Lessons for Family Legacy Protection Planning—The Tragic Loss of Star Trek’s Anton Yelchin

On June 19, 2016, when successful actor Anton Yelchin (Chekov in the recent Star Trek movies) failed to show for rehearsal, his friends became worried and drove to his house. Sadly, they found Yelchin pinned between his security fence, brick mailbox, and Jeep Grand Cherokee.

According to investigators, the 27-year-old star exited the vehicle before it allegedly rolled backwards down his steep driveway, pinning, and ultimately killing the Star Trek actor. Los Angeles County Coroner Assistant Chief Ed Winter stated the cause of death was “accidental blunt traumatic asphyxia.” Two days later, Fiat Chrysler released a statement informing the public of an investigation to determine whether a gear shift defect could have been to blame for the accident.

In June 2016, the manufacturer reported that this defect could be responsible for as many as 266 auto accidents. Back in April 2016, the manufacturer issued a recall for nearly 500,000 2014 and 2015 Grand Cherokees, as well as other models due to an allegedly dangerous design error in the electronic shifters. Until Yelchin, no deaths had been linked to the issue.

Following Yelchin’s death, several Jeep owners took steps to file a class action lawsuit against Fiat Chrysler, alleging that the drivers suffered economic losses in the aftermath of the tragic accident. According to the lawsuit, plaintiffs claim that Fiat Chrysler knew about the shifting device’s possible defect for at least two years but hid this knowledge from the public, a decision that allegedly resulted in dozens of reported injuries and possibly Yelchin’s death.

Estate Planning Lessons: What Happens if You Pass Away Unprepared?

When you’re in your 20’s and 30’s and in good health, it’s easy to feel invincible and to justify deferring estate planning. Why worry about a long-term financial strategy and your “legacy” if you’re just getting a toehold in your industry?

Yelchin’s tragic situation highlights the fact that we are all – young and healthy, old and infirm alike – vulnerable to events outside our control. Establishing even a rudimentary plan is better than having nothing.

Details have yet to emerge about whether the actor had estate planning documents in place. However, actors who suddenly vault to success via high profile movie and TV roles as well as business owners who experience dramatic surges in income should reevaluate their plans frequently, especially during and after periods of major career growth and contraction.

Depending on the nature of your income surge, you might need focused, specialized planning to minimize tax consequences. Likewise, when your life or business goes through big inflection points, it can help to rethink your long term financial strategy just as a way to clean up the “open loops” in your life – to eliminate background distraction, so you can concentrate more on what’s important and what you love to do.

Failing to establish, amend, or revise a trust or will as your life changes can create needless risks. While no lawsuits appear to have been filed yet by Yelchin’s heirs, a properly drafted, up-to-date estate plan can make it easier for a family to hold those responsible for the death of a loved one accountable. In addition, the clarity created by such a plan helps keep family members concentrated on meaningful and important work, such as consoling children left behind and supporting one another emotionally, rather than potentially distracting legal issues.

While drafting a trust or a will does require skill and thoughtfulness, an experienced estate planning lawyer can take the emotional charge out of this process, simplify it greatly for you, and ensure an enduring legacy for the next generation. 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.

Stress Test Your Estate Plan

So you’ve done the hard work of establishing an estate plan. Good for you. However, you still have serious work to do to ensure that the strategy you’ve selected will maximize your peace of mind and protect your legacy.

Estate plans are living, breathing creations. Your life can and will change due to new births, children getting older and other shifts in the family; changes to your portfolio, career and business; and changes to your health, where you live and your core values. Likewise, external events, such as tax legislation passed in your state or the development of a novel financial instrument, can throw your plan off track or open the door to opportunities.

Obviously, you want to do due diligence without spending inordinate amounts of time noodling over your plan. To that end, ask yourself the following “stress test” questions to assess whether you need to meet with an estate planning attorney to update your approach:

1. When was the last time you updated your will or living trust? Since then, have you had new children or gotten divorced? Have you moved to a new state, opened or sold a business, or just changed your mind about the type of legacy you want to leave behind? Strongly consider updating your documents as soon as possible - especially if big, tangible life events have occurred.

