Monthly Archives: February 2014

Estate planning: A little organization goes a long way

Planning for our departure from life, whether that possibility is imminent or more remote, is never fun. Many people never plan at all, and still more may plan halfway but leave many loose ends untied. Creating a last will and testament is an important part of the estate planning process and is probably the one people are least likely to omit.

Yet successful estate planning goes far beyond this simple document, and it requires more than simply hiring an estate attorney. It involves working cooperatively with that attorney, along with other professionals such as one’s accountant, financial adviser and medical team, along with family and other involved parties.

One important aspect of the estate planning process is the health care power of attorney and living will. A durable power of attorney for health care can designate a trusted individual to make health care decisions for you if you become incapacitated. While this is often a spouse, it can also be a sibling, child, close friend or a significant other. This is an especially critical step for people in serious relationships who are not married but want to assure that their rights as a couple are respected by hospital staff in the event of an emergency. In addition, a living will can explain your wishes about life-saving medical treatment, resuscitation and other concerns.

If you become incapacitated or deceased, you will also need to designate someone to manage your financial and legal affairs. The financial power of attorney document clarifies these wishes. If you neglect this step, the court may need to appoint a guardian. This costly, harrowing step can be avoided by planning ahead — and assuring your guardian is fully aware of his or her designation and future responsibilities ahead of time.

None of these documents will be particularly helpful if your loved ones do not know how to access this information. You may find it helpful to keep all these legal documents, along with a list of other important information — all financial and bank account numbers, safe deposit box information, recent tax returns, and copies of real estate deeds and vehicle titles — in a secure, clearly organized box or folder. In addition, don’t forget any information about debts, creditors passwords — and of course, the contact information of all professionals on your estate planning team, including your estate attorney.

Source: Washington Post, “Organizing important documents for an orderly departure” Nicole Anzia, Feb. 12, 2014

‘Fast & Furious’ star’s estate records provide valuable lessons

When Paul William Walker IV, star of the “The Fast and the Furious” movies, died, in a tragic irony, in a high-speed car collision last November, he left behind more than a legacy of high-speed action flicks. He left a will to assure that his 15-year-old daughter’s needs would be provided for in the event of his untimely demise. Ventura County residents can learn a lot from this estate planning case study.

At the time of its probate filing, Walker’s estate reported assets of roughly $25 million. This was split almost evenly between personal property, expected income and net real estate assets. It is clear from the probate reports that Walker’s will was created mainly to provide for his daughter. The filing revealed a revocable living trust with his daughter as the sole beneficiary. It also revealed that Walker had nominated a guardian for his daughter — in this case, his own mother. He did not leave anything to his girlfriend of seven years.

Creating a trust for his daughter and naming a guardian for her were wise steps. However, the trust was not fully funded during Walker’s life. If he had done that, he could have avoided the costly and time-consuming probate court process. Even though his will was a pour-over will which passed all his assets into the trust, he could have kept his personal affairs private and avoided the hassle of probate court had he directly funded the trust while alive. While it was good thinking to name a guardian for his daughter, the court will still need to review his request. The law still favors custodial parents, so his guardianship designation may be denied.

In addition, Walker’s will was signed in 2001, when his career was young. He failed to update his documents in the 12 years prior to his death. In that time, his parents could have become incapacitated or deceased. He did not update documents to provide for his girlfriend, although he could have neglected that intentionally, or provided for her in other ways, such as a life insurance policy or joint bank account.

His assets probably also grew significantly over 12 years, and he could have taken advantage of tax-reducing strategies as his estate burgeoned. The main lesson for Ventura residents to learn from Walker’s estate is that trust planning needs to be updated frequently, with the aid of an estate planning attorney.

Source: Forbes, “Five Estate Planning Lessons From The Paul Walker Estate” Danielle and Andy Mayoras, Feb. 10, 2014