5 Reasons Why Uncle Bill May Not Make a Good Trustee

If you have created a dynasty trust that you intend to last for decades into the future, choosing the right trustee is critical to the trust’s longevity and ultimate success. 

Initially you may think that a family member, such as a sibling (“Uncle Bill” to your children, who are the initial beneficiaries of your Dynasty Trust), will be the best choice as trustee.  After all, Uncle Bill understands the personalities and varying needs of your children, and since Bill has always been frugal, he will surely keep the costs of administering the trust down. These are good reasons to possibly select a family member, like Bill, to serve as trustee.

However, Uncle Bill may not make a good trustee for a long-lasting dynasty trust since he will probably not be equipped to handle all of his fiduciary obligations on his own.  Instead, he will need to hire legal, investment and tax advisors to insure that the trust is being distributed, managed and invested as you have intended.  All of these expenses will add up and may ultimately cost much more than the fees of a corporate trustee, such as a bank or trust company. Many corporate trustees can meet all fiduciary obligations under one roof for one comprehensive fee. 

Below are five reasons why you should consider choosing a corporate trustee for your dynasty trust instead of Uncle Bill:

 1.      A Corporate Trustee Doesn’t Have a Potentially Disruptive Personal Life.  A corporate trustee won’t become ill or die, get married or divorced, have children or grandchildren, go on an extended vacation, move to a foreign country, or get distracted by day-to-day life that can get in the way of properly administering your trust.

 2.      A Corporate Trustee is Unbiased.  A corporate trustee won’t favor one of your children over another (unless that’s what you intended) and will act in an unbiased manner in making distributions that will benefit both the current and remainder beneficiaries.

 3.      A Corporate Trustee Avoids Conflicts of Interest and Self-Dealing.  A corporate trustee won’t sell the family company or a vacation home (that you intended to eventually go to your grandchildren) to him or herself or a friend at less than fair market value.

 4.      A Corporate Trustee Invests Appropriately.  A corporate trustee won’t invest all of the trust assets in a money market, real estate, or hedge fund but will diversify the portfolio to benefit both the current and remainder beneficiaries (subject to any specific instructions you list in the trust agreement).

 5.      A Corporate Trustee Has Expert Knowledge.  A corporate trustee won’t need to hire a slew of attorneys and accountants to interpret the trust agreement and will keep current on changes in the laws governing trusts, fiduciaries and taxes.

Final Considerations:

The duties and responsibilities of a trustee are extensive:  From managing the requests and expectations of the current and remainder beneficiaries, to providing periodic reports of the trust assets, liabilities, receipts and disbursements to the current and remainder beneficiaries, to prudently investing the trust assets, to preparing and filing all required tax forms, the work of a trustee seemingly never ends. 

Because of the breadth of duties and responsibilities, a corporate trustee rather than Uncle Bill may be the best option for your dynasty trust.  Please contact our office if you have any questions about the selection of a trustee generally or the use of corporate trustees, so that we can assist you in selecting the right individual or entity to serve as your trustee.

If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.

IRS Announcement: Estate Tax Closing Letters Will Now Only Be Issued Upon Request

Due to the increased volume of federal estate tax return filings in order to make the “portability election,” the IRS has announced that estate tax closing letters will only be issued upon request by the taxpayer. This change in IRS policy started on June 1, 2015.

What is the “Portability Election” and How is the Election Made?

The “portability election” refers to the right of a surviving spouse to claim the unused portion of the federal estate tax exemption of their deceased spouse and add it to the balance of their own exemption. The portability election went into effect for deaths occurring on or after January 1, 2011. 

To properly make the election, a surviving spouse must file a federal estate tax return within nine months of the date of a spouse’s death, although a six-month extension of time to file the return can be requested. Filing an estate tax return is required to make the election even if the value of the deceased spouse’s estate does not exceed the federal estate tax exemption.