2. Who have you named as executor and trustee? If you had to start your planning over from scratch today, would you still make the same decisions? If not, why not?

3. Do you have adequate insurance? Many people do not have enough insurance for themselves or their businesses. They also fail to name contingent beneficiaries. Get your insurance policies in order.

4. How much of your property is jointly owned with someone other than your spouse? Jointly owned property has the potential to be double taxed. Take a look at your real property and seek advice on the proper adjustments to make in order to save on taxes when it's really necessary to save on taxes.

5. How's your record keeping? Nothing is more frustrating for an executor than sloppy record keeping.

6. When was the last time you gave your plan a thorough once-over? Even if nothing “huge” has happened in your life recently, if it has been over five years since a qualified estate planning attorney has assessed your strategy – it’s time to schedule a meeting. Identify any issues and iron out the kinks one at a time.

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 To Do When a Disability Throws Your Estate Plan Into Chaos

As poet Robert Burns mused centuries ago," The best-laid plans of mice and men often go awry." Despite thoughtful effort and a concerted strategy, you cannot prepare for every emergency. A car accident, sudden illness, workplace injury or chronic medical condition can force you to re-evaluate the core assumptions you used to plan your future and set up your legacy.

A 2015 report published by the Centers for Disease Control and Prevention (CDC) offered this sobering assessment: “In 2013, approximately one in five U.S. adults reported a disability, with state-level prevalence of a disability ranging from 16.4% in Minnesota to 31.5% in Alabama.” The CDC also reported that “annual disability-associated health care expenditures were estimated at nearly $400 billion in 2006, with over half attributable to costs related to non-independent living (e.g., institutional care, personal care services).”

Frustrating as it is. you can't turn back the clock. However, you can take meaningful actions to protect your legacy and estate in the wake of your newfound limitations. Here are some insights to that end:

Work with a qualified estate planning attorney to ensure the following:

●   There’s an authorized person to make financial and healthcare decisions for you if you become mentally or physically unable to do so yourself.

●    There’s also an authorized person to manage your property, pay your bills, file your taxes and handle similar business if you’re unable to do these tasks.

●    Your wishes about health care decisions, such as end of life care and do-not-resuscitate instructions, have been communicated in a legally valid and binding manner.

Get a recommendation from your estate planning attorney or your financial advisor, who can help you take additional actions, such as:

●    Ensuring that you have appropriate insurance.

●    Reassessing your investment options and portfolio in light of your new limitations and constraints on your ability to generate income.

●    Making sure that you have a budget that works and that your bills will all get paid on time.

Mind this important distinction:

Be advised that “disability” for legal purposes is different than “disability” for financial planning purposes.

For example, disability for financial purposes might mean you can’t work gainfully anymore because of cancer or a workplace injury. On the other hand, “incapacity” in an estate planning context typically means that a person is no longer capable of making sound decisions, often due to systemic illness or injury. 

In other words, you can be “disabled” for financial/insurance purposes and be non-disabled for legal purposes. However, almost anyone who is disabled for legal purposes would also be considered disabled for financial purposes.

Either way, it’s important for us to work together with your financial advisor to make sure you and your family are fully protected.

Take these actions on your own:

 1. Pay attention to where your money is going, as well as to your long term planning strategy. Your estate planning attorney can help you assess whether your current plans are still realistic and, if not, what alternative options you have.

2.  Maintain a healthy lifestyle. For instance, cut down on added sugars and refined vegetable oils and be sure to eat enough vegetables, protein, and healthy fats.

3. Get the help you need from trusted professionals. Now is the time to tap your friends and family and network for assistance with the heavy lifting. No single advisor will have all the answers. But, your team can work in concert to reduce the anxiety and uncertainty and keep you focused on what really matters.

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.

