College Bound Student?
Legal Documents for a Young Adult Child

Through your years of parenting, has the phrase “Be careful, accidents happen” been a common instruction?  And now that your child is over 18 and a legal adult, doesn’t this guidance apply just as much?  Yes!  Unfortunately, tens of thousands of Americans between the ages of 18-25 are hospitalized from non-lethal injuries each year.  Further, accidents are one of the leading causes of death in young adults.

Why Do You Need Special Documentation?

Due to “age of majority” laws, when your child hits age 18 years he/she is considered an adult in the eyes of the law and gains certain rights – in certain respects, your child is essentially a stranger to you from a legal perspective.  For example, under the Health Insurance Portability and Accountability Act you have no rights to obtain medical information (Note: This article is limited to medical issues, since these are of essence in estate planning matters).  Therefore, to help care for your child in the event of medical emergencies, it is important to be prepared. In the event of a medical emergency, there are several forms you need when your child turns 18 (and whether your child is at home, living away, working part-time, or not yet doing any further education; essentially any situation in which your child still relies upon you).

Recently, a child away at college was taken by ambulance to a hospital due to a severe accident on-campus.  When the parent called the hospital and asked to speak to the doctor, she was asked if the child was 18 and did she have power of attorney.  When she said “no” the hospital’s response was “we can’t talk any further with you.”  This highlights the necessity of related legal documents.  This documentation is certainly something parents or children don’t want to think about before college, but as with insurance and other areas of life, it is important to be prepared for unforeseen circumstances.  Here are four documents to consider:

HIPAA Authorization

A HIPAA release/authorization allows healthcare providers to disclose personal information for the person being treated to specified individuals.  Limitations can apply – it does not have to encompass everything, so this is a personal decision that your child can make and you can discuss possible ramifications; an unlimited release allows the most flexibility in dire situations, which is ideal.  As with the broader advance health care directive, a HIPAA release can include a Living Will.

Advance Health Care Directive

No one expects life or death situations to happen to young adults, yet if it does happen it is best to be prepared. In the unfortunate circumstance that your child is incapacitated and unable to make healthcare decisions, an advance health care directive appoints an agent to make these decisions. By creating an advance health care directive, your child can let your physicians and family members know how he/she would like to be treated in these dire medical situations.

General Power of Attorney

A general power of attorney (POA) allows the person your child appoints to act on his/her behalf and is often included in an estate plan to ensure that someone is present to handle your child’s financial matters (e.g., tuition, student loans, banking and investment accounts, insurance, settling claims, landlord issues, and even social security identify theft).  Without a POA, parents may not be able to provide necessary help.

FERPA Release Form

The Family Educational Rights and Privacy Act (FERPA) is a federal law that affords parents the right to have access to their children’s education records, the right to seek to have the records amended, and the right to have some control over the disclosure of personally identifiable information from the education records. When a student turns 18 years old, or enters a postsecondary institution at any age, the rights under FERPA transfer from the parents to the student (“eligible student”).   Consider having your child sign a “Disclosure and Consent Form” which can include both access to the educational and medical records (be sure to contact the college directly to find out the specific options and forms for that school, since policies differ).  Your intervention may be necessary if, for example, your child is injured and forced to have an extended leave from education, thereby impacting grades and records.

Finally, keep in mind that if your child attends an out-of-state school, it is important to sign specific forms for the school’s state as well as your home state.  Finally, maintain scanned copies of these documents on your phone, your child’s phone, the cloud and your computer.

Specialized Estate Planning for Families

Estate planning is multi-faceted and requires adaptations as people move through life phases.  The attorneys at Mortensen & Reinheimer, PC thoroughly understand the estate planning needs of families.  Please contact Mortensen & Reinheimer, PC at (714) 384-6053 to make an appointment, or use our online contact form. Our website is http://www.ocestateplanning.net.

About the author:
Tamsen R. Reinheimer, Attorney, is a Certified Specialist in Estate Planning, Trust & Probate Law (The State Bar of California Board of Legal Specialization). She has significant experience in all aspects of estate planning, trust administration, and probate. Contact Tamsen at tamsen@ocestateplanning.net.

The “Beneficial Ownership Information” Reporting Rule – Does it Apply to Your Trust?

The Corporate Transparency Act (CTA) requires certain business entities (“reporting company”) to disclose information, including data about their “beneficial owners,” to the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN).  If your trust owns business interests (domestic or foreign), the CTA might apply to you. The CTA came into effect on January 1, 2024, and its deadlines are fast approaching.

