Law Offices of Connie Yi, PCLaw Offices of Connie Yi, PC2024-03-18T14:54:55Zhttps://www.connieyilaw.com/feed/atom/WordPress/wp-content/uploads/sites/1603535/2021/08/cropped-Connie-Site-Icon-New-min-32x32.jpgOn Behalf of Law Offices of Connie Yi, PChttps://www.connieyilaw.com/?p=503942024-03-18T14:54:55Z2024-03-18T14:54:55ZInclude everyone who matters to you
A good place to start is by making sure your estate plan includes everyone who is important to you. This might mean going beyond traditional family structures. For example, you might want to include close friends or mentors who have played a significant role in your life. It is about recognizing the diverse relationships that enrich our lives and ensuring they are acknowledged in our plans.
Support causes that promote diversity and inclusion
Another way to embrace diversity and inclusion during the estate planning process is by supporting causes or organizations that work towards these goals. You can do this by leaving a portion of your estate to charities or foundations that fight for equality, support marginalized communities or promote cultural understanding. This not only helps further the causes you care about but also sends a strong message about your values to your heirs.
Consider the impact on future generations
Finally, think about how your estate plan can influence future generations. By promoting diversity and inclusion, you are setting an example for your children, grandchildren, and beyond. You are showing them the importance of embracing differences and treating everyone with respect. This can be a powerful legacy that lasts much longer than any material possession.
Embracing diversity and inclusion in your estate plan is about more than just dividing your assets. It is about reflecting your values, including everyone who matters to you, supporting meaningful causes and influencing future generations. By considering these aspects, your estate plan can become a true reflection of who you are and what you believe.]]>On Behalf of Law Offices of Connie Yi, PChttps://www.connieyilaw.com/?p=503922024-03-04T04:54:58Z2024-03-04T04:54:58ZFunds in a 529 stay outside the estate
Under the Internal Revenue Code, funds in a 529 plan are not included for purposes of calculating the value of a grantor's estate. At the same time, the grantor retains ownership of the plan and has the power to change who the beneficiary is. This is ideal in the event that your original beneficiary dies or no longer needs the money in the future. In addition to a child, you can make a grandchild, niece or other family members as the account beneficiary.
Contributions can be frontloaded
In 2023, the gift tax exclusion was $17,000 per recipient. However, with a 529 plan, you can make gifts equivalent to five times that amount in a single transfer. The exclusion limit doubles for married couples, which means that you could reduce your estate's value by up to $170,000 with one contribution. Ultimately, this can help achieve some or all of your estate planning goals in a relatively easy manner. It's possible that a portion of any amount frontloaded could be credited back to your estate if you pass within five years.
Trusts, 529 plans and other tools may be available to help meet your estate planning needs. Ideally, you'll review your plan each year or after a major life event to ensure that it still accomplishes key goals or so that you can make changes in a proactive manner.]]>On Behalf of Law Offices of Connie Yi, PChttps://www.connieyilaw.com/?p=503902024-02-13T17:13:23Z2024-02-13T17:13:23ZEstate planning and life insurance
When appropriately combined, estate planning and life insurance let you provide your family with the needed financial support after you die. The best results may be seen when estate planning and life insurance are combined to make a comprehensive, cohesive plan.
Although life insurance can be used in estate planning in various ways, it is typically seen as providing additional financial support for your loved ones. It provides the family with the income needed to cover funeral costs, eliminate debts, and provide immediate funds to family members.
In many instances, life insurance policies do not face the same taxes that a person's estate is subjected to after death. Sometimes, life insurance funds are used to offset the estate tax expense.
Life insurance and your estate
Using life insurance to equalize your estate can assist in dividing your assets equally among multiple heirs. This benefit is particularly notable when dealing with assets that are challenging to divide, such as a business or real estate.
For instance, consider a scenario where a person has two adult children. One child may wish to sell the family business after the parents' passing, while the other intends to retain ownership. The child wanting to keep the business may need more financial means to buy out their sibling's share. In such cases, a life insurance policy could be designated for the child interested in selling the business, equivalent to its value. This approach ensures both children receive comparable inheritances without necessitating the sale of the company.
Life insurance is a powerful tool in estate planning. It can help create the peace of mind that comes from knowing that when you die, the transition of your assets will be smooth, and those you love will be adequately cared for.]]>On Behalf of Law Offices of Connie Yi, PChttps://www.connieyilaw.com/?p=503882024-01-30T23:26:37Z2024-01-30T23:26:37ZNot including a contingent beneficiary
Most people have one person in mind to name as a beneficiary to their financial accounts such as life insurance and retirement. However, it’s a mistake to only name a single individual to inherit the funds from those accounts; if they die before you, it means you don’t have anyone to leave them to. Naming a contingent or secondary beneficiary is wise and ensures someone receives the assets if your first choice passes away early.
