Late-in-life second marriages are becoming commonplace in American society, and with it, anxiety has been rising among stepchildren. Estate planning lawyers have had to pay greater attention to the particular concerns and needs of blended families because also becoming more common is the courtroom brawls between stepparents and stepchildren and stepsiblings.

The first concern I hear from clients is often related to the financial security of the parents. If Mom moved into Stepdad’s home, what’s to keep Stepdad’s kids from kicking her out of the house if Stepdad were to die first?

The second concern is for the adult children’s prospective inheritance from their natural parent. Many state elective share laws dictate that when a person dies, the spouse naturally inherits a certain share of the estate, which will certainly cut into how much, if any, is left to the decedent’s natural children after the spouse dies.

In California, community property laws can be both a blessing and a nightmare for the adult children of a blended family. On one hand, generally, a surviving spouse doesn’t have a claim over to any property or account kept separately and in the deceased’s name.

However, any property that was held jointly (i.e., homes, common bank accounts) is presumed to be community property and, unless that presumption is rebutted in court, it passes entirely to the surviving spouse. And, even separate property may pass in whole or in part to the surviving spouse if the deceased partner leaves no will.

Older adults bring a greater amount of personal wealth into new relationships and, experts say, they are more practical about the financial realities their late-in-life marriage presents.

A prenuptial or postnuptial agreement can keep Mom in the house owned by Stepdad until her death at which point it passes solely to his children. Keeping property separate in trust accounts can prevent it from being transmuted into community property. And a clause inserted into Dad’s will can ensure that the separate property in his name passes to his children, not his spouse upon his death.

After you die, you could either be rolling in your grave because of the nasty legal battle you left your blended family or resting in peace.

James D. Perry

Open the newspaper and on any given day you can find a cautionary tale of an elderly person losing thousands of dollars to his or her caretaker, a scam artist, or some final friend.

The sad fact is that the elderly make easy targets of financial abuse, and you may be their first line of defense against scammers. If you have a parent over the age of 70, you should have a conversation with him or her about what would happen if they could no longer manage money.

Approach your parent respectfully, asking permission to talk about the subject. Your parent is likely to feel vulnerable – relinquishing money means relinquishing control.

You’ll want your parent to sign a durable power of attorney. And, if your parent is already showing signs of mental impairment, you need to act fast. A durable power of attorney must be signed and notarized while your parent is still competent.

If possible, you should include the whole family in the conversation and decision-making. Put all agreements in writing so that there is no argument or second-guessing.

If you already are in charge of your parent’s bank accounts, try not to micromanage. If possible, keep just enough for monthly expenses in a joint checking account and protect the rest in another account. Pay the bills together or help your parent set up automatic bill-pay to prevent forgotten bills.

The change in power can be a tough, emotional transition, but you don’t want to put off protecting your loved ones.

James D. Perry

With wills and trusts, people tend to “set it and forget it.” But it’s important to revisit your will and trust documents at least every five years, or whenever there is a major life event – new children, new son or daughter in law, new grandchildren, divorce, remarriage, new property, etc.

Guardianship appointments should be current if you have minor children so that you can designate who will care for them if you die.

Your beneficiary designation forms determines who will get your insurance and retirement accounts. This too, should be updated periodically. If you named a sibling or your parents as your beneficiary when you were younger on these forms, you might now want to make sure they go to your spouse or children instead. Many people aren’t aware that these forms override stated wishes in your will so you should consider these documents in tandem to prevent confusion.

Keep all these documents in a safe place – a fire-proof safe, a clearly marked file in your file cabinet, a shared folder on your home computer, or ask your lawyer to hold on to them – and make sure your loved ones know where they can find them if and when they need them.

In a medical emergency, or in moments of mourning, you will not want your family and friends to be in a frenzy when all they want is to honor your wishes and your memory.

