Are Inherited IRA’s Safe from Creditors?

Retirement plans such as 401(k)s and IRAs (Individual Retirement Accounts) are protected from creditors during bankruptcy, but are they safe from creditors after your death? This is the question that thousands of people have been asking.

IRAs are rapidly becoming the most popular method of saving for retirement, as they are a safe form of investing assets. The following article shall answer the pressing question “Are Inherited IRAs safe from creditors?”

Bankruptcy and Retirement Accounts
Similar to Social Security benefits and 401(k), IRAs are protected in the event of bankruptcy proceedings. If you were to ever declare bankruptcy, the assets that you hold in your IRA cannot be seized by creditors. Keep in mind that this does not apply to IRS (Internal Revenue Service) levies, civil lawsuits and other kinds of judgements. In certain states, IRA assets may in fact be protected from creditors, but this varies from one state to another.

Both Roth and Contributory IRAs have a $1 adjustment limited inflation which is specified in the protection rules for federal bankruptcy. This limit does not apply to those IRAs that contain assets that have been rolled over from a qualified plan (401(k), so this means that they are completely protected.

What about Protection for Beneficiaries?
With an IRA, you have the ability to choose a beneficiary (or beneficiaries) to which you would pass on your assets after your death. IRAs are great estate planning tools as they provide that your assets will not be held in probate before being passed to your designated beneficiary or beneficiaries. They are an ideal means for ensuring that your estate plan will be carried out according your exact terms and specifications.

Of course, this will require some detailed planning on your behalf. IRAs and estate plans ensure that you will have complete control over the transfer of wealth of your retirement funds. This is a legal and binding document and holds true even in the event that you have do not have a will.

In most cases, those who are non-spouse beneficiaries of IRAs are not offered the same protection from creditors. Unlike the original account holder, these assets will be subject to bankruptcy hearings and thus could very well be seized, per a United States Supreme Court Ruling. The reasoning behind this is that since the original IRA owner is now deceased and the funds/assets have been transferred to the beneficiary, they are no longer to be considered as retirement funds. Keep this in mind when you are choosing a beneficiary for your IRA.

A non-spouse beneficiary is not able to commingle funds. This means that they are unable to place the inherited IRA funds or assets in their personal retirement accounts. However, if the spouse is the designated beneficiary, they may roll over, or transfer, the IRA asset in their personal account, which means they are protected from creditors and bankruptcy proceedings.

How can Beneficiaries Be Protected?
If the designated beneficiary of an IRA is their child and that child then has issues with debt or other financial difficulties, this could present a dilemma.

One way to prevent this from occurring is to establish a conduit trust on which the trustee is designated as the beneficiary rather than the child. If drafted correctly, the trust is then protected from bankruptcy and creditors. Also, the offspring will still be able to benefit from the inheritance.

In this instance, the required minimum distributions of the IRA are then calculated per the life expectancy of the trustee and thus taxed at their tax rate. Since the beneficiary does not legally own the assets, they are now protected. A key point to remember is that the income will no longer be protected once it has been paid out to the beneficiary.

As a rule, you should review your IRAs periodically to ensure that everything is up to date. As well, take note if your beneficiaries are experiencing financial difficulties. If this is the case, you might want to name a new beneficiary to protect the inherited assets.

Remember that the laws differ by each state. Talk with your estate planner or tax attorney to find out the current laws in that state in which you are currently residing.

5 Estate Planning Secrets of Real Estate Investors

So many people are struggling just to make ends meet that they do not stop to think about their future pertaining to investments and estate planning. However, a lot of people rely on real estate investments as a part of their income. Hence, estate planning plays a key role in tax advantages. Investing in real estate provides for capital gains while at the same time lowering tax liabilities.

Keep in mind that factors such as mortgage repayment, capital gains, estate equalization and real estate fluctuations will create a need for liquidation. As well, spousal rollers are tax deferred until the death of the remaining spouse or sale of the investment property. It is also important to remember that lifetime capital gains via real estate investments are not exempt from taxes.

Following are five tips to help you get the most for your real estate investments.