4 Famous Estate Planning Debacles—The Importance Of Proper Planning

These four celebrity estate planning fiascos offer lessons about how to handle your own planning and legacies.

1. Pablo Picasso – The great artist died in 1973 at 91 without a will, a status referred to as “intestate.” Of course, Picasso isn't the first, or the last, celebrity to die intestate. However, after he died, his six heirs fought for six years over the wealth of assets he left behind. One lesson for us all: Make sure you have your estate planning documents in place before you go. 

2. Heath Ledger – It was a huge surprise, and disappointment, to millions of adoring fans when Heath Ledger died in 2008 at the age of 28. He did leave a will. Unfortunately, he didn't update the will after the birth of his daughter. Fortunately for his daughter, the family decided to include her in the inheritance, which proves that sometimes people do the right thing. But what if his family had insisted instead on the terms of Heath’s will?  One lesson for us: When there’s a big change in your family situation (or when you have a life changing epiphany about your core values and legacy), update your plans accordingly. Do not assume that just because you’re young and healthy that you will have lots of time to get things in order. Do not assume that, since you have a plan in place, it will automatically update to match your current desires and needs.

3. Philip Seymour Hoffman – Actor Philip Seymour Hoffman didn't want his children to grow up as “trust-fund babies.” Fair enough, but he decided to leave his inheritance with his girlfriend, counting on her to care for his children on his behalf. The problem: there was no guarantee that would happen. Since the two weren't married, Hoffman's estate was hit with a huge tax. One lesson for us: A trust that includes your guidance about the proper use of the funds is better than hoping for the best with one that leaves your wishes undefined.

4. Tom Clancy – Author Tom Clancy left behind a huge fortune, but his estate planning documents weren't clear about some of the important details. These issues led to drama for family members. One lesson for us: the more complicated your family, your assets, and your business dealings are, the more accurate, precise, and proactive you need to be in working with us on your estate plan.

Whether you’re just starting to explore the need for estate planning or you’re a seasoned veteran with a well-worn trust binder, we should all remember a few key points:

1. Have estate planning documents in place, even if you’re young and healthy and think you’ll have plenty of time to get things in order later.

2. When there’s a change in your family situation (marriage, birth, or death) or if you’ve changed your mind about something, update your plans accordingly. Do not assume that since you have a plan in place, it will automatically update to match your current desires and needs.

3. Provide guidance to your family about how you would like them to use their inheritance. Do not rely on hope or verbal instructions. The best place for guidance is in your trust or in an intent letter that can help your trustee manage your trust.

4. If you’re well-off or have complex assets, you need to work with your estate planning attorney in a more proactive way to avoid potential missteps while still achieving your goals.

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.

3 Tips for Your Digital Assets—Protecting Your Cyber Legacy

There’s an entire category of commonly-overlooked legacy to consider – digital assets. Don’t worry if you didn’t consider these assets when you made your will or trust. It’s surprisingly common and, luckily it’s easy to correct.

What are digital assets? They include the following:

1.  Your photos (yes, all those selfies are a digital asset)

2. Files stored in the cloud or on your local computer

3. Virtual currency accounts

4. URLs

5. Social media profiles (Facebook, LinkedIn, etc.)

6. Device backups

7. Databases

8. Digital business documents

Because technology is ever-evolving, much more will be added as the months and years go by.

These assets can have real value, such as virtual currency accounts, a URL, or digital business assets. So, you can no longer adopt a wait-and-see approach for these assets. Whether you proactively plan or not, your legacy now includes more than the inheritance you want to pass along, your family heirlooms, and general assets. You must now consider your digital assets.

 So, here are 3 tips to get you started.  

1. Inventory your digital assets. Make a list of every online account you use. If you run a business, don't forget spreadsheets, digital records, client files, databases, and other digital business documents, although those should probably be part of your business succession plan. If it exists in cyberspace, connects to it or pertains to it, put it on the list for your attorney and executor.

