The Estate Planning Edge
Plan Early, Plan Well
The Law Office of
Doron M. Tisser
818-226-9125
June 2009
info@tisserlaw.com

In This Issue
Team Tisser Foundation
Did You Know...?
What's Happening
Changes in California Law regarding No Contest Clauses
Team Tisser Foundation

Doron winning a race

     Team Tisser Foundation (TTF) is a non-profit corporation founded by Doron M. Tisser and his wife Laurie.  TTF raises money for various charitable purposes and does not focus on any one charity or charitable purpose.  The goal is to raise as much money as possible to "Help Make A Difference" by "Improving Life for Others."  TTF has made donations to Memorial Sloan-Kettering Cancer Center, Leukemia & Lymphoma Socie-
ty, Challenged Athletes Foun-
dation, as well as charities helping people affected by natural disasters such as Hurricane Katrina and the Tsunamis. 

     Since 2000, TTF has donated almost $175,000 to over 25 different charities.  Friends and clients generally donate money to TTF to support Doron's participation in triathlons and marathons. 

        If you would like more information about TTF, please contact Doron at doron@tisserlaw.com, or visit www.teamtisser.org.


Did You Know?

      Transferring assets to family members, such as children, can reduce the size of your estate and thereby reduce the estate taxes owed when you die.  While there are many ways of transferring assets, most of them include the concept of "discounting" the value of the assets being transferred.  We will discuss this concept, as well as how to transfer assets to your family, in our next Newsletter, as well as show you how now may be the perfect time to take advantage of discounting. 


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info@tisserlaw.com
 
818-226-9125

The Law Office of
Doron M. Tisser
5425 Farralone Ave
Suite 100
Woodland Hills, CA
91367-6312
  
About
Doron M. Tisser

Doron M. Tisser

     Doron M. Tisser has specialized in estate and gift planning, tax planning, trust and probate administration, charitable giving, buy-sell agreements and related areas for over 25 years.  Mr. Tisser is one of less than 100 attorneys in California who has been designated as both a Certified Specialist in Probate, Estate Planning and Trust Law, and as a Certified Specialist in Taxation Law by the State Bar of California Board of Legal Specialization.  He was chosen by his peers as a 2009 Super Lawyer for Southern California, and enjoys an "a.v." rating by Martindale-Hubbell Law Directory, which is the highest possible rating and is based on ethical considerations and legal skills.  Mr. Tisser has published over 65 articles and chapters in books on various estate and tax planning subjects and is a frequent speaker and lecturer at estate and tax planning seminars.  Mr. Tisser competes in triathlons, including Ironman races, and raises money for charities through Team Tisser Foundation, a non-profit corporation he co-founded with his wife Laurie.
 


           Welcome to our first electronic newsletter, The Estate Planning Edge.  In each Edge, we will share with you current and relevant information about estate planning, as well as other matters that may be of interest to you.

            In this issue, we will address the new California law regarding no contest clauses in trusts and wills.  These clauses provide that if a person contests your trust or will, they can be disinherited.  These clauses have long been a part of estate planning documents and the new law requires that you decide how you want to include the clause in your documents.

            As always, please call us with your questions and remember, "Plan Early, Plan Well".
 
Sincerely yours,
Doron

What's Happening
  • We are proud to announce that Doron M. Tisser was recently named a Southern California Super Lawyer by his peers, which is an honor that is given to the top 5% of attorneys in Southern California. 

  • Doron M. Tisser will be speaking on the "The Continued Viability of Using Family Trust in Light of the Current Estate Tax Laws" to the San Fernando Valley Group, Los Angeles Chapter of the California Society of Certified Public Accountants on July 16th.

  • In July, Doron M. Tisser will speak at The Wealth Creator Educational Forums for Women on Estate Planning.

  • After being side-lined by injuries, Doron has begun training for triathlons again and will begin raising money for charities through Team Tisser Foundation ("TTF"), a non-profit corporation.  Doron's next race will be a half Ironman distance event (1.2 mile swim, 56 mile bike and 13.1 mile run) on October 10, 2009.  If you would like to donate to TTF, please contact Doron at doron@tisserlaw.com.

