The Konstantin Law Firm Inc. will help create a thorough plan for managing your wealth and a clear plan for distributing it after your death.

Our goal for your estate plan is the preservation and distribution of your assets, both during your life and upon your death. We want to partner with you to accomplish your personal and family goals and ease the management of your financial and legal affairs. Our firm is skilled at minimizing taxes if your estate is large enough for taxes to be of concern. When we talk about an estate, we are including all assets of any value that you own, including real property, business interests, investments, insurance proceeds, personal property, and even your personal effects. A typical estate plan generally refers to the means by which your estate is passed on to your loved ones after your death. Estate planning can be accomplished through a variety of methods, including:

• Revocable Living Trusts

• Last Will and Testament / Probate

• Lifetime Gifting

• Joint Ownership

• Beneficiary Designations

• Life Estates

If these methods aren’t coordinated well, problems can arise. We will draft an estate plan that will ensure that your estate is passed to whom you want, when you want, and is carried out in the manner you have chosen. You can rest assured that your family won’t have to endure the public process and costly matter of probate. The government won’t be able to take from your family what you’ve spent a lifetime building. But you need to be aware of the many options that exist in estate planning, and you must choose your estate planning attorney wisely.

Our webinars and website offer a wealth of free information. We want you to feel confident about the choices you make. Let us be your guide on the path toward preserving your family’s future.

Estate and Gift Tax Figures

Federal

Estate and Gift Tax Applicable Exclusion:

The amount that can be passed free of federal tax. Whatever amount is used during your lifetime is no longer available for use when you pass assets along after death. The Estate and Gift Tax Applicable Exclusion is currently $11.7 million.

Annual Gift Tax Exclusion:

The amount that can be given to each person without using any Applicable Exclusion. The Annual Gift Tax Exclusion is currently $15,000.

Generation-Skipping Tax Exemption:

This exemption allows for giving to grandchildren or other “skip persons.” It may also be used as a sophisticated way to avoid Federal estate tax in event of the death of a child. Each person currently has $11.7 million of Generation-Skipping Tax Exemption.

State

State Estate Tax:

In addition to the Federal Estate Tax, many states have a State Estate or Inheritance Tax (California does not). State Estate and Inheritance Tax may apply at a much lower level than the federal tax. It may apply when he or she is a resident in or owning property in any of the many states with such a tax.

Outdated Estate Planning Documents

Most people will create their estate plan, sign the documents, and never look at them again. For some people, this does not present a problem, especially if the person remains single their entire life, doesn’t own much property and doesn’t come into a large inheritance. However, if you get married, have children, or inherit property your estate plan is likely to need updating. If you took the time to create an estate plan to ensure your legacy of wealth is protected it should be reviewed periodically to ensure that the documents have not become outdated. Outdated documents can tie up your estate in the court system and fail to protect the ones you love most.

The Dangers of Outdated Documents

Major life events should trigger an estate plan review. These events include, but are not limited to the following:

• The birth of a child

• Inherit a large sum of money

• Receive a major promotion or raise at work

• Get divorced

• Get remarried

• Someone named in your will or other estate documents passes away

• You move to a new state

• Relationship with a power of attorney or trustee has ended

You can review the documents in your estate plan as often as you’d like or after any type of life event you experience. It’s important that these documents are reviewed with an experienced estate planning attorney in order to make sure that they are updated correctly.

Estate plans can be outdated based on many factors.

Beneficiary Documents

Beneficiary documents in an estate plan can become outdated. A will does not have an impact on who inherits your assets such as IRAs, life insurance, and annuities. These assets must have beneficiary documents signed and dated by you. They need to include you naming who will receive these assets upon your death. If the beneficiary documents have expired, or you have not changed them based on your life right now, then the original person named will receive your assets upon your death.

Ownership of an Asset

Failure to update the ownership of an asset is another way your estate plan can become outdated. If you own assets solely or jointly with your spouse, a friend, or an adult child you should review these documents to ensure that any jointly owned assets don’t need to be changed before it’s too late.

