The article featured Trial & Heirs‘ Top 10 Celebrity  Estate Planning Mistakes.  I found them interesting and thought I would share the article with you.

The point of all this is to recognize the mistakes of others so that we won’t repeat them.
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1. Jimi Hendrix’s Critical Error: Doing Nothing

If you do not plan your own estate while alive, you could end up like Jimi Hendrix and have someone that you barely know controlling your legacy. Hendrix’s legacy was fought over in court more than 30 years after he died.
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2. Justice Warren Burger’s Critical Error: Doing It Yourself

Former Supreme Court Justice Warren Burger created his own will with 176 words but he left out key provisions and his family paid the price.
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3. Heath Ledger’s Critical Error: Not Updating

Heath Ledger never updated his will with the birth of his daughter, leading to chaos and family members fighting through the press.
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4. Princess Diana’s Critical Error: Taking Shortcuts

Princess Diana used a “letter of wishes” leaving personal items to her godchildren instead of specifying her wishes in a will or trust.
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5. Florence Griffith-Joyner’s (Flo Jo) Critical Error: Forgetting to Tell Loved Ones Where  Estate Planning Documents are Located

Olympian Flo Jo’s original will couldn’t be located and her probate estate took over 4 years to close.
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6. Michael Jackson’s Critical Error: Failing to Finish What You Start

Michael Jackson created a trust, but never fully funded it, defeating a primary purpose of having a trust. This led to public family fights in probate court.
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7. Marlon Brando’s Critical Error: Making Verbal Promises

Marlon Brando’s housekeeper said Brando made oral promises of a home and continued employment, which led to two separate lawsuits after Brando’s death.
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8. Sonny Bono’s Critical Error: Procrastinating

Sonny Bono passed away at the age of 62 without a will in place. This led to many complications, including a secret love child who surfaced and wanted part of Bono’s estate.
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9. Whitney Houston’s Father’s Critical Error: Leaving Your Intent Unclear

Whitney Houston’s father, John, named Whitney as a beneficiary on a large life insurance policy, but it was unclear if he wanted Whitney to keep the money or to turn over the money to her step-mother. This  confusion led to a two-year court battle, which is ongoing.
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10. Doris Duke’s Critical Error: Choosing an Untrustworthy Executor or Trustee

Doris Duke chose an unsavory trustee – her butler – to manager her one billion dollar foundation. When he used assets for himself, it lead to an expensive fight in court that cost the charities Duke wanted to
benefit.
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Obviously there is much more to know and learn about the benefits of a Living Trust!

Contact Me Today to learn more about establishing a Living Trust for you and your family!

*The articles on this blog are for education and entertainment purposes only and should not be taken as financial or legal advice. See legal disclaimer for further information. If you would like more information about how something listed in any of my posts specifically affects you, please feel free to comment below, email me, or call me anytime.

As I’m sure you’re very aware by now, Steve Jobs passed away on October 5, 2011.

Shortly after his passing, Forbes.com had an article titled, Steve Jobs Appears To Have Protected His Estate With Living Trusts.  What follows below are excerpts of what I found interesting in the article.
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Soon after the tragic news broke of the passing of Steve Jobs, Apple co-founder and innovator extraordinaire, people began wondering what would become of his fortune.  Forbes recently estimated Jobs’ wealth at $7 billion…

…usually people with that much wealth do the proper estate planning, including using living trusts, charitable bequests, and more.  Not only does this keep their affairs private, it can help minimize estate taxes.  Topping out at 35%, the current estate tax laws — while much lower than in years past — will obviously take a big bite out of Jobs’ family fortune.  That comes out to almost $2.45 billion in taxes, if Jobs did not do the proper planning.

Ultimately, we are unlikely to ever discover the full extent of planning Jobs did to minimize his taxes.  When living trusts are used the right way — and assets are funded into them before death — families are protected by privacy.

Wills must pass through probate court to work, which means they are public record.

Trusts, on the other hand, when properly funded before death, remain out of the public eye, unless there are problems, like a lawsuit.

Reuters reported that Jobs did use Living Trusts.

