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Could this Happen to Your Family?
A young couple is just starting out in life with two young children
and wills they've created from forms from an Internet website
they heard about on the radio. They've arranged to leave everything
to each other, and then to their children. While their children
are still minors, both parents are tragically killed in an automobile
accident. The wills are presented in probate
court, and the proceeds are divided into two trusts, both supervised
by the court and subject to annual accountings and appearances.
The small estate is quickly depleted by maintenance fees and
overly conservative investments, and while still in their early
teens, the children run out of money. A simple will is an inadequate
replacement for estate planning, especially when children are
involved.
Another young couple creates a well-conceived estate plan even
before their first child is born. As the years go by and their
financial planning does well, they stop reviewing it annually.
The plan has done so well because of their continuing saving
and sound investments that the estate is now subject to estate
tax. When both die after living rich and full lives, the federal
government takes 30% of everything they've built and saved.
Estate taxes
can reach as high as 55% and continue to change at the whims
of Congress. If you fail to review your estate plan periodically,
it may fail to provide the protection you desired for your loved
ones.
A working husband and wife have their own home and a hefty life
insurance policy. They've designed an estate plan to provide
for their three children through detailed, individual trusts.
They fail, however, to provide a backup guardian, and while
this critical decision remains unmade, they are both killed
in an airplane crash. The attorney can testify about who they
wanted to raise their children, but a judge ends up making the
critical decision of who will be the childrens' guardian. Per
the terms of the trust, the court will place their assets into
separate trusts for each child, increasing the maintenance costs
and reducing the plan's flexibility. When one of the children
incurs massive medical costs that depletes her trust, neither
the trustee nor the other children can help in any way except
to offer sympathy. The fiduciary laws that govern the children's
trusts do not permit them to gift their money (even to another
sibling in need), and the ill child's future is uncertain. You
don't know the deadline for planning your estate. Estate
and tax planning should NOT be postponed, especially where young
children are concerned.
A young and active father dies from an unexpected heat attack.
His surviving wife can still name a guardian for their young
daughter, something they put off while both of them were still
alive, because they thought they could "do it later."
What they failed to consider was his separate property -- some
from an inheritance that he didn't even know about. There's
no will to guide the court, so half of his separate property
is placed into a trust for the daughter. The wife's hopes to
stay at home with their daughter evaporate with the restrictions
the court places on the trust, and she is forced to return to
full-time work to support herself and their child. Even if one
spouse survives, a professionally crafted estate plan is still
crucial to ensure your family's economic security.
THE MAMOLA LAW FIRM, APC is conveniently located throughout Orange County. For additional information, please contact us at (949) 333-6543.
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| CAUTION: This website is to provide visitors with basic information.
Every legal situation is different, and no information on this website
is to be construed as legal advice on any specific question. Additionally,
the information on this website is for informational purposes, no
warranty is made as to the accuracy of any information contained therein,
or its applicability to any particular situation. This website must
not be used as a substitute for legal advice from qualified lawyer
or legal counsel. No attorney & client relationship or privilege
is formed by visiting this site or by sending my office any unsolicited
e-mail. Therefore, initial emails must not contain any confidential
information. I may already represent parties adverse to you and cannot
advise or represent you until I check for conflicts. I am licensed
only in California, and may offer my services only to those residing
or doing business in California, unless associated with local counsel
or lawyer in accordance with other states' laws. The Mamola Law Firm, APC is not currently licensed to practice in the
State of Nevada.
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