Financial Planning Tag

How a Spendthrift Clause May Protect a Trust from Creditors

Are you concerned that your beneficiaries may still have a long way to go in learning to handle money? If so, you may want to protect them from misusing their inheritance by installing a spendthrift clause into your trust. What does this provision do? How can it protector your heirs from creditors?

The Benefits of a Spendthrift Trust

Once funds have been distributed to a benefactor, creditors can go after these assets. However, funds that are not under control of the heir or that have not yet been dispersed can be protected from certain creditors. This is where a spendthrift clause comes into play.

In a spendthrift trust, the funds are under the control of a trustee who distributes funds to the heir when he or she sees fit. Since the beneficiary cannot access these funds at will, they are not considered to be his or her property. This provides the additional protection from creditors who can only go after what the beneficiary actually owns.

There are, however, exceptions to every rule. For example, a court may direct that child support or alimony payments that have been awarded can be taken from a spendthrift trust.

Learn More About Your Estate Planning Options

To learn more about your estate planning options, contact the experienced attorneys at Petrov Law Firm by calling 619-344-0360. From developing an estate plan from scratch to reworking an outdated plan, we can help you to prepare for the future with confidence.

The Effects of Undue Influence on Estate Planning

What is undue influence? It occurs when an influencer (sadly, often a family member), exerts pressure on someone that causes the person to act contrary to the way he or she normally would. This is done by the one exerting the pressure (the influencer) in order to benefit him or herself. In other words, a person influences someone who is susceptible (due to age, the onset of dementia, etc.) to make financial or other decisions for his or her benefit (and usually to the detriment of rightful heirs).

This is an unfortunately common occurrence. How can you be sure that your estate planning isn’t subject to undue influence? Is there any way for heirs who feel they were cheated by someone exerting undue influence to take recourse?

Avoiding the Effects of Undue Influence

The best way to avoid undue influence is to have an ironclad estate plan in place that spells out your wishes in no uncertain terms. Should you decide to change your will or beneficiaries later in life, you need to be sure that your estate planning is equally meticulous, so no one can make claim that there may have been an influencer behind the scenes scheming for material gain.

When an Influencer Exists

Fortunately, there are measures in place to contest wills and other estate planning that clearly involved undue influence. But this ties up funds, sometimes for years, and wastes much of those assets on court fees. Thus, it is far better for heirs if estate planning is well thought out and documented

The estate planning experts at Petrov Law Firm will be happy to help you develop your California estate plan. Call 619-344-0360 to get your comprehensive estate plan started today.

What Does Your Digital Estate Consist Of?

You may be surprised to learn that one software company valued the average American’s digital estate at about $50,000. What is a part of your digital estate and how can you protect it to ensure it doesn’t just disappear when you die? Let’s look at how the state of California’s regulations and some good estate planning can preserve your digital estate.

What Is a Part of Your Digital Estate?

A digital estate consists of a number of components including things like:

• Online Accounts – This includes social media accounts as well as email accounts
• Digital Purchases – For example, movies, music, games, books, apps, etc.
• Financial Accounts – This would include PayPal and other forms of online banking
• Cloud Storage – This includes OneDrive, Google Drive, Dropbox, iCloud, and more
• Personal Memorabilia – For example, photos and videos that have been stored electronically
• Business Assets – This may include a website, blog, Etsy store, or eBay store
• Online Currency – At the time of this writing, one Bitcoin was worth $7,418

How California Law Helps

California is one of the few states to have passed legislation regarding digital assets. Under the bill known as RUFADAA, your trustee or personal representative can gain access to your online assets after you pass even though these are protected while you are alive by the terms of service of most companies. This allows someone who has power of attorney, a trustee, or an executor to distribute your online assets.

Planning for the Future of Your Digital Estate

RUFADAA only helps a person who has taken the initiative to execute an estate plan of some sort. To help you designate a power of attorney or trustee, contact the experienced estate planning lawyers at Petrov Law Firm. We’re helping Southern California residents to prepare for the future. Call 619-344-0360 to get started now.

What Does a Trustee Do in the State of California?

One of the things that we love to help our estate planning clients with is setting up a living trust. This gives you some great options. For example, while you are alive, you can serve as your own trustee and take care of the trust as you wish. You can also leave instructions for a successor trustee. What does the successor trustee do after you pass?

The Role of a Successor Trustee

A trust does not go through probate, so the executor of your will won’t have anything to do with the trust (unless it is the same person you select as your successor trustee). The successor trustee administers the trust after the grantor has died. Usually, the grantor will leave written terms to guide the decisions of the trustee.

