Estate Tax Planning for 2011, 2012, and Beyond

As we enter 2012, time is running out to make all of your gifting, planning, and other tax-related decisions which will impact tax year 2011. With the start of the new year, it is also time to consider planning for the 2012 tax year. There is a sunset on the horizon, but it is not as pretty to look at as most. It is the sunset of the "Bush tax cuts," which were extended through 2012 by legislation in 2010. What lies beyond 2012 is too far beyond the horizon to see just yet, and much depends on how Congress deals with the impending change, assuming Congress deals with it at all.

Estate and Gift Tax Exemption

For 2011 and 2012, a $5 million exemption from estate and gift taxes is in place. This unified tax credit is per person, so proper planning between married couples can create an effective $10 million exemption. Estates above the exempted amount are taxed at a 35% top rate. If nothing changes, however, for 2013 and thereafter, the exemption would drop to $1 million, with a top tax rate of 55% for amounts above the exemption.

Will Congress continue the current exemption beyond 2012, or allow it to drop to the $1 million level of a decade ago? Will Congress eliminate the estate tax altogether, as it briefly accomplished for 2010, or will some compromise figure be reached, such as a $3.5 million exemption with a 45% tax rate? It may be too early to tell, but it is not too early to plan. If your estate lies between $1 million and $10 million in value, it may be wise to consider reducing the size of your taxable estate through charitable giving, the establishment of trusts, and other available mechanisms. Schedule some time to talk over your estate plan with a knowledgeable and experienced estate planning attorney, who can advise and assist you with immediate and long-term planning. In San Diego, contact the Casiano Law Firm for assistance.

Conflicting Wills Result in Challenge to Estate of Reclusive Heiress

In past blog entries we have noted that the elderly are especially susceptible to fraud, coercion, undue influence or duress, causing them to create or change their will or trust to name an abuser as a beneficiary.

Heiress Creates Two Conflicting Wills within Six Weeks

This week’s headlines have chronicled recent court filings in the death of reclusive heiress Huguette Clark, who passed away in May at the age of 104, leaving behind an estimated fortune of $400 million. Court filings disclose that Ms. Clark signed two wills, one on March 7, 2005 leaving the bulk of her fortune to her 21 relatives, and another on April 19, 2005, disinheriting her family entirely. In her second will, Ms. Clark noted that she was intentionally making no provision for any members of her family, having had only “minimal contact” with them over the years. Family members dispute this statement, and claim that the wills were executed around the same time that Ms. Clark’s attorney cut off their contact with Ms. Clark. The family members have filed a will contest, challenging the second will based on a number of grounds, including:

• Lack of testamentary capacity;


• Fraud;


• Undue influence; and


• Elder abuse.

The litigation over Ms. Clark’s estate is expected to be expensive, lengthy and contentious. Important questions surround the six week period during which Ms. Clark’s estate planning intentions changed so dramatically. Did her attorney or her accountant, who are named in the will as co-executors, exert undue influence over her? Did Ms. Clark understand the provisions of her will and what she was signing? Will the judge allow her accountant, a convicted felon, to serve as an executor? Will the judge allow her attorney, whose family has benefitted from nearly $2 million in gifts from Ms. Clark, to serve as an executor? How close was Ms. Clark to her relatives? These are all questions that will need to be answered over the course of the litigation.

San Diego Probate, Trust & Estate Litigation Attorney

San Diego attorney Vincent Casiano has significant experience in probate and trust litigation, including will contests, trust contests, and cases involving financial elder abuse. If you suspect that a loved one was coerced into changing their will or trust as a result of influence by an abuser, contact the Casiano Law Firm for experienced advice and representation.

Removing Assets From the Probate Estate

Probate is the court-supervised process used to determine whether a will is valid and to distribute the property of the estate according to the terms of the will or state laws of intestate succession for property not otherwise disposed of by will, trust, or other testamentary instruments. While court supervision is sometimes necessary, such as when there is a challenge to a will, a complaint about the executor or administrator of the estate, or other dispute among the intended heirs or beneficiaries, probate is generally a process to be minimized or avoided altogether if possible. This is because probate can take a long time to complete while the process winds its way through the legal system, while the cost of probate is taken out of the estate, reducing the value of the estate that would otherwise be distributed to intended heirs and beneficiaries.

In California, probate can be avoided altogether if the value of the estate is less than $100,000. Even if you have a larger estate, there are many ways to convert your property to non-probated assets, which will reduce the size of your estate for probate purposes. Below are some of the most popular instruments and vehicles used for removing assets from the probate estate:

Revocable Living Trusts - Assets properly placed in a living trust do not need to be probated. Living trusts have many other benefits as well, such as certain tax advantages, avoiding conservatorship of your assets, and generating income during your lifetime.

Jointly-Titled Property - When property is titled in the names of two people jointly, title to the property passes to the surviving spouse or other named party upon the passing of the other party. This could apply to your house, car, or any other investment property. There may be other reasons not to place the property in joint title; discuss this issue with attorney before making any major changes.

