California Probate - Law Offices of Janet Brewer Blog

What Estate Planning Documents Should I Have when I Retire?

“Few retirees have all of these documents that are crucial to their golden years — especially during a pandemic.”

Research shows that most retirees (53%) have a last will and testament. However, they don’t have six other crucial legal documents.

Money Talks News’ recent article entitled “6 Legal Documents Retirees Need — but Don’t Have” says in fact, in this pandemic, 30% of retirees have none of these crucial documents — not even a will — according to the 20th annual Transamerica Retirement Survey of Retirees.

In addition, the Transamerica survey found the following among retirees:

• 32% have a power of attorney or medical proxy, which allows a designated agent to make medical decisions on their behalf
• 30% have an advance directive or living will, which states their end-of-life medical preferences to health care providers
• 28% have designated a power of attorney to make financial decisions in their stead
• 19% have written funeral and burial arrangements
• 18% have filled out a Health Insurance Portability and Accountability Act (HIPAA) waiver, which allows designated people to talk to their health care and insurance providers on their behalf; and
• 11% have created a trust.

The study shows there is a big gap that retirees need to fill if they want to be properly prepared for the end of their lives.

The coronavirus pandemic has created an even more challenging situation. Retirees can and should be taking more actions to protect their health and financial well-being. However, they may find it hard while sheltering in place.

Now more than ever, seniors may need extra motivation and support from their families and friends.

The Transamerica results shouldn’t shock anyone. That is because we have a long history of disregarding death, and very important estate planning questions. No one really wants to ponder their ultimate demise, when they can be out enjoying themselves.

However, planning your estate now will give you peace of mind. More importantly, this planning can save your heirs and loved ones a lot of headaches and stress, when you pass away.

Talk to an experienced estate planning attorney today to get your plan going.

You can read more about how our process works, how we can make sure we are a good fit for your needs, and how to get started today right here.

Reference: Money Talks News (Dec. 16, 2020) “6 Legal Documents Retirees Need — but Don’t Have”

Estate of Charles Schulz Still Making Money

“Is there a person on the planet who doesn't love the Peanuts characters? Snoopy, Charlie Brown, Lucy, Pigpen, Schroeder, and the gang are the iconic creations of Charles Schulz. In fact, it is still so popular that they earned Schulz's estate $32.5 million over the last year, two decades since his death due to cancer.”

Charles Schulz's estate made $32.5 million in the past year. That placed third on the list of the highest-paid dead celebrities. Michael Jackson is number one and fellow cartoonist Theodor Geisel aka Dr. Seuss is number two.

Some of Schulz's income is from the new Apple TV+ show "Snoopy in Space," as well as classics like "A Charlie Brown Christmas."

Wealth Advisor’s recent article “Decades After His Death The Estate Of Charles Schulz Is Still Making A TON Of Money” reports the Peanuts creator is consistently one of the highest-earning dead celebrities. Schulz himself is thought to have earned more than $1 billion during the comic strip's unprecedented 50-year run.

Schulz was born in 1922 in Minneapolis. He knew he wanted to be a cartoonist in kindergarten when he started drawing Popeye. By high school, he was submitting his original cartoons to his school paper, as well as local magazines. After his service in Europe during World War II, Schulz created a cartoon called "Li'l Folks" for the St. Paul Pioneer Press. His cartoons were noticed by United Feature Syndicate, a newspaper syndication company. They offered to syndicate Schulz's cartoons to their national network of newspapers with one condition: they wanted him to change the name of his comic strip to Peanuts. Schulz hated that, but United Feature Syndicate was already running a comic with a very similar name, and this wasn’t an opportunity he could pass up.

The first Peanuts cartoon ran in 1950, when Schulz was 28 years old. That first year, just seven newspapers ran Peanuts. However, by 1953, Peanuts was a hit, and Schulz was earning $30,000 a year (about $292,000 today). At its zenith, Peanuts was syndicated to more than 2,600 newspapers in 71 countries and 21 languages every day. The comic strip characters also made a fortune with merchandise and endorsements. In the 1980s, Schulz was the highest-paid celebrity in the world by a wide margin. He made $30 million in royalties (about $65 million today). From 1990 until his death in 2000, he earned $40 million a year.

