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My titles are many: attorney, counselor, advocate. I am also someone’s daughter, sister, friend and wife. But the title that has taught me the most and challenged me to constantly step-up to be a better person, is that of mother. The lessons I learn as “mother” seem to always have far deeper implications than at first glance and in fact, they inform my entire life.

I was recently reminded of how much I have learned and how much more I have to go one pandemic afternoon when my daughter and I sat down to paint our nails. Remembering how often she begged to paint my nails as a little 6-year old girl, I asked if she wanted to paint my nails.

“No, thanks . . .  I remember when I was like 6, and I always wanted paint your nails. And one time I asked if I could and you said ‘no’.”

“Yeah?”

“Yeah, you said no because you didn’t want it to look like a 6-year-old painted your nails,” she laughed.

This is true and I remember and regret saying it. For the record, she painted my nails plenty of times, but for some reason, on that particular day, I didn’t want her to do it. Like most things in life I have been given a second chance both to sit with my daughter and to reflect on why it was so important for me to let her paint my nails.

What she was asking as a little girl was not, “Mommy, do I have the nail painting skills to be worth of the brush to Cherry Crush red?” No, she was asking, “Can I try and probably do a pretty bad paint job with you? You see, I need to try, and fail, in a safe place so that I can learn to do it properly when I am older.”

I didn’t realize this was her message until I started seeing this over and over again in my practice. Parents, who like me, worried about trusting their children with small decisions that could be used to build up to real responsibility. You see, it’s like compounding interest, it’s a cumulative thing. We give small tasks. We demonstrate how to cope with setbacks by supporting our kids but also by coping with our own setbacks in a constructive way. We do our children no favors by protecting them from messy nail polish jobs. The lesson is in what to do when nail polish gets all over your thumb, when you accidentally smudge it while it’s still wet and how paint your tiny pinky nail,

There’s a popular phrase right now, “you will succeed or you will learn.” It embraces the growth mindset that took the education community by storm a decade or so ago and was first introduced to the mainstream public by Carol Dweck in her book, Mindset: The New Psychology of Success.

It’s been 6 years, and I regret not letting my daughter paint my nails every time she asked. Now, as an accomplished nail polish painter, she no longer asks to paint my nails. Why would she? It’s a skill she has already mastered.

The topics are now about managing money, friendships and social media. Every day, I practice to keep my ears and my heart open so I can be available to say, “yes, of course.”

Many people consider naming the minor children’s legal guardian as the trustee of their trust. If both parents pass away, a legal guardian will be responsible for the day to day life of the children.

The benefits of this would be that the guardian doesn’t have to consult with someone else regarding purchases and expenses and, presumably, the guardian knows best what type of costs are appropriate.

However, the responsibility of acting as day-to-day caregiver for a child (often under stressful circumstances with little or no notice) and also as trustee of the trust can be physically and emotionally taxing for even the most dedicated caregiver.  

We must also consider whether the best caregiver for a child would also make a good trustee, i.e. a financial steward.

Parents who are lucky enough to know several reliable and trusted people, often choose a different friend or family member to be trustee. This allows the guardian to focus on the job of raising the child.

There are also a growing number of parents who choose to use a professional fiduciary to act as trustee. Professional fiduciaries are licensed and regulated by the State of California. The Professional Fiduciary Association of California (https://pfac-pro.org/) has useful information about this growing profession.

Here are some tips for choosing a trustee:

• Expertise is not required.  It is important to select a trustee with good judgment and common sense. Someone who is organized and can keep good records is a good choice. A trustee must be comfortable doing research and asking for help.

• Consider the trustee’s age. Because a trust for a young child is likely to be administered for a significant length of time – possibly decades – it is a good idea to consider the age and health of your trustee. Naming multiple successor trustees and revisiting their appropriateness is critical.

• Consider the team approach. In some circumstances, naming more than one trustee (i.e. co-trustees) may be appropriate. Some benefits of having co-trustees are the sharing of administrative duties and preventing one person’s judgment from controlling all decisions and distributions. If one of your co-trustees is not a U.S. citizen, consider naming a U.S. citizen co-trustee to avoid the cost and complications that come with having a foreign trustee.

• Sometimes a professional trustee is best. When there are few friends or family members who could do this important job, if the trust contains a large amount of money or if there are concerns about family conflicts, a professional or institutional trustee may be best.

