There are special opportunities for specialized estate planning techniques in 2011 and 2012.  The unified credit amount is the highest ever, interest rates (AFR) are extremely low, and asset values have been reduced.  Now, is the time to consult with a qualified estate planning attorney to determine whether any of these specialized estate planning techniques are a good fit for you.

• Gifting

If you have wealth and would like to pass your assets to your children or grandchildren, this year and next are the perfect years to do so.  Each individual’s unified credit amount is $5 million; this means that a couple can give away $10 million without incurring any gift tax.

In addition, your estate planning attorney can show you how to compress certain underlying assets, leverage your unified credit and generation skipping tax credit with life insurance, and provide asset protection for your gifts.

• Charitable Lead Trust

This low interest environment and reduction in asset values makes lifetime charitable lead trusts more beneficial than normal.  A charitable lead trust provides an income tax deduction, stream of income for your favorite charity, and a lump sum for your family at the end of the charity’s term (i.e. at your death.)

• Loans to Family Members

Loans to family members are currently free or greatly reduced, depending on the size of the loan.  The current low interest rates allow minute interest payments that can be forgiven either under the unified credit amount ($5 million) or the annual gift tax exclusion ($13,000.)

• Grantor Retained Annuity Trusts (GRATs)

GRATs are simply a method for transferring assets in wealthy families and they work well in a low interest environment.  The government is currently trying to eliminate GRATs, so don’t delay consulting with a qualified estate planning attorney to determine whether GRATs are a good fit for you.

Take advantage of 2011 and 2012 and the unique estate planning opportunities these years provide.  Consult with a qualified estate planning attorney.

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.

Today many families are different than what they were a few decades ago. A large percentage of children are being born outside of marriage and many couples choose not to marry at all. Couples that are marrying are doing so at just about any age, from young adults to senior citizens.

The result is that most families can no longer get by with the average generic estate plan. Couples that plan not to marry need to pay close attention to their estate plans so that they can be sure to provide for their partners if something should happen to them. In many cases they want their partner to oversee their health care and finances if they are unable to do that themselves, or they may want them to take care of their final arrangements. Outside of marriage a partner’s legal rights are very limited, which is why it is vital to have an estate plan if you do not have plans to marry.

With an estate plan you can leave your assets to your partner, plus you can include a Medical Power of Attorney and a General Power of Attorney so that your partner can make decisions for you if you become incapacitated.

An estate plan is also important if you plan to enter into a second or third marriage. These days the divorce rate is very high, and as a result many marriages are not the first, but there are likely children involved from the first marriage. With an estate plan you can ensure that your children from your first marriage get a fair share of your estate when you die, plus you can make sure that you are providing for your new spouse and family.

When entering into a second or third marriage one of the best estate planning tools available to you is the prenuptial agreement. With a prenuptial agreement you can make sure that your new spouse will not attempt to derail the inheritance that you plan to leave to your children from a previous marriage. This type of agreement is also very helpful in preserving the wealth you have built up in the event that your marriage ends in divorce.

Having a solid estate plan has always been important, but with today’s families it is more important than ever.

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.

The majority of the time seniors will either use long-term care insurance to pay the cost of nursing home care, or they will try and qualify for Medicaid to help them cover these costs. In some situations it may be a good idea to use long term care insurance in order to help you qualify for Medicaid later.

One reason why someone might want to combine long term care insurance with Medicaid planning is if they can afford coverage for a certain amount of time, but may not be able to pay the premiums over the long term.

In this situation you can purchase insurance for a specific amount of time, probably about 5 years and then transfer assets during this time, either to family or through a trust created to hold these funds for family members. This will ensure that you will qualify for Medicaid when you can no longer afford your insurance premiums. With this tactic you will want to ensure that you keep enough of your assets to cover your premiums for at least five years, as well as any other expenses that you might have.

Another situation where you might considering combining Medicaid planning with long term insurance would be if you want to transfer assets from your name, but if something were happen would be unable to pay for the five year look back period that Medicaid requires. If you have long term care insurance, you will be covered until the penalty period is over and you would qualify for Medicaid.

Using a strategy of combining Medicaid planning with long term care insurance is a good solution if you have assets that you would like to protect if you should need Medicaid in the future. If you would like to using long term care insurance to supplement the five year look back period required by Medicaid, it is a good idea to talk with an attorney experienced in Elder Law and Estate Planning. An attorney can help you with your plan to ensure that it does what you intend to it do.

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.

Depending on your means, planning for your twilight years can be very challenging because to put it bluntly, none of us has a crystal ball and you simply don’t know how long you are going to live. The statistics tell us that people are living longer; the “oldest old,” those who are 85 years of age and older are the most rapidly expanding portion of the American population. This is as it stands now, and medical science is making strides on a continual basis, so there is no reason to think that the numbers of people living into their late eighties and nineties won’t continue to grow.

