Question of the Day - February 27, 2014:
My Mother is a 78 and is of meager means. She has no real property but does have several thousand dollars in a Vanguard rollover IRA. She does not have a will and I believe that there is really no need for one. I’m hoping that you can tell me that I am correct. If she chooses to name her five children the beneficiaries of the IRA, does this allow us, in the event of her death, to avoid probate?
Your mother’s estate will avoid probate if the assets titled solely in her name upon her death total less than $150,000. From what you have told us, she has nothing to worry about. She can avoid probate with “poor man’s estate planning”.
She should name her children as IRA beneficiaries, assuming she wants them to get the money. Anything passing upon her death by means of a pay-on-death beneficiary designation will avoid probate. And it’s good for her children too. If your mother’s IRA pays into her estate, it will be subject to income tax upon her death. But if you and your siblings inherit the IRA as designated beneficiaries, you will have the opportunity to stretch out IRA distributions over your own life expectancies. This may not mean much if the IRA is worth only a few thousand dollars, but for readers of this column who have significant funds within IRA’s or other retirement accounts, it’s always important to verify that you have beneficiaries.
Your mother can also name the children as joint tenants or pay-on-death beneficiaries on her bank accounts so that they will also pass free of probate upon her death.
The only downside to avoiding probate this way is that if one of the children were to die before your mother, that child’s living descendants, if any, won’t inherit anything. Only the surviving joint tenants or pay-on-death beneficiaries will get a share. But as your mother doesn’t have that much anyway, it’s probably OK to do this. She can update her beneficiary designations upon a child’s death if she is able to.
She does not need a will if she wants everything divided equally among her children. If she dies without a will, her children and the living descendants of her deceased children will inherit her estate by intestate succession. But that doesn’t mean your mother needs no estate plan. At the very least, she should have a durable general power of attorney and an advance health care directive. These documents are very important because they will give her children the means of making important legal and medical decisions on her behalf should she ever become incapacitated.
For those of you readers who own homes, poor man’s estate planning is not for you. It is almost always a bad idea to put your children on the title to your home, because they’ll be part owners now, not just upon your death. If you want the property back in your name, they may not be willing to cooperate. If you own a home and you want to avoid probate, you need a trust.
Welcome to Len Tillem & Associates
In 1994, Len Tillem established his firm to provide personalized, pragmatic legal representation to clients in a variety of practice areas. The experienced attorneys at Len Tillem and Associates are available to assist you with:
- Estate Planning
- Asset Preservation & Long Term Care Planning
- Probate and Trust Administration
- Trust & Estate Litigation
- Wrongful Death & Serious Injury Litigation
Contact us if you are in need of high quality, personalized assistance with any legal matter. In some cases, we partner with the leading experts in specialized fields of law to obtain the best possible result for our clients.
Len Tillem has been practicing law in the San Francisco Bay Area for more than thirty years, and he’s been addressing the community’s legal concerns live on the radio since 1990. Currently, Len records daily podcasts that can be heard through his website and itunes.
Together with Len Tillem and Associates senior attorney Rosamonde McNichol, Len writes "The Elder Advocate" newspaper column, providing answers and insights on a wide variety of legal topics effecting seniors. The column is published weekly in several Bay Area newspapers, including the Santa Rosa Press Democrat, the Napa Valley Register, the Sonoma Index Tribune, the Vacaville Reporter, the Lake County Recorder Bee, and the Clearlake Observer. You can also read the column in the PrimeLife supplement to the San Francisco Chronicle on the first Sunday of every month.
Len Tillem's law practice — Len Tillem & Associates — concentrates on Elder Law. Elder Law is a specialized field of law focusing on the unique needs of the elderly. Elder Law includes such topics as Estate Planning and Estate Tax Avoidance, Wills and Probate, Trusts and Trust Administration, Long Term Care Planning including Medi-Cal Planning, and Elder Abuse. Len is a member of the National Academy of Elder Law Attorneys, and the California Advocates for Nursing Home Reform. Len also served as a delegate to the 1993 White House Conference on Aging.
