Failing to plan for the disposition of a business interest could be devastating to the family of the owner and to the business itself. Problems are many and can include:

• not finding a suitable buyer when the time comes, forcing the family to sell the business to outsiders or at drastically reduced prices;

• inexperienced family members taking helm of the business, causing friction with existing management or employees; and

• the subchapter S status of a corporation could be jeopardized if the stock goes to ineligible shareholders.

So, do you need a buy sell agreement?  A buy-sell agreement is simply a contract that spells out the disposition of the business by obligating one party to buy and obligating the departing owner to sell the business interest upon the triggering event. A well-drafted buy-sell agreement will serve to:

• provide a readily controlled market for the departing owner’s interest,

• establish a price or valuation method of the business interest in advance,

• provide for a smoother transition for the business,

• prevent unintended tax consequences, and

• provide cash to a disabled business owner or to the estate of a deceased owner.

After carefully considering whether a buy sell agreement is best for your circumstances, the next issue to determine is funding for such a transaction.  The buy-sell agreement should specify how the buyer will pay for the business interest. There are many ways to fund such future events including life insurance policies on the principals, savings or other investment accounts that can be used to tap into, and installment sales.

Installment sales are often part of a buy-sell agreement, for at least a portion of the purchase price. An installment sale will require payment of principal and interest from future business earnings, forcing the seller to rely upon the business’s success to receive payments. The uncertainty of installment sales makes them more appealing when used in conjunction with something like insurance funding.

Buy sell agreements are flexible enough that they can be structured to meet the needs of both the business and the owners, taking into consideration tax implications and individual goals for the transfer of the business. A buy-sell agreement is often structured in one of two ways: as an “entity purchase” or a “cross purchase” between the owners of the business.

Under the entity purchase method (aka the redemption method), the business contracts to purchase the interest of a departing, disabled, or deceased owner, and each owner promises to sell upon that triggering event. When combined with a life insurance policy, the business owns a policy on each owner, pays the premiums, and is the named beneficiary on the policy.  Upon the triggering event, the policy payout can be used to meet the terms of the agreement.

The cross-purchase method uses a contract between the owners, not the business entity itself. Each owner purchases a share of the departing owner’s business interest as detailed in the contract. If funded with insurance, each owner buys an insurance policy on the other owner, pays the premium and is the beneficiary.  At the death or disability of an owner, each co-owner receives policy benefits, which are then used to meet the terms of the agreement.

Are you a business owner in need of additional information on buy sell or other business agreements?  If so, please contact the Law Offices of Daniela Lungu at (925) 558-2710 or email info@lungulaw.com.

Do you want a specific topic discussed in this blog? If so, please contact us at info@lungulaw.com with your suggestions.

About Daniela Lungu, Attorney at Law

Daniela Lungu, founder of the Law Offices of Daniela Lungu, devotes her law practice to asset protection through estate and business planning. Ms. Lungu’s goal is to provide the people of the Bay Area and California with the highest quality, and most personalized legal services possible. Her attention to detail and a high level of communication with her clientele distinguish her from other attorneys in the field.

Important legislation, written by Senate President Pro Tem Darrel Steinberg (D-Sacramento), Senate Bill 1140, took effect this January and amends the Welfare and Institutions Code, and is an expansion of the rights of financially exploited elders.

Before this important legislation took effect, an elder had to prove his or her property was taken for a wrongful use or with the intent to defraud in order to fall under the legal definition of financial abuse.  There are different levels of fraud.  Over fraud is easy to identify and in some instances rectify or avoid. It is the more overt kinds of fraud, such as undue influence that causes the most harm and is often harder to prove and remedy.  In such cases, proving intent, the legal measure by which you can make someone accountable in most instances, is difficult, if not outright impossible.  This bill addresses this situation by changing the definition to add undue influence as a basis for proving financial abuse. (See Cal. Welf. &: Inst. Code § 15610.30(a)(3).)