If you haven’t started any of these documents, you should immediately create a balance sheet that lists the basic information about your assets and schedule an appointment with your estate-planning attorney as soon as possible.

James D. Perry

At the end of May, parties claiming deceptive business practices by LegalZoom filed a class action lawsuit in California against the online legal document preparation service. They argue that LegalZoom’s advertisements give consumers “a false sense of security that people do not need hire a traditional attorney.”

In July 2007, Anthony Ferrentino asked his niece, Katherine Webster, to help him use LegalZoom to prepare a will and living trust. But, when Katherine went to transfer her uncle’s assets into the trust, she found that the financial institutions that held his money refused to recognize the LegalZoom documents as valid. Katherine tried to get help from LegalZoom’s customer service representatives to no avail, and the trust was still not funded when Anthony died in November 2007.

Katherine is now one of the plaintiffs in the suit against LegalZoom suing on behalf of herself and on behalf of anyone in California who paid LegalZoom for a living trust, will, advance directive for health care, or power of attorney.

The internet has brought a lot of convenience to our lives with its wealth of information, online shopping, and the ease of staying connected to our loved ones. But sometimes convenience means cutting corners, and the one area you don’t want to cut corners is in protecting your loved ones and your property.

These legal document preparation services are not the same as going to an actual attorney, but they do not clarify that in their user agreements. And, customer service representatives may look over your documents, but they cannot dispense legal advice, identifying problem areas or correcting mistakes. The documents are customized with your personal information, but they are not tailored to your needs.

After her uncle’s death, Katherine hired an estate planning attorney to petition the court to allow the post-death funding of the trust and to convince the banks to transfer the funds. The attorney also discovered that Anthony’s will was never properly witnessed.

Correcting the mistakes ended up costing Anthony’s estate thousands of dollars. Doing it right the first time would have saved time and money, and a lot of emotional stress. In the end, the “convenience” simply wasn’t worth it.

James D. Perry

My Dad was a guy who loved is family and took care of little things behind the scenes to make his kids lives a bit easier. One of those things was to prepay a cremation of his body and interment of his ashes at plots that he and my mother purchased years ago at Rose Hills.

When he died, his preplanning saved me many hours of decision-making and legwork. The only downside, if there was one, is that I get periodic calls from my Rose Hills representative urging me to prepay my own plan.

Paying in advance combines pre-planning with pre-funding, which makes it an attractive estate planning mechanism. Often, prepaid burial plans are a tool used to “spend down” excess funds to qualify a client for MediCal Long Term Care benefits.

There are primarily three ways to pre-pay for a funeral: insurance, trusts, and individual funding.

An individual may buy a whole-life insurance policy to cover the costs when needed, or money may be put into a trust run by a financial institution or statewide funeral directors association.

Individual funding may be done through so-called guaranteed and non-guaranteed plans. Under a guaranteed plan, a funeral home promises that if you pay today, it will provide services to you when needed no matter how much prices rise. Many of them exempt other costs, such as flowers and music, though, and changes to the plan potentially void the price guarantee. A non-guaranteed plan offers no such price protections.

Whatever route you might choose to take in pre-paying your funeral, though, be aware of the risks.

Revoking a prepaid plan is not easy. California imposes up to a 10% fee on prepayments in trust. And, canceling an insurance policy entitles you to receive only the cash value of the policy – not necessarily the value of premiums paid – minus commissions and costs.

Also, there are widespread allegations of fraud and mismanagement within the industry. State and federal legislators are working to curb abuses through regulation and disclosure requirements, but consumer protections for those caught in a scam are still not strong.

Some consider it sound financial planning – a hedge against inflation locking in today’s prices in an industry where prices continue increasing. Others simply wish to spare their loved ones the trouble of picking out caskets, buying burial plots, and making other arrangements during their grieving.

As with any investment, diligent scrutiny and seeking legal and financial advice where needed are key to ensuring your money and your loved ones are protected.