1. Investments in Real Estate
Distribution, sale, or transfer of property may result in either capital loss or gain dependent upon the market value and condition of the properly in question. If the property is a rental property and the market value exceeds the capital cost, taxes are payable on the recaptured value of that property. However, it can result in a loss if the value is lower than the capital cost which can then be deducted against other gains.

Those real estate properties that are financially successful should then be transferred to surviving family members or the designated beneficiary of the estate. Keep in mind that any taxable liquidity must also be funded in advance. This is to ensure that those taking control of the said property do not have any issues in the future.

It is recommended to create a holding company when investing in commercial properties to assist in split income situations. Additionally, it is wise to go through a family trust to purchase shares of the holding company.

2. Principal Residence
Capital gains acquired from the sale or transfer of a principal residence are not subject to taxes. It should be pointed out, though an investor is only allowed to obtain one principal residence per family unit. Those properties that are held in joint tenancy shall remain with the remaining spouse. Upon their death the last will and testament dictates the future dispersion of the property in question.

To ensure that the total cost of your property tax deferral is covered, you need to have adequate liquidity upon execution of your estate plan. This aids in lowering the repayment for the beneficiary upon transferal of the estate.

If minor children are not part of the estate plan, it is a good idea to use your assets as a replacement to the interest via estate equalization. Keep in mind that you need to keep interpersonal conflicts of property liquidation to maintain harmony within the family unit.

3. Build a Solid Fiscal Foundation for Your Family
Owning a rental property is a great way to earn long-term benefits as opposed to wholesale real estate, property rehab and flipping property. Even with the maintenance costs on depreciating properties, it is a lucrative and easy way to earn a constant cash flow. This money is tax advantaged until you own the property in full. Also, you will not incur any tax liabilities.

You can lower your taxes via a 1031 exchange. This allows your capital gains to be transferred to a new property. Buying, fixing and selling a property is also another way to earn money without incurring tax liabilities. Before venturing into any of the aforementioned options, you should discuss your financial situation with a CIA to determine which option is best for you.

4. Invest in Recreational Property
Tax on the disposition of recreational property is deferred only if the property in question is a joint tenant property. Otherwise, capital gains are taxed. However, if the property is left to the surviving spouse, taxes will incur upon the transfer of property.

If the surviving spouse inherited the property outright and then remarries, the property could then end up in the hands of an unwanted beneficiary. To avoid this, it is advisable to create a spousal trust which can also prevent capital gains tax. This allows the testator to then distribute the property when the remaining spouse passes away.

5. How to Avoid Liquidity Crisis
Upon the death of a real estate investor, the capital gains that arise out of the dispersion of property can often be a lot of red tape for the family of the decreased. This is due to the fact that property is not as easy to sell off as other assets. Thus, it is worthwhile to solve any liquidity issues prior to the event of your death.

24 Essential Pieces of Estate Planning Paperwork

Estate planning is something that we all have to think about in our adult lives. We must prepare for our loved ones to be taken care of after the time our death, or in the unfortunate event that we become incapacitated and are unable to make any sound decisions. We need to divide our assets and appoint someone to make decisions on our behalf. It can be quite overwhelming, so you want to make sure that you have all of the proper documentation in place. In the following, we shall highlight the 24 most important pieces of documents that one should have when it is time to put your estate plan into effect.

1. Power of Attorney: This is the power that you appoint someone to act as your agent for tax, legal, medical purposes and so forth.
2. Savings Bonds: Be sure to have copies of the actual bonds
3. Living Trusts: Be sure to have a copy of your irrevocable or revocable living trust as this is a critical aspect of your estate planning.
4. DNR (Do Not Resuscitate) Order: This needs to be included with your estate planning in the event that you are in an accident or become incapacitated to the point that the order needs to be invoked.
5. Last Will and Testament: This is a document that has the name of the Executor of your will, a detailed list of your assets and the names of your designated legal guardians for your children.
6. Pension Plan Information
7. Annuity Contracts
8. Health Care Proxy: This is the person whom you appoint to make all of your medical decisions should you become incapacitated.
9. Bank Account Information
10. Safe deposit box Details
11. IRAs
12. 401(k) Account Information
13. Life Insurance Policies
14. Long Term Care Plan Details and Policies
15. Tax Returns from Prior Three Years
16. Vehicle Title
17. Marriage License/Divorce Certificate
18. Birth Certificates for you, your spouse and any dependents
19. Social Security Numbers of the above
20. Social Security/Disability Details
21. Military Discharge Paperwork
22. Names and Details of any important contacts (beneficiary, legal guardian(s), emergency contact, doctors and so forth)
23. Mortgage Accounts
24. Housing Deeds (also any cemetery plot or land deeds)

