People often come to us curious — or confused — about the role trusts play in saving on taxes. Given how frequently this issue comes up, here we’re going to explain the tax implications associated with different types of trusts in order to clarify this issue. Of course, if you need further clarification about trusts, taxes, or any other issue related to estate planning, meet with our Personal Family Lawyer® for additional guidance.

TWO TYPES OF TRUSTS

There are two primary types of trusts — revocable living trusts and irrevocable trusts — and each one comes with different tax consequences.

What Happens To Your Facebook Account When You Die?

If you’re active on social media, Facebook probably plays a prominent role in your life. And now the social media titan can even play a role in your afterlife.

Today, estate planning encompasses not only your tangible assets—bank accounts and real estate—but your digital assets as well, such as cryptocurrency, websites, and social media accounts. Though social media may seem trivial compared to the rest of your personal property, a Facebook account functions as a virtual diary of your daily life, making it a key part of your legacy—and one you’ll likely want to protect.

Because social media is so new, there are very few state laws governing how your Facebook account should be handled upon your death. In light of this, Facebook itself is in nearly total control of what happens to your profile after you die. And without proper planning, your post-mortem Facebook presence can haunt the loved ones you leave behind.

Since roughly 8,000 Facebook users die every day, the company has created a few options for dealing with your account once you’re gone. While it’s possible for you to take care of this on your own, many people are working with legal professionals like us to incorporate these digital assets into their overall estate plan to ensure their legacy is properly preserved and protected.

Here are three options for what you can do with your Facebook account when you die:

Estate PlanningStephen PennerFebruary 27, 2023Digital Assets

Seven Issues to Consider When Purchasing Disability Insurance

If you earn a good living now, but you worry about not having enough money for a future time when you cannot work due to illness or injury, disability insurance is your answer. However, you need to make sure you are getting an insurance policy that will meet your needs and not waste your money. This article covers seven issues to consider when purchasing disability insurance.

Disability Insurance: Issues to Consider

The answers to these seven questions can give you the best chance of finding a policy that is well-suited for your particular situation.

Estate PlanningStephen PennerFebruary 27, 2023Disability Insurance

Will The Coming Wealth Transfer Be A Blessing Or A Curse For Your Family?

Whether it’s called “The Great Wealth Transfer,” “The Silver Tsunami,” or some other catchy sounding name, it’s a fact that a tremendous amount of wealth will pass from Baby Boomers to younger generations in the next few decades. In fact, it’s said to be the largest transfer of intergenerational wealth in history.

Because no one knows exactly how long aging Boomers will live or how much money they’ll spend before they pass on, it’s impossible to accurately predict just how much wealth will be transferred. However, studies suggest it’s somewhere between $30 and $90 trillion. Yes, that’s “trillion” with a “t.”

A Blessing or a Curse?

While most are talking about the many benefits the wealth transfer might have for younger generations and the economy, fewer are talking about the potential negative ramifications. Yet there’s plenty of evidence suggesting that many people, especially younger generations, are woefully unprepared to handle such an inheritance.

In fact, an Ohio State University study found that one third of people who received an inheritance had a negative savings within two years of getting the money. Another study by The Williams Group found that intergenerational wealth transfers often become a source of tension and conflict among family members, and 70% of such transfers fail by the time they reach the second generation.

Estate PlanningStephen PennerFebruary 17, 2023Family Governance, Affluenza, Trust Fund Babies

How Estate Planning Can Bring Blended Families Closer

Yours, mine, and ours … in today’s modern family, it’s oh so common. The blended family is the product of a second (or more) marriage, in which one or more of the parties comes with children from a prior marriage. And then, they may even go on to have children together.

While we say that they are modern, blended families are normal and have been common throughout thousands of years of human history, especially in times when life expectancies were much shorter than they are now. There is nothing wrong with a blended family. Indeed, on the contrary, second or third marriages are often sources of great love, strength, and security. Members of blended families can be intentional and careful in providing for both sides in the family in ways that are simultaneously unequal, prudent, fair, and just.

If you have or are part of a blended family, it’s important to understand how estate planning could be exactly what you need to keep your family out of conflict and in love, both during life, in the event of incapacity, and when one or more of the senior generation (read: parents) dies.

Let’s begin with understanding where potential conflicts could arise when you have a blended family.

