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shutterstock_265887227On October 5, 2015, Governor Brown signed the End of Life Option Act into law. The law requires that two doctors determine that a patient has six months or less to live before the lethal drugs can be prescribed. Patients also must be mentally competent to make medical decisions and be able to swallow the medication themselves and must affirm in writing, 48 hours before taking the medication, that they will do so.

But the law, when passed, wasn’t to become effective until 91 days after the adjournment of a special legislative session on health care, and no one knew exactly when that was going to happen. Now we do.  That session ended on March 10, 2016, which means that the law will be effective as of June 9, 2016.

Since this is a new law and a new policy for the state, it is going to take time for both the public and doctors to fully understand how the process is going to work and what the legal requirements are for compliance.

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shutterstock_226347421 (2)As an estate planner, I get calls often from disgruntled beneficiaries, concerned parents, frustrated Trustees, or distrustful siblings.  Death and money don’t always bring out the best in families. But despite countless books, movies and television shows, rushing to court isn’t always (maybe ever) the best idea for families facing conflict.

Litigation, after all, is designed to create “winners” and “losers,” but family disputes are seldom winner-take-all scenarios.  Worse, the very adversarial nature of litigation can fracture and disrupt family relationships to the point that after the dispute is over, those relationships may be lost, forever. And finally, litigation is both expensive (think six figures to go to trial) and public (think family secrets filed as public documents).

Mediation, a process in which the parties themselves can negotiate an agreement to a family dispute, is a real alternative to litigation for trust and estates conflicts, but not one that many people know about.  Yet. (I aim to change that.)

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money signIn last week’s end of the year budget bill, Congress made permanent the qualified charitable rollover distribution. This lets individuals who are 70 1/2 or older donate up to $100,000 a year directly from their IRA to qualified charities. By doing so, donors can reduce their taxable income (because the money coming out of the IRA won’t count as taxable income to them) and charities can benefit from income-tax free gifts (because qualified charities don’t have to pay income tax on the IRA withdrawals). The charitable rollover counts towards the donor’s required minimum distribution.

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giveAs the year draws to a close, now is the time to consider making charitable gifts, both because it’s a good thing to do and because year-end charitable gifts will provide tax deductions.

In addition to the time-tested check writing method, here are three other ways that you can give that are less obvious and quite beneficial.

  1. Consider opening up a Donor Advised Fund. You can open up a Donor Advised Fund in 2015 and get a charitable deduction for that gift by year’s end. But, you can make recommendations on how those funds should be spent in 2016 or after.  Donor Advised Funds are a great strategy when you need the charitable deduction right away, but haven’t had time to research the charities that you want to support. You can open up Donor Advised Funds at large financial institutions like Schwab and Fidelity and Vanguard and also at community foundations like our very own Silicon Valley Community Foundation.
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digital_assets_estate_planningI’m thrilled to announce the release of my first in a series of e-books on estate planning that are designed to provide you with practical answers to real-life questions. This one is on Estate Planning for Digital Assets, and you can download it for free from my website.

This e-book is for anyone who has digital assets (email, photos, a blog, a Facebook page, Google Docs , and so on) and wants to learn about the best way to provide, or deny, access to these assets as part of a comprehensive estate plan.

It turns out that the traditional model of estate planning, which is to appoint someone to act for you after death, just doesn’t translate well to the digital realm, where terms of service contracts and federal law require an individual to provide consent before anyone else can access their digital assets.

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shutterstock_265887227In October, California became one of five states to permit medical aid in dying with the passage of the End of Life Option Act. The bill is modeled after one passed in Oregon in 1997.

Governor Brown signed the bill, with a signing statement that said, in part, “I do not know what I would do if I were dying in prolonged and excruciating pain. I am certain, however, that it would be a comfort to be able to consider the options afforded by this bill. And I wouldn’t deny that right to others.”

The bill allows doctors to prescribe lethal drugs to terminally ill patients who are expected to live six months or less. A patient must make two oral requests, at least 15 days apart, and one written request, signed in front of two witnesses. The signer must have the capacity to understand what they are requesting, the request must be voluntary, and a physician has to discuss feasible alternatives that would also be available to the patient.