Undue influence, as defined by Civil Code section 1575, involves taking unfair advantage of a person’s weakness of mind or the confidence that person had in the perpetrator. By including undue influence as a basis for financial abuse, California now authorizes the recovery of damages, attorneys fees, and costs and thereby provides victims with a potent tool for a faster recovery (§ 15657.5(a)).   This is a preferable remedy to the traditional remedy of rescission, which simply undoes the bad act performed on the elder person.

In addition, SB 1140 requires a perpetrator to return, upon demand, property taken from an elder who lacks capacity. Failing to do so subjects the perpetrator to remedies that reach beyond rescission: damages, attorney’s fees, and costs (§ 15657.6).   This removes the possibility that the elder person will have to deplete all their remaining assets in order to recapture or regain assets taken from them wrongfully.

Perhaps most significantly, SB 1140 changed the statutory definition of wrongful use.  Wrongful use is now defined as the taking of an elder’s property whereby the perpetrator knew or should have known that doing so would likely be harmful to the elder (§ 15610.30(b)).  This puts aggressive salespeople on notice that their interactions with the elderly are going to be scrutinized more carefully.  Caveat emptor no longer applies in most transactions involving the elderly.  A seller may be liable for damages if the seller knows or should know that the sale is likely to harm the elder.

Other changes to the law of financial abuse in SB 1140 are as follows:  expressly recognizes that a victim may recover compensatory as well as punitive damages; holds an employer vicariously liable for financial-abuse damages resulting from the wrongful conduct of an employee committed in the course and scope of employment; and provides a four-year statute of limitations that commences when the plaintiff discovers, or should discover, the facts constituting the financial abuse (§§ 15657.5 and 15657.7).

This new law is an important tool in the protection and rights of elders and should help victims of elder abuse recover from the effects of wrongdoing.

Do you suspect that someone is the victim of elder abuse?  If so, please contact the Law Offices of Daniela Lungu at (925) 558-2710 or email info@lungulaw.com.

Do you want a specific topic discussed in this blog? If so, please contact us at info@lungulaw.com with your suggestions.

About Daniela Lungu, Attorney at Law

Daniela Lungu, founder of the Law Offices of Daniela Lungu, devotes her law practice to asset protection through estate and business planning. Ms. Lungu’s goal is to provide the people of the Bay Area and California with the highest quality, and most personalized legal services possible. Her attention to detail and a high level of communication with her clientele distinguish her from other attorneys in the field.

According to the Restatement (Third) of Trusts (“Restatement 3d”), trust beneficiaries are generally defined as persons that are intended to have enforceable rights in trust property and the successors to those persons. Restatement 3d § 48 adds that “[a] person is a beneficiary of a trust if the settlor manifests an intention to give the person a beneficial interest; a person who merely benefits incidentally from the performance of the trust is not a beneficiary.”

These rules are very relevant to the determination of whether a person has standing to bring a claim against the trustee to enforce the provisions of a trust.

B. Impact of Beneficiaries on Trust Modification and Termination

The issues of whether a person is a beneficiary, and, if so, what type of beneficiary, are relevant with regard to the termination or modification of non-charitable trusts. In most jurisdictions, trust beneficiaries may compel a trust’s termination or modification if: (1) continuance of the trust is not necessary to carry out a material purpose for which it was created; and (2) all of the trust beneficiaries consent and are not incapacitated. If the settlor is alive and not incapacitated, his or her consent is also necessary. Also, the trust will be terminated or modified if the trust’s purposes have become impossible to accomplish, or, because of a change of circumstances, continuance of the trust would defeat or substantially impair the fulfillment of the trust purposes. IV Scott & Fratcher, The Law of Trusts, §§ 337, 340 (4th ed. 2001) (hereinafter “Scott”).

