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Tuesday, May 19, 2015

Joint Tenancy in Estate Planning: When (and How) to Avoid an Unintended Override

I am considering adding my daughter to my checking and savings accounts. Is this a good idea? 


Joint tenancy is a legal term referring to the situation in which two or more individuals share an undivided ownership interest in an asset or piece of property. The situation is extremely common between spouses or domestic partners, as it creates a seamless transition of property to the other upon the death of the first. However, joint tenancy is not always as convenient as it seems, and it can actually lead to the override of a well-intentioned, carefully-considered estate plan. If you are considering joint tenancy for the sake of convenience, we encourage you to read on before taking this step – there may be more to it than you realize. 

Joint ownership of financial accounts

For many, the thought of managing daily and monthly personal finances proves exceptionally overwhelming, prompting the decision to add a significant other, child or close friend to an account. By virtue of being added to the account, this individual gains all the administrative rights of the original owner, including the ability to write checks, make deposits, and initiate withdrawals. This person will also gain outright ownership of the account upon the death or incapacity of the original owner, despite the language of that owner’s will or living trust. In other words, joint tenancy over checking and savings accounts – which can grow to a considerable size with income from one’s pension and retirement accounts – will override one’s intentions in an estate plan, and there is little that can be done to undo this arrangement. 

For anyone struggling with upkeep of personal finances, one alternative to joint tenancy is a simple durable power of attorney for finances. This document will allow a trusted friend or relative to make transactions on behalf of the account holder without actually undoing his or her predetermined estate plan. 

If you have additional questions about the effects of joint tenancy on financial assets or real property, please do not hesitate to contact the estate planning attorneys at the Law Offices of Berge & Berge, LLP today by dialing (408)985-9918. 


Monday, May 18, 2015

Tips for Second Marriages: How to Best Protect Both Your Children & Current Spouse

I am in my second marriage, with children from my first marriage. How can I craft an estate plan that will protect both interests? 

Estate planning often encompasses more than just a Last Will and Testament, and can become increasingly complex as family dynamics change and grow. One common scenario seen by many experienced estate planning lawyers involves testators engaged in a second marriage with children from a first marriage or prior relationship. At the outset, it may seem simple enough: leave everything to the surviving spouse, remainder to the children. However, this “plan” can quickly unravel should the surviving spouse opt to redo his or her estate plan in favor of their own children, a favorite charity, or other surviving family members. One major factor to keep in mind when preparing your estate plan is that once the assets have passed to the surviving spouse, that property then becomes part of that individual’s estate, and may be disposed of in his or her own discretion. 

Keeping assets protected for the surviving spouse and children

One way to avoid the above-described scenario is to set aside certain assets in trust for the benefit of either the surviving spouse or the surviving children. There are many ways to set this up, and one popular trust instrument designed specifically for this scenario is known as the Qualified-Terminable Interest Property trust (or, QTIP trust for short). The QTIP trust creates two sub-trusts – often simply titled as the “A” trust and “B” trust – which are designated for two distinct purposes. The first trust is to contain an amount of assets calculated to adequately provide for the surviving spouse’s health, education, maintenance, and services as needed for the duration of his or her life. This is a finite figure, and is often managed by a trustee to ensure proper distribution. For higher-net worth couples, the spousal trust language will instruct the trustee to only fund the trust with an appropriate amount so as to fulfill the marital estate tax deduction. 

The remaining funds in the “B” trust are then set aside for the benefit of the trustor’s children. If the children are still minors, the trustor must choose an appropriate trustee to oversee the distribution of these assets. For adult children, this may not be necessary. 

In the end, the surviving spouse is adequately provided for, and the deceased’s children will be able to enjoy their parent’s legacy without fear of disinheritance. 

If you are looking to set up an advanced estate plan, or would like to discuss your options upon remarriage, contact the experienced estate planning attorneys of the Law Offices of Berge & Berge LLP. The firm’s office is conveniently located for residents of San Jose and Santa Clara counties, and can be reached by calling 408-985-9918. 

