Why Factoring Long-Term Care Into Your Estate Plan Pays Off

For most people, thinking about estate planning means focusing on what will happen to their money after they pass away. But that misses one pretty significant consideration: the need to plan for long-term care.

The last thing any of us want to contend with when a health issue arises later in life is having to throw together a hasty estate planning solution in the face of mounting medical costs. Your best defense is careful planning with the help of a trusted expert.

Why it’s so important to plan for long-term care:

While only about 19 percent of current U.S. residents will need to reside under long-term care for a period of over three years, that number sharply increases when factoring in nursing home stays of a shorter duration — which will still have a substantial impact on your estate.

Whether the care you need takes place in a nursing home, assisted living facility, or with an in-home provider, the costs can mount with alarming speed. For example, national average rates for assisted living hover around $3,500 per month. As those costs add up, you could see your assets dwindle much sooner than you’d hoped. Luckily, estate planning attorneys can help in several ways.

What to go over with your estate attorney:

If long-term care isn’t factored into your estate plan, you are probably not looking at a truly realistic and accurate representation of your assets. Talk to your estate planning attorney about the following factors in order to get on the right track:

1. Set reasonable expectations for long-term care:

It’s impossible to know what life will bring, but we can certainly make educated guesses. For example, are there any major diseases that run in your family? There is a chance you will have the good fortune of staying healthy well into your golden years, but estate planning is an aspect of your financial life in which it’s helpful to protect yourself against worst-case scenarios.

In the estimated likelihood that you will require such care, at what age could you reasonably predict you’ll need it? Do you have any current health conditions to consider? Exploring these possibilities may not be the most enjoyable exercise, but it’s far better than facing the reality of long-term care with no plans in place.

2. Consider a long-term care insurance policy:

As Medicare or standard health insurance may not cover your costs, a long-term care insurance policy is one way to protect yourself against draining your financial assets. Ask for resources for finding an affordable premium that isn’t likely to increase prohibitively over time. Begin this process as soon as possible, as your premium will be lower the younger you are when you apply.

Another potential oversight is assuming your long-term care will be covered by Medicaid. Discuss it as an option to determine your qualifications and get authoritative insights about the specificities of your unique financial situation in terms of Medicaid benefits.

3. Get Smart About Living Wills and Trusts:

To best prepare your loved ones for complex medical decisions, go over advance directives. In addition, discuss options for setting a revocable living trust, and possibly one or more irrevocable trusts, like a life insurance trust or a charitable remainder trust, as part of your long-term care planning.

It’s also important to create a plan that allows someone you trust to access and utilize your financial resources for your benefit in the event of unforeseen medical circumstances. One common mistake is tying up assets in investments that lack liquidity when you need them most. For example, money locked into annuities can result in a fee for early withdrawal. Working with a team of that includes an estate planning attorney, financial advisor, and insurance professional can provide you and your family with the best overall solution.

Take the time now to talk to an estate planning attorney about the best ways to maintain financial security in tandem with the demands of long-term care. Even if you don’t end up needing long-term care in you lifetime, you can enjoy the peace of mind knowing you’ll be covered.

The process of completing a long-term care plan may sound daunting, but we’re here to help you by making it a streamlined experience—simply get in touch with us today and let us put you in a more secure position for the future. 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.

‘Till Death Do Us Part: Estate Planning Tips for Commitment Without Marriage

Advice columnist Ann Landers once observed that “love is friendship that has caught fire.” If that’s true, there are thousands of ways for that blaze to unfold. For many Americans, such devotion and passion do not need to be neatly formalized as marriage.

In fact, our cultural norms are shifting, and quickly. Consider following:

1. Per the U.S Census Bureau, approximately 112 million people in the U.S are unmarried;

2. 45 percent of our county's households are "unmarried households"

3. In 2013, CDC found that "cohabitation [without marriage] is now a regular part of family life in the U.S."

Unfortunately, the law has not kept up with these societal trends. While it is normal for laws to progress more slowly the progress of societal norms, if you and your partner love each other but don’t want to tie the knot, you need an estate plan that considers your specific situation. This will ensure that you are both protected, while also protecting your family members and other loved ones that you wish to include.