Have more questions about your estate plan? Feel free to call or schedule a time to meet with me.

Are you considering all of your assets?

When we think about our assets, we most often think of things that we buy or earn, like cash or cars. However, we can also create assets – our intellectual property.

Creations like music compositions, dance performances, mobile apps, etc. can be a source of income for yourself, family members and loved ones.

What Is Intellectual Property?

You don’t have a be a famous painter or a rock star to have intellectual property. Intellectual property is simply a work or invention that is the result of the human creativity and intellect and can be legally protected, e.g., by copyrights, patents, and trademarks. It is protected by federal (and sometimes state) law and can have great economical value.

Intellectual property can be given, sold and inherited. However, some intellectual property, like patents, must be registered during the lifetime of the creator while others, like copyrights, can be registered by the estate of the creator.

Take Steps to Protect Your Intellectual Property

Different steps are necessary to legally protect different types of intellectual property. Here is a summary of how to protect some of the most common types:

When You Don’t Own Your Intellectual Property

As discussed above, intellectual property should be registered to protect it from misappropriation by others. However, you can sell, give away, donate or lose your intellectual property.

With “work for hire,” an original work is created for someone else. For example, an artist who was hired to paint a mural on a wall, certainly has a copyright in the created artwork but that copyright is owned by wall owner.

Also, even if you register your intellectual property, you must actively protect it. For example, with a copyright, the owner must actively enforce the copyright to prevent it from being declared “in the public domain,” a famous example is the “Happy Birthday” song.  

If you are not sure whether you or a loved one own intellectual property, consider consulting with an intellectual property attorney.

Include Your Intellectual Property in Your Estate Plan

It is important to include your intellectual property in your estate plan to protect it and to maximize its value. Before we create or update your estate plan, be sure to provide us with a list of all of your intellectual property, as well as any related agreements, assignments, or licenses.

Special issues with copyright.
If you own a copyright, you should specifically state both the title of the original work, i.e., the book, painting, etc., and the details of your copyright in your will or trust. If your copyright is not specifically mentioned in your will or trust, it will be transferred to your heirs by a residuary clause, which disposes of all property not specifically dealt with elsewhere in your will whereas the original work could be transferred differently. As a result, one person could end up with the book or painting and others with the copyright. In addition, depending upon how valuable the copyright is, the heirs who inherit it could have a heavier tax burden.

Because the future value of a copyright is impossible for the creator of a work to know, copyright law gives the creator the right to terminate most transfers or licenses of the copyright at a future date, providing the creator with an opportunity to market the work once its fair value is known. This termination right, which passes under copyright law to the creator’s surviving spouse and children when he or she dies, cannot be waived or transferred to anyone else during the creator’s life. If the creator transfers the copyright, e.g., to a trust, the statutory heirs (the people the state statute says will have the termination right) could undo the creator’s intent. The only exception is a transfer of the copyright by a will, which cannot be terminated by the statutory heirs. Although establishing a trust is preferable for many types of property to avoid probate, ask your attorney whether transfer of your copyright by Will is a better option in your situation.

Patents
Unlike copyrights, there is no termination right for patents, which can be freely transferred by a will or to a trust for the benefit of the loved ones you chose. Transferring ownership to a trust is often a good choice to avoid the expense, time, and lack of privacy of the probate proceedings required for transfers using a will. Your patents should be clearly identified in your estate planning documents, which should state the owner of the patent, the patent number, those who have the right to license the patent, and the parties who are responsible for paying the fees required to maintain the patent. In addition, the United States Patent and Trademark Office should be provided documentation showing the transfer to the new owner.

Trademarks
Similar to a patent, a registered trademark can be transferred by either a will or by establishing a trust to benefit your loved ones. As is the case with patents, a trust is often the better choice. Documentation should be sent to the United States Patent and Trademark Office to record the transfer of the trademark registration to the new owner. It is important for the executor or the trustee or any individual who inherits a registered trademark to continue to defend it against infringement and use the mark to maintain the legal protection provided by trademark law. In addition, the executor, trustee, or new owner should continue to renew the trademarks and pay the required fees.

Royalties
Intellectual property that has been transferred or licensed to another party often generates royalties or other income that become part of your estate. Those payments could be directed to a living trust or a trust established at your death. When you pass away, any publishers or other agencies should be notified to direct the payments to the trust or to the loved ones who have inherited the right to receive those royalties.