James D. Perry

Recently, a client of mine died and his family could not find a signed copy of the trust he had created. People lose things; it’s a fact of life. But, what do you do if you lose the documents detailing your estate plan?

If you lose your original will, and there is no copy on file with your estate-planning attorney, the state considers the will revoked. There are exceptions to this, and the presumption can be overcome in probate court by a preponderance of evidence showing that the will was not destroyed or intentionally revoked. Probate court is an expensive hassle, though, and if you do not have the evidence to over come that presumption, you will die intestate leaving the probate court to distribute your assets according to state law rather than according to your express wishes.

Unlike a will, though, a trust is not necessarily deemed “revoked” if you lose the papers. If you have transferred assets – like your house – into the trust, the transfer will be reflected in the deed or title.

People, including the elderly, sometimes throw out or shred files and papers that they think are of no more use. Or, they might go overboard with their ideas about “security” making it very difficult to find the papers they need when they need them. Estate planning documents have been found in freezers, lampshades, mattresses, or behind pictures. Conditions and diseases like dementia and Alzheimer’s can exasperate these problems.

It’s important to safeguard your estate plan documents. Leave copies with your estate planning attorney, your trustee, or another person so there is evidence of your wishes readily available.

James D. Perry

You may be willing to trust your teenage grandchildren to house sit for you while you’re away for the weekend, but would you trust them to properly manage your entire bank account after you die?

Paris and Nicky Hilton, heiresses to the Hilton Hotel fortune, are notorious for their party-girl ways. DUI charges and driving violations landed Paris in jail at the age of 25, and Nicky has a reputation for drifting in and out of relationships with potentially opportunistic suitors. Neither has yet shown the maturity necessary to manage the Hilton’s billions should they take over any substantial part of estate today – much less so had they inherited at the age of 18.

Generally, if you decide to leave an inheritance in trust, the account can provide for the minor’s health, education and maintenance through a custodian (living parent or appointed conservator) until he or she becomes an adult. However, once he or she reaches majority, the remainder of the account is discharged to them outright.

You also have the option to hold a minor beneficiary’s inheritance in a trust to be paid out in stages or based on milestones. For example, you could pay a beneficiary 50 percent of his inheritance when he reaches the age of 25 and the remainder at 30; or, 50 percent when he gets his bachelor’s degree and 50 percent when he gets his master’s degree. Again, though, once the beneficiary receives a lump sum free of trust, that property is vulnerable to bad decisions, lawsuits, and divorcing spouses (only if transformed into community property in California).

There is also the option of leaving the minor’s inheritance in a lifetime trust. The assets are managed indefinitely by a trustee or until a designated time when the beneficiary may take full control. The inheritance is protected from divorcing spouses, lawsuits, and if a third-party trustee is used, from the beneficiary’s own bad decisions. If there is anything left in the trust when the beneficiary dies, you can control who will receive the remainder.

There are added costs that come with the administration of a lifetime trust, including accounting and legal fees. And the trustee may be entitled to receive a fee for services rendered while administering the trust. These costs must be weighed against the amount of inheritance and your own long-term estate planning goals when drawing up your will.

Keep in mind, though that some people will never be able to handle money properly, due to disability or character flaw. Some clients struggle with how much control they can or should have from beyond the grave, but only you can determine how much weight, if any, to give such considerations.

You may not be a Hilton, but careful planning in advance can make for a smooth transfer of property.

James D. Perry

California residents started the new year with a bevy of changes to state law governing estate planning. One notable change is to California’s No Contest Clause Statute.

A no contest clause includes language in an estate planning instrument that warns heirs from challenging any provisions in the will at the risk of being disinherited in the process.

No contest clauses were originally seen as a way to avoid costly litigation and the public airing of dirty family laundry, and were fully enforced in California courts.

