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Fullerton Estate Planning Law Blog

California considers ABLE accounts

California is considering a new type of savings account that may help those with disabilities build up resources without threatening their needs based benefits from subsidy programs. These accounts are known as ABLE accounts, which stands for "achieving better life experience." The accounts are only available to select individuals, but offer some great advantages to those who qualify, and may help those who suffer with a disability build up some resources for later in life.

In broad strokes, the state sponsored accounts are only available to those who already have eligibility for Social Security Income (SSI) benefits because of a disability they received before the age of 26. Those who choose to use the accounts can only have one account at any given provider, and must use the funds within the account to pay for qualified disability expenses. These may include living expenses, housing or education, among others.

Does passing a house onto an heir trigger tax reassessment?

California estate planning can get exceptionally complicated, especially when it comes to how to protect your interests when passing real estate from one person to another. If you own a piece of real estate, then you almost certainly would want to pass that on to someone when you pass away, but this is not always as simple as just making a transfer of property.

In California, when a home experiences a change in its ownership, or if the owner builds new construction on the property, the property receives a reassessment for its tax value. Whereas many states reassess real estate property tax values on a regular ongoing basis, such as every three years, in California, the reassessment only happens if and when the property changes hands or undergoes new construction. If not carefully planned for, this can serious impact an estate plan.

Should I start estate planning before my 40s?

In many cases, estate planning is considered something that the elderly or middle-aged concern themselves with, but younger individuals can benefit greatly from beginning their estate plan ahead of a normal time frame. The truth of the matter is that none of us are guaranteed any more days on Earth than we have already lived, so if you are a person in your 20s or 30s, you should consider how your estate might be handled if you suddenly passed away, and how you might protect the ones you love against this possibility.

Even for the young, death or incapacitation can arrive at any time. While this is often difficult to grasp in youth, it is crucial to plan for the possibility before it arrives. If something were to happen to you and you were suddenly unable to work for the rest of your life -- which could last for many more decades -- how would you provide for yourself or any other family members?

Estate planning as a non-citizen in America

Here in California, we enjoy a large number of non-U.S. citizens as a significant portion of our state residents. This reflects well on California as a progressive state that values people of all backgrounds, but also implies a number of legal issues when it comes to estate planning that one should not overlook.

This is not to say that non-citizens cannot create effective estate plans, but rather that such a plan contains slightly different components than an estate plan for a fully fledged citizen.

Beware outdated beneficiary designations

If you have not updated your will in some time, you should consider revisiting its terms and beneficiaries. Of course, changing your beneficiaries is not always as simple as simply updating your will. In California, if you name your spouse as a beneficiary, then you face some legal hurdles before you can remove him or her as a beneficiary or add additional beneficiaries in case he or she passes away before you do.

The complications in this matter often stem from implications of California's community property division laws. Any property that you acquire throughout the course of your marriage automatically divides down the middle, so if you plan to remove your spouse as a beneficiary, then you probably need to get his or her written consent to do so.

Be sure to protect your digital assets in your estate plan

Estate planning is a complex process, and the best laid plans can prove very difficult to implement if you do not take special care to leave your executor the tool he or she needs to abide by your instructions. These days, many assets are solely or primarily digital assets, so it is important that you make appropriate provisions to ensure that your digital assets are included in your estate plan, as well as ensuring that your executor has authority and the proper information needed to access your digital assets.

In order to properly include your digital assets in your estate plan, several steps must take place. First, it is usually helpful to sit down and list out all of your digital assets. In this case, we can think of digital assets as anything that requires you to provide a username and password.

Tax implications of adding a guest house

For many Californian's, their home is an essential component of their estate plan. However, maintaining an effective estate plan becomes more complicated the more changes occur to to the assets within an estate, and modifications or additions to your home may change how you approach this asset and its tax implications.

The tax implications of your home can greatly affect how your structure your estate plan, so be sure to get a clear picture of those changes before your sign a deal with a contractor. This is especially true if you plan to build a guest house.

Wills have limitations to their power

It is common knowledge that nearly every adult should have some sort of proper will. Wills help you make your end-of-life wishes known and can protect your family from a lengthy mess that drains away resources and helps property pass from from one individual to another efficiently. However, there are some things you should not attempt to use a will to do.

If you think that a will can completely get around the probate process, this is sadly misguided. A will does not evade the probate process, but merely directs the court as to how your property should be divided. As long as your will does not conflict with the law, and no one challenges the will successfully, the court will divide your property as you lay out in your will. However, the probate process does still occur. If you hope to circumvent probate entirely, you might consider placing your assets in a well-crafted trust and working with an estate planner to build an estate plan to work around as much of the probate process as you can.

Can I challenge a will?

If you recently faced the loss of a close relative or loved one, you most likely had to deal with a will. Very often, one party or another believes that a will is invalid, and wonders if it is possible to challenge the terms of the will.

So, can you challenge a will in the state of California? The short answer is "yes," but, like most legal issues, it is more complicated than a simple yes or no.

Does moving states affect my trust?

Often, as people grow older and pursue opportunities and interests, they move from one state to another. Of course, any time you move states, you suddenly must contend with a whole host of issues you might not expect — different taxation and different laws that govern everything from DUI penalties to building codes. But, does moving states affect your estate planning if you created a trust in one state and relocate to another?

In broad strokes, no — regardless of where you create your trust, it remains valid in all 49 other states. There are no states in the union that refuse to recognize trusts created in some other particular state.