Other important information:

● Loan information
● Credit card information
● Lines of credit
● Dental Insurance Information
● Eye Care Insurance
● Personal Accident Insurance Plan
● Long and Short Term Hospitalization and Disability Insurance Details
● Detailed list of your assets

Once you have all of the above information in place, you would meet with your estate planning attorney to ensure that all of your estate plan documentation is in place.

Of course, you want to make sure that you properly store your documents. Most people chose to store their estate planning details in their safe deposit box at a bank or other financial institution, while others chose to keep it in a home safe or simply a filing cabinet. Just make sure that someone knows where the paperwork is stored in the event of your death.

If you have all of the above in order, you can rest assured that your loved ones are provided for in the event of your demise!

Should you have any questions regarding how to protect your personal or business assets, feel free to call the Titanium Asset Protection at (714) 827-9955. With our years of experience in asset protection, we will be able to answer any of your questions and concerns. Call us today for a free and confidential consultation

The Estate Planning Questions You Must Ask for Blended Families

With blended families becoming more and more common, it is critical to make sure that you make the necessary provisions in your estate planning.  Blended families are those in which one or more partners have children from a previous relationship. Often, the parents are confused when it comes to their rights as a parent when it comes to legal issues such as estate planning.
When it comes to estate planning for blended families, there are so many things that can go wrong. Blended families are often made up of those who have been divorced or widowed, so certain legal situations may arise. It is imperative that these be addressed in your estate planning process to avoid any legal hassles in the event of you or your spouse’s demise.

In the following article, we shall discuss the issues and questions you need to discuss with your attorney when it comes to estate planning for blended families.

Questions to Ask in the Estate Planning Process

  • What do you want to happen to your remains after your death?
  • Should you become incapacitated; who do you want to make decisions on your behalf?
  • Who is going to provide for your children and/or dependants?
  • What legal rights does your former partner have when it comes to your shared children?
  • Do you have any financial obligations to your former spouse/partner?
  • Does anyone involved have any liabilities that might impact the financial standing of all of the parties involved in the estate planning?
  • Who will take over as their legal guardian in the event of your death?
  • Are you collecting Social Security or any other benefits? What will happen to those in the event of your death?
  • Do you have a plan as to how to divide up your assets?
  • How will you provide for both your surviving spouse and your blended family?

Other Things to Keep in Mind When Estate Planning for Blended Families

  1. Prepare for a variety of situations

As life is unpredictable, you should sit down and discuss the following scenarios with your current spouse or partner

  • The event that your spouse should die before you
  • The event in which you pass away first
  • The unfortunate event in which you both die at the same time (ie: accident, natural disaster and the like). You would need to choose a legal guardian to care for your shared children in this sector, as well as whom you want to be the joint executor of your estate.
  1. Make sure that your will is up to date

If you currently have a written will, it is imperative that you update to include your current parent and children. Make sure that all details are relevant and up to date as this can prevent many hassles down the line. This also applies to a living trust. If you do not make the necessary changes, your former spouse may end up with everything and your current spouse and children could lose everything that is dear to them. Always ensure that your current will and living trusts are current.

  1. If you have a prenup, make sure that your estate planning details are included in the documentation.

In the event that you are engaged to be married and are going to have a prenuptial agreement, you should ensure that all of your estate planning is included. This is the best way to make sure that any of your children from a previous marriage or relationship are provided for in the event of your death. Include a detailed medical history for your children such any medical conditions or allergies as well as all of their medical and educational records.