Insurance Policies, 401(k) plans - Any type of insurance policy or retirement plan that has a named beneficiary can automatically transfer the benefit to the beneficiary or beneficiaries upon death, without having to go through probate.

These are just some of the ways you can minimize or avoid probate of your estate. When forming or revising your estate plan, raise the issue of probate with your estate planning attorney to discuss the mechanisms which will work best with your overall estate plan. In San Diego and Southern California, contact the Casiano Law Firm to speak with an experienced estate planning and probate attorney.

Tony Curtis Estate Dispute: Children Allege Undue Influence, Duress, Fraud

Few disputes have the potential to be as emotionally-charged and contentious as trust and estate disputes, especially those pitting the children from the decedent’s prior marriage against a stepparent. When actor Tony Curtis died in September of last year, following years of poor health, he left behind an estate plan that completely disinherited his five children. In his will dated in May of last year, just months before his death, the actor named each of his five children-including actress Jamie Lee Curtis-and specifically and intentionally disinherited each of them. No explanation was given in the will. The will left the actor’s entire estate to his widow and fifth wife, Jill Vandenberg Curtis, with a small portion of the estate going to the couple’s charity.

Lawsuit Filed Contesting their Father’s Will

The actor’s daughter, Kelly, has filed a lawsuit alleging that their father was the victim of “duress, menace, fraud or undue influence” by his widow, Jill, which resulted in his changing the dispositive provisions of his estate plan just prior to his death. Kelly contends that she and her siblings were completely blindsided by the disinheritance and that their father would never have eliminated them entirely from his estate plan.

Auction of Personal Items Yields Over One Million Dollars

Earlier this month Tony Curtis’ personal effects were sold by his widow in an online auction which yielded over $1 million. Over 500 items were sold, ranging from cars to personal letters. The actor’s children were upset by the auction as they were not offered any personal effects from his estate, not even a personal item to remember their father by. In accordance with the terms of his will, the auction proceeds went to his widow, with a small portion to the couple’s charity. The auction served to only raise the ire of the actor’s children even further, and they were vocal about their displeasure in the media.

Families Feud When Children Disinherited in Favor of Subsequent Spouse

Whenever an estate plan completely disinherits children in favor of a subsequent spouse, a trust and estate dispute is likely to follow. In this case, the disparity in the age of Jill and Tony hasn’t helped matters-Jill is 42 years younger than Tony, and 11 years younger than Tony’s oldest daughter, Kelly.

Regardless of the size of the estate, estate planning involving blended families or children from previous marriages involves additional complexity and concerns. It is important to consult with an experienced estate planning attorney to ensure that your wishes are properly carried out, with minimal exposure to potential litigation. For experienced estate planning assistance in the San Diego area, contact the Casiano Law Firm.

Challenges to Estate Planning Documents and Elder Abuse Litigation

In last month’s blog entry we discussed the requirements for a valid California will and some of the potential grounds for challenging a will, including allegations of:

• Lack of testamentary capacity


• Fraud


• Undue influence


• Duress


• Improper execution of the will


• Elder abuse

Financial Elder Abuse Litigation

Unfortunately the elderly are particularly vulnerable to fraud, coercion, undue influence and duress, often because of Alzheimer’s or dementia, or due to loneliness or isolation from friends and relatives. Many of our elders are being robbed of their hard earned savings by strangers, personal or financial advisors, caregivers or even family members. Many seniors have been coerced into creating or changing wills or trusts to name the abuser as the beneficiary, or changing beneficiary designations on life insurance or retirement benefit accounts to name the abuser as the beneficiary.

California has seen an exponential increase in the number of lawsuits filed alleging financial elder abuse, partly because of our growing population of seniors, and partly due to increased awareness and enhanced protection of elders due to changes in the law.

California Laws Protecting Elders from Financial Abuse

California law has been expanding protections for the finances of our senior citizens by broadening the definition of financial abuse and making it easier for victims to bring lawsuits and prove their case. California law defines financial elder abuse as the taking, appropriating or retaining the real or personal property of an elder for a wrongful use or with intent to defraud, or both. California law requires banks and other financial institutions to report suspicious conduct which may constitute financial elder abuse since bank personnel and financial brokers are often in the best position to notice the signs of financial elder abuse.

San Diego Probate, Trust & Estate Litigation
San Diego attorney Vincent Casiano has significant experience in financial elder abuse cases as well as probate and trust litigation arising out of financial elder abuse. the Casiano Law Firm for experienced advice and representation.

Rules for Valid Wills Create Traps for the Unwary

California's statute of wills contains several requirements that must be followed in order for a will to be valid. An invalid will could cause the estate to be probated according to the laws of intestate succession, where the wishes of the will-maker (the testator) are completely ignored, and the estate is distributed according to preset statutory rules.

