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Monday, August 12, 2019

Strategies for Reducing the Income Tax Squeeze on Irrevocable Trusts

Under federal income tax laws, irrevocable, non-grantor trusts (such as Bypass Trusts and Dynasty Trusts) are subject to highly compressed income tax brackets. In 2019, the top 37% tax rate kicks in at only $12,500 of trust income. In addition, trusts in the top tax bracket are subject to the 20% long term capital gains rate, a 9.3% California state tax and a 3.8% surtax on the lesser of undistributed net investment income or adjusted gross income over $12,500.


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Tuesday, July 30, 2019

If You Die Without a Will or Trust, Does Your Spouse Inherit Your Entire Estate?

If you are married and you die without a Last Will and Testament, you may mistakenly believe that your spouse will still inherit your entire estate.  Not so fast.  Who will inherit your estate depends on several different factors:

1.   How is your property titled?  Is your property titled in your name alone, in joint names with your spouse, in joint names with a child or other relative, or does it have a beneficiary designated?  Knowing how all of your property is titled is the real key to understanding who will inherit it after you die.  For example, if your home is titled in joint names with rights of survivorship with your spouse, then your spouse will inherit the home.


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Friday, June 14, 2019

3 Asset Protection Tips You Can Use Now


A common misconception is that only wealthy families and people in high risk professions need to put together an asset protection plan.  But in reality, anyone can be sued.  A car accident, foreclosure, unpaid medical bills, or an injured tenant can result in a monetary judgment that will decimate your finances.  Below are three tips that you can use right now to protect your assets from creditors, predators and lawsuits.

What Exactly is Asset Protection Planning?

Before getting to the tips, you need to understand what asset protection planning is all about.
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Saturday, June 1, 2019

Medicare vs. Medi-Cal: Similarities and Differences

With such similar sounding names, many Americans mistake Medicare and Med-Cal programs for one another, or presume the programs are as similar as their names. While both are government-run programs, there are many important differences. Medicare provides senior citizens, the disabled and the blind with medical benefits. Medi-Cal, on the other hand, provides healthcare benefits for those with little to no income.


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Wednesday, May 15, 2019

Selling Your Business

The majority of businesses in the United States are small businesses. To understand the impact that small business has, consider the fact that small business generates nearly 60% of all new jobs within the United States. Amazon, Walmart, and other big companies often stand out with their massive revenues and employment numbers, but at the end of the day, the primary drivers behind the economy are small business.

If you have a family business or personal business that you’ve built up, you are likely one of these economic drivers. For many families and individuals, the business becomes an identity. Family businesses in particular are susceptible to acting as an identity for that family. Thus, for many small business owners planning for retirement, the question of what to do with the small business is a major stressor. For a family business, the transfer of control and ownership from one generation to the next can be incredibly complicated and strenuous. If it’s not a family business, then the question is primarily how to effectuate the sale and estate planning repercussions. The following sections will give an overview of general considerations for family-owned businesses and then general concerns relating to the sale of a business.


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Monday, May 13, 2019

3 Ways to Minimize Estate Planning Fees


Today, it is impossible to put together even a simple estate plan without the assistance of an experienced estate planning attorney. Why? Because estate planning laws vary greatly from state to state and these laws are extremely convoluted and constantly changing.  

One wrong word, one missing signature, or one procedure not followed to the letter of the law can partially or completely invalidate a Last Will and Testament, Revocable Living Trust, Advance Health Care Directive, , or Durable Power of Attorney.  

Though attorney fees may feel expensive, they’re actually not when viewed in light of the service and protections provided.  In fact, estate planning fees are best viewed as an investment, not an expense.
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Wednesday, May 1, 2019

Preventing Will Contests

So, you have a will, but is it valid?  A will can be contested for a multitude of reasons after it is presented to a probate court.  It is in your best interest to have an attorney draft the will to prevent any ambiguity in the provisions of the document that others could dispute later. 

A will may be targeted on grounds of fraud, mental incapacity, validity, duress, or undue influence.  These objections can draw out the probate process and make it very time consuming and expensive.  More importantly, an attorney can help ensure that your property is put into the right hands, rather than distributed to unfamiliar people or organizations that you did not intend to provide for. 


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Thursday, April 25, 2019

Six "Must Haves" for Nursing Home Contracts

The decision to place a family member into a nursing home is a dilemma for an ever-increasing number of Americans. In addition to the emotional difficulties inherent in making such a decision, if a family decides to place a member into a nursing home, there is a mountain of paperwork awaiting them. While nursing homes will often argue that their contacts are standard and cannot be changed, this is rarely the case. To ensure that your contract doesn’t have any hidden or illegal clauses, it’s essential to consult with an experienced elder law attorney before you sign it.

When you receive the nursing home contract, make sure to actually read the contract in detail to understand the provisions. Make sure that the following provisions are included:


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Friday, April 12, 2019

Why Does Probate Take So Long?

Probate can be easily avoided, but most estates are dragged through the process.  Why?  Many people fail to create an estate plan, so probate is required.  And - others plan with just a Will, so probate is required.  As a result, assets end up at the mercy of a probate judge, open to public scrutiny, and delayed passing to beneficiaries.


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Friday, April 12, 2019

What is the Medicaid Lookback Period?

Medicaid is a healthcare program jointly operated by the individual states and the federal government. Medicaid is designed to help individuals with limited income and resources pay for healthcare costs including nursing home care, assisted living, or in-home care. However, qualifying for Medicaid can be difficult. While eligibility is state-dependent, there are generally four key requirements: (1) you must be 65 years of age or older, permanently disabled, or otherwise qualify depending on your specific state’s class requirements, (2) you must be a resident of the state in which you are applying, and either a U.S. citizen, permanent resident, or legal alien, (3) your income must be within your state’s income limitations, and (4) your assets must be within your state’s asset limitations.

To help individuals qualify for much-needed Medicaid coverage, multiple strategies exist to reduce one’s income and assets to the state threshold without adversely affecting the individual’s life. These include gifting assets to family and friends, transferring assets to a spouse, and investing in exempt assets (exempt assets are assets that do not count as “assets” for Medicaid purposes – most states allow certain home values to be exempt).


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Monday, April 1, 2019

The Effects of Gifts on Medicaid Planning

Medicaid is a healthcare program designed to help individuals with limited income and assets afford needed medical care. Importantly, Medicaid covers long-term healthcare services such as nursing home costs and costs for at-home personal healthcare. Because Medicaid is intended to benefit those with limited income and assets, there are strict eligibility requirements based on income and assets. Although Medicaid is a federal creation, it is jointly operated by the federal and state governments. As a result, the specific income and asset eligibility requirements for each state are different and you should consult with a Medicaid planning attorney in your area for specific eligibility advice.


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Law Offices Of Michael J. Wittick, A Professional Law Corporation is located in Irvine, CA and serves clients with estate and wealth preservation matters throughout Irvine, Lake Forest, Laguna Woods, Laguna Hills, Foothill Ranch, Tustin, Aliso Viejo and the surrounding areas.



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