  1. Ensure that you’re medical and pension plans, as well as any legal documentation is up to date.

All of the dependants in your blended family need to be added to your insurance policy. Be sure to have the correct information such as their social security number, birth date, legal name and so forth. This also includes any retirement plans, mutual or trust funds and IRA’s. This can save a great deal of legal hassle and red tape in the future.

Your blended family will already have enough to deal with the in event of your demise. If you pay attention to the above details, you can give them the peace of mind that any legal issues are covered.

Should you have any questions regarding how to protect your personal or business assets, feel free to call the Titanium Asset Protection at (714) 827-9955. With our years of experience in asset protection, we will be able to answer any of your questions and concerns. Call us today for a free and confidential consultation




New California Law- Medi CAL Will Dramatically Scale Back Estate Recovery

As California’s answer to Medicaid, Medi-Cal is funded by both the federal and state government. It was created to provide low or no-cost medical care for low income/low resource CA residents. Eligibility is determined by such factors as income, assets, age and disability.

In January of 2017, new rules were set in place regarding Medi-Cal. Some of these changes will have a direct effect on estate recovery. In the following article, we will discuss these changes and how they apply to estate recovery.

Prior to 2017, the state of CA allowed claims on the estates of those Medi-Cal recipients aged 55 or older. For the past 20 or so years, these claims were eligible regardless of whether or not the recipients dwelt in a nursing facility. Upon their death, the state sent the heir of the estate an “estate recovery claim.” This claim was for the amount of the benefit paid to the decreased party.

New Changes To The Medi-Cal Law Effective For Those Who Died On Or After January 1, 2017

As of January 1, 2017, the following provisions were made regarding Medi-Cal and estate recovery:

  • Recovery is limited for those 55 or older solely to Home and Community Based services and nursing home residents
  • Prohibit claims for surviving registered domestic partners and spouses
  • Recovery is limited to only those cases that are subject to CA probate.
  • The state is required to waive a claim due to a substantial hardship if the estate recovery is of modest value.
  • The state is required to provide the current beneficiary and their liaison with a copy of the expenses that are subject to recovery.
  • The amount which a state can charge on liens is restricted.

The new changes effective on January 1st, limited Medi-Cal recovery to those who died on or after January 1, 2017 and were 55 or older at the time that they received their benefits for hospital visits, prescription drugs, community based services and nursing facility care. Those under the age of 55 are subject to recovery if they were “permanently institutionalized” in a medical institution or facility, and were not expected to be able to return home.

In accordance with the new law, the following services are now subject to recovery:

  • Doctor’s appointments
  • Prescription medications
  • Managed care reimbursements
  • Nursing home care
  • Intermediate care for developmentally disabled individuals
  • Home care
  • Community based services
  • Related hospital and prescription services given to an individual while residing in a long term nursing facility or receiving community or home-based services.

Those who are exempt from estate recovery include the following:

Minors/Disabled Children: If the recipient is survived by a child under the age of 21, the state cannot recover the estate. This renders the claim null and void. As well this applies to disabled children of any age. The child in question does not have to be the heir to the state nor do they have to be living with the recipient of Medi-Cal.

Spouse/Registered Domestic Partner: If the deceased is survived by either a registered domestic parent or spouse, the claim for estate recovery is then null and void. In the case that the spouse or domestic partner also is a recipient MediCal benefits, they will then be subject to estate recovery at the time of their death.

Estate Recovery is limited to probate estate. This means that the state can only make a claim against an estate for the amount of the Medi-Cal benefits paid at the time of death, or equal to the value of the state, whichever is less. Effective under the new law, however, recovery is now limited to those estates which are subject to probate under CA law. A living trust is not eligible for recovery, however a will is subject to probate and is therefore due for recovery at the time of death.