Failing to update your plan
Prudent estate planning requires you to periodically update your documents. Whenever a major life change occurs such as marriage, divorce, birth, adoption or death, you’ll have to revisit your estate plan and make the relevant changes. Some people fail to take this crucial step, which can cost them later.
Not including healthcare plans
Some people don’t realize that healthcare plans are a big aspect of estate planning. One of the biggest mistakes is failing to include advance healthcare directives or a medical power of attorney and choosing an agent to ensure your wishes are upheld. If you are incapacitated in the future and cannot voice what you want in terms of medical care, it burdens your loved ones.
Only having a will
While it’s wise to have a last will and testament, only having that and nothing else in your estate plan is a mistake. This document only allows you to name beneficiaries and guardians for minor children and pets and how your final arrangements should be handled. Estate planning entails many more legal documents that go beyond what a will can achieve.
Estate planning isn’t a comfortable topic, but it’s necessary. Ensuring you do it right can ease your mind.]]>On Behalf of Law Offices of Connie Yi, PChttps://www.connieyilaw.com/?p=503862024-01-30T04:16:11Z2024-01-30T04:16:11ZIrrevocable and revocable beneficiaries
Most IRA and 401(k) accounts and insurance policies have beneficiary designations that are revocable. This means that the account holder can change their beneficiaries at any time, and they do not have to inform the current beneficiary or obtain their consent. When beneficiary designations are irrevocable, they can only be changed if the current beneficiary provides consent in writing. Divorce decrees sometimes name the couple’s children as irrevocable beneficiaries to make sure that child support obligations are met.
Community property laws
In states like California that have community property laws, all of the money earned and assets acquired during a marriage are considered the property of both spouses. This includes funds in accounts that may have beneficiary designations. When a married person in California opens a retirement account, half of the money they place into it belongs to their spouse. If they die, their spouse will be entitled to their half of the money regardless of who the designated beneficiary is. This is why a surviving spouse is usually the designated beneficiary in California estate plans. If the surviving spouse is not the designated beneficiary, the person who is the designated beneficiary will only receive half of the funds in the account.
Peace of mind
Estate plans should provide peace of mind, but they only do this if they are revisited from time to time to ensure that they still reflect the testator’s wishes. Checking beneficiary designations should be done regularly and after major life events like marriage or divorce. Revocable beneficiaries can be changed at any time, but irrevocable beneficiaries can only be removed if they give consent in writing.]]>On Behalf of Law Offices of Connie Yi, PChttps://www.connieyilaw.com/?p=503802024-01-19T16:15:13Z2024-01-19T16:15:13ZPets and poor estate planning
Pets present some unique challenges to estate planning in California. For many people, their pets are like children. They may fear that the welfare of their pet animals may not be taken into account by a heartless judicial system or even uncaring heirs. It certainly can cause some heartache for those that love their pets. Overall, pet owners should be concerned with avoiding the following scenarios:
the pet becoming property of the state
the pet being donated to an animal shelter and then destroyed
the pet being neglected or even “lost” by an uncaring heir
If your estate enters intestate succession, your pet ending up in a shelter is a very good possibility. Since California shelters destroy animals, your pet will then have a high likelihood of eventually being destroyed. Even if it ends up with an heir, avoiding this fate may be impossible unless you exert more control over your estate planning.
Protecting your pets through estate planning
Thankfully, you can take steps to avoid this horrific outcome by denying the government or your heirs the ability to disregard the well-being of your pets. This can be done by including guidelines in your will that explicitly state how an heir should take care of the pet. While you cannot actually leave money to a pet since pets are not legally recognized that way in California, you can give money to an heir with instruction that it should be used for the pet. Enforcing this will be hard if not impossible, so ensure that you trust that heir.
Alternatively, you could give the pet to an organization that will care for it like a pet rescue. Lastly, you can create a pet trust. This is probably the safer choice if you are that concerned about ensuring your pet's safety. The pet and money with instructions for care will be placed into a trust. If the caretaker fails to follow the instructions, they can be sued.]]>On Behalf of Law Offices of Connie Yi, PChttps://www.connieyilaw.com/?p=503792024-01-07T19:34:37Z2024-01-07T19:34:37ZChange your will and powers of attorney
One way to ensure your blended family is taken care of while you are revising your estate plan is to make changes to your will. You’ll want to remove your former spouse’s name and add your current spouse in their place to ensure that the right person receives your assets.