Over nearly 50 years, Schulz drew 17,897 published Peanuts strips. The last of his cartoons was published on Feb. 12, 2000, one day after he died. Remarkably, Schulz wrote and drew every single comic himself. When he died, his will said that no new Peanuts comic strips could be drawn by another cartoonist. So far, his wishes have been honored.

Reference: Wealth Advisor (Dec. 8, 2020) “Decades After His Death The Estate Of Charles Schulz Is Still Making A TON Of Money”

Is the Pandemic Motivating People to Do Estate Planning?

“Lack of understanding around estate planning may be leading Americans to avoid getting a will, even as interest is on the rise due to the global pandemic, according to a new survey from financial services leader Policygenius.”

A survey from Policygenius, an online insurance marketplace, found that most people (60.4%) didn’t have a will, but that may be about to change. Nearly 40% of survey respondents (39.7%) said they feel it's more important to get a will because of the pandemic.

PR Newswire’s recent article entitled “Policygenius survey finds Americans with misconceptions about estate planning” reports that many respondents also held misconceptions about the estate planning process, which may a reason they avoid it.

The survey found that more than one in five respondents (22.8%) who think getting a will is too expensive overestimated the cost by hundreds or even thousands of dollars.

A total of 48.2% incorrectly thought that their possessions would automatically pass to their spouse, if they died without a will. That may suggest that people may not be creating wills because they think they don't need them.

There were 24.1% respondents who said that they don't have a will because they haven't had time to put one together, and more than half of those respondents (62%) were parents.

The survey also found that respondents prioritized family, with more than a third of them (35.9%) saying that having a child is the most important life event for someone, if they want to create a will. About two-thirds (65.5%) said that making the process of inheritance as easy as possible is one of their top three important issues, when getting a will.

Just 39.3% knew that if someone passes away without a will, a court will determine who gets their assets.

The Policygenius survey is based on responses from a nationally representative sample of 2,689 Americans ages 25 and over. It was conducted by SurveyMonkey from July 16 through July 17, 2020.

Ask an experienced estate planning attorney about a will and a comprehensive estate plan. Contact our office today to schedule your consultation.

Reference: PR Newswire (Dec. 2, 2020) “Policygenius survey finds Americans with misconceptions about estate planning”

Did Robert Redford Have a Business Exit Plan?

“Robert Redford officially bought what was once the Timp Haven Resort (now known as the Sundance Mountain Resort) in 1969. This year, he's stepped away, selling the resort to Broadreach Capital Partners and Cedar Capital Partners. While we don't know how much the resort was sold for, the structure of the sale shows how this iconic real estate investor has built a successful exit strategy.”

Motley Fool’s recent article titled “What Robert Redford's Sale of Sundance Can Teach Investors About Exit Planning” says that, in announcing the sale, Redford told the Salt Lake Tribune that he’s been thinking of selling for several years. However, he wanted to find the right partners. Broadreach and Cedar plan to upgrade the resort, add hotel rooms and build a new inn. The companies have also said that they will keep the resort sustainable and practicing measured growth, as well as also continuing to host the Sundance Film Festival.

The 2,600-acre resort has 1,845 acres of land saved from future development through a conservation easement and protective covenants. The 84-year-old actor has had a lifelong interest in the environment and in land stewardship. Redford and his family have also arranged with Utah Open Lands to create the Redford Family Elk Meadows Preserve at the base of Mt. Timpanogos. The gift will reduce Redford's tax liability on his estate.

Both Broadreach and Cedar have extensive hospitality experience, but neither looks to have much ski resort experience. However, they're working with Bill Jensen, an industry legend, who recently left his role as CEO of Telluride Ski and Golf Resort in Colorado.