Trusts that Own Business Interests

If the business held by your trust is one of the estimated 36 million American businesses considered a “reporting company” under CTA, you will need to understand what “beneficial ownership information” (BOI) about your company must be disclosed to the federal government and when you need to do so. The owners, managers, and advisers of every LLC, corporation, and other entity – whether already existing or one they are planning to create in the future – need to consider whether that entity is required to file a report.

A ”reporting company” includes most entities formed in or registered to do business in the United States. However, the act also creates numerous exemptions, which exclude certain categories of entities.

“Beneficial owners” for purposes of the CTA are individuals that either: (i) exercise substantial control (directly or indirectly) over a reporting company, or (ii) own (directly or indirectly) at least 25% of the ownership interest of a reporting company.

FinCEN was created in 1990 to support federal, state, local, and international law enforcement by analyzing the information required under the Bank Secrecy Act (BSA), one of the nation’s most important tools in the fight against money laundering.  Small businesses are a popular target for money launderers, as they invest in or operate cash-intensive businesses in order to mix their illegal proceeds with legitimate income.

Since this law may be applicable to many of our clients, Mortensen & Reinheimer  PC would like to keep you informed.  All clients to whom the CTA and BOI reporting apply, need to file reports themselves or work with separate legal counsel (Mortensen & Reinheimer PC will not do any client reporting compliance, since our area of expertise is estate planning law and not business/corporate law; we are simply providing this information to help support our clients).  If legal assistance is necessary, we suggest that clients contact their business/corporate law attorney.

Next Steps?

Some steps to consider should include talking with your business/corporate attorney about:

• CTA’s reporting requirements
• How to determine whether your business is a non-exempt Reporting Company
• What information needs to be reported to FinCEN
• Compliance deadlines for different categories of covered entities 

If you need referrals to business/corporate attorneys, please feel free to contact us.

Additional Details

For those clients who seek to learn more about the CTA, FinCEN and BOI, here is some additional information (these links do not act as recommendations; we are simply providing these links as resources):

• FinCEN’s beneficial ownership information reporting rule – a quick review
• Q&A on the CTA
• CTA: Beneficial Ownership Disclosure Obligations
• Beneficial Ownership Information U.S. Treasury)

About the author:

W. Robert Price, Esq., is President of Mortensen & Reinheimer, PC.  He is a member of the American Bar Association, the Orange County Bar Association, and the Society of Chartered Property and Casualty Underwriters. He is a California licensed Fire & Casualty Broker-Agent, a California licensed Life & Health Insurance Agent, and has an MBA from Pepperdine University.  Contact Robert at wrobertpriceesq@yahoo.com.

Single Adult? Why You Need Estate Planning

If you aren’t married, you may think an estate plan is unnecessary. To the contrary, estate planning is a responsible way to make sure that those you love, who have already suffered your loss, are less encumbered with other issues due to your passing, regardless of your marital status, age or economic bracket.

Here are Q&As addressing some of the most common concerns:

Q. Overall, why does a single person need estate planning?

When you take the time to create a thorough estate plan, your loved ones will avoid probate, and therefore be spared attorney’s fees and court fees. A trustee in charge of your living trust will oversee all of your last wishes, instead of leaving a judge to distribute your property through probate. 

Most adults accumulate assets as they age (including cash, retirement plan, investments, personal property, real estate, etc.).  Who will get those assets when you die?  And who will take care of your funeral arrangements?

Q. What if I have minimal assets?

Even if you don’t own much, if you were to die without an estate plan your property could go through the probate process and potentially be awarded to a beneficiary you never would have chosen.

Q. What happens if I’m disabled or have an end-of-life situation?

Estate planning also involves planning for the possibility of incapacity or disability. By creating an advance health care directive,  you can let your physicians and family members know how you would like to be treated in medical situations when you cannot necessarily make the decisions for yourself.

Q. Who will manage my finances if I cannot?

A general power of attorney allows the person you appoint to act on your behalf and is often included in an estate plan to ensure that someone is present to handle your financial matters. This may mean handling your insurance, business transactions, settling claims, and/or employing professional assistance.

Q. Do I need a will or a living trust, or both?

A will is a legal document detailing an individual wishes after they die. A living or revocable trust does not require going through probate; if your assets are properly titled, they would pass directly to your spouse upon incapacity or death, without the need for any court intervention. As for a will, your attorney can advise whether to include both it and a living trust in your estate plan, which can allow you to take advantage of each tool’s benefits. The use of a living trust is less clear-cut, so discuss the pros/cons and your specific situation with your attorney.

Q. How does estate planning help my heirs with taxes and expenses?

With proper estate planning, it can help minimize taxes and expenses associated with transferring your assets after your death, avoiding the costly probate process.

Q. What if I have children?

Take the time to think about who will willingly take on the roles and responsibility of raising your children in your absence. A guardian has the responsibility to protect the physical and emotional interests of your children. A trustee has the responsibility of protecting the assets within the trust that you created.