Non-consenting beneficiaries whose interests are not benefited by a termination or modification of a trust will prevent a trust termination, whether or not such beneficiaries only hold contingent interests or are not yet ascertained. Scott § 340; Matter of Schroll, 297 N.W.2d 282 (Minn. 1980) (an inter vivos trust provided that a successor trustee should be a bank. The court held that this provision could not be eliminated by the consent of the settlor and all living beneficiaries, because there were possible unborn contingent beneficiaries). On the other hand, in a number of cases the court has decreed the partial termination of the trust, although one or more of the beneficiaries did not consent to such termination, on the ground that the interests of the non-consenting beneficiaries were not adversely affected. Scott § 340.2.

Some court laws may differ.  For example, Cal. Prob. Code § 15404(b) provides that if one or more beneficiaries do not consent to the proposed modification or termination, then a court may still grant a modification or termination if the interests of the non-consenting beneficiaries are not substantially impaired. Section 15404(c) provides that if the trust instrument provides for the disposition of principal among a class of persons, the court may limit the class of beneficiaries whose consent is needed to compel the modification or termination of the trust to the beneficiaries who are reasonably likely to take under the circumstances.

C. Required Disclosures to Beneficiaries

The determination of whether a person is a beneficiary, and, if so, what type of beneficiary, is also relevant to determining the nature and amount of information concerning the trust to which the beneficiary is entitled.

A trustee’s successful administration of a trust is often facilitated by clear and frequent communication with the beneficiaries. Keeping the beneficiaries informed can help avoid the trustee’s involuntary removal and/or being sued for breach of fiduciary duty. Furthermore, to be able to enforce the trustee’s duties, the beneficiaries must know of the trust’s existence and the details of its administration.

1. Information Required to be Disclosed — Nature and Timing

a. The Restatement and Case Law. Usually, when the settlor is competent and can revoke the trust, the settlor can easily keep information regarding the trust from the beneficiaries. Restatement (Third) of Trusts (“Restatement 3d”) § 74 (T.D. 2005). Once the settlor becomes incapacitated or dies and can no longer revoke the trust, however, the trustee’s duties that are owed directly to the beneficiaries and the beneficiaries’ rights regarding the trust are implicated.

b. State Statutory Law. States have enacted statutes regarding a trustee’s duty to disclose to beneficiaries.  California provides that the trustee has a duty to: 1) keep beneficiaries of the trust reasonably informed of the trust and its administration, 2) provide upon reasonable request a report of transactions, 3) provide prompt notice to the beneficiaries when the trust becomes irrevocable and whenever there is a change in trustee, 4) provide upon a request a copy of the trust instrument when such trust becomes irrevocable, and 5) provide annual accountings to current beneficiaries. Cal. Prob. Code 16061.2; 16062; 16061.5; 16060; 16061.

c. Duty to Keep Beneficiaries Informed Under the Uniform Trust Code.

The UTC contains provisions concerning how much trust information must be disclosed to beneficiaries and a settlor’s right to control such disclosure. The provisions of the UTC that codify the trustee’s duty to inform and report are among the most controversial portions of the UTC and, as a result, have become the least uniform among jurisdictions that have enacted the UTC.

D. Trustee Compensation

1. State Law Regarding Trustee Compensation

For some time a trustee has been allowed compensation in the United States unless the trustee voluntarily serves without compensation or waives his or her right to compensation. The amount of the compensation is fixed either by the terms of the trust instrument, by contract between settlor and trustee, by statute or by court action.

In most states there are statutes that govern the allowance of a trustee’s compensation.

There are basically three types of trustee compensation statutes in force. The most common type of statute authorizes the court in its discretion to allow the trustee “reasonable compensation.” See, e.g., Cal. Prob. Code 15681. Under this type of statute the trustee often requests a specific amount on one or more of the trustee’s accountings, and the court grants the trustee a fee which it deems fair and reasonable under the circumstances. A second type of statute provides that the trustee is “entitled” to compensation and authorizes the trustee to collect the compensation from the trust estate without prior court authorization but subject to review upon petition of an interested person. The third basic type of compensation statute sets forth, in varying degrees of detail, a schedule or scale of commissions or fees that are permitted a trustee.