Consider naming an executor or trustee with expertise in managing intellectual property and the income it generates for the benefit of your loved ones to maximize its value.

Give Us a Call

Estate planning for intellectual property can be quite complicated. An experienced estate planning attorney can help ensure that the products of your creativity are properly protected and passed on to your family and loved ones in the way you intend. Call today or schedule a consultation to ensure that your estate planning goals for your intellectual property are achieved.

Most lawyers are old fashioned – we like paper, regular mail, signatures in pen, the oxford comma.  A lawyer’s duty is to protect and defend their clients and that means protecting privacy. I think I can speak for most attorneys when I say that cloud-based services make us uncomfortable. 

Like the famous quote, “you can’t stop progress,” I have been adopting cloud-based tools that both help me to advance my clients’ interests and protect their privacy. 

All this poses a huge learning curve for me. And so, last night, as my family cleaned up after dinner (thanks, kids!) and settled in for a Saturday night movie, I found myself on the phone, once again,  with a help desk technician. 

As he patiently walked me through the steps of a relatively simple task, I heard the crow of a rooster through the phone.

“Is it morning where you are?” I asked.

There was a long pause, “Yes, excuse me, I’m so sorry. We are all working from home here. My apologies that you heard that.” 

“No, it’s lovely. It’s easy to forget that there is a real person on the other end of the line.”

Clearly surprised by my comment, he paused and then chuckled. Although we were half a world apart, we were connected, as humans, living through this historic moment.  

Thank you help desk technicians. For turning your home into an office. For your patience and kindness. I couldn’t do this without you. 

Here’s a lovely remake of the 1988 “We Are the World” adapted for the current pandemic.

Q: As a married couple, should you hold your home as joint tenants or as community property?

Answer: It depends.

Before we get started, make sure you read this disclaimer. If you have any questions about your own circumstances, talk to your attorney or contact me to schedule a consultation.

When you bought your home, it’s most likely that the title company prepared a deed. Below is a picture of a real deed:

Among many things, the deed includes the name of the person who sold you the property, your name, a legal description of your property and also the legal form of your ownership. For example, if you were single when you bought the property, it probably says something like: “Albus Dumbledore, an unmarried man.”

Deeds are public documents. They tell the world who owns the property. This is important because, in our example, if Dumbledore wants to sell the property, the buyer needs to have a way to confirm that Dumbledore is the rightful owner. The buyer does that by looking at the deed on file with the county recorder. Property deeds are so important that they are sometimes kept for hundreds years to document land ownership. 

When a married couple buys a home, typically the title company creates a deed for the couple. In my experience title companies usually describe the legal form of ownership as something like, “Harry Potter and Ginny Weasley, husband and wife, as joint tenants.” This special language tells the world that both Harry and Ginny are equal owners of the property. Sometimes the title company goes further and the ownership looks like this:  “Harry Potter and Ginny Weasley, husband and wife, as joint tenants with right of survivorship.” This special survivorship language means that when either Harry or Ginny die, the other becomes the owner of the entire property. 

In California, married couples and registered domestic partners can choose to hold their home as “community property.” If property is held as such, the language looks like this: Harry Potter and Ginny Weasley, husband and wife, as community property.” Land held as community property has an implied right of survivorship, even it doesn’t say it on the deed.

The decision to hold property as joint tenants or as community property can have a dramatic impact on each person’s property rights, their ability to shield property from a debt or judgment, and their eventual tax bill. In this article, I address only the tax impact of a joint tenancy versus community property.

To understand this we need to understand “basis”. 

Imagine Dumbledore and McGonagall own Hogwarts as joint tenants after buying it from the Ministry of Magic for $1,000. They sell it to Harry for $3,000. The $1,000 paid to the Ministry is their basis. The $2,000 difference between the basis and the sales price is taxable gain and where there is taxable gain, the IRS wants a share. Dumbledore and McGonagall will need to write a check to the IRS, if their tax rate is 20%, they will need to pay $400. In the end, they will have $2,600 left of their $3,000 sale price. The same is true for you when you sell your home. 