In addition to his radio program and law practice, Len and attorney Rosamonde McNichol, also of Len Tillem and Associates, write a newspaper column focusing on senior legal issues. The column is published in four Bay Area newspapers: the Santa Rosa Press Democrat, the Napa Valley Register, the Vacaville Reporter and the Sonoma Index-Tribune; and two newspapers in Lake County: the Lake County Record Bee and the Clearlake Observer. The column also appears in the monthly PrimeLife supplement of the San Francisco Chronicle, published the first Sunday of each month.
Tillem is a native of New York City, having migrated to Sonoma County in the early 1970's. He earned a Bachelor's of Arts degree at Brooklyn College, and his law degree at New York University. A resident of Sonoma, California, Tillem is married and has two children.
Probate/Trust Administration and Estate Planning
Rosie McNichol grew up in the Philadelphia area. She attended college at Duke University in North Carolina where she studied comparative religions and East Asian history. She later attended law school at U.C. Davis, after which she clerked for Justice Charles Springer of the Nevada Supreme Court. She has worked with Len Tillem since 1996.
David A. Brown
Estate Planning/Trust Administration
Born in Vallejo, California, David A. Brown graduated from the United States Naval Academy in 1987 with a Bachelor of Science in Chemistry. He then served as an officer in the United States Navy on the guided missile destroyer USS Hoel (DDG-13), and then with U.S. Naval Mobile Construction Battalion Four (NMCB FOUR) when it was deployed to Saudi Arabia during the First Gulf War of 1990-1991 and in the Republic of the Philippines after the eruption of Mount Pinatubo in late 1991. In 1993, Lieutenant Brown left the Navy and started a second career in the law. He graduated with honors from Empire College School of Law in June 2000 and was admitted as an attorney to the California State Bar in November 2000. Mr. Brown's practice focuses on general estate planning, complex document planning issues, and elder law public benefits planning.
Audrey J. Gerard
Raised in a small town in the Sierra foothills, Audrey J. Gerard majored in Environmental Studies at Sonoma State University . After a brief foray into the world of politics, Ms. Gerard returned to Sonoma State's paralegal program in the early 1990's. After working as a litigation paralegal for several years, she attended Empire College School of Law, graduating as the Valedictorian of the Class of 2000. Ms. Gerard handles litigation cases, including elder abuse, personal injury, and estate related claims. For more information or to speak with Audrey email her at: firstname.lastname@example.org.
Arden L. Kwan
Long Term Care
Arden L. Kwan is a graduate of Cornell College. Her concentration was in the areas of Psychology and Sociology, with particular interest in our society's care of the elderly. She was awarded her Masters of Social Work, in 1989 from UC Berkeley with an emphasis in Gerontology.
Ms. Kwan has an extensive background, knowledge and experience in the area of long term care. She has worked directly with the elderly as a home health aide, a hospice volunteer and as a social worker for On Lok Senior Health Services. She has also worked at California Advocates for Nursing Home Reform where she did consumer advocacy and coordinated the lawyer referral services.
Ms. Kwan has worked as the Long Term Care Specialist for Len Tillem and Associates since 1995. She works directly with clients and their families assisting them in identifying their long term care needs, developing and implementing a plan to preserve assets from long term care costs. She also assists clients with filling out and managing Medi-Cal applications, going to administrative fair hearings and acting as a liaison between the client and the state and federal agencies.
Denise G. Olazar
Civil Litigation Paralegal
Denise Olazar is a San Francisco native. She has fourteen years experience as a former police dispatcher, police officer, and field training officer for the Pacifica Police Department with specialized training in accident and DUI investigation. Denise served as Vice-President on the board of the California Chapter of Concerns of Police Survivors, President of the Southern California Chapter, and Advisory Board member of the California Peace Officers Memorial Foundation from 1992 through 2004.
Denise joined Len's civil litigation department in 2005 as a paralegal for Attorney Audrey Gerard, while attending Sonoma State University. She graduated with a B.A. in Criminal Justice.
Ms. Olazar's law enforcement experience is very beneficial, especially when working with clients who have been victims of personal injuries involving traffic collisions and walking our clients through the litigation process of personal injury, medical malpractice, elder abuse and estate related matters.
Probate/Trust Administration Paralegal