Protecting Yourself From Financial Elder Abuse

Did you know that the average age of an investment fraud victim is in the high sixties? Did you know that 90% of abusers turn out to be family members and caretakers? The figures around financial elder abuse are unnerving. Incidences of financial elder abuse have increased by 150% over the last ten years, and only one in every six cases of such abuse ever gets reported. The internet is replete with stories of schemes of the ways that abusers convince the elderly to part with their hard-earned pensions and savings. America is aging fast. The number of elderly individuals in our country is growing faster than ever before, and that means that we have a lot of vulnerable Americans who are ripe for targeting by slick scammers who know just how to exploit them.

But there is hope. With projects like the Educating Seniors Project and friends of the agency who work with the California State Bar, we can all work together to protect our most vulnerable citizens from those who would take advantage of them. To start, consider some of the signs that financial elder abuse might be happening to you, or might be just over the horizon:

Missing Checks

If you're noticing a break in the numbering in your checkbook and don't have a record of the check that was there, you might be compromised. Always make a note of your transactions in at least two separate places so you have a record of what was spent, and can easily identify it when (or if) someone is writing checks from your account without your permission.

Missing Cards

Much like with missing checks, keep watch on your credit and debit cards. If you are worried that someone might use your cards without your permission, keep them hidden in a safe place where others cannot find them.

Unusual Transactions

Read over your bank and credit card statements often to look for irregularities. If you see a transaction that you did not make, contact your bank or card company immediately to discuss your options with them.

Giving Too Much

If you have a caretaker or relative that keeps asking for things (or keeps taking things without asking) and you're afraid to speak up because of your reliance on them, then you are a victim of elder abuse. Document the signs, take notes and pictures and contact Adult Protective Services. If the abuse is severe or you suspect you are susceptible to more harm, you should call 911 immediately. 

If you suspect (or know) that you are a victim of any kind of elder abuse, financial or otherwise, you should report it immediately. There is no shame in being a victim or in reporting it, even if the perpetrator is someone you consider to be a friend or relative. No one who truly cares about your well being would take advantage of you, and you owe it to yourself and those who love you to reach out and get help if you are being abused.

Ready to get protected? Rayo Law Offices Can Help:

Call (925) 825-1955 or contact Zachary Rayo online to set up an appointment for an initial “meet and greet” consultation.

It's All In The Details

If you're reading this article, it's a sure bet that you either have an estate plan or you're considering having one crafted for you. Designating your final wishes with a will and a trust is one of the easiest ways to take care of those important final details and provide solid instructions for your family in the event of your passing away. All of your assets within your estate can be funnelled down in the manner you specify to the specific people you love and want to provide for, even after you are gone.

But there are always "little details" that go beyond wills and trusts that need to be looked at and considered when having an attorney draw up your estate plan. One of the biggest of these is the beneficiary assignment for your life insurance policy.

This may seem like a little detail, but as they say, it's all in the details. If the beneficiaries you have named for your life insurance policy contradict what it written into your will and trust, the court may choose to treat the life insurance policy payout(s) as separate from your estate. How can this affect you negatively? Consider the following example: 

Someone dies and, while their will names their current family to benefit from the assets of the estate, an existing life insurance policy names an ex-spouse and their children. In a very real case where this happened (Estate of Post), the new family fought with the old family over the assets in the estate. The court decided that the life insurance policy was not covered by the will (the proceeds are paid after the person dies and are not part of their assets.) and though the man who died did not want his ex-spouse or her children to receive any benefit after his death, they were paid out as beneficiaries designated by the life insurance policy.

A solid estate plan crafted by a legal professional like Attorney Zachary Rayo of Rayo Law Offices involves a comprehensive planning meeting where little details like life insurance policy beneficiaries and other commonly overlooked issues that can cause big problems down the line are discussed and preparations made to deal with them. Sure, we live in an age when, more and more, people are motivated to be their own legal counsel, but there are dangers lurking out there in the estate planning process that only an experienced estate planning attorney like Zachary Rayo can help you navigate around.