This increased longevity makes it all the more likely that you may spend some time in a nursing home or assisted living facility at some point in time, and the financial ramifications of this are profound. MetLife does a study on the subject each year, and the numbers are trending upward with no end to the increases in sight. In 2010 the average annual cost for a private room in a nursing home was $83,585, which is an increase of 4.6% over the 2009 average annual rate of $79,935.

The cost of residing in an assisted living community actually rose even more. In 2009 the average annual rate was $3,131 per month, which is $37,572 a year. In 2010 the average national cost rose to $3,293 a month or $39,516 annually.

In the state of California as a whole the cost of nursing home care is higher than the national average at nearly $105,000 annually for a private room; in San Diego it is about $97,500. The average cost for a year in an assisted living facility in San Diego is just below $37,000, which is right around the national average.

These are some eye popping numbers and the experts say that they will continue to grow, so it is useful to keep this in mind when you are planning your legacy.

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.

The process of estate planning has traditionally been about gaining personal control over your affairs to make sure that your wishes are carried out after your death. This endeavor is of course still central to estate planning, but there is an added dimension that is sometimes overlooked. One of the most amazing demographic trends of our time involves senior citizens. They are in fact the fastest growing portion of the population, and the group of seniors who are 85 years of age and older is growing fastest of all. This increasing longevity is making incapacity planning a must if you want to make sure that you are prepared for any eventuality.

Decision making power is at the core of incapacity planning. If you were to become unable to make your own decisions due to either physical or mental incapacitation, and you hadn’t planned for it, the court could be petitioned to protect you. If the petition is granted they will name a guardian who will make your personal decisions for you, and this includes medical decisions along with where you will reside. A conservator will also be appointed to handle your financial affairs, and this individual or entity will have the power to invest the assets in your estate.

You can, however, maintain personal control of the matter and take that decision out of the hands of the court with the proper estate planning. You simply execute a health care proxy naming the medical decision maker of your choice. You then add a durable financial power of attorney and with this document you select the individual that you would like to empower to handle your financial affairs in the event of your incapacity. As simply as that you have a solid incapacity plan in place, and if you ever decide to change the attorneys-in-fact you are free to do so as long as your capacity is intact.

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.

The field of elder law encompasses all legal matters that are of particular relevance to people entering their twilight years, and one of the possible eventualities that we may encounter as we age is that of incapacity. Many of us have seen the families of elder patients face difficult decisions, and it is not uncommon for family members to disagree about the correct course of action. This is one of the reasons why estate planning attorneys recommend that their clients include health care components when they are planning their estates. One of these that is very useful is the durable medical power of attorney, which is also referred to as a health care proxy.

When you execute this legal instrument you name a person of your choice to act as attorney-in-fact, and by doing so you empower this individual to make medical decisions for you in the event of your incapacity. Many people will also include a living will to elucidate their preferences when it comes to the medical procedures they would like to accept and those that they would deny should they become unable to make real-time decisions.

There is an added element to consider when you are making sure that your health care wishes are honored, and it stems from the passing of the Health Insurance Portability and Accountability Act of 1996. This law is in place to protect the confidentiality of your medical records by making it illegal for health care providers or insurance companies to share this information without your consent.

This sounds great on the surface, but some hospitals will not honor durable medical powers of attorney due to this law. They require a HIPAA release to allow your agent access to your health care information, so it is a good idea to add this to your estate plan. It is also useful to point out that you may want to add multiple family members to the HIPAA release so that they can all communicate openly with your doctors about your condition should you become incapacitated in the future.

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.

When an individual passes on, his or her estate is in most cases going to have to go through the process of probate. Probate is a legal proceeding conducted under the jurisdiction of the probate or surrogate court that is local to the deceased, and as such it requires the expertise of an attorney. There is no law requiring this, but the probate process is so full of legal twists and turns that a probate lawyer really is a must in just about every case. Many people do choose a family member to be executor of their estate, but this person is going to retain a probate attorney for guidance. In fact, there are those who retain a probate lawyer to serve as executor and attorney for the estate, feeling more comfortable placing the entire matter into the hands of an experienced professional.

So one of the foundational responsibilities of a probate lawyer is to guide estates through the process of probate. But because they do understand probate so well, they are also effective estate planners, equipped with the knowledge that it take to arrange an estate in a way that makes the probate process go smoothly. This is why people typically retain probate lawyers to help them draw up wills and address other estate planning issues, from advance health care directives to setting up trusts.