  • Our Protective Estate Plan Review (PEPR) program is in its 12th year and continues to provide benefits to clients who are members in PEPR.   Members in PEPR have an annual conference to determine what events in their lives and families may require changes to their estate plans.  For instance, they might want to change the names of the persons they have named as successor trustees or guardians.  In addition, they might want to change the ages at which their children will inherit money.  Additional benefits of being a PEPR member are that members are notified of changes in the law that require changes to their trusts, and they receive a discount on changes made to their estate planning documents.

Changes in California Law Regarding No Contest Clauses 

          A no contest clause is a provision you can include in your living trust (as well as other trusts) and your will which provides that if someone contests the document, he or she is disinherited. 
 
          A new California law makes three changes to no contest clauses.
 
1.      The law changes how the no contest clause applies to various documents you have signed.
 
2.      It changes how no contest clauses apply to creditor claims.
 
3.      It changes how the law applies to a challenge to a transfer of property on the grounds that it was not your property at the time of the transfer.
 
          You are not required to have a no contest clause in your documents.
 
          Some attorneys believe that choosing not to have a no contest clause is the best way to ensure that your wishes are carried out because any beneficiary who believes there is an error in your documents can file an action in court without fear of being disinherited. 

          Other attorneys believe that having a no contest clause in your documents can help prevent beneficiaries from filing actions that you would not want to have filed, including actions by beneficiaries that have either been disinherited or given less than they believe they should have received.
 
Application of No Contest Clause to Documents
 
         The new law specifies that a no contest clause can be broad enough to include a contest by a beneficiary against other documents you have signed, such as your living trust, will, beneficiary designations for IRAs, retirement accounts and life insurance, deeds to real estate, as well as other documents and trusts you have created (such as life insurance trusts), provided that you have mentioned those documents (either specifically or in general) in your no contest clause. 

          The advantage of having the no contest clause be as broad as discussed in the preceding paragraph is that you can prevent challenges to any of the documents you have entered into.

           For example, assume you have two children, your family trust leaves everything in equal shares to the children, and you have signed a beneficiary designation for your IRA leaving the IRA entirely to your daughter. If your family trust provides that the no contest clause includes challenges to your IRA beneficiary designation, then if your son challenges that beneficiary designation, he would be disinherited from your family trust.

           If you assume your changing your IRA beneficiary is consistent with your intentions, having the no contest clause be broad should not cause unwanted results.
 
Application of No Contest Clause to Creditor Claims
 
            Under the new law, your document can specify that if a person files a creditor's claim against your estate after you die, that would result in the person being disinherited.  A creditor's claim is a claim that you owe someone money or that the person spent money on your behalf, e.g., paying your bills or your funeral arrangements.

            The issue with including this provision as part of the no contest clause is that if a child pays expenses on your behalf (e.g., your living expenses, funeral expenses or last illness expenses) and the child files a creditor's claim to be paid back, that would result in the child being disinherited. 

            It is important to decide whether you feel such a provision might work against a child who advances monies on your behalf.
 
Application of No Contest Clause to a challenge to a Transfer of Property
 
            If you include this provision in your no contest clause, a challenge to your ownership of property can result in disinheritance.

            For example, if you leave an interest in real estate to your son and your spouse believes that you do not have the right to make that transfer because the property is her separate property (e.g., she inherited the property), a challenge to the transfer by your spouse could result in your spouse being disinherited from the entire trust.

            Whether or not to include such a provision depends on whether you believe that a beneficiary might object to your claim of ownership in a property.
 
Summary of New No Contest Clause
 
            As you can see, the new law can apply in different ways with different results.  While it is not possible to anticipate all future events in terms of challenges to your estate planning documents, you need to decide how to apply the new no contest clause law to your estate planning documents.

           Based on the new law, you should decide whether you want to continue to have a no contest clause in your trust and will and, if so, what matters that clause should apply to.

           Please let us know if you would like to discuss this matter and how it relates to your estate plan.

This communication published by the Law Office of Doron M. Tisser is intended as general information and may not be relied upon as legal advice, which can only be given by a lawyer based upon all the relevant facts and circumstances of a particular situation.

Copyright Doron M. Tisser, Esq. 2009.  All Rights Reserved.