Over my years of practice, I’ve seen an increase in the number of women looking to create an estate plan.

Estate planning is important for women because they have a greater likelihood of ending up alone later in life. Women have a longer life expectancy than men and tend to marry older men often making them the final word on disposition of family assets.

In my own case, I had the good fortune to convince my wife Patricia to marry me, despite the fact that I am six years older. As a bonus for me, she loves to cook and bought me my first order of “Grecian Formula” which “restores lost color to graying hair naturally.”

Deborah Jacobs, writing for Forbes Magazine, suggests that women ask themselves a few important questions to help them craft their best estate plan, inclusive of powers of attorney, guardianship, life insurance, wills, and trusts.

1. Whom can you trust? You should have a durable power of attorney giving a trusted family member or close friend the legal authority to make decisions for you should you become incapacitated due to mental illness, medical emergency, or accident.

2. Who would raise your children? It’s often the hardest question to ask because the thought of orphaning your children is so painful.  But not asking the hard questions can leave your children at the mercy of the court.  If you haven’t named a guardian, the court will need to name one.  This can lead to a custody battle between relatives wanting to take the children, or, the reverse, no one may want to take them.

3. Do you have life insurance? Life insurance can help replace lost income when a spouse dies, or it may cover state or federal estate taxes.  If you have life insurance through your employer or a pension plan, be sure to keep your beneficiary forms updated.  You may want to designate a family member as the owner of the policy to avoid the proceeds being taxed as part of your estate.

4.  Do you have assets of your own? The estate tax applies to each person individually.  California is a community property state, so property that is used jointly in the marriage (e.g., the marital home or a joint bank account) is presumed to be community property.  If you are trying to balance the tax burden, you may need to transfer title to one spouse individually.  Otherwise, you may be rebutting the community property presumption in court.

5. Is there money in the bank? If your spouse dies, you will not have access right away to his individual bank accounts.  You want to be sure that there is enough money in joint accounts or separate accounts to which you have access to cover immediate expenses until the spouse’s estate is settled.

6. Should you shed assets to save taxes? Before you start giving away the farm, you need to make sure you have enough money for yourself to live and pay emergency or final expenses.  You can give away as much as $13,000 individually per year tax free, $1 million over your lifetime.  This year is an anomaly in estate taxation (0% on estates, 35% on gifts), but starting Jan. 1, 2011, unless Congress acts, you will be paying the death tax and the gift tax at a rate of 55%.

There are a great number of estate planning and financial planning vehicles you can employ to transfer assets prior to and after death and to lower your tax bill.  Take stock of your goals and your financial reality, and then talk to your estate planning attorney.

James D. Perry

We never read about a perfect celebrity estate plan. An estate plan that can smoothly transfer assets is not newsworthy, and happy relatives rarely sue.

From what I have read, esteemed film actor Dennis Hopper made every attempt to create a solid estate plan. Unfortunately, his name and estate plan have been in the papers because of a singular unforeseen problem: one angry widow.

Early this year, Hopper filed for divorce from his wife of 18 years, Victoria Duffy. She responded by filing a complaint in court claiming Hopper had cut her out of his will at the behest of other family members. She claimed he lacked the mental capacity to change his will, a charge his doctors emphatically denied despite his declining health due to inoperable and terminal prostate cancer.

Because Duffy and Hopper were still married at his death, she stands to inherit a quarter of his sizeable estate and a $250,000 life insurance property, but a clause in their prenuptial agreement may strip her of all inheritance. According to the document, the couple must have been “married and living together” on the date of Hopper’s death.

The prenuptial agreement categorized any property purchased or acquired by Hopper during the marriage as separate property. Just prior to his death in May, Hopper signed an affidavit under oath accusing Duffy of stealing more than $1.5 million in valuable artwork from him – artwork that was considered his separate property.

Hopper had created a revocable living trust and funded it with assets including works from his art collection. Now his trust is suing Duffy, asking a court to compel her to return the property so it can be properly distributed to his named beneficiaries.

