Latest Entries »

WHAT HAPPENS WHEN A PERSON IS NO LONGER ABLE TO COMPETENTLY MANAGE THEIR FINANCES OR NOT ABLE TO TAKE CARE OF THEMSELVES?

 By Rex L. Crandell

  1.  What are you going to do when you find out that a loved one or someone you is still alive but not competent to think properly or they are not able to take care of their basic necessities of life like cooking, getting dressed, bathing, using the bathroom, or they can no longer communicate to others what they want or need?    These issues should be considered any time when their competency becomes doubtful.  This might be in the form of not being ability to understand when people speak to them, manage their home or financial affairs, when they cannot keep up with, supervise, and make competent decisions that are in their own best interest at this time. 
  2. It is much better if these issues are addressed before the person looses their ability to continue to manage her own affairs. 
  3. If a person is not able to keep up with what is going on in their life.  Or they are unable to recognize the various people familiar with the people that they normally have contact with, then it is suggested that one or two family members schedule a doctor’s appoint for the person.  You should consider bringing them to a licensed medical physician and have a written competency evaluation report prepared.  It might be a good idea to ask in advance if this particular doctor’s office customarily provides competency evaluations and issues written letters if it is determined that the person is no longer able to take care of themselves or they are diagnosed as being incompetent.  
  4.  When a person is unable to comprehend and make the necessary decisions in their lives, the California Probate Code uses the term that the person “lacks competence”.  When a licensed medical physician makes a written competency report indicating that the individual is not competent, in the doctor’s written opinion, then many things need to change regarding the care and supervision of the person.
  5. If the person has a Revocable Living Trust and most of their assets are labeled in the name of the trust, then you should read the trust instrument to find out what it says about a competency determination.  A creator of a revocable trust that names themselves as the initial trustee cannot continue to act in the capacity of a trustee when they have been declared not competent.  In addition, the person would not have the right or legal ability to sign or enter into any type of contract or agreement if they are incapacitated. 
  6. You should re-read the trust instrument to see what it says about the process and who will step into the office of successor trustee when a determination of non-competency has been issued by a medical doctor or by other specific terms spelled out in the trust.  This section should be read before contacting a medical doctor to examine the person for competency issues.  The specified successor(s) trustee will take over the office of trustee for the trust (as written in the trust document) assuming that the successor(s) trustee is ready, willing and able to assume the trustee’s duties and responsibilities.
  7. For assets that are not labeled in the name of a trust there will need to be some procedure to manage those assets if a non-competency determination is properly issued.  These assets frequently could include pension plans, annuities or IRA accounts that are governed by a beneficiary statement with the asset holding entity.  Other assets that are labeled in the person’s individual name and do not show the trust as the owner will also fall into this category of asset, like bank accounts or real estate held in the person’s name alone and not in the name of the trust. 
  8. If the person does not have a Durable Power of Attorney for Financial Management, then a court supervised conservator will need to be nominated, appointed and confirmed by the local probate court.  Then the appointed conservator will need to make regular reports to the court because the entire process is done under court supervision to protect the rights, assets and health for the incapacitated person. 
  9. There is much more paper work involved when the person does not have a revocable trust and a Durable Power of Attorney for Financial Management because that creates the need for a Conservatorship which is supervised closely by the courts.  You would be well advised to attempt to avoid the costs, regulation and time involved in the court supervised Conservatorship path when there is any way to avoid it. When the person becomes incompetent and they had previously created a revocable trust and labeled most of their assets in the name of the trust, then a court supervised conservatorship can be avoided for management of all assets in the trust. 
  10. If the person had previously prepared and signed a Durable Power of Attorney for Financial Management and a determination of incompetency has been medically issued in writing, then the person specified in the Durable Power of Attorney for Financial Management document will then step in and begin managing the assets that are not held in the name of a trust.  When the person becomes incompetent and they had previously signed a Durable Power of Attorney for Financial Management form, then all assets that are not in a trust will be managed by the named financial manager without court intervention.  Again, if one exists, then the provisions should be read, evaluated and understood, especially by the person named in the document to take over the financial management duties.  Normally, the provisions are written in a way that is understandable to most people. 
  11. In other words, do not be put off that it might be written in that ancient, (never spoken publicly form of Old Roman Latin) language commonly referred to as “legalese”.  Just read the document, determine what it says and discuss it between all family members.  If you do not clearly understand what the document means, then hire a professional to assist you in your understanding.  
  12. You should also hire an attorney to be your legal advisor to help the family keep within the proper legal bounds when dealing with these types of situations.  Now days, when well-meaning but mistaken family members do not follow the legal rules law enforcement officials may try to prove criminal elder financial or physical abuse took place.  A well meaning but not informed about the laws in this area can create personal liability for the care giver for not following proper procedure.  Caring is not enough; it also has to be the proper thing to do for the incapacitated person to keep the care giver out of the frying pan, so to speak.
  13. If the possibility of incompetency exists, then the reality of the situation should be dealt with directly and promptly.  It is becoming an increasingly more common situation in our modern society, that most of us will eventually become incompetent and not able to manage our own affairs at some point in our life. 

