Posted by & filed under Asset Protection, Retirement Planning, Trusts.

Estate Planning Attorney - Uniform Trust Decanting Act - What Is It And How You Can Benefit

Decanting a fancy bottle of wine may be familiar to most people, but there is a new type of decanting: trust decanting. The Uniform Trust Decanting Act was enacted in California on September 14th. Trust decanting is a method in which a trustee may distribute trust assets from an old irrevocable trust into a new one, or amend an existing irrevocable trust, without court approval. It has its limitations; only certain trusts can be decanted. You can’t decant a trust established for charities, for example. In this article I will explain what you need to know about the Uniform Trust Decanting Act and how you can take advantage of it to protect your assets.

1. Who Is Involved?

Before exercising decanting power, the trustee must give notice to very specific people who will be involved in the process. These people include the settlor, beneficiaries, trustees of the former trust, trustees of the new trust, and the attorney general in some instances. The act provides specific guidelines as to what the notice should include. A recent modification of this act entails stricter provisions than the original. If you are located in the San Francisco Bay Area, specifically in the cities surrounding Antioch, Concord or Walnut Creek, feel free to reach out to The Law Offices of Joel A. Harris to get more information on what to include.

2. What Is Allowed?

The Trustee of a trust may wish to update legal provisions, correct legal or drafting errors, take advantage of new tax laws, clarify ambiguities, and protect beneficiaries from changed circumstances, health conditions or creditors.

3. What Is Not Allowed?

Not following the regulations of trust decanting can lead to serious consequences. Decanting should not be abused as a way to defeat the settlor’s initial intent. The Uniform Trust Decanting Act prohibits decanting that defeats tax or charitable purposes of the settlor. The more initial control the trustee has over the distributions of the trust, the more freedom they have to modify the trust through decanting. There are provisions as to what can be modified by the trustee. Generally speaking, the most important provision to remember is that trustees cannot change the original beneficial provisions of the trust itself. For more information on what is or is not prohibited, contact The Law Offices of Joel A. Harris.

“The Uniform Trust Decanting Act prohibits decanting that defeats tax or charitable purposes of the settlor.”

4. Who Will Benefit?

Decanting is designed to extend the terms of a trust or make it more safe for those involved. Those who are new beneficiaries may benefit most. This is because they receive new assets that can be used to alleviate health, personal or educational expenses. Also, beneficiaries will likely get exactly what was planned when establishing the trust. The new provisions of the law allow for assets to be better protected. Finally, since the trustee is required to provide 60 days notice prior to the exercise of the decanting power, beneficiaries have time to object to any proposed changes. Our advice is to have all parties entitled to notice sign and approve any trust decanting.

Are You Worried about Your End of Life Plan?

If you are not prepared with a current estate plan then your family could be vulnerable to higher tax bills, extensive legal fees, and familial conflicts. To avoid those obstacles you should visit an Estate Planning Attorney to get professional help, and create a plan that well suits your goals.

The Law Offices of Joel A Harris are located in the cities of Concord, Walnut Creek, and  Antioch, California.  We have worked for nearly 30 years giving the best guidance our clients need to protect their assets. Have a question about your planning your estate? Feel free to schedule a sit-down meeting where we are happy to patiently answer every question you may have. For your free consultation reach out to us at (925) 757-4605.

Sources

  1. https://www.uniformlaws.org/committees/community-home?communitykey=5b248bac-9251-47fb-bad8-57a23f3df540&tab=groupdetails
  2. https://www.lexology.com/library/detail.aspx?g=6f3a2428-28fd-4fd9-b851-9089efa03697
  3. https://www.calcpa.org/news/2018/12/20/asset-pouring
  4. https://www.americanbar.org/groups/gpsolo/publications/gpsolo_ereport/2018/september-2018/power-trust-decanting-part-1/

Posted by & filed under Estate planning, Retirement Planning.

As we all know, most attorneys go above and beyond to ensure their clients are overjoyed with their work; it is important to recognize that attorneys cannot bend rules to get clients out of every nightmare they come across. For years, I have prided myself on my team’s abilities to extricate our clients from any messes they have encountered or even caused. Unfortunately there are some things even I can’t help with – here are five of them for your amusement and enlightenment.

1. We Cannot Abuse Attorney-Client Privilege

Attorney-client privilege is a client’s right to refuse to disclose information that was confidentially shared between themselves and their lawyer. This law encourages clients to share information that will prompt the lawyer to better assist them in their representation. There are certain limitations to this privilege. First, a client cannot use the privilege to further a case of fraud, tort or crime. I can’t help people commit a crime, and keep secrets if they are planning to kill someone. I also can’t help their heirs if they name the wrong beneficiaries on the accounts or keep them out of probate if they don’t properly fund the trust.  If things in their life change and they don’t come in for an update, lawyers can’t be responsible for the big mess that will leave! Remember your lawyer’s legal limits when considering their lawyer-client privilege. Along with abusing privilege, lawyers can also not neglect it. Beneficiaries and clients are entitled to all the information shared between themselves and their lawyer.

2. We Cannot Represent Both a Trustee and a Beneficiary

When I represent the trustee or Executor, I can’t represent a beneficiary, and vice versa. These people will have wildly differing wishes that a single attorney cannot protect. An attorney is responsible for protecting clients but not in any manner that can disparage their clients, and this can include working with multiple clients. Along with this, a lawyer’s loyalty to their clients can be limited to responsibilities of those they formerly protected.