Some probate attorneys take it a step further and provide comprehensive elder law services. Recent census figures indicate that senior citizens represent the fastest growing segment of society in the United States, with the number of people 85 years-of-age and older growing fastest of all. This has created the need for an added layer of elder law expertise to guide people who need Medicaid advice, nursing home financing strategies, and assistance with things like incapacitation and disability planning. Dealing with the probate court is always going to be an important function of probate lawyers, but most are also ready, willing, and able to help their clients with every aspect of elder law.

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.

Estate planning can include preparations for every aspect of your twilight years and beyond. This can extend to matters of elder law such as retirement planning, the creation of living trusts, Medicaid assistance and incapacity planning in the form of durable powers of attorney and advance health care directives. Then of course there are after-death financial matters, with the goals being to protect your assets and do everything possible to facilitate a smooth and timely distribution to your heirs.

Another detail that should be a part of your estate plan involves funeral arrangements. It may not seem like a priority to a lot of people, but there are definitely very good reasons why you should make your wishes known. One of them lies at the root of one of the core purposes of estate planning.

Experiencing the passing of a loved one is a very difficult time for those left behind, and this recognition is a part of estate planning. It is important to try to minimize the stress placed upon your family and friends during this emotional time, and when you have no funeral plan in place, the matter will rest in the hands of the bereaved.

Depending on the dynamics of the family involved, there can be disagreements concerning the appropriate funeral arrangements. There are matters of cremation versus burial, and whether there should be a traditional funeral or a direct burial or cremation. The type of memorial service that should be conducted, if any, is another matter that must be addressed. Few of us would feel comfortable leaving our loved ones behind engaged in potentially acrimonious exchanges regarding the details of the funeral.

This possibility is completely eliminated when you take the time to state your wishes concerning desired funeral arrangements in writing and include this document as a part of your estate plan. It is one of the routine components of a well planned estate and something you should definitely take into consideration.

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.

Two of the primary objectives of estate planning are asset protection and ease of transference. Nobody wants to see their estate lose value for no good reason, and most people would like to see their heirs receive what has been bequeathed to them in a timely manner without a lot of hassles or red tape. Estates typically must pass through the legal process of probate, and this involves filing reams of paperwork with the probate of surrogate court and slowly wading through the process. In California the process of probate usually takes somewhere in the vicinity of eight months, and it can take longer if the estate is contested. The cost of going though probate is generally going to be around 5% of the value of the estate.

Getting back to our original estate goals of retaining the value or your assets while making it quick and easy for your heirs to get their inheritances, you can see that probate is the proverbial fly in the ointment. This is why you hear so much in estate planning circles about avoiding probate, and one way of doing so is with pay on death (POD) or transfer on death (TOD) accounts.

These accounts are rather self explanatory. If you open a pay on death bank account, you name a beneficiary, and that person will assume ownership of the account when you die. This can also be done with securities via a transfer on death arrangement. In the state of California and a handful of others, vehicle ownership can be transferred in this manner. Asset transference via POD and TOD accounts are direct and immediate, and these transactions are not subject to probate.

If you want to keep it simple and avoid probate, POD and TOD accounts may be a good choice for you. It is said that the simplest solution is the best one, and these accounts are indeed elegant in their simplicity and a very useful component to many estate plans depending upon the specifics of the estate in question.

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.

Many people think of an estate plan as being the exclusive domain of older folks who have acquired considerable assets, but this is really not the case. There are a number of estate matters that young adults should address as well, and they are not all financial in nature. Of course the estate plan will inevitably will be revisited as circumstance change over the years, but it is important to have certain rudiments in place from early adulthood.

One of the things that young people should consider is how they feel about medical care in the unlikely event of their incapacitation. Accidents are a fact of life, and though nobody wakes up in the morning expecting to become a “statistic,” there are numerous serious accidents in America each and every day. Advance health care directives like living wills and medical powers of attorney express your wishes concerning medical procedures you will allow and who you empower to make health care decisions in your behalf.

Another matter that makes estate planning relevant to young parents is that of child guardianship. When you make out a will, one of things that you would want to include would be your choice of child guardian in the event of your passing. When you think about it you can immediately recognize how important it is to state your wishes in this regard. Not only do you want to make sure that you are the one to make this decision for the good of your children, but naming a guardian also eliminates the possibility of acrimony among your loved ones concerning who would be the best custodian.

Though young parents may not have had the time to amass a great deal of assets, they still have to consider the financial well being of their children. Part of a solid estate plan would include ample insurance to cover their needs and provide stability into the future. Other forms of long term financial planning can also begin as a part of an estate plan that is constructed with the future of the children in mind.

As you can see, estate planning is not just for affluent senior citizens. It is something that the young need to consider as well, and the peace of mind that you gain when you have a plan in place makes it well worth the effort.

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.