Real estate records in California show that in March, 2009, which was about two months after Jobs took his second leave of absence from Apple, Jobs and his wife transferred three real estate properties into two different trusts. This means he funded those trusts with that real estate.

Funding a trust is key to using it correctly.

Does this mean Jobs funded all of his assets, such as his Disney stock, into his trusts too?  We don’t know. But with someone as intelligent — and private — as Jobs was, the smart money is on him having done so.

The only way we’ll find out for sure, though, is if someone files his will in probate and opens his estate.  If that happens, it would be reported what assets have to pass through probate, which would only include assets that were not funded into the trusts during his life.

Jointly-held assets, such as joint bank accounts with his wife, and assets with beneficiary designations, like insurance, also would not have to pass through probate in most cases…

…In Job’s family, his first child was born out-of-wedlock to another woman, before his marriage, so doing the right legal planning was even more important for him.  A child does not have an automatic right to share in the inheritance, so how much Jobs chose to leave her — and his other children — was up to him.

When people don’t make their intent clear in their estate planning documents, families often fight over their wishes, especially when there are children of different parents involved.

So many rich and famous people fail to do the proper estate planning. Michael Jackson, James Brown, Gary Coleman, Sonny Bono, Jimi Hendrix, Martin Luther King, Jr., and Stieg Larsson are just a few ….

It’s refreshing to write about a celebrity who apparently did things right.
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Obviously there is much more to know and learn about the benefits of a Living Trust!

Contact Me Today to learn more about establishing a Living Trust for you and your family!

*The articles on this blog are for education and entertainment purposes only and should not be taken as financial or legal advice. See legal disclaimer for further information. If you would like more information about how something listed in any of my posts specifically affects you, please feel free to email me, or call me anytime.

One of the major reasons people chose to establish a Living Trust is to avoid probate.

Probate can be a very time-consuming and costly experience for your beneficiaries.

What happens to someone’s home when he/she/they pass away all depends on how title is held.
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If you own title to your home and don’t have a will or a Living Trust, then your home will go through the probate process.

The court process, known as probate, will follow your state’s probate laws and distribute your real estate according to state law.  Your state’s laws may or may not be in agreement with how you would like your real estate to be distributed.

Furthermore, while this process is occurring, attorneys and the court system, will be charging fees to your estate.
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If you own title to your home and have a will, then your home will still go through the probate process. 

Keep in mind that having a will provides instructions for probate.  So although your home/real estate will most likely go the people you want, the probate process will still occur.

Remember also, that while this process is occurring, attorneys and the court system will be charging fees from your estate.

Furthermore, since the probate process is part of public record, anyone can see what you owned and how you owned it.

Also, if someone believes they have a legal right to your property they can argue within the probate process.  This could potentially delay anyone from receiving your real estate until probate decides who has the legal right to your real estate.
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One way people have tried to avoid probate with their home is to add their child(ren) to the title of  their home. 

The problem with this strategy however, is that adding your children on title as joint tenants also means that they are then co-owners of your property.

This means that you need their permission to sell or mortgage your property.

It also means that your property could be subject to the claims of their creditors.

You may create unneeded liability and tax consequences upon your children.

Finally, when you add your child on title as a joint tenant, you may be liable for gift tax, and if your child
dies before you, your family may have to prove that your house should not be probated in their estate settlement.
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Transferring your real estate into a Living Trust is one of the BEST ways to avoid probate.

In fact, if you have a Living Trust, most professionals would highly recommend that all your real estate be transferred into your Living Trust.

Otherwise, upon your death, depending on how you hold the title, there will be a death probate in every state in which you hold real property. When your real property is owned by your Living Trust, there is no probate anywhere.
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Obviously there is much more to know and learn about the benefits of a Living Trust!

Contact Me Today to learn more about establishing a Living Trust for you and your family!

*The articles on this blog are for education and entertainment purposes only and should not be taken as financial or legal advice. See legal disclaimer for further information. If you would like more information about how something listed in any of my posts specifically affects you, please feel free to comment below, email me, or call me anytime.

Nobody, including myself, wants to dwell on the topic of death, but for better or worse, it is going to happen to most of us someday.

My hope for all of us is that it happens after a well lived life, but tragically however, most of us know of someone who has passed away long before we felt they should.