But . . . the tax law does peculiar things to the property tax basis when death is involved. It’s not magic but an act of congress. The tax basis actually increases on death. This increase in tax basis decreases the taxable gain. Let’s see how that works: 

Instead of selling Hogwarts, imagine that McGonagall inherits Hogwarts when Dumbledore dies. The tax law gives her a new tax basis on Dumbledore’s half, which is now $1,500 (½ of the fair value of Hogwarts when Dumbledore died). When you add the new, stepped up basis of Dumbledore’s share to McGonagall’s own basis of $500 (1/2 the purchase price), she will have a new basis of $2,000 ($1,500 + $500). When she sells it to Harry for $3,000 and deducts her tax basis, her taxable gain is only $1,000.  With a tax rate of 20%, she would write the IRS a check for $200 and keep $2,800 of the sales price.

Now, remember community property discussed above?

If Dumbledore and McGonagall were married and held Hogwarts as community property, McGonagall would inherit Dumbledore’s share just like above, but she would get a new tax basis for ALL of Hogwarts, not just Dumbledore’s half. Under community property law, McGonagall’s new basis would be $3,000.

Why is this? Tax laws are written by politicians to encourage people to do things and politicians want to encourage people to get married. This means that when McGonagall sells Hogwarts to Harry for $3,000 and deducts her new $3,000 basis, she has $0 taxable gain. She keeps the entire $3,000. And so would you.

Title to property involves complex and multiple considerations. You should always talk with an attorney before changing title or taking title to property.

Hogwarts, Harry Potter, McGonagall and Dumbldore are the property of J.K. Rowling and NBCUniversal.

Many people are turning to online estate planning platforms during the Covid-19 pandemic. This could be a good option for some people.

Some people with very simple estates can use DIY forms and systems effectively. If you go with an online DIY service, consider one that provides attorneys to help, it might be worth it to pay a little extra for that service.

Common problems with with DIY plans

While some DIY plans can work well, the problems with those plans fall into two categories: problems with the services and problems created by the user.

DIY Service Issues

Two common issues with DIY services are that the the forms themselves have errors and they are actually ineffective. This could be caused by poorly drafting or by using documents that are actually designed for another state. Keep in mind, that estate planning documents are state specific.

Websites can over simplify or inaccurately describe the purpose and use of the forms they offer. This means that you could complete the form differently than you would have if you had really understood the effect of the documents.

Issues caused by users

Some problems caused by users arise because the user wants to change the form or decides to write in special language to reach a certain goal that wasn’t intended by the form. These improper changes make the documents ineffective and confusing and can even void the documents. Here are some other common issues:

• lack of understanding or misunderstanding of income, property or estate tax consequences
• misunderstanding of common estate planning terminology
• improper execution of documents
• failing to update the plan to reflect changes in the law or tax code
• failing to create a comprehensive plan, such as not understanding how life insurance and beneficiary designations impact an estate
• failing to implement the estate plan, effectively eliminating the entire purpose of the plan, such as failing to fund a trust

How can you tell if you have a simple estate?

Estate planning is a complicated field and there are many nuances. DIY services can give you general information but for advice about your specific situation, you’ll need a professional. Some situations almost always warrant more care and handling by an licensed attorney. If you have any of the following situations, you should strongly considering hiring an attorney:

• you own real estate
• you have minor children
• you or your partner are in a second or subsequent relationship with children on either or both sides
• you have an adult child who is in a second or subsequent relationship with or without children
• your adult child is in a relationship with someone who has a child from a former relationship
• a child of yours or your partner passed away leaving children
• a family member has a physical or mental disability
• a family member has or has had drug, criminal or addiction issues
• a family member receives public benefits
• you or your partner have received or expect to receive an inheritance
• you own a business

There are, of course, many other issues that require more care. If you’re not sure whether you have a complex issue that needs more than an online plan can offer, a local estate planning attorney is the place to start.

Are These DIY Plans Bad for Estate Planning Attorneys?

There will always be those who think that they can do a better job than a professional. You might be thinking, of course she wants me to use an attorney, she is one! Guess what – you’re right but not for the reason you think.

At the beginning of this post, I described just some of the reasons why DIY plans can be a mess. Usually, by the time anyone notices a problem, the person who created the plan is in a coma, incoherent or dead. By that time the plan cannot be repaired. The only solution is to pay an attorney like me to fix it. This is always much more costly than hiring an attorney to create a proper plan in the first place.

So, here’s why I don’t want you to DIY your estate plan without talking to an attorney first: I do this type of work because I like helping families. No family deserves the stress, hassle and huge expense of dealing with a broken estate plan while, at the same time, trying to arrange for a memory care home, final wishes or even a funeral. Even worse, if parents die and leave young children, the children will be forced to use their inheritance, including the family home, to pay for attorneys and court costs.