Estate planning for married couples can seem straightforward, because it relies on long-standing, proven legal and tax strategies. Unmarried couples, however, may need to take a more individualized approach in order to achieve their goals. Here are some of the documents and methods you need to consider when creating or updating an estate plan. 

1. Revocable Family Trust:

The Revocable Family Trust allows you to use your assets while you are alive and then bypass the probate process when transferring property to loved ones after you die. Such a trust can also keep your business out of the public record, and it can empower someone else to handle your finances if you become unable to do so. Even though trusts tend to cost more up-front than related solutions, the benefits they provide cannot be easily or reliably replicated with other planning options. On balance, a trust is the superior tool for virtually everyone; it should be the cornerstone of almost any comprehensive plan, especially for couples who have not formalized their relationships with a legal marriage.

 2. Pour-Over Wills:

A pour-over will can be an effective “backup” and compliment to a revocable trust. When you die, your assets get funneled into (or “poured-over” into) your trust and then distributed to your beneficiaries per the terms and instructions of that trust. The pour-over will keeps things simple, making the process less stressful (and prone to error) for your executor and trustee. It also helps wrap up loose ends, in case you didn’t transfer every single asset to your trust before you die.

What happens if you die without a will or other estate plan? Courts refer to this as “dying intestate,” and it means that the rules that will apply to your estate will be those written into your state’s laws. These laws rarely, if ever, account for long-term unmarried partners, so a will is essential to protect the person to whom you are committed. As an unmarried couple, you simply cannot rely on the intestate laws to work for you.

3.  Beneficiary Designations:

 Most retirement accounts and many other types of accounts allow you to designate a “beneficiary,” or a person who will automatically receive what’s in the account when you die. Make sure you update your beneficiaries on your 401(k), IRA, or other retirement accounts, as well as on life insurance and other documents. Depending on how your trust is designed, your circumstances, and your goals, you may name one or more trusts as the beneficiary rather than an individual person.

4.  Durable Power of Attorney, HIPPA Authorization, Advance Health Care Directive, and Similar Documents:

 These documents allow you to designate your significant other as the person who has the right to make certain types of decisions and sign documents on your behalf if you become incapacitated. If no such power exists, the decision-making task typically passes to a close blood relative and typically also requires a court proceeding called a guardianship or conservatorship, depending on the type of help you need and what state you in live. Your lawyer can help you determine which powers should be covered by documents like these to ensure that enough authority is granted while still providing protection against unauthorized actions.

Whether you’ve been living with a life partner for decades, and you’re now eyeing retirement options; or you’re just beginning a family with a person who has not formally and legally been recognized as your wifeor husband, you probably have questions. How should you protect yourself and family financially as you get older? What can you do to enshrine the values you hold dear for the next generation? What if an unwanted event happens, throwing you and your partner off balance -- what contingency plans can be put in place?

Our firm can help you identify and implement a strategy to you with the peace of mind that a properly drafted and implemented estate plan can provide. 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.

Morphing Your Estate Plan Creation Project Into a Process for Success

Many people put their estate plan on their to-do list as a one-time project: “Create estate plan” or “Meeting with lawyer 10:30 a.m., for estate plan creation.”

Thinking of your estate plan as a single task to check-off the To Do list is a common approach. However, it is also an approach that can lead to considerable trouble. Here’s why it’s essential to view your estate plan as a process, rather than a singular project.

Process vs. Project: What’s the Difference?

A project that takes several steps to complete—like an estate plan—can seem like it’s a “process” already. First, I need to call the lawyer. Then, I need to make time to attend the appointment. Before that, I need to get together these documents….

In fact, a project doesn’t become a process simply because it takes time and effort to complete. Here are some of the key differences between a project and a process.

A Project:

1. Seeks to create something new or implement a single, concrete change.

2. Requires leadership to plan and execute.

3. Can habe its plans or goals changed on short notice

A Process:

1. Creates value by returning to the same task many times

2. Requires management to ensure the process is consistent and produces expected results.

3. Can be changed only by launching a project with a goal to change the process.

Estate Planning As A Process:

When you’re creating a new estate plan, it’s natural to see that plan as a project. You’re creating something new when you work with a team to implement your plan. You create a positive change in your life by having an estate plan from not having one. And, you’re right. Setting up a trust or implementing your first estate plan certainly qualifies as a project.