The following property items are exempt from estate recovery claims:

  • Retirement accounts
  • Life insurance policies
  • Homesteads of “modest value” (in which the fair market value is less than 50% of the average home price in which the property is located)
  • Those items which are not subject to probate
    • Living trusts
    • Life estates
    • Mobile homes
    • Joint tenancies
    • And so forth
  • Any property which was transferred prior to the death of the Medi-Cal recipient

All of this may sound overheating. The best way to protect your home is to ensure that nothing remains in your estate after your death. Another safeguard is to execute a durable power of attorney that includes both real estate transfer and gifting clauses.

At Titanium Asset Protection, we know that the changes to Medi-Cal and estate recovery can be quite overwhelming. If you have any questions regarding these changes and how they will affect your estate, please contact us at (714)-827-9955 for a confidential and free consultation. A member of our knowledge and expert staff will gladly assist you with any concerns you may have pertaining the above changes for Medi-Cal recipients.

How to Protect Yourself from Lawsuits

Without a doubt, in the modern era, the risk of getting a lawsuit is very high. Because of this, more and more people are doing whatever they can to avoid getting into those predicaments in the first place. While this is undoubtedly easier said than done, you’ll find that a lot of people simply don’t know how to handle themselves or execute proper etiquette.

This is very problematic because overall, most people do not have any clue how to properly articulate themselves or express themselves in the public square. Not literally, of course, but remember, in litigious contexts, it is important to acknowledge that communicating or making statements about another person can result in serious consequences. Rather than getting caught up in one of those situations, you can keep the following advice in mind. This will ensure that you not only avoid getting sued, but it will also allow you to better articulate and organize yourself should you feel concerned about possibly getting into legal action.

Now remember, even if you exercise the best judgment, it is still possible to get into a lawsuit. However, in the event that that would happen, assuming you followed protocol to a tee, you would not be held liable. So even if a suit is brought to court, you can still survive or avoid a long-standing dual just by following the best practices.

Stay Silent

First and foremost, one of the easiest ways to get sued in the public square for making slanderous or libelous statements about someone is simply by saying those statements out loud. If you avoid this in the first place, you’re never going to encounter any of those kinds of issues.

This is something that a lot of people experience because when they interact with others in a public forum, oftentimes they make the mistake of making an assumption or statement that isn’t true. For example, if you’re a celebrity and you make a statement about other celebrities, talking about their actions, you’re opening yourself up to a lot of problems. This is primarily because a lot of people that are in those situations, don’t fully realize just how critically important it is to maintain your public appearance. If people don’t take that responsibility seriously, they’re going to end up in a lot of trouble. So rather than just throwing assumptions out there about another person, always keep in mind that if you make a statement about someone, it has to be something true. You cannot openly spread lies or falsehoods about people, because as a result, you could be opening yourself to being sued. When in doubt, just stay silent. There is no way someone can sue you for NOT saying something bad about them.

Know the Law

In a way, getting into lawsuits is a bit like playing a game. A very costly and time-consuming game, but a game nonetheless. Now while the stakes and costs of this “game” are much higher than Monopoly, the fact remains that you must treat a game like you would any other endeavor of competitiveness. You must know the rules.

Without knowing the rules, it’s not possible to properly know what not do. With the law, if you’re able to understand what you can and cannot do, you’re going to be in way better shape than someone that doesn’t understand the difference between libel and slander.

It’s also important to know how what you could be sued for in your type of business or even personal matters, because if you understand how to get into a lawsuit, you can understand how to avoid them altogether.

Most of the time, people treat these situations in a very counter-intuitive fashion, and as a result, they end up getting themselves into legal trouble they very well could’ve avoided. So rather than being one of those individuals, ensure that you’re always exercising caution. Now, of course, you will not be expected to understand the ins and outs of complicated legal jargon and code all by yourself. That’s where having educated people on your team helps.

Have a Good Team

One of the first things to keep in mind, when it comes to avoiding lawsuits, is having a good team around you. If you have people that are smart enough to avoid trouble in the first place, you’re not going to encounter any issues.

These are the individuals that will watch over your work and ensure you’re doing the right thing. They’re also the people that are going to go over all of your work and ensure that anything that you do intend to disseminate is properly checked and approved.

