Daryl L. Binkley, Esq

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Desert Estate Planning Law Blog : Palm Springs Estate Planning Lawyer & Attorney : Daryl Binkley Law Firm : Palm Desert, Indian Wells, Southern California

Daryl L. Binkley
Insight & commentary for Indian Wells, Palm Desert, Palm Springs, Rancho Mirage & other desert communities

When my grandmother passed away about 10 years ago, her estate had a six-figure estate tax bill due. Money that would've went to her heirs (including my mom)--went to the government instead. In 2010, the current status of the Estate Tax is that it is on a one-year hiatus, set to reset in 2011, at the same rate it was when my grandmother passed away.
New York Times writer, David Kocieniewski sums up the current situation of the Estate Tax best when he says "A Texas pipeline tycoon who died two months ago may become the first American billionaire allowed to pass his fortune to his children and grandchildren tax-free." Imagine a $9 billion dollar estate paying less in estate tax than my grandmother. I recommend reading his entire article.
Well, and that's what we currently have--it is what it is. I believe 2010 may become, a true "gift" year to those people that pass away with large estates. Given that we are so far into 2010, it is an interesting legal issue as to whether Congress will attempt to pass a retro-active Estate Tax. Given that the family of the Texas billionaire will save close to $5 billion in taxes, they may have some extra money to pay legal fees to make a constitutional argument against a retro-active tax.
So the Estate Tax Odyssey continues where the government has giveth, will it taketh back???
Tags: Estate Taxes, Texas billionaire, constitutional fight, retro-active tax

Well it is 2010, and the legislative branch balked on the issue of the estate tax for 2010. So, as it stands 2010 is still an estate tax-free year--for NOW. But, there is much talk that a law may be put in place that would be retroactive back to January 1, 2010.
Whatever the government decides to do with the estate tax issue this year, (or not), it will be interesting to watch. Perhaps the only thing more interesting than how the estate tax issue plays out this year, is how it will play out in 2011.
An article posted on Forbes discusses how in some extreme cases, making gifts right now might be tax advantageous. I think another practical issue regarding gifting strategies deals with the fact that some assets, particularly real estate, may be valued at very low levels, so if you do make a gift, given the reduced property values, your gift is of less value.
Given the state of the economy, the unknown nature of the future of the estate tax, and whether the estate tax will be applied retroactively in 2010, any decisions in regards to gifting and estate planning should be analyzed in relation to the objectives of the parties involved. What might be beneficial to do for one estate may not be beneficial for another--based upon the size of the estate and the basis in the estate's assets (that are considering to be gifted, for example)..
Tags: 2010, Estate Taxes, Gifting, Retroactive Estate Tax

My daughter, Isabella loves animals. So far, she has not seen a cat, dog, horse or fish she didn't like. In fact, she can spend all day playing with our neighborhood dogs and cats. So when I told her recently we will have a chance to tour the Animal Samaritans SPCA operations on Ramon Road in Thousand Palms (a place where she could see animals, specifically cats and dogs) she was super-excited. As a member of the Animal Samaritans’ Planned Giving Advisory Council I also wanted to experience the organization from the “front-line trenches.”
We didn't plan to stay as long as we did, but we left with so much appreciation for the people who run the place, the veterinarians and support staff who care for animals that are brought in for check-ups, surgery or vaccinations, and the volunteers who help out this wonderful organization.
As a parent and animal lover, I felt it was important for my daughter to see that there are so many animals in need of shelter. And that these wonderful pets are as lovely and sweet as our own dog at home. My mom adopted a pet from here, and I am pretty sure that our next pet will come from this place as well.

As we strolled to look at the clinic, one of our guides Richard Martin, the Director of Operations, shared with us that on average the clinic provides more than 8,500 surgeries each year, which is one the highest number of surgeries compared to other similar organizations in California. And in late September construction workers poured the first layers of cement for the new Animal Samaritans' vet clinic.

Mr. Martin said, "We are very excited about the new clinic being built as we will be able to better serve our community with affordable vet care and realize our mission to assist in the elimination of animal homelessness." The new facilities will be state of the art.

He continued on by saying, "Our facility is so busy and we are grateful for our staff, volunteers and everyone who helps our organization." The organization also has a great amount of events.

