Estate planning is largely thought of as the process of leaving instructions regarding what will be taking place after you pass away. Without question, this is a large part of the endeavor, but it is useful to consider the period of time that may precede your passing as well.

With the above in mind, the execution of advance health care directives is highly recommended. One of these directives is called a living Will.

This type of will has nothing to do with arranging for the transfer of financial assets. A living Will is used to state your choices regarding medical procedures, such as being kept alive via the use of artificial life-support measures.

Leaving a life or death decision in the hands of your loved ones without providing any input is really placing them in an unfair position.  Family members can disagree, and acrimony or even legal battles can ensue as we have seen with the case of Terri Schiavo.

To cover all of your bases, you would also do well to execute a durable power of attorney for health care. With this legal instrument, you empower a person of your choosing to make medical decisions on your behalf if you were to become unable to communicate your own choices.

Making your medical preferences known is necessary if you want to be prepared for all eventualities. If you’re ready to do just that, simply pick up the phone to set up an appointment with an experienced and qualified San Jose estate planning lawyer.

The Law Office of Roy W. Litherland is a member of the American Academy of Estate Planning Attorneys.

Social Security is going to be important for most people who are planning for retirement. With this in mind, understanding the details is key, and we would like to take a look at a couple of things you should know.

If you are not yet receiving Social Security, your full retirement age will be between 66 and 67 years of age depending on the year during which you were born. However, you have options.

You don’t have to wait until you reach full retirement age to apply for Social Security. Once you reach the age of 62 you can apply, but you must understand the fact that you will receive a reduced benefit as a result.

On the other side of the spectrum, you may delay applying until you are as old as 70 and receive delayed retirement credits in return. As a result, your benefit will be increased when you do in fact start to receive Social Security payouts.

If you are married, you and your spouse will each receive the benefit that you have respectively earned. That is, unless one of you is entitled to less than half of the other. In such a case the spouse who was drawing the lesser amount would see his or her benefit raised up to half of what the higher earning spouse was receiving.

These are a couple of things to consider when you are planning for the future. To gain an in-depth understanding of how best to take advantage of your Social Security eligibility while planning for a comfortable future, the wise course of action is to sit down and discuss a holistic strategy with a qualified and experienced San Jose retirement planning lawyer.

The Law Office of Roy W. Litherland is a member of the American Academy of Estate Planning Attorneys.

In a sense, an inheritance can be viewed as a gift that is given posthumously.

When you give a gift of any kind that is not postdated, you give the gift in real-time. However, if you do not plan your estate optimally, your loved ones could wind up waiting quite a while to receive their inheritances. And, there can be considerable expenses involved that reduce the amount that they actually do inherit.

If you use a last will to direct the transfer of your assets, your estate is going to fall into the hands of the probate court. The court will supervise the administration of the estate after determining the validity of the will. While this process is dragging along, your family members will receive nothing.

How long it will take for the process of probate to run its course will vary depending on the jurisdiction, whether or not the estate is being challenged in any way, and the relative size and scope of the assets. It can take anywhere from several months to multiple years.

Probate can also be costly, consuming perhaps as much as 1/10 of the value of your legacy in some cases.

So, you don’t just want to arrange for asset transfers without regard to the details. The wise course of action is to prevent asset erosion while making sure that your heirs receive their inheritances in a time efficient manner. This is something that is best accomplished with the assistance of a licensed, experienced, and savvy San Jose estate planning lawyer.

The Law Office of Roy W. Litherland is a member of the American Academy of Estate Planning Attorneys.

A lot of people contribute into the 401(k) plan that is offered at work, and this is one of their fundamental retirement planning tools. It should be emphasized that it is definitely a good idea to participate, and if your employer is offering to match your contributions, the wise course of action is to take advantage of this opportunity and contribute the maximum amount of the match.

Though economic indicators appear to be improving at the present time, over recent years a lot of people have been separated from their jobs, and as a result they have questions about their 401(k) plans. What does happen to your 401(k) if you get laid off?

The answer is that the choice is yours. You may be able to keep your existing 401(k) even after you lose your job, but of course contributions would not be coming out of your paycheck anymore and you may find it difficult to get anyone to help you service the account. Costs that were previously absorbed by your employer could be shifted to you as well.

