What is a power of attorney?

With the use of a power of attorney, you give legal permission and authority to another individual to act on your behalf.  The “agent” or “attorney in fact” makes decisions for you when you are unable to make such decisions yourself.

What is a general durable power of attorney?

When you sign a general durable power of attorney, you are giving another person the legal authority to handle your finances when you are unable to do so yourself.

Your agent can do a number of things.  This includes paying your bills, handling your daily expenses, making your needed purchases, investing your money, and more.

When naming the agent for this power of attorney, you will want to select someone you trust and who cares about you.  They also need to have maturity, good financial management, and record keeping skills.

What is a power of attorney for health care?

The holder of a power of attorney for health care will have the legal authority to make  medical decisions for you if you are ever unable to make your own health care decisions.  This could be the most important document you ever sign.  Not only will this person have the power to end your life, they will have the power to decide where you live, what types of medications you take, and what treatment you receive.  Your agent will also have access to all of your medical  records and be able to control your funeral and burial arrangements or make anatomic gifts or donations of your organs.

It is very important to have someone who you regularly communicate with and knows what your wishes are.

You need to choose an agent who loves and cares for you and has good communication skills  since he or she will have to speak with medical professionals regularly to make sure your needs and wishes are met.

Why should I have a power of attorney?

A power of attorney gives you a form of control, even when you are unable to personally be in control.  It is also very important to name an alternate for each of these documents in case the first person you choose is unable to act.

With the help of these trusted helpers, you will be assured that your finances and/or medical affairs are in order. If you don’t have a power of attorney your family may have to petition the probate court to appoint a conservator for you.  Conservatorships are very expensive and detailed legal proceedings that you will want to avoid like the plague.

If you questions about selecting a power of attorney agent or want to create a power of attorney, please feel free to telephone our estate planning law office. We’d be happy to assist you and answer all of your questions. Please call us at 858-792-5988.

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A person who makes a will or trust (testator/settlor) can freely choose who they want to leave their assets to after they die. However, it is usually not until after the testator dies (now referred to as the decedent) that the family members learn about how their loved one has chosen to distribute his or her assets. When a decedent disinherits a relative, that relative may feel they have been treated unfairly and that they should be legally entitled to an inheritance. The relative may decide that they want to challenge the decedent’s will or trust.

Since a will or trust contest is complicated, most heirs will hire a California probate and estate attorney to review the documents and help them determine if they have a valid legal reason to file a challenge with the California probate court. A hearing will be set by the court to listen to testimony of witnesses and review medical records or other documents in support of the heir’s will/trust contest.

Grounds or Reasons to Challenge a Will or Trust

You cannot simply challenge a relative’s will or trust because you were left out. For example if your mother intentionally left you out of her will, it may be difficult for you to get the court to decide that you are entitled to inherit your mother’s estate. However, if you have clear and convincing evidence that one or more of the following circumstances occurred at the time your mother made her will, you may be able to get the court to agree and award you your rightful inheritance:

• The document is either not signed or is missing the proper formalities of a will or trust as required under California law.  California law requires both the testator and the witnesses to all be in the same room at the same time, and the witnesses must also know that the document being signed is a will.
• The testator or trustor who signed the will or trust may have not been mentally competent at the time the trust was signed.
• There was fraud.  Someone may have lied to the testator knowing the testator  would  decide to disinherit a particular relative due to the lie.
• The testator was misled or tricked into signing the will because they thought it was another type of document or did not know or understand what they were signing.
• There was pressure by a family member or caretaker of the testator, who may have influenced the testator to sign the document because they may benefit.    This  is frequently referred to undue influence.  It is not necessary for the testator to have  been completely senile or delusional.  A court will throw out a will if the judge believes the testator was in a weakened state and was taken advantage of.

Most cases are not won or lost on the capacity of the testator. The contest is usually about undue influence. In these cases the testator may still have enough mental capacity to understand what is going on, but because of age, weakness, or fear, feel that he/she must do as directed by a third person. Examples of this may be caretakers who threaten to leave or threaten physical harm. Also children who threaten to cut off relationships with, or constantly denigrate other family members and apply pressure to have the estate left to them.