Hopper took the responsible steps executing a will, creating a trust and funding his trust. But, all the planning in the world won’t deter a person with enough money for a lawyer and a nasty grudge.

James D. Perry

2010 is not only the year to die; it’s also the year to give.

As it stands now, an individual can give away up to $13,000 tax free this year as part of his or her $1 million lifetime maximum.  But anything over that $13,000 will only be taxed at a rate of 35% — an historic low.

There is still some trepidation among estate planning attorneys as to how to advise their clients to prepare for the 2011 estate tax.  Congress hasn’t made any moves to reinstate the estate tax for this year or to write new laws governing the tax rates for the coming years, and with the 111th session coming to a close, it’s looking less and less likely that they will.

Until new laws are passed, or until Jan. 1 when the old laws return, millions of Americans are set to enjoy the benefit of a 0% estate tax rate for 2010.

But, on Jan. 1, the estate tax rate and the gift tax rate will jump to 55%.  Traditionally, the estate tax and the gift tax rates have matched because Congress didn’t want people ducking the IRS by giving away their entire estates prior to their death.

Christmas is only 63 days away.  This year, at least, giving away some of your fortune may also end up being a gift to yourself.

James D. Perry

One of the most frequent questions I get from my clients is “Why should I spend the money to create a trust?”

The easiest answer to that question is that for the price you pay now, you save far more money down the road. But that answer doesn’t satisfy everyone. So here is one serious money-sucking situation that might make you think twice before dismissing your need for a trust.

In the event of your incapacity, the court may impose a conservatorship because the individual can no longer handle his or her own finances. Anytime you have to initiate court proceedings, you’re looking at a significant investment of time and money – more of both if the proceedings are contentious.

Also, nearly anyone can petition the court to become your conservator if they can show that you no longer have the capacity to manage your affairs. We have seen this most recently where an advocacy group for child actors, A Minor Consideration, petitioned the court to take control of the finances for the 14 children of OctoMom, Nadya Suleman. An Orange County judge has given the green light to the group to proceed with their case.

However, you might become incapacitated for any number of reasons in your life having nothing to do with the Hollywood scene, including dementia, illness, disease, or accident.

By creating a revocable living trust, you designate ahead of time a successor trustee who you want to be in charge of your affairs should you become incapacitated. Moreover, you can designate exactly what property that person can control and choose different individuals to manage multiple assets. Most people transfer the title to their house into a living trust so that the successor trustee would be able to manage the affairs of the home.

Your life is probably not as crazy as the OctoMom’s, and you may never have Lindsay Lohan or Britney Spears’ problems (both have battled conservator petitions in court), but you may one day be struck by Alzheimer’s disease, or an accident or illness resulting in a coma, any one of a number of mundane real life disasters that strike regular people.

You and your estate planning attorney have tools available to prevent confusion in your family and keep them from fighting for control should you become incapacitated.

James D. Perry

The law is full of old rituals that today we would consider ridiculous.

For example, in early Bavaria, to convey real property by sale, by gift, or by will, one had to box the ears of young boys to seal the deal. The idea was that by creating a memory of pain in the child, he would be a good witness later in life if a dispute over the transfer ever arose. Without this formality, the conveyance was ineffective, even where the intended recipient took possession of the land and even if no dispute ever arose.

Thankfully today, the law has done away with such silly rituals. There are, however, three formalities you must follow too ensure that your property transfers upon your death in the manner and to the person your intend.

1) You must create a will. Write down all the property you own and to whom it should go upon your death. Without this basic document, all your property will be sent through the probate court and distributed to your heirs through the rigid state laws of intestacy.

2) You must sign your will. In California, this requirement can be filled one of three ways: you may sign the will yourself; your name may be affixed to the will by some other person at your direction and in your presence; or your name may be affixed by a conservator acting under court order.

3) Your will must be witnessed by at least two people. During your lifetime, at least two people who do not stand to inherit must sign your will as disinterested. Furthermore, they must be present and physically watching as you sign the will and they must be competent of the fact that they are signing your will.

