Keeping it in the Family: How to keep assets in the family after death or disaster strikes.

Secure Your Assets

What is the single biggest threat to your assets leaving your family?  I will give you a hint, it ‘s not estate taxes.  Many people believe that estate taxes will take a lion’s share of their estate when they die, yet estate taxes apply to few estates.  This year, the estate tax exclusion amount is $5.40 million.  If you are married, you can double that number, for a total of $10.8 million that can pass estate tax free.

Another myth is that if you die without a Will all your assets will pass to the State of California.  Not true (in most cases).  While it is true that some estate may pass to the state, you first have to go through the intestate distribution rules outlined in Probate Code sections 6401 and 6402.  Under the intestate rules the court will order your assets to be passed to your spouse, your children or grandchildren, or attempt to find more distant relatives if you have no spouse or children/grandchildren.  In other words, family comes first even when there is no Will or Trust in place.

The more troubling issue is when an elder has a Will or Trust that changes the estate plan to pass a majority of assets to a wrongdoer.  Perhaps the person now receiving the estate was never meant to benefit, but changes are made at the end of life when the elder is most susceptible to undue influence or lacking capacity.

We can call this generally “financial elder abuse” although in many cases it is also legally defined as financial elder abuse.  This type of abuse is a growing problem among our elder population and its affects can be devastating.  In some cases, an entire estate can be in jeopardy of being lost to a family due to the intervening acts of a bad actor.  The problem is that a bad actor can completely destroy an otherwise well planned estate.  And then there’s the lawyers’ fees and costs required to try and restore the rightful estate plan so assets pass to the rightful heirs.

No doubt preparing a proper estate plan is of paramount importance if you want to keep your assets in the family.  And a plan is not just a Will or Trust, it is an overall structure where you consider each of your assets, how each asset is titled, and how those assets will ultimately pass to family members.

Next, you have to be on guard for bad actors.  That’s harder to do than you may think because most bad actors come into the picture quite harmlessly.  As a person ages, family should be more mindful of the help the person needs, the people they are around a majority of the time, and the possibility for disaster when Will and Trust changes are secretly made.