Each animal at the shelter has their own story. There was a beautiful gray cat "Pretty", a survivor of hurricane Katrina, there was Samba, a cat so beautiful and mysterious that we wanted to take her home (Pretty has already been adopted—YEAH!). In a separate room we met the "tub kittens"—15 kittens who were left in front of the Animal Samaritans building one early morning in September in a medium-sized tub sealed shut with packing tape. Luckily, they all survived and are now lively, playful kittens hopping and jumping around. We met a super sweet dog, Isabella (yes the same name as our daughter), who was so excited to see visitors.

"Our volunteers and foster parents are here to take care of animals and provide so much needed love and care, before our pets are adopted. Donations and financial contributions are much needed but if those are not an option for you, volunteering and foster parenting are great ways to get involved" said Sandra Viden-Martins, Director of Development at Animal Samaritans SPCA.

"Our Animal Assisted Therapy volunteers bring their own temperament tested animals to various communities, from senior centers to children with disability, and what they do for others is truly amazing," continued Sandra

Besides volunteering, there are other ways to help this organization, such as providing for the Animal Samaritans SPCA in your estate planning documents, such as a will or trust. Planned giving provides funds for community-wide services of Animal Samaritans SPCA. Just remember to include the name of the charity in Thousand Palms in your estate planning documents to avoid confusion with other charities in other areas that may have a similar name.

I know that many pet lovers can attest to the fact that their pets improve their well being, significantly reduce their stress, and provide companionship. You might want to visit the lovely animals there and see what they can do for your well-being. I know, I will be back there with my family soon.

Tags: Animal Planning, Animal Samaritans, Community Events, Non-Profit, Pet Planning, SPCA

As I was browsing through various RSS feeds recently, a graph from Taxprof Blog and analysis by Tax Policy Center grabbed my my attention. According to their analysis: "In 2009, less than one-quarter of one percent of deaths—just 5,500 decedents—will leave taxable estates, the smallest percentage since at least the Great Depression."

Economic downturn, recession and a huge drop in real estate values in California (and elsewhere) have certainly affected the overall wealth of people--for so many, an estate tax might not be an issue of concern. In my own practice I have certainly seen that people are not as concerned about estate tax (as they were just a few years ago) but on top of their list of concerns is avoiding probate.

"THERE’S HELL, AND THEN THERE’S PROBATE” is a J.J. Childers, J.D. quote from his book Asset Protection 101. To me this is a joke that makes me smile and cringe at the same time. In the text, Mr. Childers goes on to add that “thanks to the probate process you probably wouldn’t wish the job of executor on your worst enemy.” Yet individuals who have a modest amount of real property titled in their name alone, and procrastinate away their estate plans, will lead their loved ones straight to a government imposed estate plan in a system, that’s well, a hell.
While the joke may seem exaggerated and extreme, it certainly rings true for people I talk to that have experienced nasty probates, especially contested probates.
In my practice, the topic of probate brings up a lot of concerns by people that come to meet with me, in fact, questions about probate are some of the most common ones I receive. Some people have no idea about what probate involves, others have experienced it first-hand and become quite versed in the procedure. I find that many people know enough that they want to avoid it, but then have some misconceptions as to what will avoid a probate.
First, as already stated in the opening paragraph, if you have a modest amount of real property in your name alone, for example, a house worth $120,000.00, then having no estate plan—means you have opted for the government’s plan of distribution—probate. So if you think you have no estate plan, that’s Ok, the government substitute’s one for you—formally called probate. However, if you are the same individual with the same home, but have formalized your estate plan with the use of only a “Will” then guess what—you still will have a probate.
Clearing Up the Misconception about “Wills”
From my experience, I find many people expect that a “Will” will avoid probate. A “Will” will not. I like to clarify the misconception with my own joke—that if you are single and have modestly valued real property titled in your name alone (i.e. as an individual), then generally speaking, having a “Will” alone is like having front row tickets to the probate court. Of course, as most of my jokes, it is not that good, and the reality is much worse.
If you have never heard of probate and are not sure what it is—the simple explanation is that it is a government process or system administered through the courts that helps in the orderly distribution of your assets after you have passed away (of course making sure that creditors and various governmental agencies get paid, too). The probate plan works if you do not have an estate plan (assuming you have assets of a certain value and titled in your name alone), but it even controls estates where the decedent left only a Will as their main estate planning document.
Some states are considered probate-light, where the fees related to probate and procedures are not as extensive and time consuming, at least so I have heard, but California is not one of them.
4 Things you should know about probate
1) Cost: Probate costs are based on the size of the estate, and there are statutory fee schedules for attorneys and executors to charge certain amounts, and on multi-million dollar estates, legal fees are usually held to a “reasonability” standard. Of course, there is an opening for “extraordinary” legal costs when contests come up.
2) Time: For estates with a modest amount of assets, a probate can easily take 2 years or more, and even longer if a contest arises. Hopefully, if you have a smaller estate and have no disputes, then maybe a probate could be very fast at a year to 18 months. Recently I met with someone that has been going through a probate for almost the last 10 years due to contests. The legal fees in these contests reduces the amount that your heirs will eventually receive.
3) Loss of Control: a judge you have never met or who doesn’t know you or your family will be ultimately making decisions as to how your assets would be distributed. As we all know, someone might look great on paper and might seem like the obvious choice to be an heir of your estate, but it may not be the person you would choose to receive your assets.
4) Loss of Privacy: Your family matters (think “dirty laundry” in the soap opera context) and potentially the extent of your assets could become part of the public record.
4 Tips on avoiding a probate
1) Trusts: Generally the most efficient and the most recommended way of avoiding probate is through the use of a “Trust.” There are costs associated with creating a Trust and administering a Trust but these are usually significantly less than the costs of a probate.
2) Proper Titling: Titling assets in a non-probate form, generally married couples have a lot of options to avoid probate if one spouse passes away—of course the danger to those forms is if both spouses are killed in an accident at the same time—two probates!!!
3) Gifts: Gifting your assets during your lifetime

