Estate Planning, Family Law, Trust Administration, and Probate in Santa Barbara County

Legal Advice

Questions? We have the answers...

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QUESTIONS AND ANSWERS

Q: How does administration of a will work?

A: In order for assets in a will to be transferred to a beneficiary, the will must first pass through the court process known as probate. During probate, the court oversees the will’s administration, ensuring your assets are distributed according to your wishes. However, probate proceedings can drag out for years, and your family will likely have to hire an attorney to represent them, which can result in costly legal fees that can drain your estate. During probate, there’s also the chance that one of your family members might contest your will. Unlike wills, trusts don’t require your family to go through probate, which can save them time, money, and the potential for conflict. Plus, when you have a trust set up, the distribution of your assets happens in the privacy of our office — not the courtroom.

Q: What is the federal estate tax?

A: The federal estate tax is a death tax on the value of a person’s assets at the time of their death. If the total value of your estate is above a certain amount, known as the federal estate tax exemption, the IRS requires your estate to pay a tax, known as the estate tax. As of 2023, the federal estate tax exemption is $12.92 million for individuals ($25.84 million for married couples). Simply put, if you die in 2023, and your assets are worth $12.92 million or less, your estate won’t own any federal estate tax. But if your estate is worth more than $12.92 million, the amount of your assets that are greater than $12.92 million will be taxed at a whopping 40% tax rate. You can reduce your estate tax liability — or totally eliminate it — by using various estate planning strategies. However, these strategies are quite complex and involve special types of trusts. To learn how to save your family from such this tax burden, meet with our Personal Family Lawyer®.

Q: What estate planning should my child have in place once he or she reaches adulthood?

A: Once your kid becomes a legal adult — which is age 18 or 21, depending on your state — many areas of their life that were once under your control will become entirely their responsibility. And if your child doesn't have the proper legal documents in place, you could face a costly and traumatic ordeal should something happen to them. For instance, if your child were to get into a serious car accident and require hospitalization, you would no longer have the automatic authority to make decisions about his or her medical treatment or the ability to manage their financial affairs. Without legal documentation, you wouldn’t even be able to access your child’s medical records or bank accounts without a court order. To prevent your family from going through an expensive and unnecessary court process, speak with your child about the importance of estate planning, and meet with our Personal Family Layer® to ensure he or she has the proper legal documents in place as they start their journey into adulthood.

Q: Should I leave money for my child with special needs in my will?

A: Absolutely not, and let’s explain why — when planning for a loved one with special needs, you must be extremely careful and always work with an experienced lawyer, because if handled improperly, you can easily disqualify your loved one with special needs from much-needed government benefits. Because individuals with special needs often require a lifetime of care, most of them rely on government programs paid for with your tax dollars to offset the exorbitant costs of such care. However, these programs have strict income limits, so if you leave money directly to a person with special needs, such as through your will, you risk disqualifying him or her for those benefits. Instead, the government allows assets to be held in what’s known as a Special Needs Trust to provide supplemental financial resources for the person for the rest of his or her life, while preserving their access to government benefits. However, the rules for Special Needs Trusts are complicated and can vary greatly between different states, so if you have a loved one with special needs, be sure to consult with our Personal Family Lawyer®. We can make certain that upon your death, your loved one with special needs would have the financial means they need to live a full life, without jeopardizing their access to government benefits.

Q: Do I need to create a new will if I move to a different state?

A: Most states will accept a will that was executed properly under another state’s laws. However, there could be differences in the new state’s laws that make certain provisions in your will invalid. Here are a couple things you should review in your will when moving:

Your Executor: Consider whether or not the executor you’ve chosen will be able to serve in that role in your new location. Every state will allow an out-of-state executor to serve, but some states have special requirements for executors, such as requiring them to post a bond. Other states require non-resident executors to appoint an agent who lives within the state to accept legal documents on behalf of the estate.