However, the California Law Revision Commission, while scrutinizing the statute in 2008, determined that the intent and the reality were far divorced from one another. Today, the Commission finds that no-contest clauses are too often being used by greedy and dishonest heirs as a tool to blackmail other family members into settling their disputes out of court. And heirs who had legitimate concerns that the instrument was executed fraudulently, under duress, or while the testator was mentally incapacitated were forced to seek judicial review under safe harbor hearings that would protect them from being disinherited.

As of January 1, 2010, California courts are giving no contest clauses included in wills and revocable trusts greater scrutiny. This means that no contest clauses included in wills or revocable trusts which became irrevocable on or after January 1, 2001 will remain enforceable, but heirs hoping to make a good faith challenge to the instrument will not be immediately disinherited upon challenge. Good faith probable cause challenges may be based on allegations including, but not limited to forgery, incapacity, duress, fraud, undue influence, or revocation.

If you have any questions about your estate planning documents or the effects of your no contest clause, contact your estate planning lawyer.

James D. Perry

Former NFL quarterback Steve McNair was shot and killed in what police have deemed a murder-suicide on July 4, 2009, apparently at the hand of his mistress.

He left a wife, Mechelle, and four young children (two from a previous relationship), and no will or estate plan.

McNair’s estate is sizeable. He earned more than $90 million in his playing career, not including marketing and endorsement deals. At last inventory, his widow listed his estate assets at around $19.6 million.

Mechelle McNair hired a probate attorney and was granted the legal authority to administer his estate. However, in the probate petition, she listed only herself and her natural children as heirs saying she didn’t have proof that the other two were McNair’s natural children.

McNair was ordered by Mississippi courts to provide child support for the two children, which seems to indicate that Mechelle really had no reason to doubt their parentage. And while it doesn’t appear that Mechelle plans to challenge their claims to the estate, the two children – both of whom have attorneys representing their interests – have not yet filed as beneficiaries.

And most recently, another Mississippi woman has come forward claiming that McNair fathered her 17 year-old daughter.

And these are just the claims from McNair’s heirs and potential heirs. This says nothing of his outstanding debts, one of which may be unpaid rent for an apartment that may have housed a second mistress.

This sad story of his death is further agitated by the fact that this family’s grief and indiscretions must be played out in public.

Even if you are not a celebrity, or weren’t murdered by your mistress, there is no privacy when your assets go through the probate court – not from the media nor from the nosy neighbors next door. Everything is out there for the world to see, your debts, an itemization of each of your assets, and the names and addresses of your heirs.

A good estate plan can avoid this. Just do it.

James D. Perry

In my wills and living trust practice, it’s routine for a client to come in wanting to draft a will. From time to time, that client doesn’t speak any English. This may be a bit of a hurdle, but drafting the will is far from impossible.

Where the would-be testator speaks a different language, a translator will be called in, either by me or by the client, and together, we’ll hash out the details and make sure the will is drafted to specification in accordance with California laws.

The requirements to execute a will in California are the same for everyone, regardless of language, literacy, or physical disability. Your will is valid even if you can’t read the words on the paper. The same goes for your living trust document.

In the deciding case on this issue, the court ruled that a California resident who spoke Italian and very little English still had a valid will because the testator’s friend had translated as the lawyer read the document during execution proceedings, and because the testator indicated that he understood what was in the will.

The policy behind this is to encourage people to make arrangements for the orderly distribution of their property to their intended beneficiaries either by their last will, or through a revocable living trust.

Failure to have a valid will or living trust in place could result in your property going to legal heirs that you would just as soon disinherit.  Our lives and relationships are complex, and they deserve the extra effort that comes with drafting a will, or a living trust – even if it’s done in a non-native language.

Ultimately, my job is to make sure I draft the document to the client’s wishes, and to ensure that he or she is fully aware of and satisfied with the content whatever his or her native tongue.

The desire to protect our assets and provide for our loved ones is universal. Don’t let a language barrier stop your from carrying out your last wishes for your estate.

James D. Perry