The following factors have been considered in determining the reasonableness of a trustee’s appropriate compensation: (1) the size of the trust; (2) the responsibility involved; (3) the character of the work involved; (4) the results achieved; (5) the knowledge, skill, and judgment required and used; (6) the time and services required; (7) the manner and promptness in performing its duties and responsibilities; (8) any unusual skill or experience of the trustee; (9) the fidelity or disloyalty of the trustee; (10) the amount of risk; (11) the custom in the community for allowances to trustees; (12) any estimate of the trustee of the value of his services.

Many corporate trustees publish schedules of fees for their services as trustee under a will or a trust agreement.

2. Other Considerations in Corporate and Individual Trustee Compensation

Fees charged by a corporate trustee, including minimums, can vary greatly. A frequent misconception is that substantial amounts are saved by naming an individual trustee. Often, however, using an individual trustee can end up costing money due to the individual’s inexperience with the complex legal requirements of trusts, lack of investment or tax knowledge or not having time to perform the job. The fees charged by a corporate trustee are sometimes believed to be less than the differential between the investment return earned in a given trust by a corporate trustee and the investment return that would have been earned in such trust had a family member served as trustee. Also, in most states, using a corporate trustee avoids the need to obtain a bond.

Frank discussion of fees and expenses in advance can also extinguish unrealistic expectations and potential problems. Acting as trustee entails considerable responsibility, inconvenience and potential risk. Although it is often anticipated that an individual trustee will not charge a fee, the trustee should certainly understand what is involved before agreeing to serve without a fee. If it is anticipated that the individual trustee will take a fee, it may avoid misunderstanding if the instrument specifies (or there is agreement) that a fee will be taken and, if possible, how it will be calculated.

The trust instrument should discuss compensation especially when the trust instrument appoints co-trustees. Depending on the circumstances, each trustee may receive a full fee; a single fee may be divided between two trustees, or the individual trustee may forego receiving any compensation. However, it is generally unwise to set forth a rigid compensation schedule in the trust instrument because of the difficulty in anticipating the services that may be required of the trustee and the difficulty of obtaining approval of any change in such schedule.

If you have questions of how to pick fiduciaries, or get answers to your other trust questions, please call the Law Offices of Daniela Lungu at (925) 558-2710 or email info@lungulaw.com.

Do you want a specific topic discussed in this blog? If so, please contact us at info@lungulaw.com with your suggestions.

About Daniela Lungu, Attorney at Law

Daniela Lungu, founder of the Law Offices of Daniela Lungu, devotes her law practice to asset protection through estate and business planning. Ms. Lungu’s goal is to provide the people of the Bay Area and California with the highest quality, and most personalized legal services possible. Her attention to detail and a high level of communication with her clientele distinguish her from other attorneys in the field.

By: Ann-Marie Murphy, Quizzle.com

If you’re a renter, you’re in good company. More than 95 million Americans rent their homes, according to the American Tenants Association. Maybe you live in a part of the country where the costs of home ownership are out of reach. Perhaps you don’t have the time or desire to tend to a home. Or maybe you’re not in a position to commit to a location for more than a few years.

Whatever your reason, renting is a perfectly reasonable and relatively non-committal way of living out on your own. But just because your home is in someone else’s name – ahem, your landlord’s – doesn’t mean you relinquish all rights. Here are seven tips that can make your renting experience easier and more affordable:

1. Protect Your Stuff with Renter’s Insurance

Nearly two in three college-age adults have no insurance protection, despite almost half reporting belongings worth more than $10,000, according to a recent study from Allstate Insurance. The reason? Misperception of cost.

The truth is renter’s insurance is perfectly affordable; the national average is just $16 per month, according to Allstate. And the insurance protects your stuff against fire, theft and vandalism. Think of it this way: If a fire sweeps across your apartment destroying everything in it, is the ability to replace all of your stuff worth just four fancy cups o’joe a month?

2. Lease Your Apartment during Low-Season

Just like there’s a purchase season for homes, there’s a high- and low-season for renting. These seasons vary depending on your location, but typically follow demand. For example, in northern states, high season is often in the summer or when college kids are scooping up apartments. Low season, on the other hand, ordinarily occurs during the winter.