A Portability Example:

The easiest way to understand how portability works is through an example.  Let’s say Carol and Bob are married, all of their assets are jointly titled with rights of survivorship, their total estate is valued at $4 million, and neither spouse made any taxable gifts during their lifetimes.  If Bob dies in 2015, none of his $5.43 million federal estate tax exemption will be needed since Carol will automatically inherit the entire estate through rights of survivorship.  In addition, a federal estate tax return will not otherwise be required for Bob’s estate since it is valued under $5.43 million.

Nonetheless, if Carol wants to pick up Bob’s unused $5.43 million exemption and add it to her own exemption so that she can pass on up to $10.86 million when she dies, she can timely file an estate tax return for Bob’s estate and make the portability election with regard to Bob’s unused exemption.

What is an Estate Tax Closing Letter?

An estate tax closing letter is a document drafted by the IRS after it determines that an estate tax return has been accepted as filed—or that all required adjustments have been completed.  In other words, the closing letter provides written proof from the IRS that all federal estate tax liabilities have been satisfied. An estate tax closing letter is often necessary to sell or distribute property.

New Rules for Issuance of Estate Tax Closing Letters:

Prior to June 1, 2015, the IRS automatically issued estate tax closing letters.  However, the IRS recently announced the following on its website in response to the increased number of federal estate tax return filings for the sole purpose of making the portability election: 

“For all estate tax returns filed on or after June 1, 2015, estate tax closing letters will be issued only upon request by the taxpayer.  Please wait at least four months after filing the return to make the closing letter request to allow time for processing.  For questions about estate tax closing letter requests, call (866) 699-4083.”

The portability election provides another strategy that estate planning attorneys can use to lessen the burden of death taxes on your family. Like any other tax or legal strategy, you should seek legal advice from an estate planning attorney to select the strategies that will work in your situation. If you have any questions about federal estate tax returns, the portability elections, or the new rules regarding the issuance of estate tax closing letters, please feel free to contact us.

If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.

How Will the 2015 Supreme Court Decisions Affect You and Your Family?

While approximately 10,000 cases are appealed to the U.S. Supreme Court each year, only 75 to 80 make it to oral argument.  Of those cases, only a minuscule few grab the media’s attention.  Below is a summary of three landmark decisions handed down in 2015 that could affect how you are taxed, pay for healthcare, and plan your estate.

Comptroller v. Wynne – A State Can’t Double Tax Income Earned Outside of the State:

Legal Issue:  Does Maryland’s state income tax scheme violate the U.S. Constitution by “double taxing” a resident’s income earned from economic activity in another state that also taxes the same income?

Decision, 5 – 4:  In a taxpayer-friendly ruling, the Supreme Court ruled that, yes, Maryland’s “double taxation” scheme violates the dormant Commerce Clause.

The Wynne case involved a Maryland couple who owned stock in a Maryland S corporation that did business in 39 states.  Since income generated by an S corporation is passed through to its shareholders, the Wynnes paid income taxes in Maryland as well as their pro-rata share of taxes on the income the corporation earned in the other states. 

In Maryland, residents are subject to a state income tax as well as a “local tax” based on the city or county in which they live.  Prior to the Wynne case, the state allowed residents to take a credit against the Maryland state tax to offset a similar tax paid to another state, but it did not allow a credit to be taken against the local tax.  Thus, income of a Maryland resident earned outside of the state was “double-taxed” by being subject to: (1) out-of-state taxes, and (2) the local city or county tax.  The Court struck down this “double taxation” scheme, holding that because the dormant Commerce Clause gives Congress power over interstate commerce, Maryland could not hinder interstate commerce by offering a credit against state income taxes but not against local income taxes.

Planning Tip:  The Wynne decision will potentially affect hundreds of cities, counties and states other than Maryland, including Indiana, New York, and Pennsylvania.  If you pay income taxes in your home state and other states, you should seek qualified tax advice regarding filing protective claims (such as amended returns or requests for refunds) for tax years in which the statute of limitations has not run.

King v. Burrell – Obamacare Subsidies Are Available to All:

Legal Issue:  Can the IRS provide tax-credit subsidies to healthcare coverage purchased through the federal healthcare exchange under the Patient Protection and Affordable Care Act (the “ACA,” commonly referred to as “Obamacare”)?