Friday, May 15, 2015

Death and Taxes

What Can We Learn from the Probate Challenges Faced by the Estate of Joan Rivers?


For many, a big step in estate planning is to simply jot down a will that reads something close to “I hereby leave my worldly possessions to ______” and to sign it and have it witnessed by friends. While such a document can accomplish several goals, it likely won’t address numerous important questions that a more sophisticated document can, such as:

• How will probate be handled?
• What could a simple trust have accomplished?
• Which state laws will apply (if the drafter has more than one residence)?
• Do will beneficiaries match the beneficiaries stated on insurance policies and investment and retirement accounts, and, if not, how will conflicts be reconciled?

The Estate of Joan Rivers offers a case in point. Ms. Rivers’ will was very specific yet contained a potential flaw that may result in confusion and, possibly, tax ramifications. Her will states unequivocally that Ms. Rivers was a New York State resident and, additionally, contains a provision stating that its validity, interpretation and administration “shall be governed by New York.”  However, this point is, unfortunately, marred, because the will also states that Ms. Rivers’ state of domicile (where she intends to “reside indefinitely on a permanent basis”) is California. 

It is impossible to know why the creators of the will failed to fully identify which state should handle Ms. Rivers’ will. By referencing New York, they may have wished to minimize estate taxes, as New York’s would likely be lower than California’s. Or by referencing California, they may have sought to minimize income taxes, as California’s is significantly lower than New York’s. Whatever the case, her estate’s attorneys face challenges that involve:

• Identifying which state of residence vs. domicile would result is the least taxes; and
• Proving Ms. Rivers’ true residence: her apartment in New York or a room in her daughter’s home in California (each are listed in her official documents).

As this case suggests, unforeseen questions and complications can arise in even the most well thought out estate plans. The estate planning law firm of Berge & Berge serves clients in San Jose and Santa Clara Counties.  To ensure your estate planning documents represent your full and best interests, contact us today at (408)985-9918.

Friday, May 15, 2015

The Problems with Robin Williams’ Estate are Worth Avoiding

How do I to avoid common estate planning mistakes?

You may not be a celebrity like Robin Williams or be as wealthy as he was when he passed away in August, but you do have personal possessions. Some of them may have a lot of sentimental value to different family members and if it’s not decided who gets what, there may literally be arguments (and even lawsuits) over your personal property after you pass away. 

In this high profile dispute, Williams’ wife, Susan Williams, and his three adult children from prior marriages have agreed to try to resolve their differences over a tuxedo in which he was married, photos from his 60th birthday and other personal items belonging to the late actor and comedian, according to the Chicago Tribune. To date, disputes over these items have been the subject of hearings and motions filed in court. 

The disagreements include:

• Susan Williams claims the property in the house she lived in with Robin Williams should not be given to his children from previous marriages.

• She alleges some of her husband's personal items were taken out of the house without her permission.

• His three children (Zelda, Zack and Cody Williams) allege Susan Williams was trying to change a trust agreement and deprive them of things their father wanted them to have, including clothing, watches, photos taken prior to his marriage to her and entertainment awards.

It has been reported that Williams updated his estate plan prior to his death, but it wasn’t made clear who was going to get which personal mementos. Another complicating factor is that the disagreeing parties are children of different marriages and his third wife. If the four can’t reach a final resolution, they will meet with a mediator.

When putting together your estate plan and deciding what to do with your personal property, it’s important to consider the following: 

• Prioritize what you have based on the objects’ importance to you and your loved ones.

• Come up with a system as to how items should be distributed. It will be impossible to make the division equal, so try to make it fair and consistent.

• Talk to family members and ask them about the things they see as important and tell them what you want to do. 

• If everyone understands your wishes and how you decided, it should lessen any disappointment or frustration and decrease the chances of any legal action challenging your estate plan.

If you have questions about, or want help with, your estate plan, contact Berge & Berge. The firm serves clients in the South Bay Area including San Jose and Santa Clara County. Call today at (408)985-9918.