But, the goal of creating your estate plan, however, should transition into an estate planning process by which you check, evaluate, and update your will, trust, and other legal documents regularly—perhaps once a year, but certainly every time you hit a major life milestone. This would include the birth of child or grandchild, death of family member, divorce, marriage, significant change in assets or income, and the like. When your estate planning is viewed as a lifelong process, your plan is much more likely to serve your family’s needs, whatever they may be, when the time comes simply because you’ve been managing it proactively with each change in your circumstances.

We can help you get started with estate planning and are here to guide you along the entire process. Let us become your ally in managing the process and in ensuring that you and your family gain maximum value from returning to it on a proper schedule.

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 Famous Pet Trust Cases—Lessons Learned

Things don’t always go according to plan. Sometimes, pet owners can get a bit creative when providing for their pets. Let’s look now at 3 famous cases involving pet trusts and distill important lessons from them.

David Harper and Red:

David Harper, a wealthy, reclusive bachelor in Ottawa, Canada, wasn’t exactly famous during his life. In his death, however, he made headlines by reportedly leaving his entire $1.1 million-dollar estate to his tabby cat, Red. Just to make sure his wishes were carried out, Harper bequeathed the fortune to the United Church of Canada under the stipulation that they take care of Red for him! The ploy worked.

Lesson learned: You can be as creative as you desire in your approach to making sure your pets receive proper care after you’re gone.

Maria Assunta and Tommaso:

In a four-legged and furry version of the classic rags-to-riches story, wealthy Italian widow Maria Assunta rescued a stray cat from the streets of Rome and gave him a proper home and name: Tommaso. As Assunta’s health failed, she tried for several years to find an animal organization to entrust Tommaso. When no suitable organization was found, Assunta left the estate valued at $13 million directly to the cat in her will and named her own nurse as caretaker. She passed away in 2011 at the ripe old age of 94, knowing her beloved Tommaso would be well taken care of.

Lesson learned: The best way to ensure the care of your pet is in writing, with a proper estate plan.

Patricia O’Neill and Kalu:

Patricia O’Neill, daughter of British nobility and ex-spouse of Olympian Frank O’Neill, had designated a fortune worth $70 million to her chimpanzee, Kalu and other pets, in her will - or so she thought. It was discovered in 2010 that the heiress herself was virtually broke, thanks to the shady dealings of a dishonest financial advisor. This story provides perhaps the most famous example of a pet trust gone dry while the owner is still living.

Lessons learned: You can only give away what you have. If caring for your pets after your death is important to you, make sure your financial plan is in line with your estate plan and that you’ve taken appropriate steps to oversee your advisors.

 To summarize, establishing a pet trust is the best way to ensure that your beloved pets receive the care they deserve after you pass on. If you want to ensure that your family—including your pet animals—are 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 Trust—the Best Option for Avoiding Probate

Ideally, when someone passes away, the paperwork and material concerns associated with the estate are so flawlessly handled—usually thanks to excellent preparation—that they fade into the background, allowing the family to grieve and remember in peace.

In fact, the whole business of estate planning—or at least a significant piece of it—is concerned with ease. How can assets and legacies be transferred to the next generation in a harmonious, stress-free, fair process?

To that end, one primary goal of many people is to avoid the complications and costs involved with probate.

There are many “tools of the trade”, that a qualified attorney can use to keep your assets out of probate—for example, establishing joint ownership on bank accounts and real estate titles, designating beneficiaries for life insurance policies and certain accounts, and so on. However, setting up a revocable living trust is quite often the best, most comprehensive option for avoiding probate. Let’s discuss why this is true.

What is a trust?

Often touted as an alternative to a will, a trust is a legal structure that permits management of your assets by a trustee on behalf of your beneficiaries. A living trust is established while you are still alive, as opposed to being created upon your death. You can be the trustee for your own living trust until you are no longer able to manage your financial affairs or pass away, at which point the responsibility for managing the trust passes to someone you designate as a successor trustee.