If you want to contest a will or trust

Will and trust contests can be very difficult for the challenger. Old family arguments sometimes make these cases the most bitter and hard fought of all. The best person to discuss your concerns about whether you have a valid will or trust  contest claim against your relative’s estate is a California probate attorney who is familiar with the legal procedure regarding wills and trusts. The attorney can analyze your claim, prepare and file the necessary court documents, and  get your case ready for  trial.  Please feel free to call our office at 858-792-5988  for a consultation.

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The most common method used to avoid probate is to hold assets in “joint tenancy.” An example of this would be husband and wife owning a house and both names appearing on the deed with the word “joint tenants” written after their names. The survivor of the couple automatically inherits the property without the necessity of probate, or any court action. Although there may be some income tax consequences, this is the quickest and easiest method of avoiding probate. Some of these tax issues may be resolved by couples holding property as “community property with rights of survivorship.”  This is a relatively new way to hold title.  It allows husbands and wives to have the tax advantages of holding property as community property, along with the simplicity of the property automatically passing to the surviving spouse as in a joint tenancy situation.

If you decide to use joint tenancy, I strongly urge that it be restricted to husbands and wives. Joint tenancy should not be used between parents and children. There are at least 4 reasons for this. First, parents and children sometimes have very bitter fights. Parents should be able to retain absolute control of their property as long as they are alive. Second, the child may be involved in an unhappy marriage. The child’s spouse could make a claim against the property. Although the spouse would probably lose, the parents may have to spend considerable money and effort to fight the claim. Third, the child may be involved in some other litigation or perhaps a vehicle collision with insufficient insurance. The child’s creditors could, then attach the parents’s property. Fourth, the child could, for some reason, have to file bankruptcy. The bankruptcy trustee would seek the parents’ property to pay off creditors. All of these situations could do irreparable damage to the financial stability that the parents have worked a lifetime for.

Some estates consist of only bank accounts, certificates of deposit, and/or stocks and bonds. In these situations, the accounts can be held in your name “in trust for” or “pay on death” to someone else. As long as you are alive, you may do as you please with the money. Upon your death, whatever is left in the account will automatically go to the beneficiary without court proceedings.  This type of estate planning would not be recommended for people who have young children or concerns about their children’s ability to handle money.  If a parent died with a young child, the money would remain in trust for the child, but the child would be able to demand the full amount at age 18.

Although the “in trust for” and “pay on death” accounts work well with liquid assets, in any estate where there is real property or deeds of trust, the only realistic and practical method of avoiding probate is to have a living revocable trust made before your death. You may keep complete control of the trust by naming yourself as trustee. You should also retain the power to change or revoke the trust during your lifetime. Upon your death, a successor trustee, already named in the trust document, immediately steps in and distributes the trust assets in accordance with the terms you have dictated. Because the trust owns the property, there are no assets to be probated upon your death.

In addition to avoiding probate, the trust has several other advantages. First, it keeps your affairs confidential because no public inventory is filed with the court. Second, it will usually contain instructions in the event of your incompetency which will avoid a conservatorship. And, third, for the larger estate, a trust may avoid hundreds of thousands of dollars in federal estate taxes.

To illustrate what a trust can save in terms of hard dollars, consider the example of an estate of $750,000. The attorney’s fees and court costs for probate will be in excess of $19,000.00. The cost of preparing a trust for an estate of that size will usually be under $2,000. In larger estates, the savings are even more dramatic. In an estate of $4,000,000, a husband and wife by having a properly drawn trust may save more than $35,000.00 in probate fees. Because of these enormous savings, I almost always recommend trusts to any of my clients who have substantial estates.

In addition to the savings in probate fees, a properly drawn AB Trust can save hundreds of thousands to millions of dollars in Federal Estate Taxes.  At the current time estates greater than $4,400,000 are subject to estate taxation.  This number is indexed for inflation. Husbands and wives together, with a properly drawn trust may pass up to $10,800,000 without paying Federal Estate Taxes.  If you have an estate of $10,800,000 you can save close to $2,000,000 in taxes.

Two final notes. First, many people are under a misconception that they will avoid probate by having a will. This is simply not true. A will merely states who gets the property and who has the right to go to court to conduct the probate proceeding. Second, as we all know, the best method of avoiding probate is to spend it all first.