DISCLAIMER AND WARNING AGAINST SELF-HELP

This information is general in nature and not intended to be legal, tax, accounting, or other professional advice, nor does it create any form of professional relationship.  If you need professional or technical advice, then you should contact a competent person to evaluate your factual situation because the situation discussed above is not the type of situation where people should attempt to go it on their own without competent advisors to direct and advice on your particular situation.  Each situation is different so no canned approach would usable or advisable.  If any of this information applies to you are someone you know you should immediately seek the services of a competent professional.  Rex Crandell & Firm is not affiliated with any governmental agency and does not claim to be a government employee nor have any special insider affiliations with any governmental agency.  This is because the information is designed exclusively for advisory purposes only to provide a general background of the area discussed.

====================================================

A MESSAGE FROM REX CRANDELL’S TAX OFFICE:
Our firm provides income tax preparation and planning services for individuals, families, C Corporations, S Corporations, LLC Limited Liability Companies, Partnerships, domestic partners, for income and deductions generated in California, the United States, and assist taxpayers internationally comply with the USA income tax reporting requirements.  Rex Crandell, Esq. also provides services in the area of Estate Planning, Estate Administration, Probate Procedures, Advance Healthcare Directives, Durable Powers of Attorney for Financial Management, and Advance Health Care Directives.

You can contact Rex Crandell’s offices in Walnut Creek and San Francisco, California by calling; 1 (800) 464-6595; or (925) 934 6320; and you can contact our office by e-mail at rexcrandell@astound.net

http://www.rexcrandell.com

http://www.taxrexcrandell.com

We would be happy to hear from you.

…FROM REX CRANDELL’s  OFFICE…

Please contact our office if you have any questions. 

Very truly yours,
/s/ Rex L. Crandell
Rex L. Crandell. CPA, Esq.

image002

============================================

FROM:

Rex L. Crandell Firm

Walnut Creek Office (For UPS/FedEx/OR if Signature Req’d Documents)
3000 Citrus Circle
Suite 207 – West Wing         [ Click For MAP TO OUR OFFICE]
(925) 934-6320
————————- 
San Francisco Office
425 Market Street
22nd Floor                               [  Click For MAP TO OUR OFFICE]
(800) 464-6595
————————————————-
E-Mail:            mailto:rexcrandell@astound.net
Internet:           http://www.rexcrandell.com
Internet 2nd Web  http://taxrexcrandell.com
Internet 3rd Web https://estateplanningreport.wordpress.com
Skype Address     rex.crandell    
Fax:                (925) 934-6325
 ————————————————-

All U.S. Mail items [Except if Signature is required]:
P.O. Box 30305-Dept. Web New
Walnut Creek, California 94598-9305 United States of America

_______________________________________________________________________________________________________

          STATEMENT PURSUANT TO IRS CIRCULAR 230: The drafter of this document did not intend nor write this document for the purpose that this document would be used to avoid any penalty imposed by a taxing authority, for promoting, marketing or recommending this advice to another party. The recipient of this document may not use this document for that purpose. Rex Crandell Firm would be pleased to prepare or arrange to have prepared by legal counsel, as applicable, a document that would meet the specific requirements of IRS Circular 230 and could be used for those purposes. Please advise us if you desire such a document.

__________________________________________________________________________________________________________

.

.

.

.

 

.

.

.

.

.

.

Advertisements


“ESTATE PLANNING”


A SIMPLE OVER-VIEW AND OUTLINE OF

THE ESTATE PLANNING PROCESS.

Presented by: Rex L. Crandell, CPA, Attorney, 800 464-6595, 925 934-6320,rexcrandell@astound.net

DO I NEED ESTATE  PLANNING?   