How does a trust help you avoid probate?

The purpose of probate is to transfer property ownership for all assets that were listed in your name when you passed away. A trust can bypass this process completely because your assets are transferred to the trust while you are still alive. Therefore, when you die, there’s nothing that needs to be transferred by the probate court (everything is already in your trust). Furthermore, a trust can cover virtually any type of asset, from real estate to vehicles to stock to bank accounts. When a trust is structured correctly with the help of an experienced estate planning attorney, your entire estate can stay out of probate court entirely. This process not only limits court costs, but it also maintains the privacy of your financial records while enabling your beneficiaries to enjoy the benefits of the trust without disruption or delay.

Establishing a trust can be a bit complicated, and the process can cost a bit more upfront than a will; however, if you’re willing to invest a little more up front, a trust can be your best option for avoiding probate later. Especially in California, probate should generally be avoided absent extenuating circumstances.

That said, as wonderful as revocable living trusts can be—always bear in mind H.L. Mencken’s warning that “For every complex problem there is an answer that is clear, simple, and wrong.”

The key to planning effectively to minimize the likelihood of a drawn out, contentious, expensive process is to work with highly qualified, trusted people. Find a lawyer who genuinely cares about you and your family and who knows how to forge the right strategy for 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.

Trump’s Presidency—Synopsis of Impacts On Estate Planning

It's official—the Electoral College voted on December 19, 2016, essentially completing the 2016 presidential election cycle. With that bit of uncertainty behind us and a fresh year starting out, here's what you need to know about planning your estate under the incoming Trump administration and Republican-controlled Congress. Regardless of how you feel about the election results, it is now the reality in which we currently live.

President Trump’s Tax Plan:

A new president usually means major shakeups in fiscal and tax policy, and Trump’s tax plan is no exception. Here are several of the proposed changes we will potentially see rolling out during his administration.

1. The repeal of the estate tax;

2. Lower income tax rates;

3. The introduction of a tax deduction for childcare costs;

4. Dependent care savings accounts (DCSAs) with conditional matching;

5. The switch from seven to three tax brackets;

6. Increased standard joint deduction from $12,600 to $30,000;

7. Increased itemized deductions cap from $100,000 to $200,000; and

8. Decrease in business tax from 35 percent to 15 percent.

Of these proposed changes, the repeal of the estate tax, also known as the “death tax,” means your assets would not be taxed by the government upon your death and would transfer in full to your beneficiaries. It is also predicted that the gift and generation-skipping taxes may be repealed as well. These actions could result in a greater ability to keep wealth within your family, but we must wait until we see the final legislation to know the exact mechanics. Additionally, the proposed changes would also negatively impact taxation on charitable gifts and other philanthropic gestures contained in your estate plan.

Estate taxes differ from state to state, so the wisest move in your playbook is to go over your estate plan with an experienced estate planning attorney to discover how these changes may impact its other components.

Of course, proposed policy changes must go through Congress, which has its own agendas and ideas about fiscal and tax policy. So, staying on top of new developments and in close contact with your team means you’ll be prepared for whatever unfolds over the coming years.

More Benefits to Revocable Trust-based Planning:

There are also many non-tax-related benefits to trust-based planning that you can take advantage of regardless of which proposed changes take place under the new administration and Congress. Just a few key benefits of trust-based planning include:

1. Greater privacy for your family and avoidance of probate;

2. Incapacity protection and avoidance of conservatorship or guardianship;

3. The creation of lifetime beneficiary directed trusts providing long-term asset protection benefits to your heirs;

4. Ensuring the protection of your asserts during your lifetime; and

5. Ensuring that your desires for taking care of your loved one’s after you pass away are effectuated.

Schedule a Call with Us:

Not even the nation’s top financial experts know exactly how Trump’s presidency and the Republican-run Congress will impact estate planning best practices for every citizen, but a skilled estate planning attorney can guide your estate planning in a smart, careful, and decisive manner.