Powers of Attorney

Every estate plan should have at least two powers of attorney; one for your financial matters and one for your medical matters. Most people don’t know that they are more likely to need a medical power of attorney before needing a will. And many people do not have a medical power of attorney, and they fail to update who is named as power of attorney in their estate plan.

 Changes in the Law

State and Federal laws that govern estate planning change. We can review your plan and make any necessary adjustments or changes so that they reflect the current Federal and State laws.

LGBTQ Estate Planning

Regardless of marital status or sexual orientation, estate planning is critical for everyone. However, for the LGBTQ community, estate planning provides protections to help guard against discrimination. When people are reluctant to recognize your relationship, it can lead to discrimination. A well-executed estate plan can guard one’s assets against discrimination.

If you fail to plan properly and you are a member of the LGBTQ community the result can be devastating to your spouse or partner and your family. If you’re relying upon a Will, Joint Tenancy, or Tenancy in Common as an estate plan,  that would be equivalent to giving up control of your estate and management of your well-being in times of incapacity. Your need for an estate plan is critical in case of an accident or illness that renders you, your partner, or your spouse incapable of making decisions or managing his or her affairs. Without a proper estate plan, the other partner could be legally precluded from having any role in the decision-making of his or her partner’s care, managing his or her affairs, or even having access to the incapacitated partner. Even if you are married, planning is critical in the event you encounter resistance to recognize your marital rights.

History of Same-Sex Marriage

June 26, 2013, was a landmark day for LGBTQ couples across the United States. With two much-anticipated rulings, U.S. v Windsor and Hollingsworth v. Perry, the U.S. Supreme Court made federal benefits available to spouses in same-sex marriages and cleared the way for same-sex marriage. In U.S. v. Windsor, the Supreme Court struck down a section of the Defense of Marriage Act (DOMA), a federal law defining marriage as only between a man and a woman. That section of the law denied federal recognition to same-sex couples validly married under state law.

The purpose of the Court’s ruling was to ensure that all married couples within a state are treated equally under federal law. As a result, if a same-sex couple is married and resides in a state that recognizes their marriage, they will be entitled to all the federal benefits granted to other married couples in their state. Additionally, an IRS ruling provides that validly married same-sex couples will be treated as married by the IRS, regardless of where they live.

The majority of U.S. states now allow same-sex marriage. However, many states still prohibit same-sex marriage and its recognition, either by state statute or their state constitution. These developments are a celebration of civil liberties and a step towards full equality for everyone under federal law. However, as you may imagine, this development has created legal complexities in estate planning for same-sex couples.

We can ensure your assets are distributed to whom you want, when, and how you want. The benefit of a Living Trust for any same-sex couple who wishes for their relationship, assets, and disposition to remain confidential is that the trust guarantees privacy, through avoidance of probate and its process of opening court records.

Minor Children and Young Estate Planning

If you have children it’s important to consider who would care for your children if become incapacitated in an accident or die unexpectedly from an illness or accident. You would also need to consider if your children live with their grandparents, If so, which set of grandparents? Decisions like where would your kids go to school?

Planning for the unthinkable is an important part of being a parent. You need to protect your minor children and young adult children as much as possible for the day when you are no longer here to do so yourself.

There are many things to consider when planning for a Minor Child? We can create a thought-out plan for a minor that could include temporary guardianship, permanent guardianship, instructions for the guardian, powers of attorney, and a designation of health care surrogate.

Incapacity Planning & Caregiver Support

In the case that you become physically or mentally unable to care for yourself, Incapacity planning will make sure your needs are taken care of. This type of care could range from simple tasks like buying groceries, paying bills, and handling financial matters to more important decisions such as selling real estate, gifting assets to your children, or making critical medical decisions. Incapacity planning could also include a number of planning techniques such as Property Powers of Attorney, Health Care Powers of Attorney, Living Wills or Advance Health Care Directives or Guardianships/Conservatorships.