Working with an attorney is expensive, I know that, but it can save you time and money in the long run. You wouldn’t reset a broken bone yourself. Similarly, you shouldn’t try to make you own estate plan without talking to a professional.

If you think you have a very simple estate, many states offer free and low cost forms available to the general public. If you’d like to find out if these forms are a good fit for you, contact me and we can go over the benefits and limitations of these low cost and no cost options.

I came across this article by Stephen Meyers about his work as a U.S.P.S mail carrier and I was transported back to the summers I passed on my grandmother’s porch when she would tell my sister and I stories about her varied life and her many jobs. Like Meyers, one of those jobs was as a U.S.P.S carrier.

By the time my grandmother started working for the U.S.P.S., in about the 1940s, she had already had many jobs. As a child in southern California, she worked in her aunts’ tailor shop sewing hems and buttons but was also responsible for housekeeping and and making the daily tortillas. During prohibition, she and her mother ran a speakeasy. Later, she worked on the docks packing frozen tuna into cans until her fingers, too, were frozen. At least once, she slaughtered, plucked, and gutted a goose in her job as a house maid. Years later, when she told my sister and I of these jobs, she laughed and her eyes sparkled, the sting of poor working conditions and low wages dulled by the passage of time.

But time did nothing to dull her memories of working for the U.S.P.S. When she told of her job delivering mail, she did not laugh. She described it as the toughest of any of her jobs. She began working with brand new shoes, a rare luxury in her case, but after after several weeks walking through neighborhood after neighborhood, she not only had blisters but had worn holes into the bottoms of her new shoes. She lined them with cardboard. When it rained, the cardboard did nothing to keep out the water. The summer heat was worse. She remembered the constant thirst. At that time, carriers could not carry drinking water because the heavy bags required both hands, and even if you could physically manage it, water could spill and ruin the mail.

Despite all that is going on right now, my U.S.P.S. mail carrier continues to arrive every day delivering consistency, routine and normalcy. I am grateful for all of the people working essential jobs, often unseen and unsung. Thank you. If you are providing an essential service during this shelter-in-place emergency and you are concerned about protecting yourself and your family, I can help. I have discounted my estate plans for essential service providers during this emergency. If you have a very simple estate, ask about your free and low cost options. 

This weekend marks the end of the 2nd full week following the shelter in place order that was issued by our county. After that order, other counties and finally the State of California followed suit. So, we have been home. 

Staying home means tending to tasks that I’d been putting off. In particular, gardening. 

Gardening for me is an olfactory experience, it smells like a medicine cabinet. That is to say, it smells like Cleveland Sage. Because Cleveland Sage it is a native plant, it belongs here. You don’t need to do anything to help it grow other than leave it alone. But this past weekend, I decided to trim this sage a bit because I wanted to plant something nearby and the sage had grown big and bushy and was blocking the light. As I was trimming, I came across a branch buried in the soil and I was reminded of how this plant cares for its children. 

An older sage will eventually lay its branches against the soil. Under the parent’s protective canopy, those branches will sprout their own roots. This is how a child plant begins. It will push its roots down into the earth, while at the same time, receiving nourishment, protection and support from the parent plant. If it lays long enough, and the roots become strong enough, the branch will eventually be able to survive on its own, even if it is severed from the parent. 

Isn’t this what we do for our children, too? 

Don’t we also aim to raise our children so that they can survive, and even flourish, when we are gone? 

If we cannot be there while they still need our protection and support, shouldn’t we do whatever we can to protect and provide for them? 

Make sure your estate plan includes who will care for your children if you can’t be there. It should include provisions for your children’s financial and physical care and protection. If you created a plan before your children were born, it is time to update it.

Actually, an estate plan is about so much more than money. It says who should care for your children and pets if you are hospitalized or die. It tells your family and doctors what kind of medical care you want if you can’t speak for yourself. It can protect you from financial disaster if you are unable to manage your bills and pay your mortgage.

It can be daunting to take the first steps to setting up your estate plan but I promise to guide you step by step through the process to make it clear, fast and easy. You take care of your family everyday, make sure they are protected when you can’t be there.

If you still don’t have an estate plan or haven’t looked at yours in a while, we can help. Contact us here or at 650-636-7247.