Thursday, April 2, 2015

Financial Elder Abuse


How can you protect seniors from financial exploitation?

About one month after her father died, Linda Magel realized that $118,000 of his life savings had disappeared. The Chase Bank branch from which it had been withdrawn was one her father had never set foot in. It seems that the elderly California man, who suffered from dementia and Alzheimer's, had been the victim of an unscrupulous bank employee who forged signatures to steal the funds.

JP Morgan Chase ultimately provided a refund, but only after considerable resistance. It initially denied her claim, saying too much time had passed.
Read more . . .


Monday, March 23, 2015

Will Contests: What Are They?

Is there any way to prevent objections to my will?

Sometimes, despite best efforts to craft a thoughtful estate plan, a beneficiary will be disgruntled -- or someone who thought he or she should have been a beneficiary wants to challenge the estate. That person might try to start a will contest by filing an objection to the will. Will contests are very difficult to win and can be very costly to litigate. There are strict rules governing these proceedings, including time limits.

In order to contest a will, a person must have standing, which means he or she has a legal interest in the matter. California Probate Code refers to this as an interested person. Generally, someone who would be entitled by law to inherit from the deceased person would have legal standing.

There are specific grounds upon which a will can be challenged. California Probate Code places the burden of proof on the person challenging the will (referred to as a contestant of the will) to demonstrate lack of testamentary intent or capacity, undue influence, fraud, duress, mistake or revocation. The proponents of the will (for example, the executor who submitted the will to probate) have the burden of proof of due execution (whether the will was signed properly, before the correct number of witnesses and met other requirements).

Careful planning cannot guarantee there will not be disagreements. This is evident in the dispute over the estate of comedian and actor Robin Williams. His widow and third wife, Susan Schneider Williams, and his three children from two previous marriages are in court over the distribution of money, property and personal belongings despite his estate plan.

The Law Offices of Berge & Berge practice exclusively in the area of estate planning. Our attorneys have extensive experience in advising clients about wills, trusts and other options for asset protection. The firm has proudly served the South Bay area for more than 20 years, including San Jose and Santa Clara County. Call us today at (408)985-9918 to arrange a consultation.


Thursday, February 19, 2015

Proposed Legislation Seeks to Make Transferring Homes Easier

Will my heirs automatically own my home after my death?

California homeowners can easily deed their homes to loved ones while alive, but the transfer becomes a challenge after death.  Probate is a costly and often confusing process that can be quite time consuming.

Recently introduced legislation would create a Revocable Transfer on Death (TOD) Deed  that would allow families to avoid probate. Homeowners could execute the deed naming a beneficiary who would obtain title to the property at the owner's death. Other states allow such transfers, and the California Law Revision Commission recommended that it be considered here.

Much like other payable on death transfers, such as bank accounts, certificates of deposit or brokerage accounts, a TOD deed simplifies matters. The homeowner maintains control over the property during his or her lifetime and can revoke the deed at any time prior to death. The deed does not provide the beneficiary any interest in the property until the owner passes, so there are typically no tax consequences.

Usually, the laws governing TOD deeds require that the deed be recorded; this is ordinarily done in the county where the real estate is located. There is a recording fee, but there should not be any real estate transfer taxes because the TOD deed does not immediately transfer ownership.

For now, TOD deeds are not an estate planning option in California. Drafting a will, creating trusts and utilizing other tools require careful consideration. It is important to understand the various methods for transferring your assets after your death.

If you have questions about your estate plan, the San Jose and Santa Clara County CA estate planning and elder law attorneys at Berge & Berge can help. We practice exclusively in these areas and have the experience and knowledge to guide you. Call us today at (408)985-9918.


Friday, October 31, 2014

Welcome to the Law Offices of Berge & Berge LLP Blog

Welcome to our San Jose Estate Planning law blog. Check back soon for new articles regarding wills, trusts, estate planning and elder law.


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