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- Planning For Minor Children
- Special Needs Planning
- Asset Protection Planning
- Business Succession Planning
- Estate Tax Planning
- Blind Trust
Planning For Minor Children
Many parents put off estate planning because they do not think they have substantial assets to protect. This outlook is common among young adults who think they have plenty of time to accumulate wealth and plan for it at a later date.
However, in failing to create a proper estate plan, many parents cannot adequately protect their children. All parents, with or without significant assets, should have an estate plan in place to set forth their wishes for their children which includes, among other things, the nomination of a guardian in the event that they have an untimely passing while the child is still a minor.
Long-Term Legal Guardian
In your estate plan, you can appoint a guardian for your children upon your passing. If there is no plan in place, the court will appoint a guardian based on what it deems to be in the best interest of your children or your children may be placed in the care of Child Protective Services. Unfortunately, the court-appointed guardian may not be your first choice and in some cases, he or she may actually be your last choice. From just a few brief hearings, it is often impossible for the courts to determine who is best suited to care for your children in your absence.
Nominating a guardian can be a very difficult decision and one that should not be made without serious consideration. The individual selected should provide stability for your children in the difficult transition and ultimately continue care in a fashion with which you are comfortable. Our firm has a great deal of experience in in the guardianship process and we can provide advice on various aspects of choosing a guardian.
Special Needs Planning
If you currently provide care for a child or loved one with special needs, you must have contemplated what may happen to him or her when you are no longer able to serve as the caretaker.
While you can certainly plan for them to receive money and assets upon your passing, such a bequest may prevent them from qualifying for essential benefits under the Supplemental Security Income (SSI) and Medicaid programs. If you do not leave them any assets, the benefits provided by these and other programs are generally limited to the bare necessities such as food, housing and clothing.
As you can imagine, these limited benefits will not provide the resources that would allow your loved one to enjoy a richer quality of life.
Fortunately, the government has established rules allowing assets of the individual with special needs to be held in trust, called a “Special Needs” or “Supplemental Needs” Trust without resulting in disqualification for SSI and Medicaid, as long as certain requirements are met.
Our law firm can help you set up a Special Needs Trust so that government benefit eligibility is preserved while at the same time providing assets that will meet the supplemental needs of the person with a disability (those that go beyond food, shelter, and clothing and the medical and long term support and services of Medicaid).
The Special Needs Trust can be used for a variety of life-enhancing expenditures without compromising your loved one’s eligibility such as:
- Annual check-ups at an independent medical facility
- Attendance of religious services
- Supplemental education and tutoring
- Out-of-pocket medical and dental expenses
- Transportation (including purchase of a vehicle)
- Maintenance of vehicles
- Purchase materials for a hobby or recreation activity
- Funds for trips or vacations
- Funds for entertainment such as movies, shows or ballgames.
- Purchase of goods and services that add pleasure and quality to life. This may include computers, videos, furniture or electronics.
- Athletic training or competitions
- Special dietary needs
- Personal care attendant or escort
Asset Protection
Our firm has expertise in assisting clients with the arrangement of their finances, real property, and other assets in a manner that minimizes their exposure to potential creditors. We are well versed in establishing protective trusts, determining insurance needs, and structuring investments and business entities so that our clients are able to enjoy the highest level of confidence in the security of their accumulated assets.
Assets owned by a properly structured irrevocable trust, foundation, or business entity limit individuals from reaching the assets held by them. In addition, placing assets into an asset protection entity may have the benefit of removing those assets from a person’s taxable estate.
We know how to evaluate current client holdings and work with our clients to identify the best ways to legally protect those holdings from a variety of creditors, whether through civil suits involving negligence or malpractice.
The exact strategies employed by our firm will vary depending on the client, the nature of the assets, the country of origin, and the tax regulations that apply to those assets, but the goal is always to effectively protect assets in a manner that is effective, legal and ethical.
We help clients protect their wealth using a variety of strategies including the use of special trusts, business entities and other legal arrangements.
Contact our firm today to schedule an initial consultation.
If an owner or shareholder does not have a succession plan in place, his or her stake in the company is either passed on to relatives as part of the estate, absorbed by other shareholders, or a combination of the two. In family-owned businesses, this often leads to disputes between siblings and other relatives. Those more active in the day-to-day operations of the business may feel entitled to larger shares than others who are less involved.