Decision, 6 – 3:  Yes, Obamacare subsidies are available to individuals who obtain their healthcare coverage through a federal exchange.

Buried in the 2,700-page ACA is a provision which states that tax-credit subsidies are available to individuals who sign up for healthcare coverage “through an exchange established by the state.”  After the ACA was passed, 34 states did not establish exchanges, leaving their residents to use the federal exchange to obtain their coverage.  The King case challenged the validity of federal subsidies given to these residents since the ACA appeared to limit subsidies only to individuals who relied on a state-established exchange.  Writing for the majority, Chief Justice John Roberts stated, “We doubt that is what Congress meant to do.”  Thus, the validity of subsidies claimed by residents of the 34 states that use the federal healthcare exchange was upheld.

Planning Tip:  Despite the King decision, the Obamacare debate will continue to be hashed out in the political arena as the 2016 presidential election fast approaches.

Obergefell v. Hodges – Same Sex Marriage is Legal Everywhere in the United States:

Legal Issue:  Does the Fourteenth Amendment of the U.S. Constitution require a state to license same sex marriages and recognize same sex marriages that are legally licensed and performed in another state?

Decision, 5 – 4:  Yes, same sex marriages are legal and must be recognized everywhere in the United States.

The Obergefell case consolidated four cases that challenged state-banned same sex marriages in Kentucky, Michigan, Ohio and Tennessee.  Relying on the Due Process and Equal Protection Clauses of the Fourteenth Amendment, the Court held that marriage is a fundamental liberty and denying the right of same sex couples to wed would deny them equal protection under the law.

Planning Tip:  Same sex couples who are considering marriage need to decide if commitments regarding how to handle money, debt, and related matters should be formalized in a prenuptial agreement.  Same sex couples who are already married need to determine if their prenuptial agreement should be fine-tuned and if their estate planning documents need to be amended in view of the King decision.

The Bottom Line on the Wynne, King and Obergefell Decisions:

There are constant changes in the law from judicial, legislative, or regulatory action. These selections from the recent Supreme Court session are just a small example of the numerous changes that occur every year. How the Wynne, King and Obergefell decisions will affect your planning options has yet to be fully determined. Our firm is available to answer your questions about these landmark cases and how they may affect you and your family.

If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.

5 Most Expensive States for Retirees in 2015

While there are many factors to consider when choosing the place where you will retire, the ones that will impact your wallet may be the most important.  Why?  Because having a low crime rate and beautiful weather will be irrelevant if high costs deplete your retirement nest egg faster than anticipated. 

Recently Investopedia.com compared cost-of-living and tax-rate data from Bankrate.com’s list of “Best and Worst States to Retire” and Kiplinger’s list of “10 Worst States for Retirement” to come up with their list of “The Most Expensive States to Retire In.”  We’ve added Genworth’s “2015 Cost of Care Survey” to the mix to come up with our five most expensive states for retirees when comparing cost of living, tax rate, and long-term care expenses (as listed in alphabetical order):

• Connecticut ranks #3 in tax rate and cost of living and #2 in long-term care expenses.  Along with a state estate tax, Connecticut is also one of only two states that collect a state gift tax (New York is the other).

• New Jersey ranks #2 in tax rate, #6 in cost of living, and #4 in long-term care expenses.  Along with a state estate tax, New Jersey is also one of six states that collect a state inheritance tax.

• New York ranks #1 in tax rate, #4 in cost of living, and #5 in long-term care expenses.  Along with a state estate tax, New York is also one of two states that collect a state gift tax (Connecticut is the other).

• Rhode Island ranks #8 in tax rate, #9 in cost of living, and #10 in long-term care expenses.  Rhode Island also collects a state estate tax.

• Vermont ranks #9 in tax rate, #10 in cost of living, and barely fell out of the top 10 by coming in at #11 in long-term care expenses.  Vermont also collects a state estate tax.