3. Cannot Be a Legal Entity

A trust involves the trustee, the property, and the beneficiary. Trustees and beneficiaries are legal persons who are capable of retaining respective legal counsels. However, since the owned property is not a legal being, neither trustees nor beneficiaries can represent “the trust” as an entity, and both parties must respect the other’s interests. Contact Law Offices of Joel Harris for further explanation of this limitation.

4. Cannot Show Biases

A bias should not be present in an attorney’s representation of a client. If a lawyer’s conduct in a case is tainted in any way, it can become next to impossible for the lawyer to properly represent the client. Discussions involving biases can limit a lawyer’s ability to represent the client and must be avoided. Finally, no sexual relations with clients are allowed because it is a breach of privacy and an extreme case of bias.

5. Cannot Have Any Conflicts of Interest

In the case of conflict of interest, this means that attorneys cannot represent multiple clients without the consent of each party. It is the attorney’s responsibility to get the consent of their clients while disclosing any possible conflicts. There is no excuse for conflict of interest even if the client matters are unrelated. An attorney must not represent two parties in a dispute and is bound by the American Bar Association rules to avoid even the appearance of conflict.  Rule 1.1 and 1.3 state that representation is prohibited if the terms lead to the lawyer being unable to properly represent their client.

Are You Worried about Your Estate Plan?

If you are not properly prepared and with a well-planned will, then your family could be vulnerable to higher tax bills, extensive legal fees, and familial conflicts. To avoid those obstacles you should visit an Estate Planning Attorney to get professional help, and create a plan that well suits your goals.

At The Law Offices of Joel A Harris , with locations in the cities of Concord, Walnut Creek, Antioch, California, we have worked for over 25 years giving the best guidance our clients need to protect their assets. Have a question about your planning your estate? Feel free to schedule a sit-down meeting where we are happy to patiently answer every question you may have. For your free consultation reach out to us at (925) 757-4605.

Sources

  1. https://en.wikipedia.org/wiki/Trust_law
  2. https://en.wikipedia.org/wiki/Attorney%E2%80%93client_privilege
  3. http://www.calbar.ca.gov/Attorneys/Conduct-Discipline/Client-Trust-Accounting-IOLTA/Guidelines
  4. https://law.justia.com/cases/california/court-of-appeal/2d/121/252.html
  5. https://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_1_7_conflict_of_interest_current_clients/comment_on_rule_1_7/

Posted by & filed under Right to Die Act.

State of the Right to Die Act in California

The End of Life Option Act allows adults diagnosed with terminal diseases to request aid-in-dying drugs from their physician. There are certain requirements said person must meet in order to qualify for such a request. The requestee must be 18, a California resident, have a diagnosis of a terminal disease, be able to make their own medical decisions, and be able to self-administer the drug with no assistance from others. The Act, filled with pros and cons, will also require the physician to submit paperwork to the California Department of Public Health (CDPH), or the department of health of their specified state.  In this article we break down the act and what it means to Californians and their loved ones.

1. The Act Was Created Four Years Ago

The act was enacted in October 2015, making California the fifth state to allow physicians to prescribe these drugs, also referred to as physician-assisted suicide. It is notable that  Governor Jerry Brown put it into effect in June of 2016, eight months after its original creation, due to it being passed during a special session. Brown’s main motive was feeling unable to deny the right of choice to anyone who wanted to carry out their own decision as quickly as possible.

“The act was enacted in October 2015, making California the fifth state to allow physicians to prescribe these drugs, also referred to as physician-assisted suicide.”

2. The Act Has Been Subject to Controversy

Since its initial adoption, the End of Life Option Act has stirred controversy due to its supposed lack of ethics. On May 15, 2018, Superior Court Judge Daniel Ottolia issued a temporary appeal to the act, stating that it was irregularly passed. According to the appeal, the act is not directly related to the healthcare issues it was slated to be passed to aid, making its claims invalid. Xavier Becerra appealed this ruling, asking the act to be in effect until the matter was completed running through court. For the next month, Becerra and Ottolia simultaneously appealed one another’s rulings; this battle ended on June 15th when California’s Court of Appeals granted the state’s request to continue to fund the ELOA while the case was being considered.

3. As Of Now, The Act is In Effect

In November, the state appeals court rejected yet another appeal to the act, stating that its nature and motives should allow it to be left in effect. On January 8, 2019, opponents of the act asked the superior court to reconsider their support of the act, stating that its fine print is unconstitutional. This appeal was ultimately unsuccessful, as twenty days later the California AG asked the court to deny their appeal. Overall, despite its uncertain future, it is fairly certain that supporters of the multifaceted act will continue to fight for it and those who oppose it will continue to do so.

Are You Worried about Your End of Life Plan?

If you are not prepared with a current estate plan then your family could be vulnerable to higher tax bills, extensive legal fees, and familial conflicts. To avoid those obstacles you should visit an Estate Planning Attorney to get professional help, and create a plan that well suits your goals.

At The Law Offices of Joel A Harris located in the cities of Concord, Walnut Creek, Antioch, California, we have worked for over 25 years giving the best guidance our clients need to protect their assets. Have a question about your planning your estate? Feel free to schedule a sit-down meeting where we are happy to patiently answer every question you may have. For your free consultation reach out to us at (925) 757-4605.

Sources

  1. https://www.deathwithdignity.org/states/california/
  2. https://www.sfchronicle.com/bayarea/article/California-s-right-to-die-law-upheld-by-state-13426626.php
  3. https://en.wikipedia.org/wiki/California_End_of_Life_Option_Act
  4. https://coalitionccc.org/tools-resources/end-of-life-option-act/
  5. https://www.cdph.ca.gov/Programs/CHSI/Pages/End-of-Life-Option-Act-.aspx