Your financial and medical powers of attorney should also reflect your blended family. You may want to name your new spouse as your agent to handle the finances and ensure your healthcare wishes are upheld if you’re unable to voice them in the future.
Update beneficiary designations
You might have one person in mind to inherit your financial accounts like your retirement and life insurance; usually, that would be your spouse. While it’s appropriate to name your current spouse as your primary beneficiary, they shouldn’t be the only person named. A contingent beneficiary should also be named in case your spouse passes away before you. This ensures that someone receives your assets. Likewise, if your former spouse is still named as a beneficiary, you should change your beneficiary designations immediately.
Provide for stepchildren
If your blended family includes stepchildren, you might want to reflect that in your estate plan. Naming them in your legal documents and even setting up a trust might be necessary if you wish to leave more assets to your biological children. You don’t have to treat your stepchildren equally to your biological kids.]]>On Behalf of Law Offices of Connie Yi, PChttps://www.connieyilaw.com/?p=503772023-12-20T03:05:53Z2023-12-20T03:05:53ZDesignate someone to make decisions
Estate planning sometimes involves making decisions that you're not comfortable with. Deciding who gets what from your estate can also be time-consuming. One way to solve these problems is to nominate someone to help you. This person can divide your heirlooms, assist with beneficiary-related disputes and help with similar matters.
Offer rotating selections
Sometimes, people have a selection of various heirlooms and other valuable items. In this case, offering items based on a rotating selection can be a smart move. Let your beneficiaries take turns choosing an item they want with the order determined by a random method, such as rolling a die or picking numbers out of a hat. This method can prevent disputes and ensure everyone gets their turn to claim valuable family heirlooms.
Sell items to resolve disagreements
Unfortunately, some heirlooms are highly contested belongings between your beneficiaries. If so, the only way to resolve these matters might be to sell an heirloom and split its value among those who wanted it. However, this method isn't ideal if you want to keep your heirlooms within the family. But it might be the only way to stop disagreements between beneficiaries.
Estate planning sometimes means making difficult decisions about your assets. Thankfully, using asset distribution methods lets each of your loved ones hold onto your valuable items.]]>On Behalf of Law Offices of Connie Yi, PChttps://www.connieyilaw.com/?p=503752023-12-08T05:08:12Z2023-12-08T05:08:12ZTaking inventory of assets
When most people pass away, they leave many assets behind. These assets aren't only physical belongings, such as homes, jewelry, vehicles and other valuable items. Retirement, bank and investment accounts are also crucial for an executor to access and manage. You can make this aspect of being an executor as easy as possible by leaving clear instructions for accessing financial and other accounts.
Distributing assets
An executor's duties also involve taking responsibility for your assets. For example, this individual can make investment decisions with your funds. An executor must also follow your wishes regarding asset distribution for beneficiaries. If you pass away without a will, this individual must follow California's law of intestacy rules.
Communicating with many parties
Some of an executor's most important fiduciary duties involve communication. Your executor will speak with beneficiaries, creditors, spouses and other parties with estate-related updates. Providing timely communication can help eliminate confusion for everyone involved.
An executor plays a vital role in helping to successfully close another party's estate. This individual will take on a lot of responsibility. If the person you choose puts his or her interests above your wishes, this is a violation of duties, which can incur penalties. Violations can lead to a court denying your executor’s ability to receive compensation for his or her duties.]]>On Behalf of Law Offices of Connie Yi, PChttps://www.connieyilaw.com/?p=503732023-11-27T20:47:10Z2023-11-27T20:47:10ZThink about updating your plan
Setting up an estate plan gives you peace of mind, but these plans have a way of getting out of date. If you are a parent, you may need to change how your plan covers your children as they approach adulthood and beyond. You may find it appropriate to name adult children as co-trustees of their trusts now that they are no longer minors.
Over time, one or more people named in your will or trust may have passed away. Whether the person you lost was a beneficiary, trustee or executor, you should update your plans to reflect the death.
Explore tax advantages
Depending on your tax obligations, the end of the year could be a good time to give cash gifts. For 2023, you may grant up to $17,000 in a year without imposing any income tax requirements. This does not have to be a direct cash gift. You can invest it for someone for later use.
Older individuals may also want to evaluate their tax situation. When required minimum distributions (RMD) from retirement accounts start and you do not need the money for personal expenses, you could investigate qualified charitable distributions. You can send the RMD to a charity and prevent that money from becoming your taxable income.
Talk about family heirlooms
When everyone is together for the holidays, you could ask who would like to receive your family heirlooms. Someone might really treasure an item whereas another relative has little interest in it. Knowing who sincerely wants what would allow you to provide specific instructions that ensure the transfer of your sentimental possessions.]]>