Q. How can I ensure that my pet is cared for?

While you cannot leave money to pets, you can still ensure they are properly cared for with estate planning, such as leaving your pet to someone in your will or setting up a pet trust, which ensures money is specifically designated for pet care.

Q. What if I want to leave assets to charities?

A charitable trust is an option which allows you to direct your assets toward philanthropic causes while reaping potential tax benefits.

Q. What if I want to take care of my grandchildren?

See our article “Taking Care of Grandchildren through Your Estate” which discusses a range of issues that can help you.

Specialized Estate Planning for Single Adults

Taking the time and effort to create an estate plan is one of the most thoughtful steps you can take for your family and loved ones.  Meet with the skilled estate planning attorneys at Mortensen & Reinheimer, PC to discuss your needs and concerns.  Please contact Mortensen & Reinheimer, PC at (714) 384-6053 to make an appointment, or use our online contact form. Our website is http://www.ocestateplanning.net.

About the author:
Tamsen R. Reinheimer, Attorney, is a Certified Specialist in Estate Planning, Trust & Probate Law (The State Bar of California Board of Legal Specialization). She has significant experience in all aspects of estate planning, trust administration, and probate. Contact Tamsen at tamsen@ocestateplanning.net.

 

Shady Documentation? Key Signs for Trust Litigation

Typically, beneficiaries approach the administration of a trust with optimism and belief that the trustee will fairly and adequately perform required duties. Unfortunately, that doesn’t always happen.  Questions may regarding what were the trustor’s wishes and desires (the person who created the trust), as opposed to the trustee’s supplanted wishes and desires. To that end, a trustee may manipulate documents or refuse to provide documents, which if uncovered, would serve to prove malfeasance.

Do you have suspicions that documents provided by the trustee are untrustworthy?  Are some documents missing or possibly altered?  If confirmed, such actions are likely due to a “breach of trust” violation.

In a previous article, “Breach of Fiduciary Duty,” we discussed key duties of a trustee, such as loyalty, no self-dealing, impartiality, disclosure, etc.  A trustee “is required to act in the highest good faith towards his/her beneficiary and may not obtain any advantage by the slightest misrepresentation. Concealment, threat, or adverse pressure of any kind is unlawful as long as the fiduciary relationship exists,” and any violation of these duties constitutes a wrong against the beneficiaries.

Examples of Shady Documentation

Below is a short list of shady documentation “red flags” (click here for the complete article, including “real world examples”).  Recognizing these signs might help you to determine whether to seek legal counsel to protect your interests.  Typically, these examples involve a family member or friend trustee, as opposed to a private professional.

• Do you suspect destruction of trust documents?
• Are there questionable changes or amendments?
• Is there a lack of transparency by the trustee?
• Are there clear signs of unfair or unequitable trust distribution?
• Does the trustee want to change the trust, saying it doesn’t reflect the trustor’s verbal instructions?
• Do documents suddenly appear?
• Has the trustee hidden or changed certain accounting records?
• Are statements for investments missing?
• Are some documents original and others are photocopies?
• Do some documents look like they have been altered?
• Are pages missing?
• Is the trustee on their 2^nd or 3^rd attorney?

When is litigation necessary in trust disputes?

There seems to be no end to the types of schemes a trustee will implore to benefit themselves. While trusts are typically designed to prevent unnecessary disputes, it doesn’t stop some trustees from trying to achieve illegal gain.  When suspicious circumstances surround an amendment of a trust, anyone who has standing (i.e., the trustee, beneficiaries or heirs) can contest the trust’s terms.  When disputes cannot be resolved between the trustee and beneficiaries, informally or when contesting the terms of the trust is necessary, litigation is the next step.

If you have concerns about your trust or trustee, our attorneys have the expertise and experience to handle your trust matter skillfully and efficiently. Please contact Mortensen & Reinheimer, PC at (714) 384-6053 to make an appointment, or use our online contact form. Our website is http://www.ocestateplanning.net.

About the author:
Noah B. Herbold, Attorney, is a Certified Specialist in Estate Planning, Trust & Probate Law (The State Bar of California Board of Legal Specialization). His primary focus is assisting clients with litigated matters such as: Trust Contests, Breach of Trust, Fiduciary Appointment and/or Removal, Asset Ownership, Beneficiary Rights, Determination of Heirship, Elder Financial Abuse, Property Disputes, and Conservatorships. Contact Noah at noah@ocestateplanning.net.

TIME FOR A MID-YEAR CHECK-UP!

TIME FOR A MID-YEAR CHECK-UP!

TIME FOR A MID-YEAR CHECK-UP!

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