1. Tuition or medical expenses you pay for someone (the educational and medical exclusions).
2. Gifts to your spouse.
3. Gifts to a political organization for its use.
4. Gifts to qualifying charities
   

Although we all work hard to accumulate, build, and protect our assets during life, not all of us actually take the time to protect our assets upon our death. The unfortunate result for those who do not have an estate plan in place is that their loved ones may be subject to expensive and time-consuming probate proceedings.

Did you know that a probate estate with a value of $500,000 is subject to statutory attorney fees in the amount of $13,000? By not taking the time to craft a detailed estate plan now, you are essentially including your attorney as an heir to your estate upon your death. In addition, probate can take anywhere from 6 months to more than a year to complete, during which time your assets are frozen.

A comprehensive estate plan that includes a revocable trust (also known as a living trust) can ensure that your assets are not subject to probate, and it allows you to distribute your assets in an organized, timely manner to whomever you wish.

As far as estate planning documents go, there is only one document where you can appoint a guardian for your minor child in the event that both you and your child's other parent have both passed away--your Will.

A guardian is someone legally appointed to step into your shoes as a parental figure to care for your child or children until they reach age 18. If you fail to name a guardian for your child, the courts will have to be invoked to make that decision for you. (And no judge relishes making decisions like these...especially if a heated family contest ensues.)

So, when planning for your minor child(ren), it's not enough to just name a guardian and stop there. Make sure you have named successor or alternate guardians, and make sure you have first talked with those persons about being a guardian and accepting the task of being a guardian--it is a huge responsibility. Decisions will also need to be made to ensure adequate assets to support your children's needs and the costs of their care. Do you need to purchase more life insurance to meet those needs? Do you have other assets you could earmark in trust for their care and support, and how liquid are they? Do your children have special needs?

And though it may not have any legal force or effect in a court of law, it may be a great idea to pen a conversational letter to your guardian, detailing your personal and/or religious hopes, views and values for your family and how you would like or wish your children be raised. Your guardian may not be legally bound to carry out your wishes in the letter, but perhaps he/she will be morally compelled to do so.

No estate plan would be complete without having a Durable Power of Attorney for Finances (DPA). But having a DPA sometimes isn't enough if the DPA doesn't provide for successor agents in the event the original agent is unable or unwilling to act. I always advise my clients that in addition to naming an agent to act under the DPA, they should also name at least one successor agent.

For example, I know of a husband and wife who dutifully got their estate plan documents in place a few years back, which is lucky because the husband recently developed alzheimers. The downside is that although the husband's DPA listed the wife as his agent, he didn't list a successor agent. The wife is older and would prefer for her adult children to take over as the agent. Unfortunately, unless the DPA provides for a way to appoint a new agent, the only option at this point may be to go to court.

Understandably, sometimes naming a successor agent isn't an option if the client doesn't have someone they absolutely trust to act as their agent. But more often than not, the client does have an adult child, sibling, or friend who they can list as a successor agent.

As we all know, probate is expensive and time consuming, so if at all possible, it is best to avoid the whole process altogether. Probate is not necessary to transfer assets if the decedent's estate is valued at less than $100,000. Instead, "Summary Probate" procedures can be used, which are much faster and cheaper than formal probate.

If the decedent's personal and real property is under $100,000, then it is possible to file a Petition to Determine Succession to Real Property, under Probate Code § 13150. The cost to file the Petition varies from county to county, but is generally under $350. In addition, attorney fees aren't statutorily set, unlike regular probate proceedings where attorneys are guaranteed a certain percentage.

When dealing with an estate under $100,000, it's important to know about the different summary probate options available. Recently a friend was informed by an attorney that in order to transfer the decedent's real property which was valued at under $50,000, regular probate proceedings would need to be instituted, which meant the attorney was entitled to statutory probate fees of $4,000. Luckily, my friend decided to ask around and was pleasantly surprised when I told her about this low-cost summary probate option.

It depends.