Marital Property: If you are married, consider how your new state treats marital property. While a common-law state might treat the property you own in your name alone as yours, community-property states treat all of your property as owned jointly with your spouse. If your new state treats marital property differently, you might need to draft a new will to ensure your wishes are honored. If you’re moving to California, meet with us, as your Personal Family Lawyer®, to have your will and other planning documents reviewed.

Q: What is a pour-over will?

A: For a living trust to function properly, you must first transfer the legal title of any assets you want to be held by the trust from your name into the name of the trust. Because it can be difficult to transfer the title to every one of your assets into a living trust before your death, most trusts are combined with what’s known as a “pour-over” will. This type of will serves as a backup to a living trust, so all assets not held by the trust upon your death are transferred, or “poured,” into your trust through the probate process. If you retain our Law Firm, we will not only make sure all of your assets are properly titled when you initially create your trust, but we will also ensure that any new assets you acquire over the course of your life are inventoried and properly funded to your trust. Whether you need a trust set up, funded, or you need a pour-over will prepared, contact our Personal Family Lawyer® to get started.

Q: Can I tap into my retirement savings to pay for my child’s college education?

A: If your kids will need financial assistance, beyond student loans, to pay for their college education, it’s vital that the way in which you choose to save will not negatively impact their qualification for such assistance. To this end, while you can use your retirement funds to pay for college expenses, this can affect your child’s eligibility for various need-based financial aid programs. Retirement funds withdrawn to pay college expenses are reported on the Free Application for Federal Student Aid (FAFSA) as additional income. Consequently, when using retirement funds, the expected family contribution used from FAFSA will be higher, which will therefore reduce your child’s chances of qualifying for financial assistance. Consult with us as your Personal Family Lawyer if you choose to tap into your retirement savings to fund college expenses, so we can ensure it's done right and will have the maximum benefit for everyone involved.

Q: What is “diminished financial capacity,” and why is it so dangerous for seniors?

A: The National Institute on Aging estimates that nearly half of all Americans will develop some form of dementia, such as Alzheimer’s Disease, during their lifetime. And while the cognitive decline brought on by dementia affects a variety of different mental functions, one of the first mental abilities to go is one’s “financial capacity.” Financial capacity refers to the ability to manage money and make wise financial decisions. Cognitive decline brought on by dementia often develops slowly over many years, so a diminished financial capacity frequently goes unnoticed — often until it’s too late. Moreover, studies have shown that seniors’ confidence in their money-management skills can actually increase as they age, which puts them in a perilous position. As seniors begin to experience difficulty managing their money, they don’t realize they’re making poor choices, which makes them easy targets for financial exploitation, fraud, and abuse.

Q: Should the person I pick as trustee of my living trust have a background in law or finance?

A: The person you choose to serve as trustee for your trust does NOT have to have a background or experience in law, finance, taxes, or any other field related to trust administration. In fact, trustees are not only allowed to seek outside support from professionals in these areas, they’re highly encouraged to do so, and your estate will pay for such professional support. While serving as a trustee can be a serious responsibility, the individual you select won’t have to handle the job alone. Plus, your trustee can also be paid for their service, though close family members often choose to forgo any payment beyond what’s required to cover the trust expenses. Furthermore, our Personal Family Lawyer® will be available to guide your chosen trustee step-by-step throughout the entire process, ensuring he or she is able to properly fulfill all of your wishes as spelled out in the trust, without exposing the beneficiaries — or themselves — to any unnecessary risks.

Q: What is the “contestability period'' on a life insurance policy?

A: Most life insurance policies contain a contestability period. Such periods are typically between one to two years, and if the insured dies during this period, the insurance company can investigate the claim to ensure that the policyholder didn’t commit fraud on the policy application by lying about underlying health problems, family medical history, or other conditions. That said, provided the insurance company doesn’t discover fraud or other issues with the application, it will most likely pay the claim once the investigation is wrapped up. While collecting life insurance proceeds is typically a fairly easy process, don’t hesitate to reach out to our Personal Family Lawyer® if you have questions or need support in any way.

