I was recently contacted by a non-profit regarding a handwritten will that named the organization as a beneficiary of the decedent's estate.  The will is being contested by family members and is now part of litigation that could become very costly.

I have seen this issue on more than one occasion. A persons intent to leave a charitable bequest is thwarted by poor planning, ambiguous documents and family members that feel they are not receiving their fair share of the estate. 

How can you assure your estate is distributed as you intended?

• Engage the assistance of an experienced Estate Planning attorney to prepare your Trust &/or Will.  
• Be specific regarding the non-profits you name as beneficiaries.  Include the name, tax ID, address and phone number for each charity. 
• Have your documents notarized, and do not rely on handwritten documents to fulfill your charitable intent.

These steps will help assure your gifts to charity are realized and not held up by costly litigation that accumulates legal fees which diminish the value of the gift. 

916-225-3570   [email protected]    http://www.cjwatterslaw.com

As an Estate Planning Lawyer I am in contact with people who have lost a loved one and I encourage my clients to plan ahead as much as possible. 

One of the greatest gifts my mother gave us was to plan ahead for her end-of-life arrangements.  When I meet with people regarding their estate plan I recommend they consider pre-planning their end-of –life arrangements as well.  


The information below is from the Heritage Oaks Memorial Chapel.  For more information visit their website at HeritageOakseMemorialChapel.com

5 Steps Concerning Your End-of-Life Planning

Do realize that when you make decisions in advance regarding your end-of-life arrangements, you are telling your family that you care about them.  Making arrangements for a loved one after they have passed away is stressful!  You can remove this stress for them by taking care of your arrangements in advance. You will also have peace of mind knowing that everything is in order and you have your wishes in writing.

Here are some steps that will guide you in this process:

·        Decide What You Want.  What do you to have happen once you pass away?  Many people are concerned about the cost.  If money was not an issue, what would you like to see happen? Many people who come to Heritage Oaks are surprised at how little it will cost to do what they want. We can assist you with putting a plan into place so the money will be set aside in advance to cover the cost of your wishes.

 

·         Keep in mind that services are for the living, not the deceased.  The customary visitation, funeral or memorial celebration of life are what many family members need to bring closure after their loved one dies.  Showing you care includes providing them with a formal opportunity to say goodbye and honor you together with your family and friends.  It is normal for people to grieve the loss of a loved one, and this is an important first step in that grieving process.

 

·         Decide where your final resting place will be. Local communities in Sacramento and Placer Counties have municipal cemeteries that provide a lower rate on burial plots and niches to their residents.  These cemeteries are very well maintained and the cost is 40% to 60% less than commercial cemeteries.  Plus, if you are a veteran of the U.S. Armed Forces with an honorable discharge, you’ll appreciate knowing that you are entitled to a free burial plot or cremation niche at Sacramento Valley National Cemetery in Dixon, CA. We will assist your family with making the arrangements at the National Cemetery at no charge to them.

 

·        Don’t procrastinate!  Putting things off does not bring peace of mind. Once this is done, you can relax!  A few minutes now will save your loved ones a lot of unnecessary pain.

 

·        Write down your plan. 

  We can help you get started by providing you with a complimentary Personal Memorial Planner that will guide you through organizing the important information your family will need.  We will also provide Estate Planning Tools including an Advanced Directive.

 We encourage you to request our free “Personal Memorial Planner” which will not only help answer your questions, but also guide through the planning process. Please just call us to request your planner, if you have any other questions, or if you would like to set an appointment.

Call 916-791-CARE (2273) or 800-316-1987 or email,

[email protected] [email protected] Call, or visit, Heritage Oaks Memorial Chapel, a veteran, family-owned and operated, full service funeral home & beautiful chapel serving the areas of Rocklin, Roseville, Citrus Heights, Antelope, Fair Oaks, Carmichael, Folsom, Sacramento, Elk Grove, West Sacramento, Davis, Granite Bay, Loomis, Auburn, and Lincoln.

916-225-3570   [email protected]    http://www.cjwatterslaw.com

Saving for education of your grandchildren now, or are you planning to help your children, grandchildren or another child close to you with their education expenses?  There are many options to help you achieve this goal.