Your insurance policy--YES. You have to personally change the beneficiary designation from the name of your former spouse if you no longer want to leave anything to your ex.

As far as all other assets or legal documents that comprise your Estate Plan are concerned, you don't necessarily have to change them. But it may be a good idea to, nevertheless.

Once a dissolution of marriage is granted--that is to say, after your divorce is final--California Probate Code Sections 5600 and 6122 automatically operate to, in effect, disinherit or cut out your former spouse from your Will, Trust, or other non-probate transfer. By operation of these laws, the divorce revokes all designations naming your former spouse as beneficiary of your assets and also revokes all nominations as Executor of your Will, as Trustee, as Conservator, or as Guardian. Your former spouse will be treated in the eyes of the law, as having died before you for estate administration purposes. Therefore, all assets will be distributed to heirs next-in-line, and all appointments will pass to those named as successor in your legal documents.

This is fine and good if you have named successors and alternate beneficiaries. But even then, from an Estate Planning Attorney's standpoint, it is always better to re-execute your documents so they properly reflect that you are no longer married and accurately convey your wishes.

Divorce can have quite an unexpected impact on the best laid estate plan. Oftentime, couples preparing for the dissolution of marriage will assume that their marital assets and other property have been duly "split" and therefore, automatically become separate property just because: (a) they consider themselves separated and no longer married, or (b) they are no longer living together in the same home, or (c) they have started the paperwork to get the divorce proceedings started.

Until a divorce is finalized and a decree is rendered, the marriage technically continues. In which case, if the divorcing couple neglects to change or revoke any estate plans previously put in place, those validly executed documents control. Meaning, if one spouse passes away before the divorce is finalized, all the assets get distributed according to the terms of the existing Trust or Will.

Therefore, if your spouse/registered domestic partner has already initiated dissolution proceedings, or if you are a couple contemplating divorce and you have an existing revocable Trust or Will, it is important that you first, immediately revoke any Trust document or Will, then execute a new Will (or Trust) disposing of your one-half interest in the marital property and all of your separate property in order to preserve your interests in those assets while your divorce is pending. This may also be a good time to change any Agent ("Attorney-in-Fact") nominations in your Durable Power of Attorney and your Advance Health Care Directive.

Even if you don't have a Will or a Trust in place, the above tip holds true still. A friend who recently passed is such an example. Even though he had initiated the paperwork to begin the divorce, he unfortunately passed away without a Will or Trust disposing of his one-half interest in the marital property and all of his separate property. Now, his estranged wife will receive his entire interest where it would have otherwise gone to family or someone else that he could have named.

A young man on disability recently called asking for more information on Special Needs Trusts (SNT). His mom had just passed away and left him with a small inheritance in her trust. The only problem was that this young man was receiving Medi-cal benefits and this small inheritance would make him ineligible to continue receiving benefits. A way around this is to create what's known as a SNT, which is a special kind of trust that allows needs-based public benefit recipients (i.e., SSI and/or Medi-cal) to continue receiving benefits despite receiving windfalls in the form of inheritances, personal injury awards, or life insurance proceeds.

Including SNT provisions in your living trust or will avoids having your disabled child maneuver his or her way through the complicated red tape that surrounds SSI and Medi-cal regulations. A SNT created by third parties, such as a parent or grandparent, is easy to create and is not subject to "pay-back" provisions. However, if the public benefits recipient is not fortunate enough to have a third-party SNT in place, then that individual will have to create a first-party SNT, which is subject to stricter regulations and must include a "pay-back" provision which requires any funds remaining in the trust upon the beneficiary's death be used to reimburse the State for public benefits received.

Any way you slice it, it pays to plan ahead and include third-party SNT provisions in your living trust or will. Not only do you save your disabled child the hassle of creating one upon your death, but you also avoid the "pay-back"provision requirement, thereby allowing your child to leave the remaining funds in the trust upon his or her death to his or her heirs or other named beneficiaries.