Ready to take action and get protected? Rayo Law Offices Can Help:

Call (925) 825-1955 or contact Rayo Law Offices online to set up an appointment for an initial “meet and greet” consultation.

Elder Abuse After The Fact

When elder abuse occurs, you have to act fast to protect the person being targeted. Predatory people can drain an elderly target of all of their assets with alarming speed and finesse, and if the elder abuse is not called out and challenged through the means of the court before the elderly person passes away, not only will the abuse be that much harder to prove, it may come with increased difficulty in proving remedies for damages.

The proving of abuse must be done with clear and convincing evidence of recklessness, fraud, oppression or malice, something that can be a lot harder if the person who had been abused has passed on. That doesn't mean it isn't possible after the fact, but if all you have is hearsay that someone caused pain and suffering to an elderly relative who isn't there to testify to it, you're going to be fighting an uphill battle trying to prove that abuse actually occurred. Worse, there is a four year statute of limitation for financial abuse claims, meaning that if you know about it and you still wait four (or more) years to kick off a lawsuit against the perpetrator, your lawsuit may not even be a viable one.

If you, or someone you know, is an elder suffering ongoing abuse, the time to act is now. Gather evidence, keep records, make lists with dates and times when abuse occured, and what happened. Take action to put a stop to the abuse, but also pull together all of the evidence you can before it can be hidden or destroyed by a bad acting party. You may be the only line of defense between the vulnerable person and the predators that seek to harm them, and experience shows that victimizers will continue to prey on the elderly until someone stops them. 

Don't wait until it's too late. Take action now. Rayo Law Offices Can Help:

Call (925) 825-1955 or contact Zachary Rayo online to set up an appointment for an initial “meet and greet” consultation.

Common Types of Financial Elder Abuse

Financial elder abuse has become disturbingly common in America. Over the last ten years, incidences of financial elder abuse have increased 150%, and it is estimated that only one in every six cases of such abuse ever gets reported. Other statistics seem to indicate that every elderly person, or nearly so, has had a brush with someone trying to prey on them in their vulnerable state.

This is simply not acceptable. A person who works their whole lives to set aside enough assets to protect themselves through their golden years should not have to worry about losing it all to extortion, coercion or downright thievery. So, how do you protect yourself? You look for the most common warning signs from the most common sources of financial elder abuse (and, if you don't have an estate plan, consider contacting an experienced Estate Planning Attorney like Attorney Rayo to draft one for you.)

It's sad, but family, friends and caregivers are often the most common sources of financial elder abuse. In fact, there are reports which indicate that more than 90% of financial elder abuse is perpetrated by family, friends and caretakers of the abused elder. Whether because they typically have direct access to the elder or because they are trusted or relied upon by the elder is immaterial. Look for unaccounted for losses of money or property, unusual gifts of jewelry and other valuables, changed estate planning documents which favor one person over others, strange charges on cards and odd or missing checks.

Scams are another common source of financial elder abuse. Scams can take the form of sweepstakes or lottery scams that claim a person has won a sizeable amount of money, and that all they need to do to claim it is wire transfer money to pay the taxes owed on the reward. Money taken in this way is often taken out of the country, can be almost impossible to recover, and may even require you to take action against a banking institution or other financial entity that may have wrongfully assisted in the financial elder abuse. Medi-Cal Scams also fall under this category, and often involve charging elders unreasonable fees to "pre-qualify" them for Medi-Cal benefits. 

Trust mills and unlicensed legal or financial advisors can be another dangerous source of financial elder abuse. These take many forms, and usually involve people claiming to be paralegals creating over-priced, "one size fits all" Trusts or Wills that can get an elder's assets into more trouble than if they had not gotten these documents crafted at all. Sometimes these "advisors" will even utilize the information they gain from the creation of these "one size fits all" documents to sell (or force the purchase of) an annuity or life insurance product. The biggest warning sign is if the "advisor" is trying to sell you a whole bunch of different products at once.