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A: Unfortunately, things are never quite as simple as they seem. If you try to sell the house, the records at the County Recorder’s office don’t show you as the owner. Even if a potential buyer saw the will, how would the buyer know if it was real or a forgery? Did your mother change her mind and write another Will giving the house to your brother and sister? Finally, what about that $30,000.00 credit card bill Mom ran up when she took her trip around the world? How will her creditors ever collect what they are justly owed?

Probate is the court procedure that answers these questions. At the beginning of the probate proceeding, someone, usually the person nominated in the Will as the Executor, asks the court to accept the Will that is offered as decedent’s last Will and asks to be appointed Executor. At the same time, this person publishes notice of death in a local newspaper and gives written notice of the court hearing to all other members of the decedent’s family and decedent’s creditors. Anyone who has an interest in the estate can object at the time of the hearing. If there are no objections, the Will is “accepted for probate,” an Executor appointed, and creditors are given 120 days to file claims against the estate. After the 120 day time period has run, the Executor files a report with the court showing all expenses incurred, all property of the decedent that has been accounted for, income from that property, and taxes paid. The Executor then asks the court to approve the report and allow distribution of the assets of the estate according to the terms of the Will. Now, you can finally sell Mom’s house because you’ve recorded with the County Recorder a certified copy of the Probate Court Order showing you to be the owner.

Of course, if Mom had a trust, probate could’ve been avoided.

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Mr. S. Reed Morgan was the personal injury attorney for the plaintiff in that famous case. I had an opportunity to speak to him and review an article he wrote in Texas Lawyers Magazine. With Mr. Morgan’s kind permission to reprint, this is what was proved at the trial and Mr. Morgan’s thoughts.

1. McDonald’s Corporation sells its coffee at 180-190 degrees Fahrenheit by corporate specifications.
2. McDonald’s coffee, if spilled, causes full thickness burns (third degree to the muscle/fatty tissue layer) in two to seven seconds.
3. Third-degree burns do not heal without skin grafting, debridement and whirlpool treatments that cost hundreds of thousands of dollars and result in permanent disfigurement, extreme pain, and disability to the victim for many months, years and in some cases, life.
4. McDonald’s Corporation had known about this unacceptable risk for more than 10 years and it was brought to their attention through other suits (more than 700 reported claims from 1982- 1992), repeatedly to no avail. McDonald’s produced a witness who said this number of burned people was statistically “trivial.”
5. Witnesses for McDonald’s admitted in court that the consumers are unaware of this risk of serious burns and that McDonald’s Corporation is and has been aware of this risk.
6. McDonald’s Corporation testified through its witnesses, that it did not intend to turn down the heat.
7. McDonald’s Corporation admitted that it did not warn of the nature and extent of this risk of harm and could offer no explanation as to why it did not.
8. McDonald’s Corporation admitted its coffee “is not fit for consumption” when sold because it will cause severe scalds if spilled or drunk.
9. McDonald’s Corporation coffee has burned more than 700 people over the past 10 years, many with severe burns to the genital area, perineum, inner thighs, and buttocks.
10. Mrs. Liebeck’s treating physician testified this was one of the worst scald burns he had ever seen and that this risk of harm was unacceptable.
11. The chairman of the Department of Mechanical Engineering and Bio-Mechanical Engineering at the University of Texas testified this risk of harm is unacceptable, as did the most widely publicized burn doctor in the United States, who was the editor-in-chief of the “Burn and Rehabilitation Journal,” the most widely recognized burn journal in the world.
12. McDonald’s Corporation at that time generated revenues in excess of $1.3 million daily from the sale of the coffee, selling 1 billion cups of coffee each year.
13. McDonald’s Corporation has burned not only men and women, but children and infants with their scalding hot coffee, in some instances due to inadvertent spillage by their own employees.
14. At least one individual had scalding hot coffee dropped in her lap through the service window, resulting in third-degree burns to her inner thighs and other sensitive areas of the body, resulting in disability for years.

We had to teach McDonald’s that for every degree above 140 degrees Fahrenheit, our skin burns twice as fast. At 180 degrees Fahrenheit, there is no escape from these third degree burns. The product is, by definition, defective or unreasonably dangerous.

This is the applicable law. They broke the law. Why had they not studied this risk? They have laboratories and a university devoted to the study of selling food and drinks. They had a legal duty to sell safe products, not products with a hidden risk.