Q: What is the IRS’s “Rule of 55” for 401(k) plans?

A: Although you generally must wait until age 59½ to make withdrawals from your 401(k) without incurring a 10% early-withdrawal penalty, the IRS allows for a separation of service exception for certain workers. Also known as the “Rule of 55,” if you quit, were laid off, or otherwise terminated from your job during or after the year you turn 55, you can take withdrawals from your 401(k) or 403(b) penalty-free from the account associated with that job. That said, you are still required to pay income taxes on any withdrawals from your 401(k) or 403(b) in the year they were taken. Given this, you may want to consider setting aside some of the withdrawal to pay taxes. Moreover, IRAs are not eligible for this exception, so for those accounts, you must wait until age 59½ to take withdrawals without any penalty.

Q: How can I determine how much life insurance I should have?

A: When purchasing life insurance, you’ll want to make certain you have enough term life insurance to cover the expenses that your dependents will require until they are no longer dependents — or until you are certain you will have enough money saved up to cover their needs. If you have children with special needs or a non-working spouse, they will require a longer period of care, compared to a family with two incomes and children who will achieve independence in their late 20s or early 30s, so keep that in mind when getting your policy. If you plan on staying in your business well beyond the typical retirement age, if you are an absolutely indispensable part of your company’s success, or you will have estate taxes to cover upon your death, you should consider getting permanent life insurance. And you’ll want to obtain enough permanent coverage to fulfill those obligations.

Q: How does buying or selling a business affect my estate plan?

A: If you are buying a business, you’ll want to ensure your estate plan is updated to take into account your new assets and put in place a succession plan for the business. Indeed, for every business you own, you should consider creating a buy-sell agreement and a succession plan to protect both your business and your family in case something happens to you. In your succession plan, you can not only decide who will take over your role as the company’s owner should something happen to you, but you can also provide him or her with a road map for how the business should be run in your absence. If you are selling a business, you should work with us and your tax professional to take advantage of the numerous tax-savings opportunities that may be available. For example, with the proper planning, you can avoid almost all capital gains taxes —but only if you plan ahead and take action before the sale. If you are buying or selling a business, contact our Personal Family Lawyer® to learn more.

Q: How do I include cryptocurrency in my estate plan?

A: If you own cryptocurrency, you must leave detailed instructions for accessing it, and ensure that one or more trustworthy people know about your crypto and how to find these instructions. Since accessing crypto can be a complex process, consider including terms in your estate plan allowing your fiduciary to hire an IT consultant or designate a separate co-fiduciary, known as a digital executor, to help him or her manage your digital assets. Like other assets, crypto is typically passed through a Will or Trust, and we can advise you on the planning vehicle best suited for your situation. From there, specify in your Will or Trust the person(s) you want to inherit your digital currency, and include instructions on how you’d like it managed after your death. However, NEVER provide the account info, login data, or passkeys for your crypto in your estate plan, especially your Will, which becomes public upon your death.

 

avvo ANSWERS 

Q: Can I name my fiancée as my baby's father in the birth certificate if I'm separated from my husband and going through divorce?

A: In California there is a presumption that your husband is the legal father of your child. That being said, you can rebut this presumption by having your fiancée sign a Voluntary Declaration of Paternity at the hospital. Your fiancée can then be named as the child's biological father and will be afforded all of the rights and responsibilities of the child under California law.

Q: What will happen if I don't go to court? I put a restraining order on my baby's father. While I did that restraining order, I also said that the only violent behavior was his pulling my hair, so they put that I have full custody of my baby and I was wondering if I don't show up to court [...]

A: You need to show up in court to ensure that the restraining order is not dismissed. The only way to have the temporary restraining order made permanent is through a restraining order hearing. You should attend the hearing. 

Q: If still married can he form a domestic partnership? He is married and has been separated for 3 years, living and working in California - she is in OREGON. Can he form a domestic partnership?