2. Designate a cyber successor. A cyber successor is someone you trust who can access your accounts and perform business on your behalf after you are gone or in the event you are incapacitated. Make sure they can access your accounts in a timely manner. Safeguard your list, so that it doesn't end up being vulnerable to unauthorized access, identity theft, or data loss.

3. Determine the necessary documents for your estate, and make a record of your wishes. You may want to put some of your digital assets into a trust or even include specific access in a power of attorney. Consult with an estate planning attorney to determine the best way to determine your successors, trustees, and beneficiaries, and then make sure the right documents or designations are in place so access can be made when it’s needed. The laws in this arena are evolving, so any planning you’ve done in the past probably needs an update.

Potential Pitfalls of Cyber Estate Planning

The worst thing you can do is nothing. This could result in the loss of digital family photo albums or disruption of your business if you’re incapacitated. If this process feels daunting or you’re still not sure where or how to start, give us a call. We can help you identify, track, and protect your digital assets to give you peace of mind.

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.

Act Now! Avoid New IRS Regulations That Might Raise Taxes on Your Family’s Inheritance

The IRS recently released proposed regulations which effectively end valuation discounts that have been relied upon for over 20 years. If the IRS’s current timetable holds, these regulations may become final as early as January 1, 2017. Although that date isn’t set in stone, I expect that the regulations will be final around that time or shortly thereafter.

With New Regulations Looming, What Should You Do Now?

As I mentioned before, the timetable isn’t set in stone. Luckily, there’s still a narrow window of time to implement “freezing” techniques under current, more favorable law, to save taxes and protect your family’s inheritance.

Depending on your circumstances, some options are going to be a better fit than others, and I want to make sure you get the best outcome possible. Some of these “freezing” techniques involve the use of a family business entity to own and operate your family fortune, in combination with one or more special tax-saving trusts. These plans provide numerous benefits including asset protection, divorce protection, centralized management of assets, and more – in addition to the tax savings.

Unfortunately, these types of plans can take 2-3 months to fully implement and time is running short.

So, here’s your action plan:

1. First, schedule an appointment with me as soon as possible. I’d like to get a time on the calendar so that I can take a look at the options that are available to you under current law between now and the end of this year.

2. Second, find your estate planning portfolio and take a look at it. If I prepared your plan, you’ll have a graphic that represents your current plan, making it easy to review. (If you can’t find it, let me know and I will send you another one.) If someone else prepared your plan, you might have a graphic summary or some other type of summary. Regardless of who prepared your plan, now’s a great time to review your plan. When we meet, I want to make sure that anything we do to help you protect your family’s inheritance from the IRS still achieves your overall planning goals - and not just the tax-saving goals.

Our firm is available to assist you with the immediate implementation of your wealth transfer plan using valuation discounts that are still available under current law.

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.

Updating Your Revocable Trust: How Many “Tweaks” Are Too Many?

If your life or the law has changed since you signed your trust, it needs to be updated. Updates can be made by way of an amendment or a complete restatement. An amendment updates a specific part of the trust; whereas, a restatement, updates the entire trust.

You might think that an amendment would cost less than a restatement, but that’s not necessarily true. Let’s briefly discuss which option is best for you.

Amendments v. Restatements: Which Is Better?

Imagine a recipe card you’ve used for years. If one or two provisions have been crossed out and replaced, the card may still be readable. However, if many provisions have been altered, the recipe is likely confusing. If your loved ones can’t read your instructions and determine whether to add a cup of flour or of sugar, your recipe won’t work. You’ve got a fifty-fifty chance for a great dish—or a complete disaster.

The same can be said about revocable trust. Making one or two amendments is generally acceptable, but when revisions are numerous or comprehensive, your instructions may become confusing and you may be better served with a restatement.