In the end, a solid estate plan crafted by a legal professional like Attorney Zachary Rayo of Rayo Law Offices can protect you and limit the effectiveness of some forms of financial elder abuse. Our estate plans contain not only a Revocable Trust, but also supporting documents like a Certification of Trust, a Declaration of Trust and a General Assignment of Property. Trust Transfer Deeds for real property are drafted by the attorney right here in the office, as are any Wills, Advance Health Care Directives and Durable Powers of Attorney. Attorney Rayo has been drafting estate plans for over ten years, and has experience in probate and trust litigation, giving him the perspective needed to make an estate plan as watertight as possible.

Ready to take action and get protected? Rayo Law Offices Can Help:

Call (925) 825-1955 or contact Rayo Law Offices online to set up an appointment for an initial “meet and greet” consultation.

Avoiding Allegations of Elder Abuse

Losing a loved one is hard. Losing a member of your family, whether suddenly or after a protracted period of illness, can cause all kinds of hurt feelings (and ways of expressing those feelings) to rise up and make a bad situation just that much worse. If you are taking care of an elderly relative, and especially if you are managing their finances (and have something to gain if they pass), there are many factors that you have to take into consideration if you want to avoid allegations of elder abuse and the internal strife that can occur within a family during the grieving process. Some of the most important of these are detailed below:

Keep Records:

Even if you are on good terms with the rest of your family, keeping records of everything is a good idea. Families that seem to get along great before a death can sometimes unexpectedly become vicious and cruel to each other once a relative passes. This is especially true when the person who passes away has assets of significant value, whether monetary or sentimental. Keeping copies of all financial transactions, bank statements, investments, purchases, etc. can create a powerful defense against anyone who might come after you with claims of financial elder abuse.

Transparency:

The last thing you want to do when it comes to dealing with relatives of the person under your care is to keep secrets. Be open and transparent about everything that you can legally be open and transparent about. Don't hide anything. If there are Estate Planning documents involved (and the person under your care is okay with sharing them,) make sure that they are shared appropriately. Ideally, the terms of any will or trust should be clear to everyone who stands to inherit from the estate in the event the person under your care passes on.

Meet Their Needs:

This should go without saying, but it is important to make sure that anyone under your care is well-fed and not neglected. We live busy lives, and being a caretaker, whether it is of your own relative, or the relative of another, is a full-time job. Our elders, especially those needing full-time care, are vulnerable and trusting, and if their trust in you results in them getting sick or emaciated, you can be in for some serious allegations of elder abuse.

Be Careful of Capacity:

If the person under your care is lacking in mental faculties, do not expect gifts from them that occur after a loss of mental capacity to be honored if a dispute arises. Even if the gifts are genuine and you are well-meaning in your caring for the elder individual, you can be slapped with allegations of elder abuse by relatives of the elder who may see you as a con-person taking advantage of their mentally-deficient loved one for financial gain.

Get an Estate Plan:

While a well-crafted estate plan is not an iron-clad guarantee that relatives won't get litigious after a death, it does lay out clear instructions and define clear powers. An estate plan created by a knowledgeable attorney can not only protect your assets from probate, it can also protect your estate from the disputes of heirs (whether well-meaning or otherwise) in the event of your demise. An estate without an estate plan is like a bundle of boards and nails without instructions. Anyone can choose to make just about anything out of it with the right tools and the right argument. Don't let that happen to your estate-- make a solid plan today.

Ready to get protected? Rayo Law Offices Can Help:

Call (925) 825-1955 or contact Zachary Rayo online to set up an appointment for an initial “meet and greet” consultation.

An Epidemic of Abuse

America is aging. The population of people over the age of 65 is increasing. Currently, it's the fastest growing group in America. People within this population have often worked hard and worked all of their lives, so this venerable demographic also contains the most household wealth.

Unfortunately, as they say, money cannot buy happiness. Many elderly adults are isolated and lonely, tend to be too trusting, and are often dependent on others just to get through their daily living activities. All of this, the wealth, the trust and the dependency-- these elements make our elderly into ripe targets for financial predators.