GET THE LEGAL FACTS OF LIFE

 1. What is estate planning?

 

Estate planning is a process.

}  It involves people—your family, other individuals and in many cases,

}  charitable organizations of your choice. It also involves your assets and all the various forms of ownership and title that those assets may take.

 

1. What is estate planning?

}   How your assets will be managed for your benefit if you are unable to do so.

}   When certain assets will be transferred to others, either during your lifetime, at your death, or sometime after your death.

}   To whom those assets will pass.

1.  What is estate planning?

 

}  Estate planning also addresses your welfare and needsplanning for your own personal and health care if you are no longer able to care for yourself.

}  Like many people, you may at first think that estate planning is simply the writing of a will.

}  But it encompasses much more. As you will see, estate planning may involve financial, tax, medical and business planning.

}  A will is one part of that planning process, but other documents are needed to fully address your estate planning needs.

 

1.What is estate planning?

 

}  As you consider it further, you will realize that estate planning is a dynamic process.

}  Just as people and assets and laws change,  it may well be necessary to adjust your estate plan every so often to reflect those changes.

2.  What is involved in estate planning?

}   What are my assets and what is their approximate value?

}   Whom do I want to receive those assets—and when?

}   Who should manage those assets if I cannot, either during my lifetime or after my death?

2.  What is involved in estate planning?

 

}  Who should have the responsibility for the care of my minor children if I become incapacitated or die?

}  If I cannot take care of myself, who should make decisions on my behalf concerning my care and welfare?

3 . Who needs estate planning?

}  Whatever the size of your estate, you should    designate the person who, in the event of your incapacity, will have the responsibility for the management of your assets and your care, including the authority to make health care decisions on your behalf.

 

3 . Who needs estate planning?

}  If your estate is small in value, you may focus    simply upon who is to receive your assets after your death and who should be in charge of its management and distribution.

 

3 . Who needs estate planning?

}  If your estate is larger,  your lawyer will discuss with you not only who is

}  to receive your assets and when, but also various ways to preserve your

assets for your beneficiaries and to reduce or postpone the amount of estate tax which otherwise might be payable on your death.

3 . Who needs estate planning?

 

}  If one does no planning, then California law provides for the court appointment of persons to take responsibility for your personal care and assets. California also provides for the distribution of assets in your name to your heirs pursuant to a set of rules to be followed if you die without a will; this is known as “intestate succession.”

3 . Who needs estate planning?

 

}  Your relatives, no matter how remote, and in

some cases the relatives of your spouse, will have priority in inheritance ahead of the state.   Nonetheless, they may not be the people you would want to inherit from you; therefore, a will is the preferable approach.

4. What is included in my estate?

}  Everything that you own or have rights to at the time of your death.

 

5. What is a will?

 

}  A will is a traditional legal document

which is effective only at your death

to:

}  Name individuals (or charitable organizations) to receive your assets upon your death

}  (either by outright gift or in trust).   Nominate an executor, appointed and supervised by the probate court, to manage your estate, pay debts and expenses, pay taxes, and distribute your estate in an accountable manner and in accordance with your will.

5. What is a will?

}  Nominate the guardians of the person and estate of your minor children, to care and provide for your minor children.  Assets or interests in property in your name alone at your death will be subject to your will and subject to the administration of the probate court, generally in the county where you reside at your death.

6. What is a revocable living trust?

}  A trust is a written agreement between the individual creating the trust and the person or

institution named to manage the assets held in the trust (the “trustee”).

 

7. What is probate?

}  Probate is the court-supervised

process developed under California

law which has as its goal the

transfer of your assets at your

death to the beneficiaries set forth

in your will, and in the manner

prescribed by your will. It also

provides for the relative quick determination of valid claims of

any creditors who have claims

against your assets at your death.

.

8. To whom should I leave my assets?

}  Once you have determined who should receive your assets at your death, your estate planning lawyer can help you clarify and appropriately identify your beneficiaries.

 

9. Whom should I name as my executor or trustee?

}  While you may act as the initial trustee of your living trust, if you become incapable of functioning as a trustee, the designated successor trustee will then step in to manage your assets for your benefit.  An executor or trustee may be a spouse, adult children, other relatives, a domestic partner, family friends, business associates or a professional fiduciary such as a bank. You should discuss your choice with your estate planning lawyer.