What is a Guardianship or Conservatorship?

Guardianship, also known as Conservatorship, is a court-supervised proceeding that names an individual or entity to manage the affairs of an incapacitated person. A Guardianship may also include the duty to care for the incapacitated person.

The Konstantin Law Firm Inc., helps clients avoid the necessity of a public Guardianship proceeding by creating a plan to handle their affairs in the event they become disabled.

Pet Planning

What Will Happen to Your Pet When You’re No Longer Around?

When it comes to protecting your pet, no one does it better than you do.

You love them…

You feed them…

You make sure they have everything they need to live a happy, healthy life.

But what would happen if you were no longer around?

Who would care for your pet? Would your friends and family know what foods to feed or what medications to give?

How can you ensure that your pet continues to receive the love and care they need?

What a Pet Trust Can Do for You and Your Pet

A Pet Trust is a powerful legal document that gives you the ability to not only set aside funds for your pet’s future care but also stipulate exactly what kind of care you expect your pet to receive.

• Complete control over every aspect of your pet’s future care

• Stipulate their foods, their schedules, even their veterinarian

• Revocable, so you can change and amend your trust at any time

• Designate a separate trustee to oversee the funds and create a “checks and balances” system within your trust

• Can be activated if you become disabled or incapacitated (a Will can’t do that)

• And because a Pet Trust is fully enforceable by the courts, you can rest easy knowing that your pet’s well-being will always be safe.

Is My Pet Really at Risk?

According to the animal welfare organization “2nd Chance 4 Pets,” over 500,000 pets are abandoned each year due to the death or disability of their human companions. That’s 500,000 too many. What’s worse is that those pets could have been protected with just a little planning. Think about it: what will happen to your pet if you become disabled? What if you’re no longer able to speak for yourself? How will the courts know what to do with your pet? And how can you make sure that your beloved animal doesn’t end up in a shelter somewhere or worse, alone on the streets? Because sadly, that happens all the time. We can help you put together a Pet Trust in order to avoid situations like these.

Probate & Trust Administration

Trust administration is a process that many people are thrown into after the death of a spouse or parent who was responsible for creating the trust prior to their death. The trust administration process is lengthy and challenging.

It’s not easy to serve as the administrator of a trust, which is why it’s in your best interest to work with an estate planning attorney from The Konstantin Law Firm, Inc. Estate tax law is difficult and has many nuances that impact how you value assets and distribute them to beneficiaries.

The Stages of Trust Administration

There are defined stages of trust administration that trust administrators must follow. A trust administrator is a person named to handle the trust and distribute the assets upon the death of the person who created it.

Take Inventory of the Assets

The first part of the administration process is to take inventory of the assets held in the trust. This includes determining who the owner is of all the assets. The trust administration attorney working with you will obtain a date-of-death valuation of every single asset. This is an important step because the value of the assets can have implications on any estate and income taxes.

Determine the Estate Tax

A person is permitted to pass $5 million without incurring federal estate taxes. This amount has been doubled temporarily between the years 2018 and 2025. Despite this, there are states that have much lower limits for their estate taxes. Our attorney can help determine the following: 

• Which assets are held in the trust

• Which assets are outside of the trust

• Which assets are required to go through the probate process

• Which assets will be subjected to the estate tax

An estate tax is required to be paid within nine months of the date your family member died. The payment is to be submitted with the estate tax return, using Form 706.

Divide the Trust Assets

When a married couple opts for incorporating tax and estate planning into a Living Trust, they are in possession of an A-B or A-B-C Trust. This type of trust makes sure that the assets of the deceased spouse can be used by the surviving spouse, but are still held in the trust. When these assets are held in the trust, they are shielded from possible estate tax when the surviving spouse dies.

File IRS Form 706

IRS regulations require that Form 706 be filed within nine months of the recorded date of death. This form must be filed in addition to Form 1040 for the year in which your family member died and Form 1041 for every year the trust existed following the trustor’s death.