Business exit and succession planning can be difficult—in part, because people don't like to address such unwelcome topics. Most investors don't have the luxury of waiting years to find the right buyer, but the Redford deal does show that planning ahead may be critical to creating a mechanism that supports the vision for the property.

When selling a large investment property, you must first understand why you're selling, and your desired end result. Of course, a return on investment is nice, but there may be other considerations, like in Redford's case. Another key is ascertaining the updated worth of what you're selling. Get a valuation, especially with an irreplaceable asset.

The structure of the sale is important. You will likely be liable for tax on your capital gains, so ask an attorney. If you're also structuring your estate plans at the same time, you'll need to know what amount you can give and what your heirs may have to pay. Talk to an experienced estate planning attorney to be certain that you’re covering all the bases.

Reference: Motley Fool (Dec. 12, 2020) “What Robert Redford's Sale of Sundance Can Teach Investors About Exit Planning”

No Time Like the Present Pandemic to Get the Estate Plan Going

There’s nothing like a once-in-a-lifetime global pandemic to focus one’s thinking. 2020 has been one for the books.

The pandemic has made many people focus on depressing things, like death. Many of us are worth more dead than alive.

Federal News Network’s recent article entitled “It’s your estate, but who gets it?” says that lack of control is one of the frustrating things about this already terrifying pandemic. We can wear masks, keep our distance and avoid crowds, but then what?

There are some very important and valuable things that are still under your control. One of these is estate planning.

Any number of things could have occurred in 2020 that are off your radar because you’re still adjusting to the many changes the pandemic has brought to our everyday lives.

Many people see their estate plan as one of life’s necessary chores. Once it’s signed, they simply file it away and forget about it. However, an estate plan should be reviewed regularly to be certain that it continues to meet your needs. Here are just a few of the life events that make it essential for you to review and possibly revise your estate plan with an experienced estate planning attorney:

• The birth or adoption of a child
• You are contemplating divorce
• You have recently divorced
• Your child gets married
• Your child develops substance abuse problems or has issues with managing finances
• Those you’ve named as executor, trustee, or agents under a power of attorney have died, moved away, or are no longer able to fulfill these obligations
• Your child faces financial challenges
• Your minor children reach the age of majority
• There has been a change in the law that impacts your estate plan
• You get a sizeable inheritance or another windfall.
• You have an estate plan but can’t locate it
• You acquire property; or
• You move to another state.

If any of these events occur, talk to your estate planning attorney to see if it is necessary to revise your estate plan to address these issues.

Reference: Federal News Network (Nov. 4, 2020) “It’s your estate, but who gets it?”

What Kind of Estate Planning Do I Need During the Pandemic?

“The COVID-19 pandemic has made 2020 a nightmare for many people, and inadequate estate planning can exacerbate the pain.”

Having a valid will and a complete estate plan is important for everyone, but it’s crucial as you approach retirement.

Richmond Times-Dispatch’s recent article entitled “Estate planning during the pandemic” says that it’s because you’ll probably have more assets at this stage of your life, and it’s important to consider whom you’d like to inherit.

It is critical that you plan to be sure your spouse and family will be cared for financially, in the event that something happens to you. This can be accomplished with proper estate planning with the help of an experienced estate planning attorney.

If you die without a will or estate plan, state probate laws of succession may direct the way in which your assets are distributed. This can be an expensive process, but it can also be a significant burden on your family during a time of grieving and sadness.

Even with a will, going through the court-supervised probate process of passing assets through a will can be time consuming and expensive.

One way to avoid probate is to ask an experienced estate planning attorney to help you set up a trust. A frequently used trust is a revocable living trust, which lets you modify the terms if you like.

Individuals with children or real estate can particularly benefit from setting up a trust. A trust allows you to avoid probate and makes certain that your assets are transferred to the intended people. It also lets you control exactly how the money can be used. You can also name someone to take control when you’re not available, known as a secondary trustee.