Although amendments are generally used to make smaller changes and restatements are used for larger ones, there’s no bright line rule when it comes to amending or restating a revocable trust. A general guideline to follow is that anytime you’re making more than two changes, restatements are likely better as they:

1.Foster ease of understanding and administration;

2.Tend to avoid ambiguity;

3.Reduce the amount of paperwork to retain and provide to financial institutions / parties;

4.Decrease the risk of misplacement;

5.Prevent beneficiaries from discovering prior terms; &

6.Provide an opportunity to provide other relevant updates, such as changes in the law

In many cases, a restatement may actually be more cost effective than amendments. This is especially true today as computer software allows estate planning attorneys to create and retain documents easily and efficiently. Fortunately, today, you pay for legal counseling, not typing.

Have Questions About Updating Your Trust? We Can Provide Answers:

Before deciding whether to amend or restate, it’s important to determine whether previous changes have inadvertently altered your intent or might adversely affect how the trust is administered. We’ll help make your instructions clear.

Have questions? If you do, that’s normal. We can provide you with answers. Whatever your circumstances, rest assured that we can help you to determine the best way to update your trust.

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.

Do You Update Your Resume More Often Than Your Estate Plan?

A resume is really just a snapshot of your experience, skill set, and education. It provides prospective employers insight into who you are and how you will perform. Imagine not updating that resume for 5, 10, or even 15 years.

Would it accurately reflect who you are? Would it do what you want it to do? Likely not.

Estate plans are similar in that they need to be updated on a regular basis to reflect changes in your life so they can do what you want them to do.

Outdated estate plans—like outdated resumes—simply don’t work.

Take a Moment to Reflect:

Think back for a moment. Consider all of the changes in your life. What’s changed since you signed your will, trust, and other estate planning documents? If something has changed that affects you, your trusted helpers, or your beneficiaries, your estate plan probably needs to reflect that change.

Here are examples of changes that are significant enough to warrant an estate plan review and, likely, updates:

1. Birth

2. Adoption

3. Marriage

4. Divorce or separation

5. Death

6. Addictions

7. Incapacity/disability

8. Health challenges

9. Financial status changes—whether good or bad

10. Tax law changes

11. Move to a new state

12. Family circumstances changes—whether good or bad

13. Business circumstances changes—whether good or bad

Procrastination:

If you’re like most people, if updating your estate plan is on the calendar, you’ll make it happen. Just as you update your resume on a regular basis and just like you meet with the doctor, dentist, CPA, or financial advisor on a regular basis, you need to meet with your estate planning attorney on a regular basis as well.

Our office can help to ensure that your estate plan reflects your current needs and those of the people you love. Updating is the best way to make sure your estate plan will actually do what you want it to do.

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.

Wondering Whether You Need to Update Your Estate Plan?

In short, the answer is yes. It’s unrealistic to think that a piece of paper you draft, reflecting your life at a certain time, will work when your life has completely changed some years later. We’ll use the Thompson family as an example.

Meet the Thompson’s:

Meet Bill and Karen Thompson. They got their first estate plan in place when their daughter, Jessica was born 30 years ago. They updated it when their son Steve came along 4 years later. They attended one of our living trust seminars 10 years ago and got a fantastic trust-based plan in place, protecting themselves, their children, grandchildren, and dog, Beacon.

Unfortunately, the Thompson’s didn’t join a client maintenance program; instead, they elected to take on the responsibility of calling for updates themselves. Life got busy and, as you might guess, that didn’t happen.

Here’s what’s changed in their lives in the last 10 years. Jessica and Steve are now adults and through college.

1.      Jessica has married and now had two daughters. One of the girls may have autism.

2.      Steve is also married and is expecting his first child.

3.      Karen’s mother is now living with them.

4.      They bought a vacation home in Florida.

Do you think their estate plan will still work the way they want it to?

Changes in Your Own Life:

The Thompson’s have experienced a lot of changes, but those changes might be typical of what 10 years brings. Think about the changes in your life over the past 10 years—or—since you last updated your estate plan.

Here are some questions that if answered yes, should lead you towards updating your estate plan.

1.      Have you moved?

2.      Do you have more children or grandchildren?

3.      Have you started a business, suffered health problems, or purchased a new home? Do you have  new accounts and investments?