Final Thoughts on Where to Retire:

Each year the statistics on tax rates, cost of living, crime rates, health care expenses, and weather are sliced and diced to come up with various lists for those approaching retirement to consider.  But in the end the choice of where to retire is personal.  While the financial data may point you away from or to a particular location, staying close to your support system of kids, grandkids, other family members, and friends may be priceless.

No matter where you end up deciding to retire, you should obtain qualified estate planning counsel to make sure your plan will work when it’s needed. If you plan on relocating upon retirement, living part-time in another state, or traveling extensively, we encourage you to contact us, so that we can assist you with your estate planning needs.

If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.

Additional Resources:

15 Most Expensive States for Long-Term Care in 2015

15 Most Expensive States to Retire

Dispelling the Top 3 Estate Planning Myths

Like any other complex subject, estate planning has its share of myths and misconceptions.  Understanding the top three estate planning myths will help you to create and maintain a plan that will work the way you expect it to work when it’s needed.

Estate Planning Myth #1 – You Don’t Need an Estate Plan Because Your Spouse Will Inherit Everything:

A common belief is that if you’re married and you don’t have a will or a trust, your spouse will still inherit everything.  Unfortunately this is not always the case.  Who will inherit your estate even if you’re married depends on many different factors, including how your property is titled, who you have named on your beneficiary designations, and the laws of the state where you live and any other state where you own property.  The only way to insure that your spouse will inherit everything is to sit down with an experienced estate planning attorney who will help you create an estate plan that will meet all of your goals.

Estate Planning Myth #2 – You Don’t Need an Estate Plan Because Your Family Knows Your Final Wishes:

You’ve shared your final wishes with your family and you’re confident that they’ll “do the right thing” after you die.  Unfortunately, without having these wishes written down in a valid will or a valid trust, your family may not be able to fulfill your intentions for several reasons.  First, how your property is titled will determine who inherits it, not who you’ve told your family you want to inherit it.  In addition, if you fail to complete or update the beneficiary designations for assets such as bank accounts and life insurance policies, your family won’t have any authority to tell the bank or insurance company who should inherit the proceeds.  Finally, without an estate plan, the laws of the state where you live and any other state where you own property will dictate who inherits your probate estate, not your family.  The only way to insure that your property will go to your intended heirs is to sit down with an experienced estate planning attorney who will help you create an estate plan that will meet all of your goals.

Estate Planning Myth #3 – Once You Have Created Your Estate Plan—It’s Done:

Suppose that you’ve taken the time to sit down with an experienced estate planning attorney and create an estate plan that meets all of your goals.  You may think that now you can sit back and relax because your estate plan is done.  While this attitude may seem reasonable, unfortunately as the years go by your life and the laws governing wills, estates, probate, trusts, and death taxes will continue to change, which means that eventually your estate plan will become out of date.  The only way to insure that your plan will work the way you intend it to work is to pull it out of the drawer every few years and have it looked over by your estate planning attorney.

Final Thoughts About Estate Planning Myths:

These are only three of the top estate planning myths.  Unfortunately there are many more.  The only way to separate the myths from the reality and get a plan that will work for you and for your family is to retain the services of an experienced estate planning attorney.

If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.

What You Need To Know About The Latest Updates To Federal and State Estate Taxes

Death taxes are back in the news at both the federal and state level. Specifically, decoupled estate taxes effecting both Delaware and Minnesota.

What Happened to the Death Tax Repeal Act of 2015?

Back in February and March of 2015, identical bills calling for repeal of the federal estate tax and generation-skipping transfer tax were introduced in the U.S. House and Senate.  In April 2015 the U.S. House passed the “Death Tax Repeal Act of 2015” by a margin of 240 to 179.  While the votes were largely along party lines (233 Republicans voted for the bill, while 176 Democrats voted against it), seven Democrats ended up supporting the bill.