The executor of a will is really an administrator who transfers assets from one person to another. In contrast, a trustee is more of a decision-maker who will take your place and make decisions you would want to make, if you were still around to make them.

After you set up your estate plan, you should review it every few years.

You can read more about how our process works, how we can make sure we are a good fit for your needs, and how to get started today right here.

Reference: Richmond Times-Dispatch (Nov. 19, 2020) “Estate planning during the pandemic”

Did Zappos Founder Tony Hsieh Have a Will?

“Advisors were likely powerless to push for an $800 million estate plan, as Zappos founder started to drift into unhealthy habits. The family now has to sort it out.”

Zappos founder Tony Hsieh did not quite make “billionaire” status. However, he was close, selling several companies for a $800 million personal payday.

Wealth Advisor’s recent article entitled “Even Mega-Millionaires Die With No Will: Tony Hsieh Family Steps Up” explains that when leaving that much cash behind, heirs need only invest in Treasury Bonds to be set for life.

However, when you die on a reported girlfriend’s property at age 46, far from home and without a will, the estate becomes much more complicated than it needs to be.

Hsieh sold his first startup company in 1998 and moved into the world of top-tier technology incubators, eventually starting the shoe retailer Zappos, which he sold to Amazon in 2009. He continued to manage Zappos, until he stepped down this summer. While Hsieh had no need to work financially, he liked the structure.

However, he also enjoyed pushing his health to the limit, experimenting with extreme diets, holding his breath, and literally playing with fire. Hsieh was asphyxiated in a Connecticut shed when it caught fire. He was rushed to the hospital, where he died.

Hsieh seemed untethered, but it was his life and his money.

However, now that he’s gone, his fortune is an issue.

He did not have a wife or children, so his scattered assets need to be accounted for and then dispersed.

His father and brother have volunteered to sort everything out.

However, it is going to take time and money to find all the money and there are no guarantees. Things frequently fall through the cracks.

The tax situation is also a question, with an $800 million estate, the IRS will see a significant payday.

Hsieh didn’t have a will or a trust, so probate is a concern. With a Nevada base of operations, a Utah residence, and presumptive California executors - probate can get messy very quickly.

The lesson here is clear: we all need an estate plan.

That’s how we can add multigenerational value and keep family fortunes growing, instead of dwindling to nothing.

Ask an experienced estate planning attorney about a comprehensive estate plan.

Reference: Wealth Advisor (Dec. 7, 2020) “Even Mega-Millionaires Die With No Will: Tony Hsieh Family Steps Up”

How Will a New NFL Policy Impact the Late Broncos Owner’s Estate Planning?

“In a massive turn of events, the Denver Broncos may finally get a resolution to the fiasco that is the team’s ownership situation; only it may not come in the way that it was originally planned.”

No matter the late Pat Bowlen's intentions of passing down ownership of the team to one of his children via the Bowlen Trust, the NFL looks to be asserting its authority with a new policy on minimum ownership and team control.

Sports Illustrated’s recent article entitled “New NFL Ownership Policy Could Have Major Impact on Broncos” says that NFL Commissioner Roger Goodell now has the authority and power of levying fines up to $10 million per year to teams that aren’t in compliance with the policy and up to $2 million per year for individual owners.

The new NFL policy says that one person must hold at least the minimum amount of equity in the team and also have the final say in all team matters.

The Broncos and Tennessee Titans are the only two teams not currently in compliance with this policy, meaning that they both could be fined by the league up to $10 million within the next year. The Broncos are under control of the Pat Bowlen Trust, a three-person entity that was empowered with naming one of Bowlen’s seven children as his successor after his death in 2019. Within the trust, a list of expectations was provided by the Broncos' late owner which were aimed at readying the eventual successor for life as an owner in the NFL.

However, as it now appears, there’s an ongoing lawsuit between the trust and a legal team for Beth Bowlen Wallace, as to who will be taking control of the team in the near future.