Also unfortunately, financial elder abuse is on the rise. As many as one in twenty elderly Americans has been targeted by these predators, and research indicates that more than 80% of these attacks go unreported. Translated into simple English, that means that all, or almost all Americans over the age of 65 have experienced financial elder abuse, or have been targeted by abusers in their old age. That, to put it simply, is absolutely terrifying.

If you suspect (or know) that you are a victim of any kind of elder abuse, financial or otherwise, you should report it immediately. If you are a caretaker for an elderly person who is being financially abused, then you are that individual's first line of defense. There is no shame in being a victim, or in reporting predators who seek to prey on those more vulnerable than themselves, even if the perpetrator is someone you consider to be a friend or relative. Victimizers will continue to prey on others until they are stopped. No one who truly cares about your well being would take advantage of you, and you owe it to yourself and those who love you to reach out and get help if you are being abused.

Ready to get protected? Rayo Law Offices Can Help:

Call (925) 825-1955 or contact Zachary Rayo online to set up an appointment for an initial “meet and greet” consultation.

A Not-So-Innocent Bystander

Financial abuse against elderly Americans is on the rise. In America, almost forty percent of active caregivers for the elderly say that the person in their care has been targeted by predators who exploit or financially abuse them. Worse, almost half of those same caregivers have reported that the fraud perpetrated against the people in their care was not a one-time thing. There are reports that estimate that over thirty billion dollars are lost every year in America to financial elder abuse, and that's a lot of money, especially given that most financial elder abuse may actually go completely unreported.

Elderly Americans are often hungry for contact. Living to an advanced age has left them dependent, lonely and trusting by necessity. They have to rely on others just to get by in their daily lives. Often, the people they rely on most are caregivers, whether they be family or otherwise. Caregivers see things that no one else sees, and in many ways, they are the first line of defense against financial elder abuse. Unfortunately, it can be too easy to turn a blind eye to an elderly person's family problems, or to their troubles with money and those who seek to take it, but doing so can come with a great many risks. Financial elder abuse, as the Welfare and Institutions Code states it, not only involves taking, hiding, appropriating or stealing any real or personal property with an intent to defraud, using one's influence over a vulnerable victim to do so, but it also involves those who are seen as assisting in these actions. Can you be seen as assisting in a fraud by doing nothing when you know that there is ongoing financial abuse against a person in your care? Well, that's for the court to decide, on a case by case basis, but do you really want to risk it? Do you really want to wait until the court involved to find out? That can be a very dangerous game to play.

If you suspect (or know) someone that is a victim of any kind of elder abuse, financial or otherwise, you should report it immediately. As reports have shown, victimizers will continue to prey on the elderly, exploiting the vulnerable until they are stopped. If you don't do something now, not only will the suffering get worse, but others will eventually suffer the same fate at the hands of any criminal you allow to get away with their cruelty.

Ready to get protected? Rayo Law Offices Can Help:

Call (925) 825-1955 or contact Zachary Rayo online to set up an appointment for an initial “meet and greet” consultation.

Digital Inheritance: Estate Planning For Digital Assets

We live in a time in which much of our lives are lived online. Even if you're still a bit of a newbie to social media or online banking, chances are that you have something digital that will have value to those you leave behind. Digital assets (even if they are just family photos) are one of the little details that are often overlooked in older will and trust documents, or even by those who are preparing their own estate planning documents. It's important to remember that, unless an estate plan has specific language regarding digital assets, such assets may be forgotten or worse, lost completely.

Digital assets are not automatically distributed upon the death of an individual, and so their distribution must be planned for. While such assets include the obvious like cryptocurrencies, family photos and old letters which can be used as part of geneaology projects, it also includes things like revenue-generating blogs, or documents (like bank statements, contracts and identifying writings) that can be used to value other assets in the estate, (or to prove their existence if one of your beneficiaries tries to hide something from the rest of your family.) Bank accounts and credit card debts are not always easily identified when someone passes away, so keeping track of information relating to these assets and debts is important too.

Another important reason to plan for what will happen with your digital assets after you pass away is the federal Computer Fraud and Abuse Act. By making specific mention that you give permission to specific people (and/or fiduciary organizations) in your estate plan, you can eliminate any danger of the claim that those people and/or organizations were accessing your digital assets without your permission.