And unfortunately, we as parents need to consider what would happen to our minor children if we should pass away prematurely.

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It is my belief that one of the most important things we can do as parents is to protect our children, especially when they are minors.

If we die with minor children, the Court will appoint a Guardian for that child; therefore, if you want to determine who that person will be, you need to designate your choice of the Guardian in your Will.

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Without a trust, the Guardian will also take charge of the assets going to the child, all of which will be under court supervision (with all of the costs and delays involved in that process).

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With a trust, when minors are the beneficiaries, our designated successor Trustee can manage and invest the trust funds, free of the costs and restrictions that arise when the Court appoints the Guardian.

Another benefit of a trust is that we can choose who will manage the assets on behalf of our minor children.  We may choose the same person as the guardian, or we can chose someone else to manage the funds.

Additionally, with a trust, we can continue the management of a child’s assets to whatever age we desire.  For example, we may not want to have all the remaining assets given to our children when they reach age 18 (the age at which ALL guardianships must terminate).

The management of a child’s assets in a trust can include disbursement of assets and/or funds in increments, according to our directions (e.g., 1/3 distribution at age 25, 1/3 distribution at age 30, and the balance at age 35).  Of course, during this period, the trustee can use any or all of the trust principal for the benefit of the beneficiary (e.g., education).

Obviously there is much more to know about the benefits of a Living Trust!

Contact Me Today to learn more establishing a Living Trust for you and your family!

*The articles on this blog are for education and entertainment purposes only and should not be taken as financial or legal advice. See legal disclaimer for further information. If you would like more information about how something listed in any of my posts specifically affects you, please feel free to comment below, email me, or call me anytime.

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A Living Trust is important to have for many reasons.  One of the most important reasons to have a Living Trust is to avoid probate.

Probate proceedings are legal proceedings, that are a matter of public record, and are used to wind up a person’s legal and financial affairs after death.  In California, probate proceedings are conducted in the Superior Court for the county in which the decedent lived.  A “normal” probate process without any glitches can take about eight months.  Some probate proceedings have been known to go as long as several years.
                                                                                   

Dying Without a Will or a Living Trust

When someone passes away without a will or a Living Trust, than that person is said to die “intestate.”  If this person dies owning property that is subject to administration in the probate court, than a probate proceeding will begin.

Since this person has left no instructions on how they would like their estate distributed (through a will or Living Trust), the court will follow state statutes in administering and distributing the person’s estate.

The government’s estate plan is called “Intestate Probate” and guarantees government interference in the disposition of your estate.  Documents must be filed and approval must be received from a court for all major decisions – and it all takes place in the public’s view.  If you fail to plan your estate, you lose the opportunity to protect your family from an impersonal, complex governmental process that can become a nightmare for your family.

You and your family may not agree with the state statutes, and the government’s handling of your estate.  But if you pass away with no written instructions, then the government/court system will be involved in the distribution of your estate.

Dying With a Will

Simply put, a will provides instructions for probate.  Although this is better than having no instructions for probate whatsoever, the decedent’s family will still have to go through the entire probate proceedings.

As a reminder, probate is a public matter, the proceedings are a part of public record, and anyone can come forward during probate and argue the validity of the will and/or make claims against the estate.

Once your will enters the probate process, it’s no longer controlled by your family, but by the court and probate attorneys.  Probate proceedings, without any “glitches” can take approximately 8 months.

If there are any complications during probate, than the process can take as long as two years or more to complete.

Furthermore, California Probate Code section 10810 sets the maximum statutory fees that attorneys can charge for probate.  As an illustration, fees start at four percent of the first $100,000 of the estate, and continue from there.

Dying with A Living Trust

When properly written and funded, a Living Trust will avoid probate.

A Living Trust avoids probate because your property is owned by the trust, so technically there’s nothing for the probate courts to administer.

A well-written Living Trust will also include protections for you while you’re still alive.  For example, a Living Trust will include a plan for the possibility of your own incapacity, control what happens to your property after you are gone, prevent your financial affairs from becoming a matter of public record, can be amended at any time, includes Powers of Attorney, health-care directives, and much, much more!