It looked like the trust selected Pat’s daughter Brittany Bowlen as the eventual owner. She has completed nearly every instruction set out by the late Mr. Bowlen when he created the trust in 2009. However, his oldest daughter, Bowlen Wallace, and her uncle Bill Bowlen, contend that Pat was already showing signs of Alzheimer’s Disease, which took his life in 2019—long before he signed his estate planning documents. The two say that he wasn't in a competent state of mind to make such decisions. Bowlen Wallace and Bill also believe that Beth herself has already done everything asked of her late father in the trust and that she should be designated as the owner of the football team.

This mess is in litigation and could go on for years. A court hearing scheduled for September was postponed until 2021, due to the COVID-19 pandemic.

Because of the lawsuit and the NFL’s deadline to name one person with “final say,” the team may be forced to sell—which was a possibility after Pat’s death. The other Bowlen children must approve on who the majority shareholder would be.

“It is an option, and we’ve told the beneficiaries that,” Broncos CEO Joe Ellis said of selling the team back in December of 2019. “Because if Brittany were to succeed and take over for her father, everybody else is going to have to sign off on that, most likely. That may not be a requirement, but it’s going to be necessary, I think, moving forward from a trustee viewpoint.

“That’s why a sale remains a possibility, I think, given the circumstances we’re in.”

Reference: Sports Illustrated (Nov. 23, 2020) “New NFL Ownership Policy Could Have Major Impact on Broncos”

Does the COVID-19 Pandemic have an Impact on Financial Powers Of Attorney?

“We have all seen the heartbreaking stories about people dying in hospitals from Covid-19 without family present. We’ve also heard about the tragic decisions healthcare workers must make when time and resources are spread thin. Compounding these sad situations is that often the person who can speak for the individual suffering from Covid-19 is not present because of hospital procedures designed to prevent contagion.”

If you’re concerned about the consequences of contracting COVID-19, you’d typically create an advanced directive, a medical power of attorney, and a HIPAA release to give authority to those you want to have access to your medical information. These documents are intended to both state your medical care wishes and specify who can make medical decisions for you if you’re unable.

Forbes’s recent article entitled “If You Lose It, Don’t Lose It: Financial Powers Of Attorney In A Covid-19 World” says that sometimes the issue of money is lost in the confusion. If you’re in the hospital or otherwise unavailable, who do you want to take care of any of your immediate financial issues?

People frequently associate this issue with just writing checks, like paying the mortgage. If it’s deducted automatically, it should be okay, and the other bills can wait until they recover. However, some financial issues are planning-related, and those can’t wait, like in late December when you want to make a Roth IRA conversion but you’re in a hospital. You might also want to make a contribution to your favorite charity since the CARES Act provides a $300 non-itemized charitable deduction. If you are incapacitated, you need a trusted agent who can make important financial decisions for you and execute them on your behalf.

A financial power of attorney (POA) is often the answer. It is separate from a medical POA but equally as important. Without a binding financial POA, your incapacity will have a major financial impact. A financial POA gives you the power to name an agent to act on your behalf if you lose the physical or mental capacity to handle your own finances.

If you are worried about the financial risk related to a sudden impairment from an event, such as the coronavirus, ask an experienced estate planning attorney about creating a springing and durable POA. “Springing” means the power doesn’t trigger until you’ve lost the legal capacity to handle your own finances. “Durable” means that your agent continues to retain the power to act on your behalf until you either recover or die. This is the preferred approach because they retain control until something bad happens (causing it to “spring” into action) and then their agent maintains control, even if some unscrupulous individual attempts to hijack the process (proving the power is “durable”).

Note that a POA may not be recognized when it is presented to an individual or company. Financial institutions have been hesitant to accept a financial POA submitted by the principal’s agent because they’re concerned about liability if the POA turns out to be fraudulent, or if the agent acts contrary to the accountholder’s desires. Without the institution’s agreement, the incapacitated person’s plans won’t happen. However, many states have addressed this.