Remember, the aforementioned tips are just a start. Overall, you’ll see that if you practice just a little bit of these strategies, you’ll go a long way.

Now that you know what it takes to avoid getting sued, it’s time to take action and ensure you have the best asset protection lawyer, in the business, watching your back. Titanium Asset Protection has decades of experience, and specializes in ensuring your assets will stay safe and sound no matter what the circumstances. To learn more or get a free consultation, visit or call (714) 827-9955.

The Tax Advantages of Being a Landlord

The promise of ‘tax breaks’ for investing in real estate is one of the biggest draws, but what are they?

Minimizing taxes is often promoted as one of the top reasons to invest in real estate. Yet, few investors are aware of what those tax advantages are and how they can be maximized. That often leads to thousands of extra dollars being shelled out to the tax man each year. So what are the real breaks available?

Here are five ways to lower your taxes as a landlord, plus a couple of extra power strategies to investigate…


Depreciation is one of the biggest tax breaks for landlords. Properties and improvements degrade and become worn over time. You can get a tax credit for that. Under the new PATH Act some types of properties can enjoy accelerated depreciation, and their landlords get bigger breaks sooner. Note that this is one of the few deductions out there that mortgage lenders will allow you to add back to your qualifying income when applying for loans.

Financing Costs

Mortgage interest, lender points, and other financing fees may all potentially become tax deductions. That can be a big motivator and perk for using financial leverage to grow a portfolio faster and earlier.

Taxes, Taxes, Taxes

Yes, you can actually write off other types of taxes you pay in conjunction with investing in real estate when it comes time to file your taxes. You can also deduct what you pay in accounting and tax preparation fees. That’s a big reason to get the best tax prep help you can get.


Some real estate investors and business owners may experience net paper losses in the first couple of years. Those losses may be used to offset other earned household income. These essentially become credits against other income tax liability, and maybe rolled over to cover future year’s liability. Don’t overlook this one.

Property Management

It’s sad to see so many real estate investors running themselves ragged, taking on extra liability, and hurting their net profits all because they think they are saving by not using professional property management. Ironically those ‘costs’ can be a tax break too.

More Miscellaneous Expenses and Tax Breaks for Landlords

According to Landlordology and House Logic some of the other commonly neglected breaks for landlords include advertising expenses, payroll and commissions paid, property maintenance, insurance premiums, and legal fees.

Advanced Tax Strategies for Serious Real Estate Investors

While LLCs, SDIRAs, 1031 exchanges, and other asset protection tools can add another layer of tax write-offs and defense, and are frequently referred to as ‘advanced’, they should be utilized by far more investors. Don’t wait till you’ve got a big tax bill to try and fix the situation. These tools can open the doors to breaks for offices, vehicles, communications, education, and more, as well as shielding investors from taxes on gains so they can snowball and enjoy compounding results for decades.

Disclaimer: It is always crucial talk to your own individual licensed professionals for custom advice and to create a real tax strategy before making any financial moves.

Authored by Matthew C. Mullhofer, PC

Matt is a licensed California attorney specializing in asset protection, trusts, corporate law, succession planning, bankruptcy, real estate, and tax law. He has successfully represented clients to the highest levels of the justice system in fighting to protect them, and their finances. Matt has served as the Ethics Chairman for Le Tip International, The Chapter of Orange for 15 years, and is a member of the revered Wealth Counsel.


The Big Perks of Owning Real Estate in an LLC

LLC Benefits

What are the real advantages of owning real estate in a limited liability company? What common blunders could cost investors big time? proclaims “the limited liability is the top choice for real property.” A review of recorded real estate transactions from Property Shark by the wealthiest and most sophisticated investors and funds in hot Manhattan over the last year show LLCs almost exclusively used for taking ownership. So why are these legal structures and investment vehicles so popular with savvy investors? What are the real pros and cons?

The Advantages of Investing in Real Estate with an LLC

The most popular benefits of using LLCs in real estate investing include…


The security conscious and those desiring anonymity from frivolous and malicious lawsuits prize vehicles like these as an extra layer of privacy.