A trustee is an appropriate name because you are trusting this individual to put aside his or her own personal interests on behalf of the trust and those who are designated as beneficiaries. Thus, even when it is necessary for the trustee to handle matters that call for decisions not outlined by the grantor, the trustee should be guided by what the grantor would have wanted as well as what is in the best interests of the trust itself and of the beneficiaries.

Selection of a Successor Trustee Is Serious Business

Because of these facts, you want to give serious thought to who you will assign as a successor trustee. You also want to leave detailed instructions, so your trustee has a firm basis for knowing your wishes. This will ensure that your beneficiaries get the maximum yield from the trust.

To set up a living trust and to put other estate planning measures in motion, call 619-344-0360 and speak to the attorneys at Petrov Law Firm. We are experienced estate planning attorneys serving San Diego and the surrounding areas in southern California.

6 Things a Durable Power of Attorney Can Take Care of for You

Assigning a durable power of attorney is an important part of estate planning. This is especially true if you ever become incapacitated for a time and do not have either the physical or mental ability to care for your own finances. Here are 6 vital things a power of attorney can take care of for you should you become temporarily incapacitated.

1. Bank Accounts – If you are married, your mate is probably on all of your bank accounts. But if he or she usually allows you to take care of the financials for the family, then it is important to have a fiscally responsible person in charge of these accounts and to move around money as needed.
2. Loans – A power of attorney (POA) can pay down your loans by either making minimum payments or paying them off completely depending on what is best for the estate in the current financial market.
3. Bills – Your POA can also take care of the day to day bills such as utilities, credit cards, insurance, and the like. Much of this may be on an automatic payment system, but for things that are not, it is important to have someone who knows what is due and how it is paid.
4. Taxes – This is one of the most complicated aspects of financial responsibilities, so your POA needs to be someone you can trust to be honest and to put in the work to ensure that you don’t miss out on things that could have been written off.
5. Real Estate – Whether you have land that is being leased, renovated, or lived in, someone needs to manage all of your properties at all times. If that is usually something you do yourself, you need a POA who can handle it. If you have a property management service, then the POA needs to be in touch with them as regularly as you would have been.
6. Lawsuits – Any pending lawsuits for which you may be a plaintiff or defendant would now rest on the shoulders of your POA.

Preparing Your Estate Plan in California

If you live in or near the California area, Petrov Law Firm would be happy to help you set up or review your estate plan. Appointing a power of attorney is just one element in this process. To get started, call us at 619-344-0360.

What Is a Durable Power of Attorney? – Why You Want One

Often abbreviated as DPA, a durable power of attorney is a vital component in your estate planning. This document appoints an agent to make decisions for you should you become incapacitated. What does the document contain and what exactly is your power of attorney responsible for?

What a Durable Power of Attorney Should Outline

The primary purpose of this document is to appoint someone to make financial decisions for you. A separate document should be executed to appoint a person to make medical decisions if you become incapacitated.

But how can you be sure that your power of attorney will treat financial matters in the way you would want? And what qualifies as you being incapacitated? There is no need to leave these matters to chance or opinion. You can include descriptions in the document regarding what you consider incapacitation, whether it be literal unconsciousness or mental degradation that leads to senility or dementia.

You can also provide instructions for your power of attorney as to how your financial matters should be handled. While it should be a responsible person, you also want it to be someone who will understand your instructions and be willing to carry them out.

Help in Preparing your Durable Power of Attorney and Other Estate Planning Documents

If you are interested in setting up a durable power of attorney to protect your estate should you become incapacitated, the estate planning attorneys at Petrov Law Firm can help. We pride ourselves on putting the best interests of our clients first. So if you want the personal attention you deserve from experienced and talented attorneys in the state of California, call 619-344-0360 to get started.

How Estate Planning May Be Affected by a Divorce Settlement

There are a number of life events that can have a major bearing on estate planning. Getting a divorce is one of those events. How may a settlement affect the planning that you already have in place, and how can you make sure that any changes to your estate are properly handled?

The Effects of Divorce on an Estate Plan

There are several elements of your estate planning that may be affected. Here are a few examples:

• Retirement Accounts – Because the beneficiary on a retirement account receives the money directly without it going through probate, you may need to change your beneficiary to avoid the money transferring to your ex.
• Trusts – Some property or other assets may have been part of a revocable living trust. However, if those assets were shared or had to be liquidated as a part of the divorce settlement, you will have to update the trust accordingly.
• Shared Accounts – Shared bank accounts transfer automatically on death, so you will need to close these accounts if they have not already been closed as a part of the settlement and open new bank

You may also need to make arrangements if you get remarried so that children from the previous marriage still receive any assets you wish for them to inherit. Otherwise, many things that may be put in your new mate’s name might pass directly without going through probate. This new spouse may feel no attachment to your children from another mate once you are gone, so you can’t leave it to chance.