With apartment leasing, inventory dictates price, so your best bet is to lease your place during the low-season. Not only will you have a greater variety of apartments available to choose from, but you’ll be in a better position to negotiate price.

3. Don’t Be Afraid to Negotiate

You’re likely stuck with your rent payment for at least a year, so get the best deal you can! Before you start negotiations, make sure you have all the information your landlord has about you, including your credit report and score. To take a peek at your credit report and score for free, no strings attached, swing by Quizzle.com.

To be a smart negotiator, you don’t have to be a seasoned salesman. Here are five tips to help you get the best deal:

• Know Your Neighborhood: Find out what comparable apartments are going for in your area, including any specials that are running.
• Know Your Apartment Complex: Is your complex completely occupied or are there a lot of units available? The more empty apartments your landlord has, the more willing he may be to negotiate.
• Time It Right: Make sure to give yourself enough time to negotiate so if dealings fall through, you can find another place.
• Promote Yourself: Tell your landlord why you make a good tenant and give him reasons to keep you around.
• Think beyond Money: Your landlord might not be able to budge on rent, but may be willing to give you other perks like free storage, flexible move-in/out dates, premium parking or new carpet.

4. When Money’s Short, Talk to Your Landlord

This tactic doesn’t count if you spent your rent at the mall, bar or casino. But if you’re truly strapped for cash, talk to your landlord. There’s no guarantee a landlord can or will help, but if you don’t ask, you’re never giving him or her a chance. If you’ve experienced a hardship, your landlord may be willing to work out a payment plan with you, cut you some slack on your rent payment due date or help you get into an apartment that’s better suited for your situation.

5. Know Your Lease Terms and Termination Fees

Many landlords offer a variety of lease terms: six months, one year, two years, etc. Make sure you choose the lease term that fits your situation. Typically, the longer the lease term, the sweeter the deal. But, if life happens and you need to bail, breaking your lease could cost you. Before signing anything, take a look at your lease-break fee. Can you negotiate it? Is the potential cost worth it?

6. Know Your Rights

Just because you don’t own your home, doesn’t mean you don’t have rights. For example, if you rent a home from a landlord who then lets the house go into foreclosure, you may remain in your home through the end of your lease unless a home buyer purchases the home to live in, in which case you have 90 days to find a new place to live. You may get scary letters from the bank, lender and everyone who has financial interest in the house telling you to get out, but you signed a binding contract that protects you from being kicked out of your home without notice.

Different states have different protections for renters, so do your homework. If your landlord does something that feels unfair, you may have a legal recourse. There are numerous free law resources online for renters, as well as tenants’ rights organizations that you can contact for help.

7. Uncle Sam Likes Renters Too!

Many states offer a “Renter’s Credit” or “Homestead Property Tax Credit” when you do your income taxes. The credit is typically based on the difference between your household income and property taxes. As a renter, you may not directly pay property taxes, but your landlord does, and those taxes are figured into your monthly rent payment. Make sure you hang onto any receipts showing you paid your rent so you can provide the IRS with documentation should they request it.

An attorney can’t tell you whether you should or should not use what is readily available on the internet, but as a consumer, you should always use caution and make sure you fully understand what you are doing.

Creating Legal Forms to Help a Friend Considered the Unauthorized Practice of Law

A woman asked her friend to help her prepare a will.  The friend found a will in the internet, and filled in the blanks provided.  The friend was named as executor of the estate.  The woman subsequently died and her will was admitted to probate.  In Franklin v. Chavis, 640 S.E.2d 873 (S.C. 2007), the court found that the testatrix was not involved in drafting the document and did not review it. Further, the court held that the friend had acted as more than a scrivener and had engaged in the unauthorized practice of law. The friend also drafted a power of attorney for the testatrix that did not involve filling in blanks in a form and this, too, was the unauthorized practice of law. The court also determined that the friend could not receive compensation for acting as the executor.

