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It’s easy to think Life Insurance and Trusts as two completely different things: one protects your family in case of death, and the other distributes your estate upon your death. Planning ahead is wise when you want to protect your family’s financial future, and it is commendable if you have already established a Trust as well as obtained life insurance.  You may have heard that you can or should include life insurance into your plans. But how?  Put simply, in most cases you should name your Trust as the beneficiary of your life insurance and here are four reasons why:


1.)  Better Control and Management of Your Named Beneficiary. With a trust you have taken the time to create a legal document that is binding and assures your assets will be distributed the way you want. By naming your Trust as beneficiary of your life insurance, you will always have a viable beneficiary to receive the funds. Even if one beneficiary were to pass away, the trust would have already stated the next succeeding beneficiary, together with any special provisions that you want to make for these beneficiaries.


2.) Not having to worry about the settlement of your estate. As time changes so do financial situations. For example, a realistic scenario that has occurred many times over, is when a Trustee needs funds in order to settle the estate but has no resources to do so. It is easy to imagine the added stress this causes grieving family members. Naming your Trust as beneficiary of your life insurance insures that your trustee will have funds to pay your bills, attend to your funeral and final disposition, and manage your estate until it can be distributed. wills and life insurance


3.) Protecting beneficiaries who are minors. Too many people name young children as life insurance beneficiaries without considering the consequences.  If the children are under 18, a Court supervised Guardianship is required.  This is not the best way to provide for the children. Then a child turns 18, the money is turned over without restriction.  This is worse.  Naming your trust as beneficiary will eliminate court intervention and avoid younger beneficiaries squandering their inheritance.  Most Trusts provide for the care, support, maintenance and education of children as needed, with distribution at a later age, such as 25 or 30.


4.) Protection Against Creditors or Unwanted Beneficiaries. If life insurance pays directly to heirs who have financial problems, health or medical issues, or even incarcerated creditors, the government may be able to claim the money.  A trust may protect your heirs, and the proceeds of your life insurance, from creditors and the government!


In addition, it’s noteworthy to mention that naming your Trust, a document that you update throughout your life, protects your life insurance from accidentally falling in the lap of an ex-spouse or someone else you would like to avoid.



Warning: there are also sometimes good reasons not to include life insurance in your trust. This involves more complicated estates when life insurance is used to pay estate taxes or fund a business transition. Don’t change the beneficiaries of these kinds of policies, or of policies not actually owned by you, without consulting your attorney!


Do you have questions about your own Life Insurance or Living Trust? Give us a call now for an Estate Plan Review or Consultation.





Reviewing an old estate plan

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Having an older Trust or Estate Plan is not, technically, a problem. The age of  the Trust is insignificant. However, whenever I see one that is a few years – or decades –  old, I almost always see changes that affect the final plans the person had originally intended.

Recent tax law changes also allow me to make many older trusts simpler and easier to use.  If you have a trust older than 2010 than has not been reviewed since, now is a good time for a check-up.
Here are 5 things to consider about your older Trust or Estate Plan:


  1. Are your Asset Schedules up to date? Any Estate Plan or Trust that is more than a few years old almost always has an out-of-date Asset Schedule. Did you buy or sell real estate?  Receive an inheritance? Cash out or purchase stocks or other investments? Life Insurance? Retirement accounts?  This is an easy fix you can do yourself! Wills, trusts and estate plans


  1. Do you still know, like and trust the people you have appointed to be in charge of your estate? Is your ex-spouse still listed as your Trustee or Executor? Are your trustees still alive and able to act?  Are your children now capable adults able to replace other people you may have appointed? These are usually excellent reasons to update your Trust!


  1. Do you still like your beneficiaries? Things change, people change, relationships change. Make sure the people you’ve listed as your beneficiaries are still on your good side. Do you still want to leave your family’s Lake Tahoe home to your EX-spouse?   Or your grandmother’s jewelry to your drug-addicted daughter? Are you sure you still want to leave your record collection to your bestie-turned-enemy? Take some time to review your relationships and make sure your original wishes still make sense for your current situation.


  1. Are there dead people included in your will or living people left out? Just like in numbers two and three above – take a moment to review who in your Trust or Estate Plan is no longer with us – and who you may want to add (grandchildren, adopted children, new friends, in-laws, etc.).

Reviewing an old estate plan

  1. Do you have an “AB” trust? Let me be clear here: STAY AWAY FROM “AB” TRUSTS without a property analysis.  While “AB” Trusts used to be standard, because of changes in the estate tax laws, they are no longer relevant for most families.  If your trust was created by someone who is not an attorney (document preparers, paralegals, online legal services, etc.) double check your trust. Most non-attorneys use “AB” trusts because it’s the only Trust they know how to do. Having an “AB” Trust can often be much worse than a simple trust under current laws.  AB trusts are now primarily used for blended families, so that after your spouse dies you can’t disinherit his kids!  If you have an AB trust, have an attorney look at it immediately!

You want to make sure that the plan you intended is properly carried out upon your death- that’s the whole purpose of an Estate Plan, after all!  Therefore, it’s critical that you have the best possible trustees or executors, that you name the right beneficiaries, and that you have the right kind of living trust.


I urge you to take out your Will or Trust right now and check it for these 5 things. If you need help please feel free to give us a call at 925-757-4605 or contact us by email.  I’d be happy to review your estate plan with you.

Posted by & filed under blog, Estate planning.


There are three certainties in life: death, taxes and someone who can’t wait until you die. Inheritance refers to giving property to an individual upon your death. To disinherit means refusing to leave your property to a would-be heir. For most people, the term “disinherit” is a dirty, cruel word. For you, it may not be a dirty world, but a way to express your final wishes.


Reasons to Disinherit
The reasons to disinherit a family member are extremely personal and range from emotional to business decisions. Some common reasons people disinherit include:

1. Estrangemedisinheriting a childnt between you and a family member
2. Protecting the interest of your birth children over your stepchildren
3. Allocating money and assets to a deserving family member
4. The family member received your money and assets while you are alive
5. You believe your relative only wants your money


Disinheritance Factors to Consider
The threat of disinheriting a spouse or child seems powerful (especially when you see the dramatization portrayed on a television and movie). However, disinheriting immediate family members isn’t always as easy as a subplot in a movie or television series. If you are thinking about disinheriting a child or spouse from your will, you have to do more than just leave their name from the document.


In California, you can’t disinherit a spouse unless:
• You clearly and intentionally explain your decision in your will
• You include evidence that you left property and assets to your spouse outside your will or trust. This evidence must be included in the will.
• Your spouse waived rights to inherit from you in a valid, signed agreement such as a pre-nuptial agreement.disinheriting a spouse


In California, you are permitted to disinherit your children or any other family members from your will as long as your wishes are clearly stated. 


The most efficient way to handle disinheriting someone is to leave a small amount of money to the disinherited relative and include a no contest clause to prevent them from challenging the will.


If you’re struggling with this difficult decision, contact the Law Offices of Joel A. Harris, we can help you make the right decision for you – and your family. You’ve worked too hard to leave your family’s future to chance.