Distribute Assets to Beneficiaries

The trustee, or the person placed in charge of the trust, must follow the instructions laid out by the trustor. This means he or she must distribute the assets of the trust to the named beneficiaries following the instructions and not how they see fit. Prior to distributing the assets to beneficiaries, the trustee must ensure that all creditors are paid and that all tax payments are made to the IRS and the state.

Trust Administration or Probate?

Probate is a legal process that requires court supervision when dealing with a trust or an estate. It is much longer than trust administration and will wind up costing more in the long run. Probate can take 12 months or longer to complete and the trustee is not permitted to distribute any assets without the permission of the court. The probate process is public, which means there will be a record of it with the court for anyone to read.

Contact a Trust Administration Attorney Today

Creating a trust is an excellent way to protect your assets and ensure that they wind up in the hands of the family members and friends of your choosing. Trust administration and probate is a lengthy process that involves a lot of tax law. Contact The Konstantin Law Firm, Inc. today to book a consultation.

Remarriage and Blended Family Protection

Entering into a second, third, or subsequent marriage is an exciting time in your life. However, it can be extremely stressful and worrisome if you have children. To make matters even more challenging, what happens if your new spouse also has children from a previous marriage?

Whether your previous marriage ended in divorce or you were widowed, blending a new family has its challenges and you need to protect yourself and your children (minor or adult). The compassionate and experienced team at The Konstantin Law Firm, Inc. can help ensure that the proper protections are put in place when getting remarried.

Review Estate Planning Documents

If you had estate planning documents in place during a previous marriage, you need to review these documents with a member of our firm to ensure that they still reflect your wishes. If they don’t, you will need to edit these documents immediately. When it comes to your fiduciary designations, you should ask the following questions:

Who was named as the trustee of your trust?

Who was named as the executor of your will?

Who was named as the agent under a health care power of attorney, property power of attorney, or health care proxy?

If any of the answers turn out to be your former or deceased spouse, you will need to review the alternates. If your spouse is deceased, the alternate will take their place, so long as you still want that person in charge of your estate. If you are divorced, you will want to remove your spouse from those positions of power immediately and either name your new spouse, a trusted friend, or an adult child.

Consider a Prenuptial Agreement

Since you are moving into a second, third, or subsequent marriage you should consider creating a prenuptial agreement. This will not only protect you and your assets, but also your minor children. A prenuptial agreement is a great way to protect the financial assets you bring to the marriage so that your new spouse does not take control of them upon your death, especially if you want the assets to go to your children.

The prenuptial agreement can take precedence over the will when it comes to you separating, how support will be paid, and how property will be divided. The prenuptial agreement can outline how assets are to be kept with each person (if still in sole name possession) should divorce occur or how assets acquired during the marriage will be handled.

Create a Living Trust

A Living Trust is an excellent option when you want your child to receive assets but not immediately. You can name someone to manage the trust, known as the trustee. He or she will need to follow the instructions you laid out and ensure that the beneficiary of the trust does not receive any assets until the date stated. You choose the date. It can be when the child turns 18, when they graduate high school or college, when they get married, or even when they reach 20 or any other age you decide is appropriate.

Keep an Open Line of Communication

It is in your best interest to keep an open line of communication with your new partner. If you haven’t married yet, but plan to move in together, a discussion of how the expenses will be split should occur. This discussion should also include whether or not the payment of expenses will provide part ownership in the property, especially if only one of you owns it outright at this time.

It is also important that you discuss your plans on what is being left behind to your own children or any children you might have together. If you only plan to leave assets to your children, and not yours and your new spouse’s, you need to express this wish.

Schedule a Consultation with an Estate Planning Attorney Today

The compassionate and experienced estate planning team at The Konstantin Law Firm, Inc. understands the challenges that arise when getting remarried and blending two families together. We can answer your questions and help put strong protections in place that prevent your assets from going to anyone other than the people you name. Contact us today to book a consultation.