• Custodial Accounts (UTMA)
  
• 529 college savings plans
  
• Coverdell Education Savings Account (CESA)
  
• Traditional/ROTH IRAs
  
• Personal Investment
  
• Zero  Coupon Bonds
  
• Savings Bonds – Series EE & I
  

Each of these has differing uses, benefits, and drawbacks.

• Who can contribute?
  
• Contribution limit?
  
• Who has control?
  
• Qualified distributions?
  
• Income Tax considerations
  
• What happens to the unused balances?
  
• Financial Aid considerations
  
• Gift and Estate tax benefits
  
• Contributions may be irrevocable gifts
  
• Bonds may not receive the tax-free benefit for education expenses if issued incorrectly
  

The list goes on.  Are you confused yet?   When a client asks me about a complicated financial decision such as this, I always recommend they seek advice from a Certified Financial Planner.  Planning of this type requires a complex review of your assets and your intent to assure the plan you put in place will fulfill that intent and is a sound financial decision.

I work with Certified Financial Planners regularly and can provide referrals upon request.  Please contact me for more information and to discuss how your estate planning documents may be affected by this type of education planning.

Colleen J. Watters
Estate Planning Attorney
916-225-3570
[email protected]

www.cjwatterslaw.com

Pets are a joy to have, but did you know that they also help reduce stress, lower blood pressure, and can even help us live longer?

Recent studies show that pets have a significant and positive effect on humans.

In short, researchers found that:

• Petting and talking to an animal lowers blood pressure and stress levels
  
• Aquarium viewing is a proven stress buster
  
• Pet owners make fewer visits to the doctor
  
• Pets increase the survival rate of people with heart problems
  
• Pets Help Lower Blood Pressure
  

A recent study by Dr. Karen Allen at the State University of New York at Buffalo found that people with hypertension who adopted a cat or dog had lower blood pressure readings in stressful situations than did those who did not own a pet.

Pets Help Reduce Stress
Walking with a pet helps soothe nerves and offers instant relaxation. Studies conducted worldwide have shown that the impact of a stressful situation is lesser on pet owners, especially males, than on those who do not own a pet. The studies were done by Josephine M. Wills at Waltham Centre for Pet Nutrition in the United Kingdom.

Pets Help Prevent Heart Disease
Because pets provide people with faithful companionship, research shows that companion animals may also provide their owners with greater psychological stability, thus offering a measure of protection from heart disease. This according to a study at the National Institute of Health (NIH) Technology Assessment Workshop: Health Benefits of Pets.

Pets Help Lower Health Care Costs
The NIH Technology Assessment Workshop also found that people with pets actually make fewer visits to the doctor, especially for non-serious medical conditions.

Pets Help Fight Depression
Pets help fight depression and loneliness, promoting an interest in life. When seniors face adversity or trauma, affection from pets takes on great meaning. Their bonding behavior can foster a sense of security, according to Between Pets and People: The Importance of Animal Companionship by Alan Beck and Aaron Katcher.

And, don’t forget to include your pet(s) in your Estate Plan.  Contact me today to discuss how to assure your pet is safe should you become incapacitated or pass away. 

Colleen J. Watters
Estate Planning Attorney
916-225-3570
[email protected]
www.CJWwattersLaw.com

While nobody wants to think about death or disability, establishing an estate plan is one of the most important steps you can take to protect yourself and your loved ones.  Proper estate planning not only puts you in charge of your finances, it can also spare your loved ones the expense, delay and frustration associated with managing your affairs when you pass away or become disabled.  What Estate Planning does not control is the succession of a business. Many people want to assure the business they worked so hard to build will continue to grow and prosper after their death.  While this may seem like the American dream, it can be disastrous unless a good business succession plan is in place, expectations carefully outlined, and good choices made when appointing the future decision makers.

A Business Exit Strategy Specialist can help forecast issues and assist with implementing a plan to avoid as many issues as possible.  The books below will give business owners some ideas of what can go wrong and how to assure things go right.

Ruling From the Grave is not always a good idea.  