Also note that even with a Living Trust you should still have a complementary will (known as a “pour-over will”; this type of will makes sure that any assets which may not be in your Living Trust at the time of your death “pours-over” to the trust so everything is distributed pursuant to the terms of your Living Trust.

For more information on how a Living Trust may benefit your family, click here.

Contact me today to learn more about the benefits of getting a Living Trust started today!

*The articles on this blog are for education and entertainment purposes only and should not be taken as financial or legal advice. See legal disclaimer for further information. If you would like more information about how something listed in any of my posts specifically affects you, please feel free to comment below, email me, or call me anytime.

Having completed all the requirements under the California Business & Professions Code section 6450, I am now a Legal Document Assistant under California Law.
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What is a Legal Document Assistant?

Formerly called Independent Paralegals, beginning January 1, 2001, California Law redefined “paralegal” to mean only those that work for and are supervised by attorneys.

A Legal Document Assistant (LDA) is an experienced professional who is authorized under California law to prepare legal documents for consumers.  However, an LDA is not an attorney and cannot provide legal advice or represent individuals in court.

LDA’s have the same educational background/requirements as a paralegal and are required by law to be bonded and registered in the county in which they have their principal place of business. Paralegals are not required to be bonded and registered.

I am registered as an LDA in Orange County – LDA #294 which expires 08/09/2013.  LDA’s have to re-register every two years.
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What Can a Legal Document Assistant Do?

At a client’s direction, LDAs can complete court forms, helping to avoid pitfalls and making sure that all important details on a form are properly filled in.  LDAs may also file forms with the court and have them served.  LDAs may supply books and publications authored or approved by attorneys.

LDAs may work directly with the public, without the supervision of an attorney.  A paralegal on the other hand, cannot independently prepare documents for consumers and must work under the authority of an attorney.
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What Does This Mean for You?

This means that I will be able to assist you in preparing your Living Trust/Will for a fee significantly less than what you would pay an attorney.

It also means that you will have better service and direct one-on-one access to me rather than having to rely on some software/website prepare your trust without any real assurance that the completed document is accurate and correct.

I have met many people who have decided to purchase software or rely on a website to complete their trust only to discover some crucial element was missing.  This was not because the website did anything wrong, it was because the user misunderstood or was confused by the massive amount of information that they had to go through.
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New Service, New Website, More Information!

Be on the lookout next week!  I will be announcing my new website, along with my new service –complete with pricing and all the information you’ll need to make an educated decision.

In the meantime, if you have any questions, or need any additional information, feel free to contact me anytime.

*The articles on this blog are for education and entertainment purposes only and should not be taken as financial or legal advice. See legal disclaimer for further information. If you would like more information about how something listed in any of my posts specifically affects you, please feel free to comment below, email me, or call me anytime.

If it’s been a while, now may be a good time to go through some of your records and double-check to make sure that the beneficiaries listed on your accounts are the ones you want.

In case you were wondering: Pension companies, retirement accounts, and life insurance companies have no idea when people pass away.

This is why it’s a good idea for us to always make sure that our list is current.

Along with updating our beneficiaries, we should also make sure that our beneficiaries know they are listed on our accounts, and that all information is easily accessible to them should something happen to us prematurely.

Situations that occur when beneficiaries should be updated:

• Marriage
• Divorce
• Children’s birth – don’t list minor child as beneficiary
• Children reaching 18 years of age
• Death of a previous listed beneficiary
• Establishment of a Living Trust/Will

I have heard several stories of retirement-account owners who have been divorced and remarried but have neglected to update their beneficiary designations accordingly. As you can imagine, this can be quite frustrating for their survivors, who must battle in court for a legal determination of the true beneficiary. The court’s decision, however, may not necessarily be what the deceased would have wanted.

Documents/Records to review/update beneficiaries:

• 401(k), 403(b), IRA, Roth IRA
• Life Insurance Policies
• Living Trust/Will Documents
• Pension Plans

*The articles on this blog are for education and entertainment purposes only and should not be taken as financial or legal advice.  See legal disclaimer for further information.  If you would like more information about how something listed in any of my posts specifically affects you, please feel free to comment below, email me, or call me anytime.