We’re here to help you navigate policy changes to ensure your estate is managed as beneficially as possible for you and your family for generations to come. 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 Pros and Cons of Probate

In estate planning circles, the word “probate” often comes with a starkly negative connotation. Indeed, for many people—especially those with larger estates—financial planners recommend trying to keep property out of probate whenever possible. However, the probate system was ultimately established to protect the property of the deceased and his/her heirs, and in a few cases, it may even work to an advantage. Let’s look briefly at the pros and cons of going through probate.

While in certain situations a probate proceeding can be the most effective manner of distributing a decedent’s estate [for instance, if there is a large amount of contention between beneficiaries, it may be advisable for a successor trustee to commence a court-controlled probate process to limit personal liability], in California, it generally should be avoided absent extenuating circumstances.

The Pros:

For some estates, especially those in which no will was left, the system works to make sure all assets are distributed pursuant to state law. Here are some potential advantages of probating an estate:

 1. It provides a trustworthy procedure for redistributing the property of the deceased if no will was left.

 2. It validates and enforces the intentions of the deceased if a will exists.

 3. It ensures taxes and claimed debts are paid on the estate, so there’s a finality to the deceased   person’s affairs, rather than an uncertain, lingering feeling for the beneficiaries.

4. If the deceased was in debt, probate gives only a brief window for creditors to file a claim, which can result in more debt forgiveness.

 5. Probate can be advantageous for distributing smaller estates in which estate planning was unaffordable.

The Cons:

While probate is intended to work fairly to facilitate the transfer of property after someone dies, consider bypassing the process for these reasons:

 1. Probate is a matter of public record, which means personal family and financial information become public knowledge.

 2. There may be considerable costs, including court, attorney, and executor fees, all of which get deducted from the value of the estate.

 3. Probate can be time-consuming, holding up distribution of the assets for months, and sometimes, years.

 4. Probate can be complicated and stressful for your executor and your beneficiaries.

 5. You have no control over the distribution of your property after you pass, whereas by planning for distributions during your lifetime you have full control over where your assets ultimately end up.

 6. In California, because the fees paid to the Probate Attorney and Executor are defined by the California Probate Code, you do not have much control over the cost of settling your estate once you pass away.

 7. Probate is generally more expensive than creating and maintaining a revocable trust during your lifetime. As way of example, the following asserts the combined fees paid to the Probate Attorney and Executor in California for taking your estate through the probate proceeding after you die.

 a. If on the date of your death the value of your gross estate (“Gross Estate”) is:

                                  i.   $150,000

1.  The Statutory Attorney & Executors Fees are:

a.   $11,000

b.  Gross Estate:

                                    i.   $250,000

1.   The Attorney & Executors (“Probate”) Fees are:

a.  $16,000

c.  Gross Estate:

                                     i.    $500,000

1.    Probate Fees are:

a.   $26,000

d.   Gross Estate:

                                      i.    $750,000

1.    Probate Fees are:

a.   $36,000

e.   Gross Estate:

                                      i.    $1,000,000

1.      Probate Fees are:

a.   $46,000

f.   Gross Estate:

                                      i.    $1,250,000

1.    Probate Fees are:

a.   $51,000

g.  Gross Estate:

                                      i.    $1,500,000

1.    Probate Fees are:

a.   $56,000

h.   Gross Estate:

                                       i.    $1,750,000

1.    Probate Fees are:

a.    $61,000

i.    Gross Estate:

                                        i.    $2,000,000

1.    Probate Fees are:

a.    $66,000

j.     Gross Estate:

                                         i.     $2,500,000

1.     Probate Fees are:

a.    $76,000

k.    Gross Estate:

                                         i.    $3,000,000

1.    Probate Fees are:

a.    $86,000

l.     Gross Estate:

                                         i.    $3,500,000

1.    Probate Fees are:

a.    $96,000

m.  Gross Estate:

                                          i.    $5,000,000

1.    Probate Fees are:

a.   $126,000

As you can see, the cost of creating your estate plan during life is almost always going to be less than the cost of the fees that will ultimately be paid to the Probate Attorney and Executor if when you die you do not have an estate plan, or you solely have a Will without a properly funded revocable trust. Remember, a Will is not effective until after it goes through a probate proceeding.