You are allowed to cash out the account if you would like to do so. However, if you are under 59 1/2 years old, you’ll have to pay a 10% penalty to go along with the 20% tax that will be levied.

The third possibility would be to do a direct or indirect rollover into an individual retirement account or into another 401(k) account if you get reemployed in short order.

If you are ever wondering how to stay on track for retirement after an unexpected event takes place like the loss of your job, professional guidance can be of great assistance. If you retain the services of an experienced San Jose retirement planning lawyer to  devise your long-term plan for aging, he or she will always be available to answer questions.

The Law Office of Roy W. Litherland is a member of the American Academy of Estate Planning Attorneys.

If you die without executing a last Will, you are said to have died intestate. In cases such as these, intestacy laws of succession come into play. The probate court will examine all relevant information and ultimately allow for your assets to be transferred to your legal next of kin.

A recent article that is appearing on the Forbes website states that the late British pop singer Amy Winehouse died without having executed a last Will.

This new revelation flies in the face of earlier reports that emanated from the British press. Shortly after the Grammy winning singer passed away, we were told that she in fact had an ironclad estate plan in place. However, probate records have been made available and the actual details are circulating.

She was originally thought to have an estate that was valued in the vicinity of $16 million. Now we are being told that after her final expenses were taken care of, $4.66 million remained. Her parents Mitch and Janis, who have been divorced for some time, are the heirs to the estate according to these laws of succession.

Whether or not Amy Winehouse would have wanted her parents to be her sole heirs is something that none of us will ever know. And, had she planned ahead with foresight it is possible that more of her wealth could have been preserved.

Few people would feel comfortable with the courts deciding how their resources are handled after they pass away. If you would like to avoid intestacy, take action right now to arrange an appointment to speak with a licensed, experienced Campbell CA estate planning lawyer.

The Law Office of Roy W. Litherland is a member of the American Academy of Estate Planning Attorneys.

Time passes quickly, and most people are firmly embedded in the routine of their day-to-day lives. So, you may not be aware of things that are taking place in Washington that could render your existing estate plan inadequate. With this in mind, we would like to raise awareness about the significance of this calendar year.

Whether or not your family is going to be exposed to the estate tax, and how much they will potentially have to pay, varies depending on the parameters that are in place at any given time. At the moment, the estate tax exclusion is $5.12 million and the top rate of the tax is 35%. So if you did nothing to gain estate tax efficiency, the entirety of your estate that exceeds $5.12 million in value would be subject to this 55% federal levy.

The way the laws currently stand, the above parameters will change at the end of this year. Upon the expiration of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, on New Year’s Day the maximum rate of the estate tax goes up to 55% and the exclusion will shrink down to just $1 million.

2012 is an election year, so you can be sure that the debate will rage about a possible tax cut extension. There’s a big difference between a $1 million exclusion and a $5.12 million exclusion, and a significant difference between 35% and 55%, so how it plays out could have an enormous impact on your legacy.

If you would like to explore the matter further, don’t hesitate to pick up the phone to arrange for a consultation with a highly qualified and experienced Los Gatos estate planning lawyer.

The Law Office of Roy W. Litherland is a member of the American Academy of Estate Planning Attorneys.

When you have extraordinary means, you can do extraordinary things, and sometimes you hear about the lifestyles of the rich and famous and find some of their actions to be a bit excessive.  There are a couple of high-profile female celebrities here in the United States who are certainly going the extra mile to provide for their pets in their estate plans.

Betty White is an actress who is somewhat of an enigma. She is 90 years old, but advancing age seems to have done nothing to slow down her career. Ms. White is a very passionate animal lover, and she has a golden retriever named Pontiac. Reports indicate that she has placed $5 million into a pet trust that is earmarked for Pontiac’s care after White passes away.

One of the wealthiest performers out there is Oprah Winfrey, and she too is a big dog lover who owns several canines. The pet trust that she created for their benefit is said to be funded with $30 million, so these pooches will continue to live charmed lives even if they outlive their owner.

While most of us may think that it doesn’t take this kind of money to provide for our pets, you do have to remember your fine furry friends when you are planning your estate. Pet trusts are a very viable option, even if you have no intentions of making your dog a millionaire. To learn more about pet trusts, simply take a moment to arrange for a consultation with a qualified and experienced Campbell CA estate planning lawyer.

