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Often in a marriage, one spouse is primarily responsible for handling and managing the finances and bill paying. However, that arrangement leaves the other spouse in the dark. When the hands-off spouse has to take over the financial responsibilities because of a death or disability it can be a great challenge. Anne Tergesen in her article “Estate Planning for the Uninitiated” in the Wall Street Journal provides some excellent tips to help both spouses stay informed. One of the best tips is to hire an estate planning attorney to make sure all documents are up to date and make sure that both spouses understand what each documents says and does.

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Burt & Associates is pleased to announce that Martindale Hubbell has awarded Heidi Richert Clerc with the AV Preeminent Peer Review Rating. This award is given only to those attorneys with the highest ethical Standards and professional ability.

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We are pleased to announce that the California Board of Legal Specialization has certified Heidi Richert Clerc in Estate Planning, Trust & Probate Law. Heidi joins the ranks of the other Certified Specialists at Burt & Associates (Julia E. Burt and Elaine E. Hill).

California attorneys who are certified as specialists have taken and passed a written examination in their specialty field, demonstrated a high level of experience in the specialty field, fulfilled ongoing education requirements and been favorably evaluated by other attorneys and judges familiar with their work.

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Making charitable bequests in Wills or Trusts is a common practice. However, many individuals merely name a charity and do not specify for what purpose such a gift should be earmarked. Recently, an extremely generous, if not equally frugal, librarian in New Hampshire left his entire $4 million estate to the University of New Hampshire. He stated that $100,000 must be used for the library, but did not specify how the rest of the funds must be used. The University has decided to use $2.5 million to expand a career center for students and alumni. However, the University has also decided to use $1 million to purchase a video scoreboard for the school’s football team. This decision is causing an uproar among students and community members who believe that the spirit of the gift is not being followed. The contention is that the donor would be “turning in his grave” if he knew that his money was being used to purchase a video scoreboard.

To prevent similar issues for your charitable gifts, you should leave specific instructions and directions as to how your gift must be used. If you do not, the charity has the discretion to use the funds in any way it chooses. Sample language includes, “To Charity X to be used for ___________” or “$$$$ to Charity X to establish a ______________ in my name.”

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A new development in probate law involves the use of transfer on death deeds for real property located in California. Other states have authorized the use of such deeds but it has only been available in California since January 1, 2016. Essentially, the deed works like any other transfer on death designation. When you die, your designated beneficiary inherits your house. The process sounds great in theory. Such a deed would completely circumvent a probate process. However, the use of such deeds should be done with extreme care and caution.

First, the transfer on death deed must be drafted in substantially the form outlined in the Probate Code Section 5642. The deed must be notarized and the beneficiary, or beneficiaries, must be specifically named. You cannot state, “to my children” or “to my siblings.” Such language is invalid and the transfer on death deed would fail.

Second, the person executing the deed must have “contractual capacity.” This is different than “testamentary capacity” and is a higher standard. Preparing a will requires only testamentary capacity. Testamentary capacity means that you understand that you’re signing a will, you understand who your natural heirs are, and you have an understanding of the types of property you own. Contractual capacity is a higher standard and requires that a person understand fully and completely whatever they are contracting to do.

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Forbes magazine just asked this controversial question in a recent article. The answer is almost always yes with relatively few exceptions. In California, everyone has an estate plan. Either you’ve created one yourself with a Will or a Trust or the State of California has an estate plan for you. This one is called intestate succession and the California Probate Code explains who will inherit from your estate if you die without your own documents.

It is true that a form of estate planning is the use of joint tenancy and beneficiary designations on your bank and brokerage accounts. These will trump the provisions in a Will even if you have one. However, what happens if the heir dies? What if your beneficiary designations are out-of-date? Also, often times it is unadvisable to hold property jointly with your children.

Another issue often overlooked are your personal effects. There is no way to put a beneficiary designation on an art collection or family heirlooms. A Will directs the disposition of where these items should go and to whom.

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Estate taxes issues present headaches for the simplest estates. These potential issues are compounded when the decedent is a celebrity. In the wake of Prince’s untimely death, his estate attorneys will be tasked with the momentous task of valuing his name and likeness. Essentially, someone will set a monetary value on Prince’s profit potential calculated on the day he died. A recent Wall Street Journal article explains that this task will inevitably lead to an IRS battle as the estate attorneys understandably want to make this value as low as possible while the IRS will want a very high number. A similar battle is currently taking place in the U.S. Tax Court in Michael Jackson’s estate.