In addition, a patient must self-administer the drug (in other words, no one else can administer the drug) and no one can request such drugs on another’s behalf (in other words, no one can act for a patient to make such a request through a power of attorney, an advance health care directive, or as a conservator, health care agent, surrogate, or any other legally recognized health care decisionmaker.) A patient can rescind such a request at any time.

The bill provides a form for the request for lethal drugs that reads in part:

REQUEST FOR AN AID-IN-DYING DRUG TO END MY LIFE IN A HUMANE AND DIGNIFIED MANNER I, ………………………………………………, am an adult of sound mind and a resident of the State of California.
I am suffering from ……………., which my attending physician has determined is in its terminal phase and which has been medically confirmed.
I have been fully informed of my diagnosis and prognosis, the nature of the aid-in-dying drug to be prescribed and potential associated risks, the expected result, and the feasible alternatives or additional treatment options, including comfort care, hospice care, palliative care, and pain control.
I request that my attending physician prescribe an aid-in-dying drug that will end my life in a humane and dignified manner if I choose to take it, and I authorize my attending physician to contact any pharmacist about my request.

The Bill takes effect 90 days after the Legislature adjourns its special session on health care, which will be sometime in 2016. To read more about the End of Life Option Act, here’s a good summary from the LA Times.

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house imageGovernor Brown has just signed into law a bill that, for the first time, allows people in California to transfer a home at death with a deed that names beneficiaries.

Transfer on Death Deeds are an inexpensive way to transfer real property without having to go through the time and expense of probate or establishing a revocable living trust. Such deeds have been available in many other states, but efforts to permit them in California have failed for nearly ten years.

Starting in January of 2016, and lasting until January 1, 2021 (unless extended), Revocable Transfer on Death deeds will now be legal in California. Just as you can designate a bank account or brokerage account as a “payable on death account,” a Revocable Transfer on Death Deed lets you name beneficiaries for real property. Upon your death, your beneficiaries become the property owners by filing an Affidavit, a death certificate, and notice of change of ownership. That’s it. No probate and no trust administration necessary.

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gift2Recently, a client of mine asked me how to set up a trust to hold gifts to their children that those children wouldn’t be able to use for about twenty more years. This can be done by use of what’s called a “Crummey” Trust (named after the attorney who invented the technique).

This kind of trust is usually funded with annual gifts. Currently, you are allowed to give $14,000 per year to any one person without having to report the gift on a gift tax return or use any of your lifetime exclusion from the gift and estate tax (currently $5.43 million per person). A Crummey Trust allows you to make such annual gifts, but keep those gifts in trust for years. The gift counts as being made in the year of the gift, even though the beneficiary has no control over the money until the trust ends. Other people, like grandparents, can also make contributions to this kind of trust.

Why would you want to do this? The first reason is control: if your children are currently minors (let’s say, middle schoolers), you probably don’t want to just put $14,000 into their bank accounts each year, unless you are extremely relaxed about the choices they’d likely make with that kind of annual bonanza (or want to support GameStop). You’d much rather put that money into a trust that’s managed for your children until they grow up to an age where they’re likely to use the money more wisely. Since you are setting up the trust, you can have control over what the trust’s assets can be used for, too — maybe it’s just for the purchase of a house, or maybe just to pay for graduate school, or a wedding.

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old-peoples-home-63614_150I recently read a Huffington post article about the need for women to plan their estates as if they were single. And that got me thinking about how, despite our best efforts to plan, life just has a way of constantly changing.  Children grow up, we get old, and even families slip away, or change over time.

I work with families to craft estate plans all of the time, and it’s hard enough to get them to focus on the inevitability of death. Let alone the possibility that one of them is likely to survive the other, and live alone in old age. But from now on, I will try and do a better job to get that idea on the table, too.

Statistics tell us that it’s likely to be the woman who survives.  According to a U.S. Census report, 80% of women will survive their husbands.  And it’s pretty common knowledge that close to half of marriages ultimately fail.