In spite of the Republicans’ majority in the U.S. Senate – there are currently 54 Republicans, 44 Democrats, and two Independents – the bill has stalled there.  Why?  Because Democrats have signaled that they will filibuster the bill, which means that at least 60 senators need to be in favor of repeal in order to overcome the filibuster.  Since the two independents – Sen. Angus King (ME) and Sen. Bernie Sanders (VT), who is actually running for U.S. President as a Democrat – caucus with the Democrats, Republicans will need six Democrats to change their minds and vote for repeal.  That’s a lot.  And even on the slim chance that this would happen, President Obama has repeatedly expressed his support of the estate tax and would undoubtedly veto the repeal bill if it ever came across his desk.

What’s Going On With Death Taxes in Delaware and Minnesota?

Delaware enacted an estate tax in 2009 with a $3,500,000 exemption.  Since then Delaware’s estate tax exemption has been indexed for inflation so that each year it matches the federal exemption.  Thus, in 2014 Delaware’s exemption was $5,340,000, and with a small population and such a high exemption, the state only brought in an insignificant $1,300,000 in estate tax revenues.  This has prompted the introduction of legislation to eliminate Delaware’s estate tax effective July 1.

Meanwhile, just last year Minnesota legislators tweaked their state’s estate tax laws by increasing the exemption from $1,000,000 to $1,200,000 and then increasing it in $200,000 increments on an annual basis so that it reaches $2,000,000 by 2018.  But apparently this was not enough because in May 2015 a bill was introduced that will increase Minnesota’s exemption to $5,000,000 by 2018, after which it will be indexed for inflation so that it matches the federal exemption.

Where Do We Go From Here?

Will any of these estate tax bills become law?  Only time will tell.  One thing is certain though - legislative changes can affect your estate plan and your estate tax bill. Please stay tuned as our firm continues to monitor both federal and state legislation that may affect your estate plan and your estate tax bill.

If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.

Caution: Your Traditional Asset Protection Plan is Set Up to Fail

You may be surprised to learn that not only has asset protection planning been around for a long time, but you have already engaged in it at some point during your life.  In fact, you probably have one or more types of traditional asset protection planning in place at this very moment.  The problem is in many cases the type of planning you have right now won’t be enough to protect you and your family.

What is Asset Protection Planning?

Asset protection planning is done to preserve and protect your property in advance of a claim, or the threat of a claim.  In other words, this type of planning will not be effective to shield your property from an existing claim.  Instead, it must be done long before there is even the hint of a claim.

The goals of asset protection planning are to provide an incentive for settling a claim, improve your bargaining position, offer options when a claim is asserted, and, ultimately, deter litigation.

What Is Traditional Asset Protection Planning, and Why Does It Often Fail?

There are several types of traditional asset protection planning that have been around for years.  The most common is liability insurance – automobile, homeowners, umbrella, officers and directors, malpractice, and the like.  You probably have at least one liability policy in place right now.  Unfortunately, liability insurance may actually encourage a lawsuit since it is perceived as “easy money.”  Aside from this, liability insurance often fails because the coverage is inadequate, the policies have extensive exclusions, or the carrier becomes insolvent.

Another common type of traditional asset protection planning is the use of a business entity, such as a corporation, to segregate business assets and liabilities from personal assets and liabilities.  But while a corporation may shelter your personal assets from a lawsuit filed against the corporation, the opposite is not true – if you, as the shareholder of a corporation, are personally sued, your shares of stock in the corporation are not protected from a judgment entered against you.  Of course, it is possible that if your corporation fails to observe certain formalities, then the “corporate veil” may be pierced and your personal assets will become vulnerable to a judgment entered against the corporation.

The final common type of traditional asset protection planning is established under state law and allows residents to exempt specific assets from the claims of creditors.  This may include protection for property owned jointly by spouses (“tenancy by the entirety” ownership), a primary residence (“protected homestead”), the cash value of life insurance, investments held in a retirement account, and annuities.  Nonetheless, these state exemptions are often subject to limitations, such as placing a cap on the value or land area of the protected homestead.

What Should You Do?

You may think that only wealthy people need to do advanced estate planning.  The truth is anyone who has accumulated any amount of wealth can be sued for just about any reason.  The only way to protect you and your family is to engage in more advanced forms of asset protection planning such as irrevocable trusts and sophisticated business structures.