In larger corporations, employees and clients may leave the company for fear of instability. Additionally, without prior planning, remaining shareholders may not have sufficient resources needed to purchase the shares of the exiting or deceased shareholder. This can lead to a situation where a spouse or child of a deceased shareholder attains an ownership stake in the company which can result in disputes, stalling progress and possibly leading to a loss of assets. Furthermore, if the exiting shareholder had a management duty, her replacement may not be equipped to take over her role through such a delicate transition time.
With A Plan
An attorney with expertise in business and estate planning can help owners and shareholders put together a plan that facilitates a smooth transition. Plans are customarily created after employees, coworkers, shareholders and family members have been consulted and goals for the future of the company have been outlined.
Succession planning can be tailor-made to fit any business model and should address the following issues:
- Keep the business or shares within the family. With a retention plan, a spouse, children, or other relatives can retain control of assets.
- Offer shareholders or vital employees a larger stake in the company. Interested parties stipulated in the plan will be granted the right of first refusal, or the ability to accept or reject the shares of the exiting or deceased owner before they are offered to individuals outside of the company. The price of the shares can be determined by a valuation mechanism agreed upon during succession plan negotiations. For example, a valuation mechanism may require that shares be offered at their prevailing market value, or require multiple professional business valuation appraisals
- Address issues related to your estate plan as well as minimization of potential estate taxes.
- Preserve “institutional memory” when you or other current managers are no longer running the show. For example, you can empower advisors to aid the transition team and ensure continuity, oversee day-to-day operations, provide provisions for heirs who are not directly involved in the business, and provide education and training to family members and key employees who will take over the company.
- Establish measures to ensure the business has enough cash flow to pay taxes or buy out a deceased owner’s share of the company.
- Implement a family employment plan with policies and procedures regarding when and how family members will be hired, who will supervise them, and how compensation will be determined.
What is the Estate Tax?
Estate tax is levied on the estate of a deceased person prior to it being dispersed to their heirs. You may have heard it referred to as the “death tax”. It does not apply to all estates, only those that reach a certain threshold of value, and that value differs from state to state.
California Estate Tax
California does not levy an estate tax on any estates, regardless of size.
Federal Estate Tax
Even though you won’t owe estate tax to the state of California, there is still the federal estate tax to consider. The federal estate tax goes into effect for estates valued at $11.7 million and up in 2021. This tax has full portability for married couples, meaning if the right legal steps are taken a married couple can avoid paying an estate tax on up to $23.4 million after both have died.
Blind Trust
A blind trust is a living trust that is completely controlled by the trustee. The settlor – that is, the person who assets fund the trust – and the beneficiaries have no control over or knowledge of the status of the assets held in a blind trust. These trusts are designed to prevent conflicts of interest and maintain privacy.
A blind trust is a type of living trust, either revocable or irrevocable, that grants full control of assets to the trustee. The trustee for a blind trust cannot be the trustor. The trustee must be a third party who doesn’t have a close, personal relationship to the trustor. This is necessary for a blind trust to serve its intended purposes: avoid conflicts of interest and achieve a high level of privacy.
The key difference between a blind trust and other types of living trusts is that neither the trustor nor his or her beneficiaries have the authority to manage any aspect of the trust or the assets held in it after the blind trust has been finalized.
The settler may dictate the parameters of the trust as it’s being drafted, including naming the beneficiaries and stipulating the goals for any investments held in the blind trust. But after the trust instrument – the written document that authorizes the trust – has been signed and completed, the trustor and beneficiaries have no more communication with the trustee regarding the handling of assets.
Persons having a strong interest in establishing a blind trust are politicians, board members of publicly traded corporations, lottery winners, investment advisors, and persons who wish to keep their identity secret as an investor in a regulated entity where a blind trust is permitted. State and federal laws govern blind trusts, so people who wish to establish one must enlist the help of an experienced lawyer.
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ABOUT US
At C.S. Scarcella & Associates we are blessed to serve our clients with professioanlism and the care you deserve! We know an estate plan must adapt to the changing landscape of ongoing tax changes, and the different needs at different times in ones life. We use cutting edge planning tools to customize your estate plan to suit your unique needs at whatever stage of life you're in. From our exclusive Children's Protection Plans, to our Personal Asset TrustsTM, Living Trust PlusTM, and recorded Legacy Conversations we have you covered. Expect success because we regularly follow up to make updates. No other Will and Trust law firm offers this spectrum of services nor do any have the review process that we utilize.
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Claremont, CA 91711
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