Conversely, it can be adviseable to make a plan for your digital assets simply because you do not want your online information to be made open and available to your beneficiaries. If you have content of a personal nature that you'd rather was kept private after your passing, you can specify in your estate plan which accounts and what content or assets your beneficiaries are allowed access to, and which accounts they are not. In the worst case scenario, you can even make copies of all the online content and assets and provide these to your beneficiaries before your passing and make it clear that your online accounts and digital assets are completely off limits.

All these options (and more) are available as ways to control what happens to your estate. There are many important considerations when crafting a solid estate plan, and when one is less familiar with the law than a professional working in the field, sometimes little things can get missed, turning into bigger problems down the line. Avoid all that mess by working with an experienced attorney like Zachary Rayo of Rayo Law Offices.

Ready to get protected? Rayo Law Offices Can Help:
Call (925) 825-1955 or contact Zachary Rayo online to set up an appointment for an initial “meet and greet” consultation.

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The Dangers of Do-It-Yourself Estate Planning

We live in an age of individual industry. It’s brilliant, how easily a motivated individual can do just about anything they put their mind to, whether it’s baking a fancy cake, fixing a car or writing a book. What most people don’t seem to realize is that the difference between these things and taking a DIY approach to your legal needs is akin to the difference between baking a cake and performing neurosurgery on yourself. The law really is that complex.

If you’re not the kind of person who flies so freely as to be willing to try your hand at neurosurgery with yourself as a patient, you might want to consider working with a professional. When people develop fatal diseases, they go to specialists, and an estate planning attorney is a highly trained and experienced practicioner within their unique field. Certainly you have options (including do-it-yourself services and online legal advice lines) but these still involve a lot of guesswork, without the comfort and assurance that comes with having an experienced estate planning attorney at your side to guide you through every nuance and pitfall within the law that you might stumble into while trying to construct the perfect estate plan yourself.

A 2016 Gallup survey found that more than half (56%) of Americans have no will or trust documents. These are critical pillars of any estate plan. These statistics mean that more than half of our citizens are unprotected and in danger of their assets being probated when they pass on. Don’t be one of the unprotected majority. Let us help you find the peace and comfort that comes with a comprehensive estate plan. Only an attorney can give you the best level of care and attention to detail when it comes to preparing a well-suited estate plan for you and those that you love.

Ready to take action and get protected? Rayo Law Offices Can Help:

Call (925) 825-1955 or contact Rayo Law Offices online to set up an appointment for an initial “meet and greet” consultation.

Why It Is A Bad Idea To Have Multiple Wills (And What You Can Do About It)

While it isn’t necessarily a bad idea to have multiple copies of the most recent version of your will entrusted with those closest to you, multiple, conflicting versions of your will can cause problems when the time comes to address the matters of your estate. Think about it. Your will is the key to your legacy – it is your voice, your last word when there is no more breath in you to speak with. Confusion about which version of your will truly reflects your final wishes can lead to hardship and cause divisive rifts between family members that may take a lifetime to heal. Don’t risk it. Don’t let your family be torn apart over gifts that are meant to enrich their lives, not destroy them. Follow these simple steps to help protect the ones you love when they might need it most.

Destroy And Revoke Past Versions:
Easy enough, right? Most people create and execute multiple wills throughout their lifetime. When creating a new will, it is important to state specifically that your new will revokes all past wills, and to personally assure that all copies of past versions of your will are destroyed. Your newest version should always be properly executed, as improperly executed wills can be overruled by older versions if those older versions have been properly executed.

Just Part Of The Process:
Having a properly constructed, fully legal and fully executed will is important, but a full and comprehensive Estate Plan (including your will) is an excellent way to ensure that your legacy brings some solace to your loved ones in the wake of your passing. Do you have specific instructions for your health care should you become incapacitated by age or accident? Do you have a living trust to protect your assets from going through a court-mandated probate process? These documents (and more) are critical components you must have in your Estate Plan.