Many people are creating “just in case” estate planning documents to deal with the possibility of contracting COVID-19. Ask an experienced estate planning attorney about creating a financial POA.

If you have any questions about your current estate plan, please call or email us today.

Reference: Forbes (Oct. 27, 2020) “If You Lose It, Don’t Lose It: Financial Powers Of Attorney In A Covid-19 World”

Estate Planning During COVID: Smart Documents to Update

What are some documents you should update as part of your estate planning during Covid? You might be surprised. 

The COVID-19 pandemic has introduced uncertainty and anxiety into many peoples’ lives. For some, it has also brought into focus their mortality. While we hope that the pandemic is controlled quickly, current times are unpredictable. If you haven’t already, it’s a good time to think about ensuring that your financial affairs are in order and that you have an estate plan in place. 

Give the rapid spread of the virus, it’s important to update your estate plan as soon as possible. 

Documents to Update

There are several key documents that you should review to see if you need to make any changes in light of the current pandemic. These include:

Power of Attorney: A power of attorney provides the legal authority to assign an agent authorized to carry on your financial affairs in the event that you become incapacitated. These individuals have the authority to handle financial transactions – including paying bills, writing checks, making deposits, selling or purchasing assets, and completing tax returns – on your behalf. Without this document, there is no other person who could legally conduct these financial transactions; family members would have to request that the probate court identify someone to take over these duties. Since this process can be lengthy and emotionally-taxing, it’s always better to have a power of attorney in place before it becomes necessary. While any adult can serve as your designated power of attorney agent, you should ensure that you choose someone who is trustworthy and responsible.

Healthcare Proxy/Healthcare Durable Power of Attorney: A durable power of attorney for healthcare, or health care proxy, allows you to name someone to make healthcare decisions for you in the event you are incapacitated but still alive. This role can be incredibly difficult for loved ones to fill, so it’s crucial that you discuss your wishes with the individual beforehand, so that they have a good idea of what you are asking of them before they agree to it. 

Last Will and Testament:  In California, it is strongly encouraged that individuals develop a living trust to distribute asssets in order to avoid having to go through probated court. However, if you have minor children, you can also appoint guardians for them through the use of a last will and testament. If this document is necessary, you will also have to appoint an executor who can ensure that the terms of the will are met as you intended them to be. Without a will in place to name a legal guardian, your family may go through long and drawn out court proceedings . You can spare your loved ones from going through this process by updating your last will and testament to ensure that it reflects your current wishes for  minor children. 

Living Trust (aka Revocable Trust or Revocable Living Trust: A revocable trust or a revocable living trust is recommended to handle the transfer of one’s assets rather than a will. Having a living trust in place ensures that you will not need to go through probate court.  It is generally much less expensive and far less time consuming to administer. You can also make decisions about how and when you would like to terminate life-saving effors and discuss your wishes related to organ donation. 

HIPAA Authorization: The Health Insurance Affordability Portability and Accountability Act (HIPAA) put in place federal regulations related to privacy when obtaining healthcare. Authorization to release these records is required for you to name people that can have access to your medical records. Essentially, this document allows you to decide who the treating clinicians can discuss your medical treatment with in the event that you are hospitalized. 

Assets, Accounts, and Insurance Policies: When you are updating your other estate plan documents, it’s worth taking a little time to update your account information, insurance policy information, and your inventory of assets, including digital assets and their related passwords. This action will make it much easier for your executor to carry out their duties and your family members to access any accounts or assets they may need to.

In addition to updating all of your documents and information, it’s also a good time to convey information to other family members. These conversations can help them to better understand your final wishes for a funeral or burial arrangement, as well as address any other items, such as who may be available to care for any pets left behind.

While nobody wants to think of their own mortality, the COVID-19 pandemic is forcing many people to do just that. There are many things that are currently out of our control. However, you can control what happens in the event of an untimely death. The best way to ensure that things go as you wish is to make sure that you have the right legal documentation in place through an updated estate plan.