In addition to the loss of compensation to the executor, this person was subject to legal action for the unauthorized practice of law.  The cautionary tale here is to remember that sometimes helping a friend out, and providing them with legally enforceable agreements, opens the door to future legal action.  You should always consult with a licensed attorney prior to creating, filling out, or drafting any legal documents.

Do you want to create a will?  If so, please contact the Law Offices of Daniela Lungu at (925) 558-2710 or email info@lungulaw.com.

Do you want a specific topic discussed in this blog? If so, please contact us at info@lungulaw.com with your suggestions.

About Daniela Lungu, Attorney at Law

Daniela Lungu, founder of the Law Offices of Daniela Lungu, devotes her law practice to asset protection through estate and business planning. Ms. Lungu’s goal is to provide the people of the Bay Area and California with the highest quality, and most personalized legal services possible. Her attention to detail and a high level of communication with her clientele distinguish her from other attorneys in the field.

Couples can consider entering into pre or post nuptial agreements, which will spell out the reasons for the particular division of property agreed to. Remember that it is important that both sides fully disclose assets and are independently represented by counsel so if there is a challenge to these agreements later, their strength can be ensured.  The Code section also requires a seven-day waiting period prior to marriage if a spouse waived their right to a share of the estate in the other spouse’s estate.  Remember that if you do not provide for all contingencies, the law will.

SHARES FOR FORGOTTEN SPOUSES

Section 21610 of the California Probate Code protects a spouse who is not mentioned in estate planning documents executed prior to the marriage. The statute gives the omitted spouse a statutory share of the estate, but not if (1) the decedent’s estate plan specifically disinherits the spouse, (2) the spouse receives assets outside the estate, or (3) the spouse executes a valid waiver.

So, what this means is that after a marriage, it is imperative to speak with your estate planning professional to ensure that your future desires are properly spelled out in those important documents.  The Code specifically provides certain rules for waiving rights that must be followed to the letter.  Consult with your estate planning professional to ensure you do not have a forgotten spouse problem in the future.

Furthermore, all life changing events, such as marriage, childbirth, divorce, or death of a loved one–should trigger a re-examination of a person’s estate plan, if not an amendment of key documents.   Not amending the documents in a timely manner may indeed ensure a protracted and expensive litigation among remaining family members.

If you require a review and amendment of your estate planning documents, please call The Law Offices of Daniela Lungu for your complimentary consultation at (925) 558-2710 or by email at info@lungulaw.com.

Do you want a specific topic discussed in this blog? If so, please contact us at info@lungulaw.com with your suggestions.

About Daniela Lungu, Attorney at Law

Daniela Lungu, founder of the Law Offices of Daniela Lungu, devotes her law practice to asset protection through estate and business planning. Ms. Lungu’s goal is to provide the people of the Bay Area and California with the highest quality, and most personalized legal services possible. Her attention to detail and a high level of communication with her clientele distinguish her from other attorneys in the field.

Is a Trial Period Required to Get a Modification?

The general answer to this is yes, particularly If your mortgage modification is part of a government sponsored program. For example, Fannie Mae’s guidelines require a three month trial period if your loan is in default when the trial period starts, or four months if your loan is current but default is imminent when the trial period starts. Alternately, Freddie Mac requires a three month trial period.

What is the Purpose of the Trial Period?

The purpose of the trial period is to test a customer’s commitment to make the modified loan payment because the loan servicer does not want to complete the loan modification requested if it does not truly help your financial situation and if a future default is probable.  This trial period also permits you to make the modified payment while the lender completes the documentation.

Will a Trial Period Stop or Postpone a Foreclosure?

Generally loan servicers will not pursue foreclosure action during the trial period, but that is contingent on you complying with all the requirements of that trial period.  State laws dictate whether the foreclosure process can be delayed during the trial period, and how soon after the trial period ends it can resume. You should check with your local state laws to be sure of your protection.

Are there Additional Requirements During the Trial Period Other than the Payment?