Keep the Family Baggage Out of the Family Business:  Avoiding the Seven Deadly Sins That Destroy Family Businesses

-   Quentin J. Fleming, Author

Family businesses epitomize the best of the American Dream: you work hard, you're your own boss, you leave a lasting legacy to your children -- or do you? Statistics show that only 30% of family businesses survive to the second generation, and a paltry 10% survive to the third generation. Family businesses are in trouble, and their survival is crucial to us all. Their success ensures our country's success -- and their failure can drastically affect our economic health. 
In Keep the Family Baggage Out of the Family Business, family business expert Quentin Fleming has identified the Seven Deadly Sins that are invariably responsible for a family business's demise. Keep the Family Baggage Out of the Family Business presents practical and accessible advice geared toward the average family business owner or employee and is an invaluable tool for helping family businesses not only survive but thrive.


Family Wars – The Real Stories behind the Most Famous Family Business Feuds

-    Grant Gordon & Nigel Nicolson, Authors

Many of the world's greatest businesses are family owned, and with this comes the threat of family feuding, sibling rivalries, and petty jealousies. Family Wars takes readers behind the scenes on a rollercoaster ride through the ups and downs of some of the biggest family-run companies in the world, showing how family in-fighting has threatened to bring about their downfall. Covering families such as Ford, Gucci, McCain, Guinness, Gallo, and Redstone, Family Wars is an astonishing expose of the way families do business and how family in-fighting can threaten to blow a business apart. Whether it's Brent Redstone's court case with his father and sister or the family feud over Henry Ford's $350 million trust fund, the book reveals the origins, the extent, and finally the resolution of some of the most famous family feuds in recent history. Family Wars also provides valuable advice for anyone involved in a family business, offering suggestions on how to avoid such problems.


Perpetuating the Family Business: 50 Lessons Learned from Long Lasting, Successful Families in Business

-    John L Ward, Author

John L. Ward, a leading world expert on family business, offers the best practices of the most successful and long-lasting families in business, including Ford Motors, Marriott Hotels, Levi-Strauss, and the New York Times. He provides a framework of five insights and four principles in which to position his fifty "lessons learned" for family business longevity. This is a comprehensive book on sustaining family businesses that contains international examples, cases, essential tools, and checklists of best practices; a how-to every entrepreneur should have.

For more information contact The Law Offices of Colleen J. Watters at  [email protected]

In my experience, many business owners have not included language in their Business Succession Plan to address the needs of the business should the owner(s) become incapacitated or pass away. 

If the business formation is a sole proprietorship and the owner utilizes Schedule C for tax purposes, simply listing the business on the Schedule A of their Trust can be sufficient.   If the business is valuable, then a discussion regarding business entity formation is important, and assigning the business to the owner’s trust may be appropriate.  
 
Planning techniques are likely to have transfer tax considerations that must be evaluated by an attorney and a CPA.  Changes in tax laws, as well as the business owner’s estate value, may require ongoing reevaluation and potential adjustments to the plan by outside advisors.

As the “baby boom” ages, understanding a variety of approaches to planning for business exits and succession planning will grow in importance.  Approaching these strategies as a process and integrating a team of legal, tax, accounting, insurance, and financial professionals may help tax and legal professionals address the multitude of situations their clients may face.

When a business owner wants to pass his or her business on to children, they should be certain the children want to continue to operate the business before gifting it to them.

How children relate must be considered as well.  If children a business owner’s children cannot work amicably, a business may not be the proper forum to attempt to force them to work together. Family behaviors and personalities can be an important part of this decision that organizational psychologists and other management professionals specialize in consulting with people regarding business family dynamics and succession planning.

Whether the next generation wants to be involved in the business and whether they will treat the business as a “sandbox” to play in or a “golden goose” to be nurtured and valued must be considered before the decision to pass on a business is made.

Recently I have worked with several business owners that are working on a succession plan for their business. This type of planning does not only include estate planning, but must also include business planning. The article below, written by Rebecca Abrams Sarelson, contains valuable information to consider when planning for the future of your business.
  
5 strategies for better business succession planning

Rebecca Abrams Sarelson, Contributing Writer
Jan 29, 2015, 9:07am EST

In order to develop an effective succession plan, business owners first need to realize that there is no single approach to succession. Here are some strategies that can help set your direction.
When contemplating retirement or simply the possibility of stepping aside, owners of thriving small businesses often feel challenged when planning for the continuation of their businesses.

In order to develop an effective succession plan, business owners first need to realize that there is no single approach to succession.

What may work for one business may not be effective for another. But here are some general strategies that can be helpful for getting started:

1. Articulate goals for the business
It can be difficult for business owners to be impartial, but take a step back and analyze the current state of the business, its prospects and key areas for expansion or improvement. That can provide a vital road map for the future.