If any one of these requirements is not met, the probate court can determine that you died without a valid will and the land that you wanted to go to your grandchildren may instead go to your son with a nasty gambling habit. Of course, there are some exceptions to these rules, but they too throw your intentions to the scrutiny of the court, which costs your estate time and money.

If you have any questions about the validity of your will, I urge you to talk to your estate planning lawyer.

James D. Perry

I read a news story from Wisconsin about a man who was accused of killing his parents in May. The man apparently had petitioned to be a co-representative with his sister of his parents’ estate.

The court found that he was incapable of being an executor because he was jailed on $1 million bond, but the article also noted that, if convicted of their murder, he also wouldn’t inherit.

Many states have these so-called “slayer rules” prohibiting murderers from profiting off the estates of their victims. These rules seem like common sense, fitting into our sense of justice, but they also serve to combat elder abuse and spousal murder.

Under California’s probate code, anyone who intentionally and feloniously kills a person is barred from inheriting any property or property interest from his victim regardless of whether the murderer is named in the will or whether the victim dies intestate.

Essentially, the murderer is treated as if he or she died prior to his victim, cutting off the possibility of inheritance. The murderer’s allotted share is redistributed to other heirs as directed by the will or by intestate law.

Sometimes, probate and estate law can be painfully complex, but sometimes the law just makes sense.

James D. Perry

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

Having a pet in the house has a number of benefits to our overall physical and emotional health. But I’ve heard many friends and clients question whether it would be better to remove a pet from their aging parents’ homes to prevent injuries or to eliminate the added responsibility of caring for an animal.

Carolyn Rosenblatt of AgingParents.com wrote recently for Forbes about the problems pets can present in the home of an elderly person.  If your parent has a large dog or a cat that is old and can’t see or hear a human coming to get out of the way, there is the risk that your parent could trip and fall sustaining serious injuries. And if your parent suffers from dementia, there is concern for the pet that it won’t get fed or taken outside for walks.

But whatever the risks, it is likely they can and should be mitigated to preserve the parent-pet bond.

According to research in the Journal of the American Geriatrics Society, caring for a pet serves as a buffer against isolation and loneliness. And further studies suggest that petting a dog for a few minutes a day can relieve stress, lower a person’s blood pressure, and alleviate depression. Pets also aid elders in their socialization with others, serving as a conversation starter.

If the pet is unruly, offer to pay for training, Rosenblatt suggests, or shop together for a collar or harness that provides more control. If your parent is frail, find someone to walk to dog to prevent falls or suggest that your parent’s home care worker go along on walks to monitor your parent’s safety.

Whatever the risks, it is probably more beneficial to your parent’s health to protect that owner-pet bond. Safety is a family issue, but don’t forget that Fido or Fluffy is family, too.

James D. Perry

My wife and I are off to Vermont, New Hampshire and Maine for vacation before the summer days slip away.    I’ve left instructions with my capable staff on when and how to contact me if needed, with any luck they will be able to get by just fine without me for a couple of weeks.  It would be horribly irresponsible of me to not just show up on Monday morning without telling them or my clients that I will be away.

But what if I don’t come back?   What if I choke on a lobster tail or have the big one whilst trolling for trout on Lake Winamasake?   Well, all of you that were counting on me to help you with your estate plan are just going to have find help or a referral from my staff.   And let’s be clear:  you, like me and everyone else, are going to die.

You really have to come to grips with this concept before you make out your estate plan because death is not the last thing you will ever do.   Distribution of assets is the true final act, and since you’re not going to be around to do it, you need your own capable staff to carry out your business.

That staff is your estate plan.  Your will covers the “what” and “to whom” of asset allocation, and any trusts you create handle the “when” and “how.”

Once death occurs, planning pays off for your heirs if done right.  Other than state law, your estate plan is the only roadmap a probate judge, or your trust attorney can use to settle your estate.  And state laws don’t discriminate based on your spendthrift kids, your no-good brother, or your favorite niece.

Hopefully, I will eventually return safe and sound to my office in September and be available to settle any unresolved issues that came up during my vacation.

If I don’t come back, at least I know my own estate plan is complete.  If yours isn’t, get to it before that banana peel trips you up!

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