Requirements for a Valid Will

In order to be competent to make a will, a testator must be 18 years old and of sound mind, possessing the necessary testamentary capacity to make a will. This means that the person must understand what it means to make a will, must appreciate the extent of his or her estate, and must know the family members and other persons whose interests will be affected by the making of the will.

The will must be in writing (i.e., typed or printed) and either signed by the testator or by another at the testator's direction. There must be two witnesses together at the same time to also sign the will, attesting that they witnessed the testator's signature or the testator's acknowledgement that the signature on the will belongs to him or her.

Numerous Ways to Challenge a Will

A will can be challenged (contested) in any number of ways. One may allege that any of the procedures outlined above were not followed properly, or that the testator lacked the testamentary capacity to make a will. Even a will that meets all the above requirements is invalid if it can be shown that the testator signed the will under duress or by virtue of fraud or undue influence. When more than one will is produced, difficulties arise as to which will should be accepted and admitted into probate. A will contest can cause drawn-out litigation where legal battles are fought over complicated factual and legal issues.

Always Seek Professional Assistance

As a lawyer who practices both estate planning and probate litigation, Vin Casiano knows that the best defense is a good offense, and the best way to keep a will safe from contests is to make sure that it is prepared correctly in the first place. Always seek the assistance of an experienced estate planning attorney to make sure your will is prepared with the care and skill required to be valid under California law and to withstand any legal challenges. In San Diego and Southern California, contact the Casiano Law Firm for sound legal advice and high-quality professional assistance.

The Importance of Funding Your Trust & Periodically Reviewing Your Estate Plan

You signed your estate planning documents and placed the original documents in a safe place. You're done with your estate plan, right? Not quite…you'll want to ensure that if you've created a trust as part of your estate plan, that your trust has been properly funded with the appropriate assets. You'll also want to periodically review your estate plan to make sure it still comports with your wishes and that it takes into consideration changes that may occur in your personal or financial situation.

Funding Your Trust

Your trust will control the distribution of those assets which are held in the name of the trust. Title to your assets must be properly transferred to your trust in order to avoid probate. If an asset is not transferred into the trust, a probate proceeding may be required. Transferring real estate to a trust involves preparing a deed and accompanying documents transferring title to the trust. Some assets, such as life insurance policies and retirement benefit accounts, are contractual in nature and controlled by beneficiary designations. Careful coordination of beneficiary designations is required to make sure these assets will be distributed as you intended.

Events Triggering the Need to Review Your Estate Plan

There are many changes in your personal or financial circumstances that could have an impact on your estate plan. A few examples include:

• A change in your marital status (marriage, separation, or divorce)
• Death or incapacity of a fiduciary or beneficiary named in your documents
• A change in your health condition
• Retirement or job loss
• Receiving a substantial inheritance

San Diego Estate Planning, Probate and Trust Administration
Thank you for reading our blog. If you have any questions regarding estate planning, or need assistance with the administration of a trust or estate, contact the Casiano Law Firm for experienced advice and representation.

Important But Overlooked Property Tax Exemptions

In last month’s blog entry, we discussed how property taxes are an important, and often overlooked, consideration in estate planning and estate administration in California. Many people don’t realize there’s a problem until they receive a large property tax bill indicating that their property has been reassessed for property tax purposes. In last month’s blog entry we discussed how property taxes work and why you should not transfer any interest in your real property without consulting an attorney first. Here are some of the questions we commonly receive regarding property taxes and the administration of an estate:

Will a property be reassessed upon the death of the owner?

Yes. Under California law, death of the owner is considered a change in ownership and the property can be reassessed as of the date of death for property tax purposes.

What about if the property was held in a trust? Is it still subject to reassessment?

Yes. A change in ownership occurs upon the date of death of the owner of the property, also referred to as the trustor, or lifetime beneficiary of the trust. The change in ownership and, if applicable, the date of reassessment, is the date of death the property owner, not the date of distribution to the successor beneficiary of the trust.

Will the property be reassessed if it passes to the decedent’s children?

Yes. However, if all or some of the property is passing to the decedent’s child(ren), the decedent’s child(ren) may qualify for a reassessment exclusion. In order to qualify, a Claim for Reassessment Exclusion Between Parent and Child must be filed with the Assessor’s Office within three years after the date of transfer, or prior to transfer to a third party, whichever is earlier, or within 6 months after the mailing of the notice of supplemental or escape assessment.

If the above time requirements have expired, and the property has not been transferred to a third party, a claim can still be filed, however, the exclusion will only apply to future tax years.

What about property passing to a grandchild?
Property passing to a grandchild may be exempt from reassessment if all the parents of the grandchild that qualify as a child of the deceased property owner are deceased. A Claim for Reassessment Exclusion Between Grandparent and Grandchild must be filed with the Assessor’s Office in a timely manner in order to qualify for reassessment exclusion.

San Diego Estate Planning, Probate and Trust Administration
If you have any questions regarding property tax reassessment, or need assistance with the administration of a trust or estate, contact the Casiano Law Firm for experienced advice and representation.