Sound Daunting?
Don’t worry – we at Rayo Law Offices are here to help. We’re ready to guide you through every step of your Estate Planning process. We’ll take the legal headaches out of the process and make the journey as easy as it should be.

Contact Rayo Law Offices:
Call (925) 825-1955 or contact Rayo Law Offices online to set up an appointment.

Digital Security and Your Estate Plan

We live in a world where everything is interconnected. We live in a world where everything is open, a world where the digital keys to the most critical parts of our life, our passwords and other pieces of account login info, have become an integral part of our existence. We have passwords for all of our email accounts, passwords for all of the websites we frequent, and perhaps most importantly, we have passwords that keep secure our bank accounts and other potentially vital accounts that our living trustee(s) may need to have access to should unfortunate circumstances befall us.

Security is no joke. While you will want your trustees to have access to your most important passwords, the last thing you want is for these critical bits of information to end up in the wrong hands. Always make sure your passwords and the log-in information for your accounts are safely stored. If you store them somewhere your trustee(s) can easily access them, it’s a good idea to make sure that no one else knows where they are.

Sometimes it is necessary to change our passwords or other critical pieces of log-in information. Make sure that your files are updated with only your most recent login credentials. Old and incorrect passwords will do your trustee(s) no good should the worst occur and, in the most terrible circumstances, outdated information could even create additional hardship for those you love and care about if they cannot get into critical accounts in a timely fashion.

Security questions can be a helpful way to allow your trustee(s) access to your accounts when the time comes. Some websites offer the option to retrieve your password by answering certain security questions. if you choose questions that you know your trustee(s) will know the answers to, (but that no one else will) you can secure your most vital accounts in that fashion, without ever having to write your passwords anywhere that anyone else might be able to obtain them.

Security is the most important factor. It doesn’t have to be tricky. There are many ways that you can keep your account and password information secure while still making it accessible to your trustee(s). Think carefully. Talk to your trustee(s). Make informed decisions and make sure not only that you are protected, but that those you love are protected as well. After all, that’s the whole point of an estate plan, right? Making things a little easier for those you care about in their hour of direst need.


Rayo Law Offices Can Help:

Call (916) 668-9606 or (925) 825-1955 or contact Zachary Rayo online to set up an appointment for an initial “meet and greet” consultation.

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Writing A Will? Talk To An Attorney. You’ll Be Glad You Did.

Estate planning can be a stressful and time consuming process. Regardless of whether you are planning for a modest estate or a multi-million dollar one, you need to be prepared for every eventuality, even those that are painful to think about. Great estate planning involves more than just a few forms or a handwritten will– it takes an attorney with substantial experience in estate planning who can draft the right forms and guide you through the complex process of making sure that your wishes are followed precisely if you’re no longer around to ensure it yourself.

Not everyone is qualified to put together a great will. The amount of legalese you’re likely to encounter while putting together any part of an estate plan might be enough to intimidate you. Even if you wade through it all, you might find that you need an attorney to sign off on your documentation anyway. What’s the point of doing it yourself if you have to hire a legal professional to guide you through the process? Avoid the sticky situations and potential pitfalls by seeking out a trained professional. With an estate planning attorney on your side, your legacy will be protected, not brought down by the common mistakes made by first-timers and inexperienced legal professionals. If you’re going to create a will, you owe it to yourself and to your loved ones to do it right the first time.

For a great will (or for any of your estate planning needs) contact us at Rayo Law Offices. We’re here to help make what can be a difficult process much easier on you and those you care about.


Rayo Law Offices Can Help:

Call (916) 668-9606 or (925) 825-1955 or contact Zachary Rayo online to set up an appointment for an initial “meet and greet” consultation.

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What is A “Living Issue by Right of Representation” Clause?

Perhaps one of the most challenging aspects of the estate planning process is discussing and laying out instructions that address everything that could possibly go wrong. It’s bad enough to have to think about what might happen to your loved ones and the assets you’ve gathered over your lifetime, but to have a really comprehensive estate plan, you have to think even further. You have to ask yourself questions like “What will happen to my assets if my trustee(s) die(s) before I do?” and “Who inherits what percentage of my estate if my children don’t survive me?” You might be very careful about selecting a specific person to inherit your assets should the worst occur, but what happens if the person you select passes away before you do?