Bottom line: While probate is a default mechanism that ultimately works to enforce fair distribution of even small estates, it can create undue cost and delays. For that reason, many people prefer to use strategies to keep their property out of probate when they die.

A talented attorney whose practice focuses solely on estate planning can help you develop a strategy to avoid probate, ensure that your post-death desires are realized, and make life easier 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.

3 Reasons You Want to Avoid Probate

When you pass away, your family may need to visit a probate court in order to claim their inheritance. This can happen if you own property (such as a house, car, bank account, investment account, or another similar asset), which is solely in your name. Although having a Will is a good basic form of planning, a Will does notavoid probate. Instead, a Will simply allow you inform the probate court of your wishes—your family still must go through the probate process to make those wishes legal.

Now that you have an idea of why probate might be necessary, here are 3 key reasons why you want to avoid probate at all costs possible.

1. It’s all public record:

Almost everything that goes through the courts, including probate, becomes a matter of public record. This means when your estate goes through probate, all associated family and financial information becomes accessible to anyone who wants to see it. This doesn’t necessarily mean account numbers and social security numbers, since the courts have at least taken some steps to reduce the risk of identity theft. But, what it does mean is that the value of your assets, creditor claims, the identities of your beneficiaries, and even any family disagreements that affect the distribution of your estate will be available, often only a click away because many courts have moved to online systems. Most people prefer to keep this type of information private, and the best way to ensure discreteness is to keep your estate out of probate.

2. It can be expensive:

Thanks to court costs, attorney fees, executor fees, and other related expenses, the price tag for probate can easily reach into the thousands of dollars, even for small or “simple” estates. These costs can easily skyrocket into the tens of thousands or more if family disputes or creditor claims arise during the process. This money from your estate should be going to your beneficiaries, but if it goes through probate, a significant portion could go to the courts, creditors, and legal fees, instead.

3. It is a long process:

While the time frame for probating an estate can vary widely from state to state and by the size of the estate itself, probate is not generally a quick process. It’s not unusual for estates, even seemingly simple or small ones, to be held up in probate for 6 months to a year or more, during which time your beneficiaries may not have easy access to funds or assets. This delay can be especially difficult on family members going through a hardship who might benefit from a faster, simpler process, such as the living trust administration process. Bypassing probate can significantly speed the disbursement of assets, so beneficiaries can benefit sooner from their inheritance.

If your assets are in multiple states, the probate process must be repeated in each state in which you hold property. This repetition can cost your family even more time and money. The good news is that with proper trust-centered estate planning, you can avoid probate for your estate, simplify the transfer of your financial legacy, and provide lifelong asset and tax protection to 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 Mistakes Made by Successor Trustees—How to Prevent Them

When establishing a trust, you need to give serious thought to choosing your successor trustee—the person who will administer your trust once you’re no longer able to do so. This individual ideally should be:

1. Someone you trust implicitly.

2. Someone who is organized, responsible and meticulous.

3. Someone who can remain steadfast to your wishes in the face of family disagreements and other disputes regarding the trust.

That said, even the most capable, well-intentioned successor trustees can make mistakes when managing affairs. Here are five surprisingly common mistakes along with steps to take to prevent them from happening.

1. Faulty Record-keeping:

To ensure that a trust fulfills its purpose without being contested, the trustee must keep accurate, detailed records of income and distributions. Your trustee must also be prepared to report these figures regularly to the beneficiaries and heirs. If these records are incomplete or inaccurate, the door is opened for someone to challenge the trust, potentially leading to lengthy and costly court battles.

To prevent this mistake: Hire an accountant to assist the successor trustee in record-keeping, and make sure the trustee and the accountant make a connection before the trustee takes over.

2. Misunderstanding the Fiduciary Role:

Many trustees mistakenly assume their job involves acting in the best interests of the person setting up the trust. In reality, his or her job is to act in the interests of the beneficiaries of the trust. Furthermore, the trustee may be legally liable for any failure to protect the beneficiaries against bad investment advice concerning the trust.