The jury applied the law of punitive damages to deter McDonald’s and other similar corporations from exposing consumers to this risk by imposing a penalty of two days’ coffee sales or 2.7 million, for willfully ignoring the safety of children, women and men that feed the McDonald’s money tree.

So, the issue is why should we tolerate this kind of irresponsibility? What’s wrong with penalizing corporate irresponsibility that burns and may kill our consumers?

Is this an individual who didn’t take responsibility or a corporation that didn’t take responsibility? The jury found 20 per cent against Mrs. Liebeck and 80 per cent against McDonald’s.

The risk of serious burns above 130 degrees Fahrenheit has been well documented by the Shriner’s Burn Center, which has published warnings to the franchise food industry that its members are unnecessarily causing serious scald burns. The industry did not react.

McDonald’s admitted that it never in all these years consulted a single burn doctor or thermo-dynamicist. Our firm did, and we presented this information to the jury in Albuquerque, which in turn did what is necessary to remedy the problem.

Interestingly, the news media, the day after the verdict, documented that coffee at the McDonald’s in Albuquerque is now sold at 158 degrees.

Mission accomplished. This will cause third-degree burns in about 60 seconds, rather that in two to seven seconds. The margin of safety has been increased as a direct consequence of this verdict.

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Under California law, any property that a person owns prior to marriage, that is kept separate, in that person’s name only and not mixed with marital assets, or  property that someone inherits after marriage is considered separate property. All other property is community property including property that was separate but mixed (co-mingled) with your spouse.

Probate and intestate laws also affect how property is distributed after one spouse dies. A pre-nup takes precedence over California laws that give inheritance rights to a surviving spouse.

Benefits of Pre-nups

Pre-nups are recognized by couples and courts as common agreements, especially when someone marries for the second or third time. Courts favor pre-nups because it makes it easier for the parties to decide who gets what assets when they decide to divorce, eliminating long drawn out fights.

Having a pre-nup or post-nup doesn’t mean you don’t trust or love your new spouse, it means that both of you are being smart about protecting your assets for yourself and your heirs. Second marriages can be complex, especially when there are children involved from prior marriages. One person may have substantially more assets than the other, or may want to protect a family business or heirlooms.

Attorney Assistance

Since a pre-nup can be complicated, the agreements are generally prepared by a California attorney. They are required to be delivered to each party in advance of the wedding so everyone has a chance to have the document reviewed by their own  attorney.  This way each party feels their interests are being protected, and the agreement holds up better in court. The couple should also review and make new wills and trusts acknowledging the marriage and writing changes to take into account their new marital status.

If you are getting married, you should consult with a California attorney about preparing a pre-nup to protect your assets. Also, having the attorney prepare a valid California will or trust for you will further ensure that your assets are distributed in the manner you choose, by the person you trust most to do it.

If you have any questions please feel free to contact our office at 858-792-5988  for a consultation.

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In a recent California Appellate Court decision, Beckwith v. Dahl, the court recognized that when someone commits a deliberate wrongful act preventing another party from receiving a promised inheritance, they should be responsible for their bad conduct.

The case is a very sad story.  The decedent wanted his estate split between his partner of many years and his sister.   The decedent’s sister did not follow her brother’s instructions, did not have the documents prepared that would give the partner a share of the estate, and deliberately never told the partner.   When brother died, the partner who was not a relative did not have a right to any part of the estate.  Ordinarily the story would have ended at this point.  However the court recognized that the sister lied to the partner and gave the partner a chance to sue the sister for the partner’s rightful inheritance.

This means if you were promised an inheritance but didn’t receive it, you may have a valid claim against someone who prevented you from collecting your inheritance. The key fact in this case is that someone acted wrongfully to frustrate the wishes of the decedent.  If you find yourself in a similar position please consult with a California probate and estate attorney to determine whether you have a valid case and if so, can go to court for you.  If you have any questions please feel free to call our office for a consultation at 858-792-5988.

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About Liability and Uninsured Motorist Insurance

Liability insurance is insurance you purchase in case you hurt someone else or damage their property. The State of California requires everyone who owns a car to have this type of insurance.   If you take out a loan on a new car or a used car, the car finance company may require you purchase additional insurance in case your car is damaged.  This is generally called collision insurance.

The bodily injury portion of liability insurance  pays for claims and lawsuits as well as attorney’s fees to defend you in a personal injury lawsuit against you. The property damage portion covers damage to other people’s property or cars that you may have damaged during the accident.