Help in Arranging Complicated Estate Planning

Estate planning may at times be complicated, but it doesn’t have to be difficult. The patient estate planning attorneys at Petrov Law Firm can walk you through the process so that you can be confident your wishes will be carried out. To learn more, contact our San Diego, California attorneys at 619-344-0360.

How Much Control Does a Trustee Have Over a Revocable Living Trust?

You may be looking for a way to leave your assets to heirs without the added time and expenses involved in probate. If so, a living trust could be exactly what you have been searching for. But does this mean that you are turning over control of your assets to a trustee?

If you set up a revocable living trust, then you are the trustee while you are still living. This gives you complete control over the trust. You can add assets or remove them from the trust at any time. It is a great way to leave property and other assets to your heirs and have them avoid probate without giving up control during your life.

However, when you pass away, your revocable living trust becomes irrevocable. At this point, a successor trustee will take over. He or she will then carry out your wishes for the trust in accord with any instructions that you have left behind. This makes it important to determine in advance what you want a successor trustee to do.

Providing Instructions for Your Successor Trustee

If you are a California resident in the San Diego area, Petrov Law Firm is your source for the best estate planning lawyers to help you leave instructions for your successor trustee that ensure your wishes are carried out when you are no longer here to do so yourself.

To learn more about how to set up a revocable living trust with a successor trustee in order to avoid having your estate go into probate, contact Petrov Law Firm at 619-344-0360. Our attorneys will be happy to help you get your affairs in order, regardless of how large or small your estate may be.

Estate Planning Complications When Property Is Co-Owned

One of the things that need to be settled on when taking care of estate planning is deciding who will acquire the property that you own. Something that can complicate this process is co-ownership of real estate. We’re going to discuss a hypothetical example to show how co-owned property can lead to discrepancies that end up having to be worked out later by the court system.

How Does Shared Property Ownership Affect Inheritance?

Imagine a father buys a house and decides to have his two adult sons on the deed. Ownership is split: 1/3 to the dad, 1/3 to the older son, and 1/3 to the younger son. Some time passes, and then dad has a falling out with his younger son. Now he wants to leave everything to his older child. But what about the third of the house that is deeded to the younger son? Will the courts allow the dad to leave the younger son’s interest in the home to his older child?

This is an oversimplified example to show the complications that can result in estate planning when it comes to sharing ownership of property. This can occur whether the other owners are family, friends, business partners, or anyone else. This makes it vital to have your planning properly in place and to consult an estate planning attorney when making decisions that will affect your future estate.

The Estate Planning Attorneys San Diego Residents Can Trust

If you need help with your estate planning, the attorneys at Petrov Law Firm can provide valuable advice on how to ensure your wishes are met. To learn more, contact our San Diego, California practice at 619-344-0360.

Why You Should Designate a Beneficiary for Each of Your Retirement Accounts

When a person passes away, his or her retirement accounts do not go through probate. Instead, retirement accounts are automatically paid out to a beneficiary who is selected by the account holder. What are the different types of retirement accounts that a person may have? Why should you periodically check to see who your beneficiaries are?

Which Retirement Accounts Have Beneficiaries?

If you have a savings account, this can be left in trust. Or you may have another person’s name on the account. However, retirement accounts like IRAs and 401(k)s are different. These should have a beneficiary listed on the policy. If you live in California and have an IRA or a Roth IRA, your spouse will be the beneficiary. The only way to designate someone else is to have your spouse provide written consent allowing you to designate another beneficiary. The same is true with a 401(k). Thus, unless your current mate has signed a waiver and you have designated someone else, he or she is the beneficiary.

Why Maintain Your Beneficiary List?

You should check on your beneficiaries periodically, especially if you experience a change in life circumstances. For example, if you get divorced, you will likely want to change the beneficiary on your retirement accounts.

Of course, your retirement accounts may not be the only thing that needs changing. You may have to update the beneficiary on a life insurance policy, amend a will, adjust a trust, and so on. For help with all of your estate planning needs, contact the estate planning lawyers at Petrov Law Firm. We can help you keep all of your records in good order so that your wishes are carried out properly. To learn more, call 619-344-0360 today.