Estate PlanningStephen PennerFebruary 17, 2023Blended Families, Conflict Prevention

Three Ways To Benefit by Incorporating Charitable Giving Into Your Estate Plan

You are likely well aware of the tax benefits that come from donating to charity during your lifetime — donations to charity are tax-deductible. But you may be surprised to learn about the numerous benefits that are available when you incorporate charitable giving into your estate plan.

As with donating to charity during your lifetime, dedicating a portion of your estate to a charitable cause can reduce the taxable value of your estate. You can also receive significant tax savings by naming your favorite charity as the beneficiary of your IRA, 401(k), or other retirement accounts.

And if you have highly appreciated assets like stock and real estate that you want to sell, you can even set up a special type of charitable trust that can not only help you avoid both income and estate taxes but also create a lifetime income stream for yourself and your family, all while supporting your most beloved charitable cause.

How Will A Recession Affect Your Family?

As you’ve surely heard by now, we’re in the midst of great economic shifts. The collapse of the crypto market, the roller coaster that is the stock market, rising interest rates, dropping home values, and inflation through the roof — it’s enough to make you sick. And it can make you sick, unless you take the actions we are sharing here.

During every economic shift, whether it’s the Great Depression, the last Great Recession, or even during the pandemic, some people get rich, while others lose everything. Whether your family got rich, lost it all, or just hung on by their toes, you can learn from what happened and create the exact future reality you want for yourself and the people you love.

But to do that, you need to get into action now. In service to that, here are 4 steps you can take right away to change your family’s future and ensure you have the stability you need to sail through the economic shifts in the best way possible.

On that note, whether you’ll be passing on wealth or inheriting it, it’s crucial to have a plan in place to reduce the massive loss that will occur IF YOU WAIT to start the estate planning conversation. Whether you have a little or a lot, not getting clear on what you do have (or will receive) can cause major upsets that can cost you far more than just money.

Three Essential Questions To Ask Before Creating Your Will Online

If you are looking to create your last will and testament, or will, online, you’ll find dozens of websites that let you prepare a variety of estate planning documents for very little money, and even for free. With so many do-it-yourself online document services out there, you might believe you can create your will online, all on your own, without paying a lawyer to help.

And in some cases, you can create your will online.

But if you do, you need to understand how these services can backfire on you and your family. Online estate planning can be a catastrophe for those who aren’t aware of the risks. And as you’ll see, creating your will online without a lawyer’s guidance can even be worse for your family than if you’d done nothing at all.

Estate PlanningStephen PennerFebruary 15, 2023DIY Estate Planning, Wills, Probate

Creditors And Your Estate Plan

In some cases, you could inadvertently leave a reality in which your surviving heirs — your kids, parents, or others — are responsible for your debt. Alternatively, if you structure your affairs properly, your debt could die right along with you.

According to the Federal Trade Commission, an individual’s debt does not disappear once that person dies. Rather, the debt must either be paid out of the deceased’s estate or by a co-creditor. And that could be bad news for you or the people you love.

What exactly happens to this debt can vary. One of the purposes of the court process known as probate is to provide a time period for creditors to make a claim against the deceased’s estate, in which case debts would be paid before beneficiaries receive their inheritance. But if there is nothing in the probate estate and all assets are held outside of the probate estate, then what?

Well, that’s where we come in, and why it’s so important to get your affairs in order, even if you have a lot more debt than assets. Your “estate” isn’t just what you own, it includes what you owe, too. And with good planning, we can help you align it all in exactly the way you want.

Estate PlanningStephen PennerFebruary 14, 2023Debt, Creditors, Probate

Estate Planning for a Child with Special Needs: What Parents Need To Know

Estate planning is an obvious concern for all parents, but if you have a child with special needs, it’s crucial that you are aware of the unique considerations that go into planning for a child who may be dependent on you at some level for their lifetime. If your child has special needs, you must understand exactly what’s necessary to provide for the emotional, physical, and financial needs of your child, in the event of your own eventual death or potential incapacity.

When creating your estate plan, there are two major considerations for you to focus on: 1) Who would care for your child if and when you cannot (also known as guardianship), and 2) How will your child’s financial needs be met when you are not there to meet them.

TWO TYPES OF TRUSTS

A Blessing or a Curse?

Licensed in California

(805) 965-0085

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TWO TYPES OF TRUSTS

A Blessing or a Curse?

(805) 965-0085