Limited Liability

Chief Strategist of Breakwater Equity Partners, Jack Rose, says “One major advantage of an LLC over a partnership is that the liability of the members of an LLC can be limited to their financial investment,” and “so if the worst happens, the most the owners can lose are the assets being held by the LLC.”

Lack of Double Taxation

Limited liability companies offer lack of double taxation which can be a big issue that takes a large bite out of revenues and returns when using other entities.


LLCs can provide members and investors far more flexibility in operations and structure than some other types of legal entity.

Reduced Paperwork and Time Burden

Some legal structures require regular board meetings and the recording of minutes. Burdens like these can expose investors to risk if they fail to stay on top of them. Or may eat away at time and resources if they do.

3 LLC Pitfalls to Watch Out for

1. Filing Reports

Original applications and annual renewal fees must be kept up with in order to enjoy seamless operations and ongoing coverage. In some states an LLC can be filed online, in 5 minutes or less, for just around $100. However, with anything this important it is crucial to obtain professional legal advice, personalized advice on your unique individual circumstances, and ensure paperwork is completed and filed flawlessly.

2. Timing

One of the most significant mistakes real estate investors make is putting off registering a LLC until late in the game. Transferring an owned property to an LLC or especially an IRA LLC can potentially trigger substantial tax consequences.

3. Piercing the Corporate Veil

As with any corporate structure it is vital for investors to avoid any activities which could allow for exposure to piercing the corporate veil. Activities such as comingling funds could result in the failure of the LLC to maintain its protections in court.


LLCs have many advantages. Used well they can be invaluable. Used poorly they can increase liability. Consult a professional and find out if a LLC is right for you and your strategy, and look out for the June 2016 presentation on Asset Protection at the top ranked West Coast real estate investors club 12 Rounds.

Authored by Titanium Asset Protection

Titanium Asset Protection is an elite asset protection firm with licensed California attorneys on staff who specialize in asset protection, trusts, corporate law, succession planning, bankruptcy, real estate, and tax law. Our team has successfully represented clients to the highest levels of the justice system in fighting to protect them, and their finances, with lead counsel Matt serving as the Ethics Chairman for Le Tip International, The Chapter of Orange for 15 years, being an honored member of the revered Wealth Counsel.

Estate Planning

How Much of Your Estate Will Be Left Out of Your Will?

How Much of Your Estate Will Be Left Out of Your Will? (It’s Probably More Than You Think)

You’ve hired an attorney to draft your will, inventoried all of your assets, and have given copies of important documents to your loved ones. But your estate planning shouldn’t stop there. Regardless of how well your will is drafted, if you do not take certain steps regarding your non-probate assets, you run the risk of unintentionally disinheriting your chosen beneficiaries from a significant portion of your estate.

A will has no effect on the distribution of certain types of property after your death. Such assets, known as “non-probate” assets are typically transferred upon your death either as a beneficiary designation or automatically, by operation of law.

For example, if your 401(k) plan indicates your spouse as a designated beneficiary, he or she automatically inherits the account upon you passing.  In fact, by law, your spouse is entitled to inherit the funds in your 401(k) account.  If you wish to leave your 401(k) retirement account to someone other than a surviving spouse, you must obtain a signed waiver from your spouse indicating her agreement to waive her rights to the assets in that account.

Other types of retirement accounts also transfer to your beneficiaries outside of a probate proceeding, and therefore are not subject to the provisions of your will.  An Individual Retirement Account (IRA) does not automatically transfer to your spouse by operation of law as is the case with 401(k) plans, so you  must complete the IRA’s beneficiary designation form, naming the heirs you want to inherit the account upon your death. Your will has no effect on who inherits your IRA; the beneficiary designation on file with the financial institution controls who will receive your property.

Similarly, you must name a beneficiary on your life insurance policy. Upon your death, the insurance proceeds are not subject to the terms of a will and will be paid directly to your named beneficiary.