Of course, California is trying to do more to make probate a more effective system, but why not just avoid it, if possible?
Tags: Asset Protection 101, Avoid Probate, J.J. Childers, Probate

Lost Wills, Lost Trusts, and Missing Estate Plans: Sending Your Heirs on a Treasure Hunt
Posted on October 1, 2009 by Daryl Binkley

Very frequently I receive calls from people who are trying to locate a will or trust of their parent or loved one(s) who just passed away. They are not able to locate any trust documents or have any information about the attorney who created it. Once, after doing some research for a particular family, I found out that the attorney who created a trust had passed away before his client (then there was the job of finding where the deceased attorney's files went).
There are numerous cases of "lost wills." My personal favorite is digging around a person's property after they passed away, looking for a will that was supposedly buried in a container. Maybe a myth or legend, but it sets a graphic image.
Just this week I have a received a few phone calls about this exact issue. Families were trying to locate local attorneys who worked on trusts for loved ones by calling every attorney in the area. These random inquiries from other lawyers or loved ones make me think this is a problem for many people, or it might be down the road.
So what are some possible solutions for this problem? The following are tips to ensure that you or your loved ones do not fall into the abyss of lost documents:
Tips for Couples or Individuals Creating a Trust

Give basic information that you created a trust to at least one or some of your loved ones. If you feel comfortable you might want to let them know of your wishes, desires and reasons why you made specific decisions about your assets.
If your beneficiaries are also trustees, provide them with information on where the trust is located (especially if it is locked in the safety deposit box) and information on what they need to do if something is to happen to them. Also provide them with the contact information or business card to your attorney that drafted the trust. You might want to give a copy set to your trustee so they know all the details. Attorneys will have copies of client trusts in their files as well.

If you don’t want your kids or beneficiaries to know the exact location of your trust or what the contents of the trust are, at least ensure they have contact information for the attorney that created the trust. Without this basic information, your kids /beneficiaries might be calling every attorney in the area trying to find this information. Or worse, they may need to pay another attorney to help them with this search.

Have a heart-to-heart talk with your parents or loved ones about their wishes and desires on how things should be handled in the case they are not around. If your parents don’t have any legal documents set up about their health care decisions and assets, you may want to suggest that they seek an estate planning attorney. Ask your friends and/or professional advisors for references or recommendations.

If you know that your parent(s), loved one(s), or partner(s) have created a trust and that you are a beneficiary, ask them for the attorney contact information.

If your loved ones are comfortable with it, they might even tell you where their estate planning documents are stored or even give you a copy of it.