California law, (in the absence of more specific instructions) states that the children of a trustee (or your grandchildren, if you nominate your child[ren] to inherit your estate) are known as the Living Issue and have the Right of Representation to claim (and divide equally) whatever their parent(s) were set to inherit. Typically, this happens at the level of the closest generation, meaning that if you have two children who pass away before you, and they have differing numbers of children, (say one has one child and the other has three) the estate will still be split 50/50 between groups of grandchildren. In this hypothetical situation, the single grandchild would inherit his or her parent’s share (50%) while the other three would split their parent’s half between themselves, (each getting about 16.5%)

If this lopsided arrangement troubles you, rest assured that there is a way around it. A “Living Issue by Right of Representation” clause that specifies exactly the distribution you wish for can make things more equal in the very worst of circumstances. Specific wording can change the way your grandchildren inherit the assets of your estate, making the distribution more fair than the law might otherwise dictate it to be. Remember always that it is your estate. You have the power to bestow or deny your legacy upon anyone or any organization in any percentage you deem fair. A good attorney can draft you an estate plan that will protect your assets from probate, but it takes a truly great attorney with extensive experience in estate planning to spot the little loopholes, potholes and problems that can hang up the process of getting your legacy to those you love the most in exactly the manner that sounds best to you.


Rayo Law Offices Can Help:

Call (916) 668-9606 or (925) 825-1955 or contact Zachary Rayo online to set up an appointment for an initial “meet and greet” consultation.

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Can I Have A Foreign Successor Trustee?

We live in an age of wonders. People from every country in the world have the power and the means to come and work and live in California. Work means money, assets--  and assets have to be protected. That’s what an Estate Plan is for, to protect your assets and your interests should the worst come to pass.

But what if you’re not from California originally? What if you have family living abroad? Can you list them as successor trustees if both you and your spouse die? Do your successor trustees have to be US citizens or can they be living in California on a green card?

In a typical joint revocable trust for a married couple, both spouses are the settlors and original co-trustees, and if one of them dies or becomes incapacitated, the surviving spouse remains as sole trustee.  Under these circumstances, the trust is not deemed a Foreign Trust if at least one of the spouses is a U.S. resident or citizen.

However, if both spouses pass away, become incapacitated, or resign as trustee, the residence or citizenship of the successor trustee whom they nominated in the trust becomes important.  The choice of successor trustee has a bearing on whether a trust will be deemed a U.S. Trust or a Foreign Trust, and being deemed a Foreign Trust may have unwanted tax and reporting implications.


Definition of Foreign Trust

A Foreign Trust is defined in the negative, (i.e., whatever is not a U.S. Trust is a Foreign Trust.) There are two requirements for a trust to be considered a U.S. Trust.

First, a court in the U.S. must be able to exercise primary supervision with regard to its administration.  If the trust instrument requires administration in the U.S. and/or has a provision stating that the law governing administration rests with a particular court in the U.S. (thus granting the court primary supervision authority), then this first requirement should be met.

Second, at least one U.S. resident or citizen must have authority to control all substantial decisions.  If there's a Co-Trustee that's a U.S. person (e.g., a U.S. Trust Company), then this requirement should be met.
If either one of these two requirements is not met, the trust is considered a Foreign Trust.


Implications of Foreign Trust

There are at least two implications if a trust is deemed a Foreign Trust: recognition of capital gain and IRS reporting requirements. When drafting documents for an international client, this paragraph may be included in the documents:

All trusts created hereunder shall be administered (and all books and records maintained) in the United States at all times so that all such trusts shall be considered domestic trusts and U.S. Persons for federal tax purposes as defined in Code Sec. 7701(a)(3)(E).  No person shall be deemed to be qualified to serve as a trustee or co-trustee of a trust hereunder if as a result of such person’s serving as a trustee or co-trustee, the trust would no longer be deemed a U.S. Person within the meaning of Code Sec. 7701(a)(30)(E).