 

10. How should I provide for my minor children?

}  A minor child is a child under 18 years of age. If both parents are deceased, a minor child is not legally qualified under California law to care for himself or herself. In your will, therefore,

}  You should nominate a guardian of the person of your minor children to supervise that child and be responsible for his or her care until the child is 18 years old.

11. When does estate planning involve tax planning?

}  Estate taxes are imposed upon an estate which has a net fair market value—in 2013 in excess of $5.2 million for each spouse.  For estates which approach or exceed this value, significant estate taxes can be saved by proper estate planning, usually before death and, in the case of married couples, before the death of the first spouse.  In some cases the surviving spouse can claim a tax benefit by transferring some of the first spouses lifetime estate tax exemption to be used on the second death, if an IRS Form 706 is prepared and filed with the government.  Do not confuse not paying estate taxes (at the federal level) with avoiding probate which is governed by State of California laws, because the two concepts operate independently of each other.

 

12. How does the way in which I hold title make a difference?

}  • Community property and separate property.

}  • Joint tenancy property.

}  • Community property with right of

}  Survivorship for Married couples

13. What are other methods of leaving property?

}  A number of assets are transferred at death by beneficiary designation, such as:

}  • Life insurance proceeds.

}  • Qualified or non-qualified retirement plans, including 401(k) plans and IRAs.

}  • Certain “trustee” bank accounts. “Transfer on death” (or “TOD”) securities

}  accounts.  • “Pay on death” (or “POD”) assets, a common

}  title on U.S. savings bonds.

14. What if I become unable to care for myself?

}  Conservatorship under court supervision.

}  Durable Power of Attorney for Financial Management.

}  Advance Health Care Directive

 

15. Who should help me with my estate planning documents?

}  Can I do it myself?

}  Do I need a professional to help?    In addition, you should determine whether the professional advisor has any underlying financial incentive to sell you a particular investment, such as an annuity or life insurance policy, because that financial incentive may color the advice given to you.  Unfortunately, some sellers of dubious financial products gain the confidence and private financial information of their victims by posing as providers of estate or trust planning services

16. How do I find a qualified lawyer?

}  If you do not already know a lawyer who is qualified to help with your estate plan, obtain referrals from someone whose judgment you can trust—friends, associates, or your employer.   Your local bar association maintains a list of State Bar certified lawyer referral services in your area.

 

17. Should I beware of someone who is a “promoter”
of financial and estate planning services?

}  There are many who call themselves “trust specialists,” “certified planners” or other titles which are intended to suggest that the person has received advanced training in estate planning.

}  California is experiencing an explosion of promotions by unqualified individuals and entities which have only one real goal—to gain access to your finances in order to sell insurance-based products such as Annuities, Reverse Mortgages and other commission-based products.

17. Should I beware of someone who is a “promoter”
of financial and estate planning services?

} Report high-pressure tactics, misrepresentations or fraud to the police immediately.

18. What are the costs involved in estate planning?

}  The costs of estate planning depend on your individual circumstances and the complexity of documentation and planning required to achieve your goals and objectives. Costs may vary from lawyer to lawyer.  The costs generally will include the lawyer’s charges for discussing your estate plan with you and for preparing your will, trust agreement or other legal documents which you may need.

CONCLUSION

 

}  You can’t take it with you.

}  Don’t leave a mess for those that follow you to sort out.

}  Give some thought to what you want to happen and think of the joy that may be possible by beneficiary receiving your bequest.


ESTATE PLANNING

 

} Don’t leave earth without it…

Slide1

Slide2 Slide3 Slide4 Slide5 Slide6 Slide7 Slide8 Slide9 Slide10

Slide11 Slide12 Slide13 Slide14 Slide15 Slide16 Slide17 Slide18 Slide19 Slide20

Slide21

Slide1

Slide2

Slide3

Slide4

Slide5

Slide6

Slide7

Slide8

Slide9

Slide10

Slide11

Slide12

Slide13

Slide14

Slide15

Slide16

Slide17

Slide18

Slide19

Slide20

Slide21

Slide22

Slide23

Slide24

Slide25

11. When does estate planning involve tax planning?

 

Estate taxes are imposed upon an estate which has a net fair market value—in 2013 in excess of $5.2 million for each spouse.  For estates which approach or exceed this value, significant estate taxes can be saved by proper estate planning, usually before death and, in the case of married couples, before the death of the first spouse.  In some cases the surviving spouse can claim a tax benefit by transferring some of the first spouses lifetime estate tax exemption to be used on the second death, if an IRS Form 706 is prepared and filed with the government.  Do not confuse not paying estate taxes (at the federal level) with avoiding probate which is governed by State of California laws, because the two concepts operate independently of each other.