4.      Do you now care for a parent, pets, or dependent children?

5.      Have you remarried, gotten divorced, or retired?

6.      Has someone you loved died?

7.      Have friends named in your plan as trusted helpers moved away or has your relationship changed?

8.      Are your children now adults and able to help you?

9.      Do you want to help with grandchildren’s college or dance lessons?

10.  Do you see the world in a different way?

Many things have happened in the past 10 years. Your estate plan needs to reflect the changes in your personal life, financial situation, and goals. There have also been changes in the law and we continuously learn to protect our clients in better and better ways, so the way we do things has changed.

Is Your Estate Plan Out-of-Date?

If you’ve experienced changes like the Thompsons or it’s been more than 3 to 5 years since you updated your estate plan, it’s time to come in. We’ll review your plan and chat with you about what’s been happening in your life, so we can get you and your estate plan up-to-date, reflecting where your life is now.

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 Critical Reasons to Update Your Estate Plan

Estate plans are almost magical: they allow you to maintain control of your assets, yet protect you should you become incapacitated. They take care of your family and pets. And, if carefully crafted, they reduce fees, taxes, stress, and time delays. Estate plans can even keep your family and financial affairs private. But one thing estate plans can’t do is update themselves.

Estate plans are written to reflect your situation at a specific point in time. While they have some flexibility, the bottom line is that our lives continually change and unfold in ways we might not have ever anticipated. Your plan needs to reflect those changes. If not, if will be as stale as last week’s ham sandwich and can fail miserably.

If anything in the following 5 categories has occurred in your life since you signed your estate planning documents, call us now to schedule a meeting. We’ll get you in ASAP to make sure you and your family get protected.

1. Marriage, Divorce, Death. Marriage, remarriage, divorce, and death all require substantial changes to an estate plan. Think of all the roles a spouse plays in our lives. We’ll need to evaluate beneficiaries, trustees, successor trustees, executors/personal representatives, and agents under powers of attorney.

 2. Change in Financial Status.  A substantial change in financial status – positive or negative – generally requires an estate plan update. These changes can be the result of launching, winding down, or selling a business; business and professional success; filing bankruptcy; suffering medical crisis; retiring; receiving an inheritance; or, even winning the lottery.

 3. Birth, Adoption, or Death of a Child / Grandchild. The birth or adoption of a child or grandchild may call for the creation of gifting trusts, 529 education plans, gifting plans, and UGMA / UTMA (Uniform Gifts to Minors Act / Uniform Transfers to Minors Act) accounts.  We’ll also need to reevaluate beneficiaries, trustees, successor trustees, executors/personal representatives, and agents under powers of attorney.

 4. Change in Circumstances. Circumstances change. It’s a fact of life - and when you’re the beneficiary or fiduciary of an estate plan, those changes may warrant revisions to the plan. Common examples include:

1. Children and grandchildren attain adulthood and are able to serve in trusted helper [fiduciary] roles;

2. Relationships change and different trusted helpers need to be named;

3. Beneficiaries or trusted helpers develop overspending or drug / gambling problems;

4. Guardians, executors, or trustees are no longer able (or no longer wish) to serve in their preassigned roles;

5. Beneficiaries become disabled and need a special needs trust to receive government benefits; and/or

6. Guardians for minor children divorce, move to a new state, or are, otherwise, no longer appropriate to serve.

5. Changes in Venue.  Moving from one state to another always warrants estate plan review as state’s laws differ. Changes may be needed to ensure that you’re taking full advantage of – and not being penalized by – your new state’s laws. This is also true when purchasing a second home outside of your state. 

Estate Plans Are Created to Help, Not Hurt, You:

Old estate plans get stale just like old sandwiches do. You wouldn’t rely on last week’s ham sandwich for lunch; please don’t rely on your estate plan from yesteryear. If you’ve experienced any of the changes we’ve mentioned in this article, it’s time to come in and chat.

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.