Just looking over the returns over the past week would make anyone feel anxious and nervous about what’s to come.

Here is how the Dow Jones closed the week of August 9^th:

Monday        Down     634 points – 6^th worst point decline in stock market history.

Tuesday        Up         429 points

Wednesday   Down     519 points – 9^th worst point decline in stock market history.

Thursday         Up       423 points

Friday             Up       125 points

In case you’re unfamiliar with how the stock market works, these are some very extreme swings in the market.

I don’t know about you, but I think it’s time we take a look at some of the myths that surround the stock market and investing.

I hear these comments all the time when I listen to the “gurus,” and it is very frustrating.

Just because something is repeated over and over again doesn’t make it true.

These myths need to be exposed for what they are: false statements that are not based on fact.

Myth #1:  This is a good time to invest in the stock market.

No matter what is happening in the market, we will always hear someone say this is a great time to invest.  This statement usually comes from stock brokers and money managers who make a commission on people buying and selling.

Quick question:  When was the last time you heard a stock broker say it was a bad time to invest?

When the markets are dropping, we’ll hear people telling us it’s a great time to buy, because we’re buying cheap.

When the markets are rising, we’ll hear people tell us it’s a great time to buy, because the economy is getting better and we don’t want to miss out on the opportunity.

Myth #2:  The stock market averages 8% a year.

You might have been able to average 8% or better in the 1980’s and 1990’s due in large part to the housing bubble and the dot com craze, but those days are long gone.

Just looking over the past 5 or 10 years we see a much different story.

For the last 10 years ending 8/1/11 the Dow Jones has averaged only 1.54% per year.

For the last 5 years ending 8/1/11 the Dow Jones has averaged only 1.81% per year.

This is quite a bit less than 8%. 

Times have changed and we better start seriously questioning the advice we hear.

Myth #3:  To protect yourself you should have a diversified portfolio of mutual funds and stocks.

What’s the point of diversification?  To water down losses when certain sectors of the economy are down.

Have you ever stopped to think about the opposite situation?  If being diversified waters down your losses, don’t you also think it will water down your gains?

Another thing to keep in mind; being diversified in the market, still means all your money is in the market.

Being truly diversified means you have money in the market, in real estate, in businesses, in savings, in money market accounts, etc.

Myth #4: If you want to earn higher returns, you have to take more risk.

Whenever I hear this phrase, I always think of Las Vegas.  If we start making our investments sound like gambling, then we shouldn’t be surprised when we start to lose money.

This must also come as a surprise to Warren Buffett, and all the other millionaires/billionaires who make their money investing in the markets.  They spend countless hours and manpower researching and studying companies before they invest.

Sure they lose money from time to time, but the fact that they’ve made billions of dollars in the market would strongly indicate they are not taking too much of a risk – they can’t be that lucky.

Myth #5:  Stocks do better over the long term.

Define “long term.”  What long term?  Whose long term?  Compared to what?

Oftentimes this myth is stated with no discussion of the above questions.

My point in all this is not to scare anyone or getting people worried about the future.  My point is that the market has changed and things are different now.

Some people will hold on to past beliefs and struggle during this time of change.  Others will question the old way of thinking and make the necessary changes to move forward.

If you’re tired of worrying about your money and what the stock market is going to do next, now may be a good time to re-evaluate your
current situation.

If you would like a second opinion on your finances and the strategies you have been using, feel free to contact me anytime.  My consultations are always free,  and I will not pressure you into any investment you don’t fully understand and desire.

*The articles on this blog are for education and entertainment purposes only and should not be taken as financial advice. I  understand that every person’s situation is unique and should be treated as such. Please contact me, or another financial  professional, for specific advice regarding your situation. I try my best to keep the information current, but things are always changing, so it may be different now than when it was first published. If you would like more information about how something listed in any of my posts specifically affects you, please feel free to comment below, email me, or call me anytime.

If you have been listening to the news at all lately, you will have heard about how the US debt rating has been downgraded for first time in our history.  On Friday, August 5^th, the S&P announced that it was reducing its credit rating for long-term U.S. government debt from AAA, the highest rating, to AA+.

To make a long story short – this is not good.