To prevent this mistake: Detail the fiduciary role of the successor trustee in the trust documentation itself, and be certain that the trustee understands his/her role.

3. Not Collaborating Effectively with Your Established Financial Team:

The successor trustee’s failure to communicate with key members of your team while administering your trust can lead to inaccuracies, misunderstandings and significant, preventable financial losses.

To prevent this mistake: Make sure your trustee is properly introduced to, and connected with, your attorney, CPA, financial planner and anyone else involved with your estate planning.

4. Failing to Discuss Compensation:

If your appointed trustee is a close friend or family member, the topic of compensating the trustee may be glossed over or forgotten. This oversight can result in a lack of morale or even resentment if managing the trust becomes difficult or time consuming.

To prevent this mistake: Bring up the topic of compensation yourself when you establish the arrangement; be as generous as you deem necessary; and put the compensation terms in writing.

5. Failing to Remain Objective:

Many people choose a close family member as a trustee. This strategy can be appropriate, especially when privacy matters. However, disputes about money can happen even in the tightest-knit families, and it can be difficult to near-impossible for a relative to remain neutral when resolving those fights. The end-result could be decisions that family members perceive to be unfair or that wind up being inconsistent with your intentions.

 To prevent this mistake: Make certain the person you choose can remain neutral and faithful to the terms of the trust, even under duress. If there is any doubt, consider hiring a corporate trustee with no emotional connection to the family or estate.

Selecting a successor trustee is one of the most important decisions you will make during your estate planning process. 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 Tragic Mistakes People Make When Leaving Assets to Their Pets

A pet trust is an excellent way to make sure your beloved pet will receive proper care after you pass on. The problem, of course, is that you won’t be there to see that your wishes are carried out. It’s critical to set up a pet trust correctly to ensure there are no loopholes or unforeseen situations that could make your plans go awry. Here are 5 tragic mistakes people often make when leaving their assets to their pets.

1. Appropriating more than the pet could ever need:

The gossip stories about such-and-such celebrity who left his or her entire fortune to a pet are the exception rather than the rule. Leaving millions of dollars, houses, and cars to your pet is not only unreasonable, but it’s more likely to be contested in court by family members who might feel neglected. To avoid this pitfall, leave a reasonable sum of money that will give your pet the same quality of life that she enjoys now.

2. Providing vague or unenforceable instructions:

Too many pets don’t receive the care their owners intended because they weren’t specific enough in their instructions or because they did not use a trust to make the instructions legally binding. Luckily, a pet trust can clarify your instructions and make them legally valid.

If you leave money to a caretaker without a pet trust in place, hoping it will be used for the pet’s care for example, nothing stops the caretaker from living very well on the pet’s money. But when you use a pet trust to designate how much the caretaker receives and how much goes for the pet’s care, you’ve provided a legal structure to protect your furry family member. You can be as specific about your wishes as you’d like, from how much is to be spent on food, veterinary care, and grooming. You can even include detailed care instructions, such as how often the dog should be walked.

3. Failing to keep information updated:

Bill sets up a pet trust for his dog Sadie, but what happens if Sadie passes away? If Bill gets a new dog and names her Gypsy, but he doesn’t update this information before he dies, Gypsy could easily wind up in a shelter or euthanized because she’s not mentioned in the trust. This is a common yet tragic mistake that can be easily avoided by performing regular reviews with your estate planning attorney to ensure that your estate plan works for your entire family.

4. Not having a contingency plan:

You might have a trusted friend or loved one designated as a caretaker in your pet trust, but what happens if that person is unable or unwilling to take that role when the time comes? If you haven’t named a contingent caretaker, your pet might not receive the care you intended. Always have a “Plan B” in place, and spell it out in the trust.

5. Not engaging a professional to help:

Too many people make the mistake of trying to set up a pet trust themselves, assuming that a form downloaded from a do-it-yourself legal website will automatically work in their circumstances. Only an experienced estate planning attorney should help you set it up to help ensure that everything works exactly the way you want.

When attempting to leave assets to your pet, the good news is that with professional help, all these mistakes are preventable. Talk with us today about your options for setting up a new pet trust or adding a pet trust to your current estate plan. 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.