If you wish to discuss foreign trusts and your existing or future estate plan in detail, you should speak to an experienced Estate Planning Attorney. By making the right decisions under the right guidance, you can save your loved ones a lot of money, hassle and headache in the middle of a time meant for mourning. Don’t take chances with your legacy. You may only have one chance to get it right. At Rayo Law Offices, we can help protect the part of you that will remain to benefit and nurture those who matter most in the world to you.


Rayo Law Offices Can Help:

Call (916) 668-9606 or (925) 825-1955 or contact Zachary Rayo online to set up an appointment for an initial “meet and greet” consultation.

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What is a “No Contest” Clause?

Your estate is your legacy. No one knows better than you how it should be divided, who should benefit and to what degree. The beneficiaries, those who stand to inherit what you leave behind, should accept your judgment, but what if they don’t? What if, after you are gone, they challenge your will (or worse, your entire Estate Plan?)

That’s where a “No Contest” Clause comes in. If someone who is named in your will (or your trust) decides to challenge the instructions laid out in that document, they can actually be disinherited if they make a contest of the contents and fail. Think of it as a way to insure that all of those set to benefit from your legacy play nice. Of course, such a clause only effects those set to inherit something in the first place, and it doesn’t protect against contests against wills and trusts made by those who are not included in the document, should they have cause to contest (such as disinherited direct descendents.) If you have cause to deny the lion’s share of your estate to a specific descendent, you might want to think about giving them enough to keep them from risking a contest of your will. Another way to carefully allocate your legacy (and who inherits how much) is with a Special Needs Trust.

However, a “No Contest” Clause is by no means a cure-all. There are countless little loopholes and mistakes that can open your will or trust up to attack. Every state has its own specific rules and statutes that must be observed, and even these are subject to change as new laws are passed and new cases are won (or lost) that force certain codes to be clarified. Making an air-tight will or trust document isn’t easy for the inexperienced or for the well-meaning first-timer. Don’t risk it when it comes to your legacy. Contact an experienced attorney who will guide you through the process of building a strong, well-armored estate plan. You owe it to yourself (and to those you love) to protect what you have and make certain that every cent goes exactly where it was meant to go.


Contact Rayo Law Offices:
Call (916) 668-9606 or (925) 825-1955 or contact Zachary Rayo online to set up an appointment for an initial “meet and greet” consultation.

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What is Probate? (And How Can I Avoid It?)

When someone dies without a properly-executed estate plan specifically designed to avoid the probate process, default rules imposed by California Law will govern the distribution of the decedent’s assets. If the decedent’s estate exceeds $166,250 in value (excepting joint accounts and accounts with designated beneficiaries) the estate goes into probate. The probate process in California is not cheap; it involves a number of steps that can stretch on for months or years, even with the help of an experienced attorney. All assets subject to probate are listed in a publicly available document, making privacy impossible to maintain during the process. Even worse, anyone inheriting from the estate will have to wait until the end of the probate process.

Long story short: say grandma dies and leaves her two houses and her bank accounts to her kids with instructions for those kids to sell the houses. No one can touch those assets until the probate process is complete – even if that takes a year or more. Meanwhile, the kids are paying to maintain the houses, hoping they’ll be sufficiently reimbursed when the last piece of paperwork is finally filed.

When you leave an inheritance for your children (or grandchildren,) you want it to be something that can benefit their lives, not create a burden for them that will haunt them throughout the grieving process. So how can you avoid probate? With a properly-executed, air-tight estate plan that includes a formidable living trust document.

That’s where an experienced attorney comes in. By paying a little to prepare now, you can save your loved ones a lot of money, hassle and time should the worst occur. An ounce of prevention can save you and your loved ones a pound of headache. Don’t take chances with probate. Protect your estate with a living trust.

Rayo Law Offices Can Help:
Call (916) 668-9606 or (925) 825-1955 or contact Zachary Rayo online to set up an appointment for an initial “meet and greet” consultation.

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