This office can help you go beyond traditional asset protection planning by creating a comprehensive plan that will be custom-tailored to your family situation and financial status.  Please call today to arrange for your asset protection consultation.

If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.

The Shocking Truth About Asset Protection Planning

Some view asset protection planning with a skeptical eye.  They believe there is a moral obligation to pay one’s debts.  They think that asset protection planning is immoral because it prevents a creditor from collecting on a judgment entered by a court.
 
The truth is the U.S. justice system is unpredictable.  Defendants are faced with ever-expanding theories of liability, being sued just because they appear to have “deep pockets,” and judgments entered against them based on desired outcomes instead of the law.

What, then, can you do that will ethically and legally protect your hard-earned assets from creditors, predators, and lawsuits?

What Asset Protection Planning Is, and What it Is Not:
The first step in protecting your assets is to understand that planning to preserve and secure your property in advance of a claim, or the threat of a claim, is a legitimate form of wealth planning. A few of the goals of asset protection planning are to:

1. Provide your creditor with an incentive for settling a claim;

2. Improve your bargaining position;

3. Offer you options when a claim is asserted; and

4. Ultimately, deter your creditor from filing that lawsuit.

On the other hand, asset protection planning is not about avoiding taxes, keeping secrets, hiding assets, or defrauding creditors.  In addition, it will not be effective to shield your property from an existing claim, and it must be done long before there is even the hint of a claim. 

When Done Right, Asset Protection Planning is Completely Legal and Ethical:
Using all legal tools available to help clients protect their hard-earned assets from future claims is consistent with the rules of professional conduct that govern the actions of attorneys.  In fact, these rules require attorneys to pursue representation of their clients with diligence and advocacy.  What these rules do not allow, however, is assisting or counseling a client in fraudulent or criminal conduct.  Therefore, you must be wary of an attorney who offers to assist you in protecting your property after a lawsuit has already been threatened or filed.  This type of conduct is not ethical or legal.
  
The Final Truth About Asset Protection Planning:

While you may drive carefully and steer clear of barroom brawls, unfortunately you cannot avoid all activities that create liability.  Putting together a plan to preserve and protect your assets in advance of a claim is a completely acceptable and, more importantly, legal form of wealth planning.

We are experienced at helping clients design and implement asset protection plans that are custom-tailored to each client’s family situation and financial status.  Please call us if you have any questions about this type of planning and to get started on protecting your assets from future creditors, predators, and lawsuits.

If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.

A Member Of My Family Just Died—What Do I Do Now?

After a loved one or family member passes away, it is not only difficult from an emotional standpoint, but can become an administrative nightmare. You need to gather many important documents, which are necessary to settle his or her estate.  While the documents required will vary depending on what your loved one owned and owed, below is a list of common documents you will need to find:

1. Account statements – These may include bank statements and investment account statements (including brokerage accounts, IRAs, 401(k)s, 403(b)s, annuities, pensions, and health savings accounts).  The closer to the date of death that the statement is dated, the better.

2. Life insurance policies – If you are not sure if your loved one owned any life insurance, check their bank account ledger for checks written to a life insurance company.  Because some people choose to pay life insurance premiums on an annual basis, rather than a monthly basis, you might need to look back some time in the check register. If your loved one was employed at the time of death or worked for a large corporation, a local or state government, or the federal government prior to retiring, check with their employer or former employer to determine if your loved one had any employer-provided or government-provided life insurance benefits.  If your loved one served in the U.S. military, check with the U.S. Department of Veterans Affairs to find out if your loved one had any military-based life insurance benefits.

3. Beneficiary designations – These may include beneficiary designations for life insurance, retirement accounts (IRAs, 401(k)s, 403(b)s, annuities), payable on death accounts, transfer on death accounts, and health savings accounts.

4. Deeds for real estate – If you are unable to locate the original deed, many states now allow you to view and print deeds online.  Note that you will not need the original deed to sell the property. 