To give you an idea of what this news has done to the stock market, consider the following:

On Monday, August 1^st, 2011 the Dow Jones Industrial Average closed at 12,132 points.

On Monday, August 8^th, 2011 the Dow Jones closed at 10,809 points.

The stock market dropped 1,323 points or 10.9% in just one week!

I believe now is as good time as any to question conventional wisdom and to seriously evaluate our own personal investment options.

One thing we know about the stock market is that it will go up and it will go down.

The question most of us have to consider is how comfortable we are with our investments in those times when the market goes down.

If you’re anything like me, and you don’t like to lose money you have worked so hard to earn, then now may be a good time to re-evaluate your current situation.

Next week, I will be discussing the myths that surround the stock market, and why these myths need to be exposed.

In the meantime, if you are at all concerned about your portfolio, and your current investment strategies, please feel free to contact me and we can take a look at your specific situation and evaluate what is best for you.

*The articles on this blog are for education and entertainment purposes only and should not be taken as financial advice. I  understand that every person’s situation is unique and should be treated as such. Please contact me, or another financial  professional, for specific advice regarding your situation. I try my best to keep the information current, but things are always changing, so it may be different now than when it was first published. If you would like more information about how something listed in any of my posts specifically affects you, please feel free to comment below, email me, or call me anytime.

This is the fifth and final part in my series on ways to invest your money, click here to read part one, part two, part three, or part four.

As I mentioned in my last post, when discussing Index Accounts, there are two philosophies at play.

#1 – The average investor/money manager can’t beat the performance of the stock market.

#2 –Never lose your money.

I’ve already discussed the first philosophy, and in this post I’ll be discussing the second philosophy.

When discussing Index Accounts, it is important to mention that having your money in Index Accounts can mean several things.  For instance, some Index Accounts fall into the category of Variable Accounts, in that your investment can go up and down, depending on how the particular index performs.

Other types of Index Accounts are designed to protect a person’s principal, and previously earned gains, without the risk of losing money when the market goes down.  These are the type of index accounts that I’m referring to in this post.

I believe it was billionaire investor Warren Buffett who said, “Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.” 

This is the basic theory behind investing your money in Index Accounts that protect your principal, and previously earned gains, without the risk of losing your money when the market goes down.

Like all investments, these types of accounts are very complex and detailed, and would be impossible to fully explain in a short article.  However, the basic underlining principals are fairly straight forward.

These types of investments are offered through insurance companies – which is why your principal investment and all future earnings are protected - and it does not have to be in a life insurance policy.  The basic idea is that, as long as you follow the contract, you will not lose any money in your account.  The “catch” – because there is always a catch to every investment – is that when the index goes up, you will typically get a percentage of the overall return.  In some years you may get 100% of the gain, and in other years you may get 50%.  Studies have shown, that over a long period of time, investors receive about 70% of what they would have received in the years the market went up.  The nice part about these accounts is that when the market goes down, there is no loss of previously earned gains.

To illustrate how a potential index account may work, I created the following illustration below.

Please Note:  The last two columns show the value of your money when looking at the dates illustrated.  The second to last column, shows the value of your money if you had invested it in the stock market – specifically in the Dow Jones Industrial Average (Dow Jones for short).  *The last column illustrates the value of your money if you had placed your money in an Index Account that I’ve been referring to.  *Further notice, that when the stock market (ie. the Dow Jones) goes down, the Index Account remains unchanged.  Also, to keep the Index Account realistic, I placed a 6% Cap on the Account – many accounts are set up in a similar way.  What this means is that you will get 100% of the gain in the Index up to a 6% “cap.”

*In the above illustration, the person who had their money in the Index Account, had $27,127 MORE at the end of ten years, then the person who was completely invested in the stock market.

I know that this can all be confusing, so please if you have any questions, feel free to call me for further explanation.

*The articles on this blog are for education and entertainment purposes only and should not be taken as financial advice. I understand that every person’s situation is unique and should be treated as such. Please contact me, or another financial professional, for specific advice regarding your situation. I try my best to keep the information current, but things are always changing, so it may be different now than when it was first published. If you would like more information about how something listed in any of my posts specifically affects you, please feel free to comment below, email me, or call me anytime.