetime.

Living trusts in California can be used to accomplish numerous purposes, but the biggest function is often to avoid probate. Living trusts are not included in California probate estates, meaning that these aspects of your assets will transfer privately.

Probate takes time and property is not distributed until the process is complete. Probate can also prove problematic for managing property, such as a stock portfolio or a closely held business.

Other benefits of using a living trust for estate planning purposes in California include letting a professional manage your property for you if you decided to appoint someone else in the role of trustee or giving someone else the eligibility to manage your property if you become incapacitated. Probated documents are matters of public record, but a living trust is a private matter that is not entered into probate. By using a living trust you gain more control over the administration of your estate, while also keeping these details out of the matter of public record.

Our Pasadena lawyers can help you with your full estate plan.

Do I Need a Charitable Remainder Trust?

The end of the stretch IRA caused problems and questions for many people who had been using this popular estate planning tool. The stretch IRA was often used to pass on a financial legacy to heirs in a tax efficient way by allowing those beneficiaries to withdraw funds only at minimum distributions every year. This means that that tax deferred growth had the potential to turn into substantial inherited retirement funds over the course of their lifetimes for younger beneficiaries.

However, the SECURE Act passed in 2019 marked the conclusion of the stretch IRA for account holders who passed away after December 31, 2019. However, there is one small exception for certain beneficiaries. Instead of having to withdraw all of the funds inside these IRAs by the end of a decade, as is now the requirement under the SECURE Act, eligible designated beneficiaries can use their own life expectancy numbers to calculate the amount that will be taken out annually.

Specific requirements must be met for eligible designated beneficiaries, including:

  • Non-spouse beneficiaries who are no more than 10 years younger than the individual who passed away.
  • Legally adopted or biological children of the deceased until they hit age 21, at which point the 10-year depletion rule applies.
  • Beneficiaries who are chronically ill or disabled.

If you do not fit into these categories, you may be required to withdraw the funds in an inherited IRA by the end of 10 years after the account owner passes away. Using a charitable remainder trust may be one way to tap into some of the benefits of the previous version of the stretch IRA. This setup offers a blend of tax benefits and charitable giving.

You would name a charitable remainder trust as your IRA beneficiary. At the time of your death, the assets would pass to the CRT, which is a tax-exempt entity and those assets would be allowed to grow tax deferred. Over a specified term, beneficiaries of the charitable remainder trust would receive income distributions and any remaining funds at the conclusion of that term will go to a charitable beneficiary. Speaking with a qualified Pasadena estate planning attorney is the best way to determine if this is a good fit for you and your individual estate plan goals.

A New Study Shows That Millennials Are Hesitant to Plan Their Estates

Many people in the United States overlook the opportunity with estate planning, even if they’ve had a personally bad experience with a loved one who did not conduct estate planning, or whose estate plan did not accomplish the loved one’s goals. People of all ages can benefit from estate planning, and that includes Millennial.

A new study finds that when it comes to things such as financial plans or end of life trusts, many millennials are not concerned about these issues. Nearly half of millennials, however, are in line to receive significant assets as part of the great wealth transfer, which means they’d need to plan financially for a substantial influx of cash or other assets. Recently, 15,000 millennials were asked in a survey about their estate planning and end of life planning preferences. Nearly 62% said they don’t have a trust or a will, frequently the cornerstones of a solid estate plan.

Over half of millennials were not able to answer the question of what might happen to their assets if they died without an estate plan. Despite this lack of action or understanding, nearly three quarters of the millennials who had children who responded to the study said it would be their goal to pass on their assets to their children in some fashion. Communication is one of the leading challenges facing this generation and working with an experienced and qualified estate planning attorney can help make this easier.

What Is a California Durable Power of Attorney?

Durable powers of attorney have a similar function when compared with a health care power of attorney. However, a California durable POA only relates to financial decisions, and does not give anyone authority over any of your health care decisions. In establishing a durable power of attorney in California, you may wish to work with an experienced estate planning lawyer like those in our Pasadena office.

A general power of attorney for finance enables someone else to manage financial matters on your behalf if you’re unable to do so yourself. This can allow someone else with a significant amount of responsibility and discretion, which is why it is so important to pick someone who acts in your best interest and someone in whom you can place a great deal of trust. You also want to think about someone who is capable of handling the responsibility of all the assets you’ve accumulated during your life.

Think about someone who is local, who do you trust with your finances, whether or not they’ll be effective in communicating with anyone caring for you physically, and who is best suited to the required tasks? If you’re concerned about how to start this process effectively, it’s best to sit down and make a shortlist of people who you believe could be your power of attorney agent. Discussing your options with the right lawyer can help you determine the best course of action for your personal plans.

At the offices of our Pasadena estate planning lawyers, we know how to work with clients to help you identify the people to help you and the tools to use when creating your estate. Discuss your options in a meeting with us to kickstart your planning process.