Slide27

Slide28

Slide29

Slide30

Slide31

Slide32

Slide33

Slide34

Slide35

Slide36

Rex L. Crandell, CPA, MBA, Attorney
RLC color 99

 RE: A MESSAGE FROM REX CRANDELL ABOUT ESTATE PLANNING.

Between now and the end of the year would be a good time to take care of any estate planning needs and objectives that you may have related to transferring your estate to your beneficiaries.

Estate planning normally includes preparing a current Last Will and Testament, creating a Revocable Living Trust to avoid probate, preparing an Advance Health Care Directive– Durable Power of Attorney Form to take care of your medical decisions should you become incapacitated, and preparing a Durable Power of Attorney Form to allow for your Financial Management responsibilities if you are unable to take care of them yourself.  The best time to consider these issues is well in advance of any pressing need to take care of this long-term planning.  You will need to answer questions relating to who will receive benefits from your estate after you are gone.

Many people think that a Will is the best way to transfer assets at death.  In my opinion, a Will is an outdated, costly, and time-consuming way to transfer assets to heirs.  The reason for this is that a Will must be processed as a probate in the county where the person resides.  If you have more than $150,000 of assets that are transferred under the will, then a probate would be needed in California, in most circumstances.  The probate process frequently costs from $25,000 to $35,000 in processing fees.  Probate freezes all estate assets under strict court control for 11-18 months or more.  The probate information becomes a public record of all of your private details.  Because the information is made public, marketing companies frequently target beneficiaries of estates for a variety of sales offers.  The entire probate process can be easily avoided if a person simply creates a living trust to transfer his or her assets to heirs and merely registers the assets in the name of the trust.  When you have a living trust, a Last Will and Testament can be prepared to handle only a few assets that are hopefully below the value that would require a probate court proceeding.  If you avoid probate by having a living trust, there are still legal requirements and costs to transfer your estate to your beneficiaries, but court supervision is not required.  Your successor trustee follows your instructions in your trust document to transfer your assets in the specific way that you have selected.

Having a revocable living trust does NOT eliminate all estate administration issues for the successor trustee after someone passes away.  However, the amount and level of detail needed to administer an estate that has a revocable living trust as the primary estate planning tool takes significantly less time and effort on the part of the trustee than a California State Superior Court & judge-supervised Probate processing of a Will requires.

We provide the services of estate planning for our clients.  We take care of all document preparation, using information we gather from clients about their wishes regarding the disposition of their estates and the distribution of their assets to beneficiaries and loved ones who survive them.

Please call our office to set an appointment to discuss your estate planning objectives.  We can discuss fees for estate planning services at that time.  If you choose not to utilize our services in the creation and implementation of your estate plan, there will be no cost or obligation on your part for our initial meeting to discuss your long-range objectives.  It is recommended that you obtain our Estate Planning Questionnaire & Organizer Forms prior to your appointment.  The estate planning questionnaire provides a place for you to list your assets and identify your beneficiaries so that enough information will be available to get an overview of your estate planning needs and desires.

Please contact our office to schedule your no-obligation estate planning meeting.  Call now, so that your estate plan can be designed, implemented, and completed before the end of this year.  Do not delay.  Your beneficiaries will appreciate your advance planning in this area.

I look forward to hearing from you soon.

Very truly yours,
 Rex L. Crandell

__________________________________________________________________
CONTACT:

Rex L. Crandell Firm

Walnut Creek Office (For UPS/FedEx/OR if Signature Req’d Documents)

3000 Citrus Circle

Suite 207 – West Wing         [ Click For MAP TO OUR OFFICE]

(925) 934-6320

————————-

San Francisco Office
425 Market Street
22nd Floor                               [  Click For MAP TO OUR OFFICE]

(800) 464-6595

————————————————-

E-Mail:            mailto:rexcrandell@astound.net

Internet:           http://www.rexcrandell.com

Fax:                           (925) 934-6325

————————————————-

All U.S. Mail items [Except if Signature is required]:

P.O. Box 30305-Estate Planning Dept. Web19
 Walnut Creek, California 94598-9305 United States of America