The Law Office of Roy W. Litherland is a member of the American Academy of Estate Planning Attorneys.

It is never a good idea to make assumptions without seeking out irrefutable facts. There are those who proceed with the understanding that they need not worry about the estate tax. They feel this way because they have heard through the grapevine that this is a tax imposed only on people who have extraordinary wealth.

Before you buy into this notion, you would do well to become better informed.

$1 million can sound like a lot of money, but in reality it is not the definition of wealth that it was at one time. According to CNN Money, there are some 10.5 million families in the United States with assets that exceed $1 million. Analysts expect this figure to double by 2020.

If you take into account your home and any other real property that you may own, your investments, and inheritances that you may have received throughout your lifetime, you would not have to be a Wall Street CEO to accumulate assets in excess of $1 million.

Why are we mentioning this $1 million figure? The tax relief act that was signed into law back at the end of 2010 is scheduled to expire when 2012 comes to a close. If no new laws are passed in the meantime, the estate tax exclusion will be reduced to $1 million in 2013 and the maximum rate will rise to 55%.

Clearly, this reduction in the exclusion from $5.12 million to just $1 million is going to expose many more families to the estate tax. Given this reality, you may want to sit down and discuss your tax efficiency options with an experienced and highly qualified San Jose estate planning lawyer during the current calendar year.

The Law Office of Roy W. Litherland is a member of the American Academy of Estate Planning Attorneys.

Observers have long awaited an initial public offering for the wildly popular social networking website Facebook. The founders, Mark Zuckerberg and Dustin Moskovitz, have been in possession of the proverbial gold mine for quite some time, and they have already taken steps to take advantage of the tax efficiency strategy known as the zeroed out grantor retained annuity trust.

Zeroing out a GRAT for tax efficiency purposes involves funding the trust with volatile securities, and naming a beneficiary who would assume ownership of any funds that may remain in the trust after its term has expired.

When you create the trust, you arrange for annuity payments to be made to you on an annual basis throughout the duration of the term. The IRS considers the act of funding the trust to be a taxable gift, and it adds an estimate of  appreciation using 120% of the federal midterm rate (Section 7520) that was in place when you executed the trust agreement.

This percentage is added to the value of the assets to determine the taxable value of the trust. To zero out the trust, you do the math and take annuity payments that equal the entirety of this taxable value over the duration of the trust term.

However, if the assets earn more than the percentage applied by the IRS using the Section 7520 rate, there will be a remainder in the trust after you’ve taken all of your annuity payments. This will be transferred to your beneficiary free of taxation.

Placing highly valued stock in such a trust before an initial public offering like the Facebook founders did (according to Forbes) is an ideal use of the strategy.

If you are interested in the possibility of creating a grantor retained annuity trust, or if you would simply like to discuss your options with a professional, right now is a good time to pick up the phone to arrange for a consultation with an experienced Campbell CA estate planning lawyer.

The Law Office of Roy W. Litherland is a member of the American Academy of Estate Planning Attorneys.

While it is true that ailments that are out of your control can challenge you as you reach an advanced age, there are things that are within your control as well.  Being cognizant of the perils that exist is part of the equation, and committed San Jose elder law attorneys are always going to try to raise awareness with regard to geriatric health issues.

With this in mind, it is important to understand just how common falls are among our nation’s elderly. This is an issue that is not as well publicized as it should be, and you will probably be surprised to hear some of the statistics.

The National Council On Aging states that an older adult is given medical attention in an emergency room somewhere in the United States every 15 seconds as the result of a fall. A fall victim passes away every 29 minutes, and this equates to over 20,000 fatalities each and every year.

Obviously life and death is far more important than money, but falls also wind up creating some significant medical bills. It is estimated that nearly $30 billion is spent every year on medical treatment for injuries suffered in falls. And, given the fact that the population is aging rapidly, this figure is expected to rise in the foreseeable future.

This is a very serious matter to consider as you are looking ahead to your senior years. The National Council On Aging is doing its part to raise awareness and provide prevention tips. You can explore the matter in detail by visiting the Falls Prevention section of their website.  Our Director of Geriatric Care Management also wrote a very informative blog on this topic in December.  Here is a link to that blog article: Let’s Talk Falls.

The Law Office of Roy W. Litherland is a member of the American Academy of Estate Planning Attorneys.