If you are the fortunate recipient of an inheritance, be it small or large, from someone else’s estate, it is prudent to pause to evaluate the consequences. Tax Issues In the past, inheritances often came with tax consequences. Fortunately, this is not a problem for most Californians who inherit money or assets from other’s estates. The two most common tax issues related to inheritances are the estate tax, sometimes referred to as the “death tax” and the inheritance tax. The estate … [Read more...] about Handling an Inheritance

As clients of our firm well know, we are strong advocates for planning for not only our inevitable passing but also for the possibility for the need for some form of long term care.  It’s a fact of life that the longer we live, the greater is the likely need for long term care. Paying for that care can be very expensive.  The five basic methods to pay for such care are: 1.privately with one’s one assets; 2. with long term care insurance; 3. with Medicare, which is a limited benefit; 4. with … [Read more...] about Planning for Medi-Cal’s Look Back Period

One of the primary benefits of a trust is that the assets you include in the trust will likely avoid the probate process.  There are different types of trusts and we can assist you in determining which ones are right for you. A testamentary trust is a type of trust that is included in a will or a living trust, but does not go into effect until the person who created it dies. Trust administration is an important process and understanding how a testamentary trust works will help you make a … [Read more...] about What is a Testamentary Trust and Why Would I Need One?

There has been a very recent development in California’s End of Life Option Act. The Act is the law that permits terminally ill adult patients with capacity to make medical decisions to be prescribed an aid-in-dying medication if certain conditions are met. The law went into effect on June 9, 2016. Last week, a judge in Riverside County ruled that the Act was passed illegally during a special session of the Legislature called by the Governor that was supposed to focus on specific health care … [Read more...] about Update on California’s End of Life Option Act

Last month, we discussed the pros and cons of lending money to a family member for the purposes of assisting them with the down payment to obtain a home loan.  This month we will focus on the consequences of simply transferring the money to them as a gift. If instead of loaning a child a certain amount to be used as a down payment on a home, the funds are simply gifted to them, there are still some tax issues that must be considered. As we noted last month, in 2018, gifts under $15,000 per … [Read more...] about Hey Mom and Dad: Can You Help Me with My Down Payment? (Part II)

With the high costs of college these days, another frequent inquiry we get from clients with grandchildren is how to set aside funds for a grandchild's education. A commonly overlooked planning option is the Education Savings Account authorized by Internal Revenue Code Section 529. Often referred to as a “529 account”, this planning option permits you to reduce your taxable estate while earmarking funds for the higher education of a grandchild or any other family member, for that matter. Funds … [Read more...] about Helping Pay for the Grandkid’s Education

This is a common inquiry made by our clients with young adult children who are seeking to buy their first home.  Gone for most first time buyer are the days of loose loan underwriting standards that lead, in part, to the collapse of the real estate market in the last decade.  Most lenders now require sizeable down payments and good credit to obtain secured home loans. A common source of down payment money is the young buyer’s parents.  There are typically two ways that such funds are provided … [Read more...] about Hey Mom and Dad: Can You Help Me with My Down Payment? (Part I)