Probate avoidance is a noble goal, saving your loved ones both time and money as they close your estate. In addition to the assets listed above, which must be handled through beneficiary designations, there are other types of assets that may be disposed of using a similar procedure.   These include assets such as bank accounts and brokerage accounts, including stocks and bonds, in which you have named a pay-on-death (POD) or transfer-on-death (TOD) beneficiary; upon your passing, the asset will be transferred directly to the named beneficiary, regardless of what provisions are in your will. Depending on the state, vehicles may also be titled with a TOD beneficiary.

To make these arrangements, submit a beneficiary designation form to the applicable financial institution or motor vehicle department. Be sure to keep the beneficiary designations current, and provide instructions to your executor listing which assets are to be transferred in this manner.  Most such designations also allow for listing of alternate beneficiaries in case they predecease you.

Another common non-probate asset is real estate that is co-owned with someone else where the deed has a survivorship provision in it.  For example, many deeds to real property owned by married couples are owned jointly by both husband and wife, with right of survivorship.  Upon the passing of either spouse, the interest of the passing spouse immediately passes to the surviving spouse by operation of law, irrespective of any conflicting instructions in your will.  Keep in mind that you need not be married for such a provision to be in effect; joint ownership of real property with right of survivorship can exist among any group of co-owners.  If you want your will to be controlling with regard to disposition of such property, you need to have a new deed prepared (and recorded) that does not have a right of survivorship provision among the co-owners.

You’ve spent a lifetime of hard work to accumulate your assets and it’s important that you take all necessary steps to ensure that your wishes regarding who will get your assets will be honored as you intend. Carve a few hours out of your busy schedule, several times a year, to review all of your deeds and beneficiary designations to make certain that they remain consistent with your objectives.



What’s Involved in Serving as an Executor?

What’s Involved in Serving as an Executor?

An executor is the person designated in a Will as the individual who is responsible for performing a number of tasks necessary to wind down the decedent’s affairs. Generally, the executor’s responsibilities involve taking charge of the deceased person’s assets, notifying beneficiaries and creditors, paying the estate’s debts and distributing the property to the beneficiaries. The executor may also be a beneficiary of the Will, though he or she must treat all beneficiaries fairly and in accordance with the provisions of the Will.

First and foremost, an executor must obtain the original, signed Will as well as other important documents such as certified copies of the Death Certificate.  The executor must notify all persons who have an interest in the estate or who are named as beneficiaries in the Will. A list of all assets must be compiled, including value at the date of death. The executor must take steps to secure all assets, whether by taking possession of them, or by obtaining adequate insurance. Assets of the estate include all real and personal property owned by the decedent; overlooked assets sometimes include stocks, bonds, pension funds, bank accounts, safety deposit boxes, annuity payments, holiday pay, and work-related life insurance or survivor benefits.

The executor is responsible for compiling a list of the decedent’s debts, as well. Debts can include credit card accounts, loan payments, mortgages, home utilities, tax arrears, alimony and outstanding leases. All of the decedent’s creditors must also be notified and given an opportunity to make a claim against the estate.

Whether the Will must be probated depends on a variety of factors, including size of the estate and how the decedent’s assets were titled. An experienced probate or estate planning attorney can help determine whether probate is required, and assist with carrying out the executor’s duties. If the estate must go through probate, the executor must file with the court to probate the Will and be appointed as the estate’s legal representative.  Once the executor has this legal authority, he or she must pay all of the decedent’s outstanding debts, provided there are sufficient assets in the estate. After debts have been paid, the executor must distribute the remaining real and personal property to the beneficiaries, in accordance with the wishes set forth in the Will. Because the executor is accountable to the beneficiaries of the estate, it is extremely important to keep complete, accurate records of all expenditures, correspondence, asset distribution, and filings with the court and government agencies.

The executor is also responsible for filing all tax returns for the deceased person including federal and state income tax returns and estate tax filings, if applicable. Additional tasks may include notifying carriers for homeowner’s and auto insurance policies and initiating claims on life insurance policies.

The executor is entitled to compensation for his or her services.  This fee varies according to the estate’s size and may be subject to review depending on the complexity as well as the time and effort expended by the executor.