Uninsured and/or underinsured motorist coverage pays benefits to you if you have injuries caused by another driver who does not have insurance (or not very much ) if you are hurt while in a car, riding a bicycle, on a motorcycle or walking as a pedestrian.California Law only requires that your insurance company sell you minimum coverage of $15,000 per person.  Many people only buy the minimum coverage against uninsured motorists.  That may be a tragic mistake. I cannot begin to tell you how many times in my career I have had clients with serious injuries caused by persons with only $15,000 of bodily injury insurance.  Many of my clients would have been financially destroyed without the money they received from their own under-insured motorist policy.

A probate and trust attorney will be able to help you plan your estate beyond your  liability and uninsured motorist insurance, such as creating a trust, will, powers of attorney and other estate planning options to help you protect your assets and save estate taxes.  If you have any questions please feel free to call our office for a consultation at 858-792-5988.

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Estate planning is a smart way to provide for your family’s financial future after you pass away or to handle your own financial affairs if you become incapacitated or an emergency occurs. Putting off dealing with your financial affairs could end up costing you or your family thousands of dollars more in attorney’s fees and California probate or conservatorship costs. Establishing a trust will protect your family against these added costs and delays. It also lets you decide who should inherit your estate.

Avoiding Probate and Conservatorships

If you don’t have estate planning documents, the transfer of your assets would be subject to a formula in the probate code.  Your estate may not go to the people you want to receive it.  For example, your spouse who needs all of the family assets to bring up your young children may watch some of the money go to the children instead, and remain tied up until the children turn  18.   Or let’s say you become disabled.  Having a trust and health care power of attorney in place allows you to pick someone you trust to  handle your money and take care of you.

Establishing joint financial accounts, holding title to property in joint names with the right of survivorship, naming beneficiaries in life insurance policies and pension accounts and transferring assets transferred to a trust are all ways to avoid probate. This way, your family gets to inherit your assets automatically and immediately.  However adding someone else’s name to your accounts or property can have important financial consequences and for anything more than small amounts of money should not be done before consulting with a California estate and trust lawyer.

Hiring aCaliforniaprobate and trust attorney will almost always save you and your family much grief and a lot of money. The attorney can assess your financial situation, give you advice about the best way to plan for your family’s financial future and the management of your assets and prepare the necessary legal documents. The attorney can recommend other professionals that you may need to assist you with the management of your assets such as private professional fiduciaries or institutional fiduciaries, a CPA or other persons as well.

If you have any questions please feel free to contact our office at 858-792-5988 for a consultation.

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Families with younger, disabled or irresponsible children are faced with the added decisions of who to appoint as the executor or successor trustee of their estate to take care of their children’s needs. Since each family’s situation is unique, it is best to discuss important decisions regarding the management of your estate assets and care of your children with an experienced California probate and estate attorney. The attorney can evaluate both your financial needs and help you choose the right qualified person or persons to act as the executor or successor trustee of your estate.

Requirements for a private professional fiduciary?

Families with smaller estates and no responsible relatives have been appointing  private professional fiduciaries as successor trustees and executors. A professional fiduciary must comply with the California licensing laws under the California Business and Professionals Code Sections 6560-6562. The laws were enacted by the legislature in 2007 to regulate non-family professionals who act as conservators, guardians, trustees and agents under a power of attorney. Anyone who acts as a conservator or guardian of two or more unrelated persons is subject to licensing under the Act. Attorneys, accountants, CPA’s, financial institutions, employees of trust companies and other companies that are regulated by the SEC are not required to be licensed when acting in their normal duties of employment.

Services Provided

Professional fiduciaries provide important services to children, seniors, disabled persons and others who require assistance managing their housing, medical and financial needs, including managing estate or trust assets for beneficiaries and heirs who are unable to manage them on their own. Professional fiduciaries also work with a California estate and probate attorney in connection with estate and trust matters.

If you are concerned about the well-being of your family, including small children, children with special needs, or adolescent children, after you pass away or become incapacitated, it is important to speak with a California probate and trust attorney. The attorney can help you with all aspects of your estate planning, including recommending and choosing a private professional fiduciary to acts as the executor or successor trustee of your trust and other estate and tax matters.   If you have any questions please feel free to call our office for a consultation at 858-792-5988.

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