A: California Family Code Section 297(b)(1) clearly states that a person can enter into a domestic partnership so long as they are not "married to someone else or a member of another domestic partnership with someone else that has not been terminated, dissolved, or adjudged a nullity." If one party is still legally married, he/she cannot enter into a domestic partnership. 

Q: Will I have to pay out my wife in divorce if I keep a home out-of-state owned prior to marriage?

A: Property characterization issues are very complex. There are several things that must be considered when determining whether the home will be considered entirely your separate property, your separate property with a community interest, or whether the home will be transmuted to community property. Have you ever deposited the rents into a community account? Were the mortgage payments, management fees, and/or HOA fees paid out of a community account? Did you claim the property on your joint tax returns? If so, it is likely that your wife will be entitled to receive a portion of the equity in the residence.

Q: Do I have to give the non-custodial parent visitation anytime they ask for it? I have been the custodial (primary residence) parent for 7 years. There has been no change in circumstances, but the non-custodial parent wants joint custody. I homeschool the children and work only while they are gone for visitation [...]

A: Unless there has been a significant change in circumstances which would warrant a change in custody, and a showing could be made that such a change would be in the best interests of your children, then it is unlikely that a court would modify custody and/or visitation. Your only obligation is to abide by any existing court orders and ensure that your children have frequent and continuing contact with the non-custodial parent (NCP).

If you have concerns about the NCP's living situation, you may want to address these issues with the court. It is not in the best interests of the children to be locked out of the house and/or exposed to domestic disputes.

I suggest you contact an experienced family law attorney in your area to discuss this matter further.

Q: Do I have to tell the father of my child where I am living if we have joint custody but it doesn't specify that on the file? We signed papers a year ago but then got back together, and he just started enforcing them last week. He tells me I can't live with a roommate, or he will take her away from me. He is a very angry person, very manipulative, and I am terrified if him [...[

A: Custody, visitation, and support can be modified if there is a change in circumstances that would render a modification of existing orders to be in the best interests of the child. 

I suggest consulting with an experienced family law attorney in your area to discuss this matter further.

Q: Court fee for summary dissolution is $435 for each spouse or $435 for both the spouses? Regarding simple/summary dissolution, the fee to be charged by the court is $435 for each spouse (i.e., $870 for the summary dissolution process) or just $435 for both the spouses (i.e., $435 for the whole process)?

A: There is only one $435 fee for filing the joint petition for summary dissolution.

Q: Rules on moving with a child/visitation question. I have full custody with reasonable visitation listed in the order. There is no calendar in the paperwork that states when the visitation is to commence. What qualifies as reasonable? Also, if I were to move out of the area, how far can I move legally? [...]

A: Move-Away cases can become very complex. Generally, you will have to ask the court's permission to move with the child if you and the other parent cannot agree to your move. Visitation and child support will likely have to be modified as a result of the intended move-away.

Also, you should consult with an experienced family law attorney about removing any ambiguities in your current custody and visitation orders. "Reasonable" is a very ambiguous term, and it is likely that you and the other parent will disagree as to what "reasonable" visitation entails.

Q: While filing summary dissolution forms, what should I write as the date of separation? I have never applied to court for separation. Is the date of separation referring to the date when my spouse and I started living separately? (although we didn't go to court to get a legal separation). Or should I leave the field empty?

A: The date of separation is the date that you and your spouse decided to end your marital relationship with no intention of reconciling. It does not matter that you did not obtain legal separation from the court; this is not necessary. Do not leave the date blank. The date of separation is very important for property division, spousal support, etc.

Q: Do you have to serve a restraining order in person or can you mail it? What is the process in regard to a restraining order? My ex claims they filed a restraining order, but refuses to give any information.

A: A temporary restraining order can be ordered by the court "ex-parte," without notice to you. You will be personally served with a copy of the Notice of Hearing and Temporary Restraining Order, if they were granted.