The primary requirement is that you make the required payment on time during the trial period.  However, the lender might require you to submit other documentation or proof of financial fitness, and also may require you to complete their loan modification paperwork during this trial period.

Once Begun, Can the Terms Change During the Trial Period?

Depending on the information collected during the trial period, and if there are changes to the financial circumstances of the borrower, the terms might change.  It is important to provide accurate information to the lender during this process.

How Will my Credit Rating be Affected During the Trial Period?

The answer to this depends on the status of the loan before entering the trial period, and if you are participating in a government sponsored program such as Fannie Mae or Freddie Mac. You should speak with your lender about your particular situation.

Is the Loan Servicer Required to Complete the Modification if I Meet the Requirements?

There is a financial incentive for lenders to complete the modification if they are part of the Making Home Affordable Program.  You should check with your lender to see if they are participating in a government sponsored program.

What Happens if I Miss a Payment?

If you miss a payment during the trial period, your eligibility to participate in the program might end. You need to check with your lender to see what rules exist for late or missed payments, or if there is a right to pay off the remaining balance due during the trial period to ensure continued eligibility.

Bottom line is that you should speak to a trusted mortgage broker or lender to find out about your individual circumstances, and read the information carefully to ensure you understand the terms of your particular loan modification program.  For referrals to trusted lenders, please call the Law Offices of Daniela Lungu at (925) 558-2710 or email info@lungulaw.com.

Do you want a specific topic discussed in this blog? If so, please contact us at info@lungulaw.com with your suggestions.

About Daniela Lungu, Attorney at Law

Daniela Lungu, founder of the Law Offices of Daniela Lungu, devotes her law practice to asset protection through estate and business planning. Ms. Lungu’s goal is to provide the people of the Bay Area and California with the highest quality, and most personalized legal services possible. Her attention to detail and a high level of communication with her clientele distinguish her from other attorneys in the field.

A study done by Fidelity Investments shows that about 45 percent of couples work jointly in making day-to-day financial decisions such as budgeting and only 38 percent discuss retirement, savings and investments.  This lack of communication guarantees that the surviving spouse will have financial problems and confusion when the first spouse passes.

During my initial sessions with couples that are considering creating an estate plan, I encourage frank and complete dialogue of these issues between spouses.  Even if one spouse is more financially savvy than the other, it makes financial and economic sense that each spouse know where the assets are held, passwords to the accounts, has access to paper financial records and statements, etc.

There are many reasons for having this discussion with your spouse and working together so that each person understands the full financial picture.  Health care, future retirement, savings, care for children, and more provide the basis for this discussion. 

Before you have that all important discussion, use this checklist as a guide to gathering the information needed:

·         Identify all cash, savings, money market, certificates of deposit and other liquid assets

·         Identify all retirement accounts including 401(k), 403(b), SEP and other IRA accounts

·         List all real property investments worldwide and have a copy of the deed handy

·         List all other assets such as vehicles, promissory notes, business interests

·         List all other personal property, such as jewelry, art collections, etc.

Make sure that you have a copy of the most recent statement for each titled assets.  Once you have assembled the documents, make sure both of you understand the ownership and titling of each asset and how it might pass after death, either by will, trust or joint ownership.  You might also want to involve a financial advisor, CPA, or estate planning attorney in this process.

Should you require a questionnaire to assist in gathering all the information required to complete this project, please send your request to info@lungulaw.com .

If you have any questions about the information provided or recommendations, please call the Law Offices of Daniela Lungu at (925) 558-2710 or email info@lungulaw.com.

Do you want a specific topic discussed in this blog? If so, please contact us at info@lungulaw.com with your suggestions.

About Daniela Lungu, Attorney at Law

Daniela Lungu, founder of the Law Offices of Daniela Lungu, devotes her law practice to asset protection through estate and business planning. Ms. Lungu’s goal is to provide the people of the Bay Area and California with the highest quality, and most personalized legal services possible. Her attention to detail and a high level of communication with her clientele distinguish her from other attorneys in the field.