Family Legacy Building

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.

Leaving Securities to Heirs

If you have a diversified portfolio of assets, you may have questions about the best way to leave securities to your heirs would be. For example, can you pass securities on to heirs through transfer on death (TOD)? We’ll examine how this works so you can make an informed decision on the best way to leave your assets to beneficiaries.

You Can Pass Securities Directly to Heirs at Death

The good news is that the state of California has ways to transfer some of your assets outside of the potentially costly and lengthy probate process. One of these is the California Uniform TOD Security Registration Act. This act specifically addresses the passing of stocks and other securities directly to a beneficiary by what is called transfer on death.

The good thing about TOD is that if something happens to you, your heir immediately becomes the owner of the securities that have been designated. The key is to properly designate the TOD assets so that the transfer takes place seamlessly and without question.

Help in Designating Transfer on Death Securities

Petrov Law Firm specializes in estate planning. We can help you to leave your assets to beneficiaries in a way that cuts through some of the legal red tape and gets the money to your heirs faster and without costly legal bills. To learn more, give our San Diego office a call today at 619-3344-0360. We can help you with all of your estate planning needs in the state of California.

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.

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.

Why You Should Consider the Relationship Between Your Heirs and an Appointed Trustee

If you determine that the best way to leave your assets to beneficiaries is via a trust that will help keep matters out of probate, there is still something vital to consider. What is the relationship between your heirs and the person (or persons) you are appointing as a trustee? Obviously, a better relationship will make things easier on those who are to inherit your estate. 

What Does a Trustee Do? 

When the trustor passes away, the trustee is in charge of keeping the trust safe and making appropriate distributions to any beneficiaries. So there are a few things to consider when appointing a trustee: 

• Is this person trustworthy enough to carry out your wishes? 
• Does the trustee have sufficient ability to handle this responsibility?  
• Will the trustee’s relationship with the beneficiary help or hinder the proper distribution of the trust? 

Of course, planning your trust properly can also help the process along, even if there is some disputing between the trustee and beneficiary. However, you can minimize how much of the trust ends up going toward administration costs by selecting the right person – someone who has the ability to care for the trust and the desire to do what is best for the beneficiary.  

Help for Creating Trusteeships in San Diego, California  

If you live in California and need advice or help in creating a trust, the estate planning attorneys at Petrov Law Firm will be happy to assist you. To learn more, call our San Diego and Chula Vista attorneys at 619-344-0360.

Who Will Inherit Your Retirement Accounts?

There are a number of different ways to save for your golden years. Some types of retirement accounts are: 

• IRA – Contributions are tax deductible and taxes must be paid when the funds are withdrawn. 
• Roth IRA – Contributions are taxed in advance instead of at the time of withdrawal.  
• 401(k) – Contributions are made pre-tax, and therefore are subject to taxes when withdrawn. In addition, a penalty is imposed if funds are withdrawn earlier than age 59 and 6 months.  

The question arises, however: what if you pass ways with money in a retirement account? Who gets it?  

Where Your Retirement Accounts Go 

The normal process when setting up a retirement account is to designate someone who would serve as a beneficiary and inherit any remaining funds. If you do designate a beneficiary on a retirement account, this will supersede your will. For example, if your retirement account beneficiary is your mate, but you later divorce and leave everything to your kids in your will, you will have to change the beneficiary on the retirement account as well, or your ex will still get that money. 

In other words, a retirement account is not a probate asset, so your executor will have no say in what happens to it. You have to make that decision now by keeping your beneficiary up to date. 

Having the Proper Estate Planning Attorney on Your Side 

In order to ensure that all of your wishes will be carried out, you want the advice of an estate planning attorney who can help you to understand how these little details work. The experienced estate lawyers at Petrov Law Firm can help you plan for the future of your heirs. To learn more, call 619-344-0360 today. 

When Beneficiaries Don’t Get Along

Even if the questions don’t go so far as to result in one of the beneficiaries contesting the will or protesting the estate distribution process, you might find it best to have a distant relative or professional handle the distribution of assets.

The executor of your will is likely to get paid for his or her work. Frankly, being the executor of a will is hard work that involves legal documents and judicial processes. From an outsider, it might appear to be easy. And if your adult children are looking for ways to increase family tension, one person getting more than the others (as payment to handle your estate) might be reason enough to start a shouting match.

Your passing will be an emotional and stressful time for your family. Be sure to name an executor who won’t be caught in the middle of an unnecessary family fight.

Acts of Independent Significance

Either intentionally or unintentionally, your will can change meaning with an act of independent significance. Generally, this means that your will has a statement or clause that is vague and can change meaning based on circumstances.

For example, if you are part owner of a business, you can state that you want your shares in the business to be distributed to “the other legal owners.” You’ve avoiding listing the names of the other owners knowing it’s possible that list will change over time. This is also helpful when indicating what you want to go to your “children” or “grandchildren” in case the family grows after you complete the will.

Another independent change can be in the contents of a house, bank account, safe, etc. You can simply state that the assets for distribution are the “contents of my house.” Between the writing of your will and your death, the contents of your house will likely change. Therefore, the recipients get the contents that are in your home at the time of your death.

In addition, you can state in your will that you will write further instructions for distribution. So if you know how much money you want to go to charity, but you haven’t selected the charity, you can choose the recipient at later time.

A good estate lawyer will help you construct a will using acts of independent significance to ensure your assets are distributed exactly as you intend.

The Best Title For Your Home

Each has benefits and drawbacks. If you own a home with someone who would not be recognized as part of your legal family, joint tenancy is a great way to ensure they can stay in the home after you pass.

Creditors and potential lawsuits can pose a threat to your home today and after you have passed. If you have a complicated family (multiple marriages, a step-family, or an unmarried partner) or you own a business, you should consult an attorney to ensure that your home is protected now and passed along as per your wishes when you die.

For example, one of your children might be the primary caregiver for your and your spouse. While you might intend to give the house to that one child for the sacrifices he or she has made, both your will and the title on the house will impact the likelihood of that happening without complications.

If you own a business that carries significant debt, your estate might be responsible for that debt when you die. If you have equity in your home, those creditors could force your widow or widower to sell the family home and pay off the debts.

While you can ask a title company for advice, many title companies are reluctant to give legal guidance. An estate lawyer is your best option.

Who Inherits My Mortgage?

A good estate planning attorney will help you select the right option for you and your family. Most importantly, your lawyer will review your current mortgage contract to see what the bank will allow for repayment after your passing. Your attorney will be able to structure your estate plan to distribute your estate’s funds to pay off the mortgage balance first if you wish. The attorney will also be able to create stipulations that allow for options such as guaranteed residency for your spouse and co-ownership for your children.

If you are young enough to qualify for an affordable life insurance policy, your lawyer can arrange a low monthly payment for a term life policy that will pay off your mortgage if you pass away before you pay off the loan. These life insurance policies are typically known as mortgage insurance (not to be confused with PMI) and change over time to reflect what you owe on the mortgage.

Even if you still have a mortgage, there may be significant financial equity in your home. Money can cause significant dissent in the closest of families. If you are not specific, or if your will is out of date, your family could lose the home, and each other, after your passing.