DO I NEED AN ESTATE PLAN?

Whatever the size of your estate, you and your heirs will benefit from an estate plan. If your estate is small in value, you may focus simply on who will receive your assets after your death and who should be in charge of managing your estate. Alternatively, if your estate is larger, Rosser will discuss not only who will receive your assets and when, but also various ways to preserve your assets for your beneficiaries and to reduce or postpone the amount of estate tax which otherwise might be payable on your death.

If you do no estate planning, then California law dictates who will take responsibility for your personal care and assets if you become incapacitated. If you do no estate planning before you die, California law also determines the distribution of your assets to your heirs; this is known as “intestate succession,” and may not conform with your wishes. In addition your estate will most likely go through probate, which is burdensome to your heirs and costly to your estate.

There are four main reasons people establish an estate plan:

1. To avoid Probate

2. To decrease Estate Taxes

3. To ensure their estate is distributed in accordance with their wishes

4. To make managing the estate as easy as possible on their loved ones.

Rosser J. Pettit can help you develop a comprehensive estate plan to meet your needs. He will be happy to meet with you for an hour to discuss you estate planning concerns for free.

The California Legislature has chosen to classify certain careers or professions as “Professional.”  Professionals are bestowed with greater responsibility simply do to the nature of their profession.  For example, the consequences of a doctor’s mistake would be far more life altering to the patient than a mistake made by a newspaper delivery person to the newspaper subscriber.  Therefore, Professionals are held to a higher standard then participants of all other careers or professions.

            In order to maintain this high standard of professionalism the California Legislature prohibits Professionals from limiting their liability for mistakes by establishing a Limited Liability Company, or LLC.  In short if the California Legislature has determined you are a professional (see the list below), it is illegal for you to operate as a LLC.

            California Corporations Code § 13401(a) defines a professional as one who provides any type of professional service that may be lawfully rendered only pursuant to a license, certification, or registration authorized by the Business and Professions Code, the Chiropractic Act, or the Osteopathic Act.  Additionally, Corporations Code § 17375 specifically prohibits those meeting the above definition from establishing an LLC to provide those services.

Below is a list of common Professionals:

1. Accountant
2. Acupuncturist
3. Architects
4. Chiropractors
5. Doctors
6. Dentists
7. General Contractor
8. Lawyers
9. Marriage and Family Therapist
10. Nurses
11. Optometrists
12. Pharmacists
13. Psychologists
14. Physical Therapists
15. Physician Assistant
16. Securities Brokers
17. Veterinarians

If you are conducting business as an LLC and you are a member of one of the above named professions you need to make a change.  The procedure is relatively simple and can be done with little if any effort by you.  Let us know if we can help.

“Funding” your trust is a necessity of any trust centered estate plan.  If you have already made a big step in the right direction by establishing a trust; you must not forget to do the next most important item, which is properly “funding” your trust.  Failure to fund your trust can defeat the purpose of establishing a trust and can prevent the protections and planning you and your beneficiaries expect.

Trusts that are not properly funded often result in probate.  Depending on the size and nature of the asset left out of a trust, a probate proceeding may be needed to transfer that asset to the intended beneficiary.  This process is expensive and time consuming, but more importantly, it is easily avoidable.

Many estate plans have a section titled “Funding Instructions” which outlines the steps you must take to transfer your specific assets into your trust.  As always I am here to help, so if you have any questions or concerns about funding your trust, or need help transferring real property or other assets to your trust, please give me a call.

Additionally, if it has been more than three years since you established your trust, or you have had a significant event in your life, I strongly recommend a review of your trust documents.  Common life changing events are:

• Marriage
• Divorce
• Death of a family member
• Birth of a child
• Adoption

Other events that warrant a review of trust documents are:

• Moving to another state,
• A significant change in income or ability to earn a living,
• Death or incapacity of a named trustee or beneficiary,
• Expectation of a major operation or cancer treatment,
• Acquisition of real estate not held in the name of the trust,
• Your sentiments concerning the suitability of a trustee or beneficiary have changed,
• Receipt of an inheritance.

I appreciate your business and am pleased to help with all your estate planning needs.  Please feel free to give me a call if there is anything I can do for you.

Rosser J. Pettit

619-977-9432

ross@rosserjpettit.com