As we are approaching the last quarter of 2009 and 2010 is just a few months away, I expect to hear more and more comments about estate tax and its fate in 2010 and beyond. As I commented in my previous post , the estate tax is currently set to disappear in 2010 and then re-emerge in 2011 at pre-George W. Bush rates, with a 55% tax on the portion of an estate over $1 million.
Just today, in WSJ, Jonathan Weisman wrote an article entitled "Estate Tax Faces Its Own Life-and-Death Struggle", highlighting how the current political climate and political parties might be dealing with a tax set to disappear in 2010 and the expectation of additional tax law changes in 2011.
As mentioned in the article, the debate over healthcare has pushed discussions about estate tax issue to a second tier level, but what I found interesting is that central players on the estate-tax policy also have key roles in the healthcare debate. As it stands now, President Obama has proposed permanently locking in the estate tax at the current 45% with a $3.5 million exclusion but some might worry (as stated in the article) that some politicians might block any action in 2010 to ensure the tax will return in 2011 at the 55% rate with a $1 million exclusion.
Also the stock market fluctuations and deep declines in real estate values may let politicians have a different view on where to tax estates since a dollar today arguably goes further (at least in reference to real estate) then it did a couple of years ago.
So how might all this affect you, if the laws remain unchanged:
· In 2011, more estates will have to pay the estate tax since the exclusion drops from $3.5 million to $1 million.
I am sure we will hear more about this issue, so stay tuned…

Many of my clients frequently comment how they first found me online, such as through my blog. Some of them related to my posts, so much so, that they felt they knew me before even meeting me in person.
So when I stumbled upon the recent post from Home Care Palm Springs about Why Are Seniors Social Networking?, I was not surprised. After all my mom (who is a senior), has been active online for over a decade. She even met her husband online -- very progressive of her, if I may add. The post mentioned 5 reasons why seniors enjoy social networking, one of them being "bridging the generational gap" which might explain the popularity of Facebook and My Space. On Facebook you can find teens, parents and grandparents all connected regardless how far away they are from each other. Just yesterday, the CEO of Facebook Mark Zuckerberg reported on his Facebook Blog that Facebook now serves 300 million people across the globe. And that number will surely rise.
Back in February, Inside Facebook, an independent blog that covers Facebook activity, reported the number of women over 55 who use the site had grown by 175.3 percent since September 2008. (Male users in that age group increased by 137.8 percent.) Additionally, Facebook’s advertising site estimates that there are now more than 4 million users between the ages of 45 and 65 in the United States alone. Some sites, like Eons (similar to Facebook in style and purpose), are solely for boomers.
Recently I heard a great explanation of social networking from Steve Love, a local real estate agent. He said that social networking is like a big cocktail party. People who enjoy it & benefit from it, treat it as such. I certainly agree.
What do you think? Do you use social networking? Do you like it? Have you met new people, made new friends? I am curious to hear all the good, the bad and the ugly...let me know.
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Well, here it's Friday night at 9:21 pm and the Law Office of Daryl L. Binkley has a new physical address as I write this Blog about moving.
I was online in my previous office just about 4 hours ago, and now I am in my new office using my wireless keyboard, with my wireless laptop, surfing the Internet wirelessly and I'll print out my Blog wirelessly. Now the whole wireless thing is not special or new. The amazing thing is the smooth transition--that with the first try of hooking up all my wires, turning on my computer, and then clicking the Internet Explorer button did the Internet work for me--now that is SPECIAL. I honestly have to give Kudos to Verizon, they have made for a smooth transition.
Anyways, here is my new physical address:

As I watched Dr. Andrew Weil's “Healthy Aging" DVD over the weekend I expected to hear tips on a healthy diet, exercise, maybe some recommendations on vitamins and/or supplements--but what really got my attention, being an estate planning lawyer, was his recommendation of an ethical will as "a gift of spiritual health."
Unlike other estate planning documents that specify your wishes regarding your assets and medical decisions, an ethical will refers to transferring your values, experiences and personal stories to your family or community. It is an intimate and more personal document that doesn't have a legal standing, but in some circumstances it might even be more cherished by your loved ones.
Ethical wills have a very interesting and long history tracing back thousands of years. You can find a historical overview of their origins and uses through medieval to modern times by clicking here.

Today you can find many free resources on the Web on how to start writing an ethical will, but in essence you can start writing it at any point, and then whenever compelled keep adding to it. As a highly personal letter, it can contain your most cherished memories, favorite quotations, desires and wishes for you children and grandchildren, reasons behind certain decisions or perhaps little known details of your life. It can contain life lessons you learned, people who had the most impact on you and why or might be something entirely different but relevant to your life.

Creating a meaningful legacy is really what estate planning is all about (you can find my blog on this topic here) and the addition of your personal story or letter can only add to that legacy.
Tags: Ethical Will, General Estate Planning, Meaningful Legacy

Attorney Daryl L. Binkley is the founder of a boutique law office focused on estate planning, business law and litigationMore...

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