2. Identify successor leaders
Business owners cannot assume that their children have the skills, experience or desire necessary to ensure the continued prosperity of the business. For this reason, consideration may have to be given to key employees. It is imperative that business owners make an honest assessment of each potential successor's abilities and talents and confirm willingness to lead the business. Business owners must devote themselves to train successors in all aspects of the business and the successors must be prepared to commit the necessary time and energy.

3. Establish decision-making policies
If one person cannot perform the tasks necessary to maintain the business, then clear guidelines for running the business must be established. The role each successor is to assume should be carefully articulated and a dispute resolution mechanism should be created.

4. Allow successors to assume responsibility
Many business owners struggle with turning over control. Allowing the successors to step in and assume responsibility while the owner steps back can be difficult. However, permitting successors to have an opportunity to undertake the responsibilities for which they have been trained creates a gradual transition that allows the owner to slowly phase out, while introducing new management to the employees and clients over time.

5. Document an estate plan
Making sure that the ultimate ownership vests in the successors must be documented in an estate and tax plan. Whether the owner should create a lifetime gifting program, purchase life insurance or implement other strategies should be discussed with an estate and tax attorney. In families with multiple heirs, careful consideration needs to be given to the division of the business and other assets amongst the heirs.

Ultimately, small business owners are not guaranteed that a family member or employee will be interested or qualified to assume responsibility for the business. Owners should keep in mind that the business may one day be sold. Keeping concise records may permit the owner, or the heirs, to sell the business at maximum value. A qualified estate and tax professional can assist business owners in facilitating tax advantageous business transitions or sales.

Rebecca Abrams Sarelson is a partner in Arnstein & Lehr’s Miami office. She focuses on international and domestic corporate transactions, taxation, wealth preservation, estate planning, tax-exempt organizations, and real estate transactions. Sarelson handles complex business and tax planning, plus she counsels clients in entity selection, joint ventures, general corporate and partnership matters.

The scenario - A client lists property with you that was owned by a decedent who did not have a trust, but your client fails to tell you that they have not opened probate on the estate. You have a buyer for the property, have scheduled a 45 days escrow, and realize that your client does not have authority to sell the property.

What next? Generally, it will take at least 4-5 weeks after filing the Petition for Probate with the court before the first hearing will be scheduled. If all goes as planned (there are often issues that arise to prolong the process) the personal representative will receive Letters Testamentary at that hearing, giving them the authority to sell the property.

The next step is to file a Notice of Proposed Action, noticing the court and all beneficiaries with the details of the sale. A fifteen day notice period is required before the sale can be completed. 

This entire process can take up to 8 weeks to complete, which means your 45 day escrow is blown and the possibility of losing the buyer becomes a very real issue.

You can petition the Court to grant a Special Administration, issue letters with limited authority to the petitioner, allowing the sale to proceed. Generally, a Special Administration is requested for urgent matters. In this instance, you can claim preservation of the estate as the reason for the court to grant the Special Administration. The court could rule that the failure to open a probate before listing the property does not rise to the required level of “urgency’ for a Special Administration. 

When listing a house of a decedent, always determine if the house is titled to a trust or if a probate must be opened before the house can be sold. You will save yourself and your client from experiencing the delay of probate at a time when you cannot afford such a delay; not to mention the added expense of filing a Special Administration petition in addition to the standard Probate petition.

I recommend anyone that purchases a home create a trust which, if drafted correctly, will allow for avoidance of the probate process all together.

Probate Fees in California:

Probate fees are set by law [Probate Code Section 10800]   as follows:

            4% of the first $100,000.00                          

            3% of the next $100,000.00                          

            2% of the next $800,000.00                          

            1% of the next $9 million                             

            1/2% of the next $15 million             

Beneficiary designations are an important part of your estate plan and must be monitored regularly.  Designations on retirement accounts, investments, and life insurance are the most common forms that people will encounter. But, there are many assets that can be transferred via beneficiary designation.  Multiple beneficiaries can be named with a designated percentage to each.  Charitable donations can be made using this method and may result in tax incentives.  You need to fully understand the process to be sure distribution to a beneficiary fulfills your intent and protects the gift from being squandered or collected by a creditor of the beneficiary.