5. Automobile and boat titles – If you are unable to locate the original title, a duplicate original can be ordered from the department of motor vehicles.  Alternatively, some states will allow the transfer of a vehicle title without the original for an additional fee.

6. Stock and bond certificates – This may include corporate certificates, local and state bonds, and U.S. savings bonds.  If you are unable to locate an original certificate, a lost certificate affidavit can be filed by the deceased person’s legal representative.

7. Business documents – If your loved one owned a small business, then you will need to locate all of their business-related documents, including bank and investment statements, corporate records, income tax returns, business licenses, deeds for real estate, loan documents, contracts, utility bills, and employee records.

8. Bills – This will include utilities (electric, gas, water, sewer, garbage), cell phones, credit cards, personal loans, property taxes, insurance (real estate, automobile, boat), storage units, medical bills, and the funeral bill.  Check their checkbook for bills that were paid during the past year.

9. Estate planning documents – This may include a Last Will and Testament, any Codicil(s) to the will, a Revocable Living Trust, and any Amendment(s) to the trust.

10. Other legal documents – This may include a Prenuptial Agreement and any Amendment(s), a Postnuptial Agreement and any Amendment(s), leases (real estate, automobile), and loan documents (personal loans, mortgages, lines of credit).

11. Tax returns – This should include gift tax returns and the past three years of state and federal income tax returns.

12. Death certificates – It is a good idea to order at least ten (10) original death certificates so that you do not have to keep ordering more.

As you can see, a significant amount of paperwork is involved. For even a small estate, you should set up a filing system for the deceased loved one’s affairs. This can help ensure that nothing gets missed and that administration costs can be minimized.

If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.

Where is the Best Place to Store Your Original Family Legacy Protect Planning Documents?

Estate planning attorneys are often asked where original estate planning documents – wills, trusts, powers of attorney, and healthcare directives – should be stored for safekeeping.  While there is no right or wrong answer to this question, consider the following:

1. Should you store your original estate planning documents in your safe deposit box?  Many people may believe that the best place to store their original estate planning documents is in their safe deposit box at the local bank.  This may make sense if you have given your spouse or a trusted child, other family member, or friend access to your box.  However, since a safe deposit box is a rental arrangement (you are leasing the box from the bank), if you are the only one who signed the lease and you become incapacitated or die, no one else will be able to open your box.  Usually the only way for someone else to gain access to your box if you become incapacitated or die is to obtain a court order, which wastes time and money.  If you are not comfortable giving someone else immediate access to your box, many banks will allow you to add your revocable living trust as an additional lessee, which will give your successor trustee access to your box if for any reason you can no longer serve as trustee of your trust. 

2. Should you store your original estate planning documents in your home safe?  Home safes are popular these days, but in order for yours to be a good place to store your original estate planning documents, it should be difficult to move (bolted to the floor!), fire-proof, and water-proof.  In addition, make sure someone you trust has the combination to your safe or will easily gain access to the combination if you become incapacitated or die.

3. Should you ask your estate planning attorney to store your original estate planning documents?  Traditionally, many estate planning attorneys offered to hold their clients’ original estate planning documents for safekeeping (usually without charging a fee). Today most don’t want to take on the liability.  In addition, as the years go by, it may become difficult for family members to track down your attorney, who could change firms, become incapacitated, or die. 

4. Should you ask your corporate trustee to store your original estate planning documents?  If you have named a bank or trust company as your executor or successor trustee, this may be the best place to store your original estate planning documents.  This is because banks and trust companies have specific procedures in place to insure that your original estate planning documents are stored in a safe and secure area.  If you choose this option, make sure one or more of your family members know where your original documents are located.

Regardless of where you decide to store your original estate planning documents, make sure your family members, a trusted friend or advisor, or your estate planning attorney know where to find them.  Otherwise, if your original documents can’t be easily located, then it may be legally presumed that you no longer liked what they said and purposefully destroyed them.

If you want to ensure that your family is cared for, please click here to schedule your complimentary Estate Planning Strategy Call with San Francisco’s premier estate planning attorney, Matthew J. Tuller.