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How an IRA Trust can help avert disaster

A father designated his son and daughter as the beneficiaries of his large retirement account. The daughter’s husband was physically abusive and the couple had been considering divorce. The father was adamant that his son-in-law receive nothing from his estate.

After a very healthy life, the daughter was diagnosed with stage four cancer. The father was so distressed about his daughter’s illness that his health failed and he passed away two months later. The daughter, weakened by her illness and her grief following her father’s death, passed away four days later.

The son received 50% of the retirement account. The daughter was supposed to receive the other 50%, but she did not have an opportunity to claim the account before she passed away. She also did not have a chance to name a beneficiary of the retirement account if she should pass away. The retirement account terms and conditions provide if an account owner does not name a beneficiary to receive the retirement account, the spouse becomes the default beneficiary. The daughter’s abusive husband became the beneficiary of his wife’s interest in the retirement account. In an unthinkable but fairly common twist of fate, the abusive son-in-law received 50% of the father’s retirement account!!

An IRA Trust could have completely avoided this situation. The father could have created an IRA Trust and named the Trust as the beneficiary of his retirement accounts. The father would have chosen all future beneficiaries in the Trust, certainly excluding his son-in-law. When the daughter passed away, the funds would not have gone to her abusive husband, but rather to provide college education for our client’s grandchildren.

If you have a retirement account, you need to contact our office to discuss whether an IRA Trust is right for you. The bank has rules defining default beneficiaries if an account beneficiary is not properly named. Don’t let the bank’s plan become your plan.

Avoiding fights over inheritance with revocable living trusts

When parents pass away without clear instructions in place about how to divide their assets upon their death, they may leave family members battling over inheritance for years. Such fights can cause rifts that are sometimes impossible to heal.

A will contains detailed instructions on how a person wants their assets, such as family heirlooms and household items, to be distributed after they pass away. In the absence of a will expressing your wishes, the state will determine how your assets are distributed according to a predetermined formula. While initially less costly than a trust, it is subject to the delay and expense of probate.

However, simply writing a will and consistently updating it is not enough to prevent conflict regarding estate settlements. At the heart of most successful estate plans is a revocable living trust. A revocable trust is essentially a comprehensive method of estate planning and a tool for avoiding probate. Revocable trusts reduce the potential for family infighting about who gets what and keeps matters out of court. As opposed to a will, a revocable trust always remains private.

As the trustee of your own trust, you can decide how your assets should be distributed upon your passing. You can also appoint a trustee to oversee the division of assets based on your wishes if you are unable to do so.

Parents can preserve harmony and minimize the chance of future disputes by communicating their wishes to their children while they are still alive. A revocable living trust will ensure that their estate is treated in a timely and precise manner upon their death. Even families with modest wealth can benefit from smart estate planning for the future.

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California’s Aging Population: Implications for Elders and Caregivers 

Today, the population of individuals over the age of 65 in California numbers approximately 4.5 million people. By the year 2050, it will exceed 11 million. These numbers are even more consequential when we consider the portion of the entire state's population represented by older individuals: 

About 11% of today’s 40 million Californians are 65 or older. By 2020, that population will be 15%. By 2030, it will be almost 20% and a staggering 22.3% by 2050. What are the implications of this?

A recent column by Dan Walters in the Sacramento Bee warns about the aging of health care providers in California. The column astutely warns that we have an aging population that will present unprecedented demands for services and support from our medical and caregiving infrastructures. Even today there is a shortage of trained, capable caregivers through home care agencies, at assisted living facilities, and in skilled nursing facilities. It will only get worse in the future. It is a looming crisis for all who need long-term care facilities and services.
“To rise to this challenge,” suggests estate planning and elder law attorney Michael Gilfix of Palo Alto, California, “we need a new, coordinated, multigenerational approach.” His focus is on the need for more coordination of services and more tailored, focused use of limited family resources. Careful planning to preserve assets and qualify for Medi-Cal, the only program that can pay all or most of the cost of skilled nursing care, must be part of the planning. Medi-Cal, California's Medicaid program, is needs-based. To qualify, assets must be limited and/or carefully organized. 

This approach is necessary, Gilfix suggests, because there must always be a financial safety net. If all family assets are exhausted before Medi-Cal coverage is obtained, there are no funds available to pay for services that are not covered by the Medi-Cal program.

Children and grandchildren must be viewed as part of the planning and part of the solution. They must participate, coordinate resources, add counsel, and devote time and attention to the needs of their elders. It is self-evident that this is typically a win-win for everyone, but it is rarely done. 
Such planning is more typically pursued by wealthier families through the use of "family offices," but the need is no less critical for the middle class. Middle class families have the power to preserve their homes, their savings, and their legacies. But they must take steps to plan ahead of time.

Attorneys Michael Gilfix and Mark Gerson Gilfix recently co-authored an article entitled, “A New Paradigm: Truly Multigenerational Planning,” published in the September issue of Trusts & Estates magazine, that expands this concept in very practical ways. Gilfix & La Poll Associates, one of the nation’s leading estate planning firms, follows this approach with its clients. For multigenerational planning to be effective, it is critical that steps are taken before the crisis stage.
The Gilfix & La Poll Team

Pioneers of Elder Law - For over 30 years, Gilfix & La Poll Associates LLP has innovated creative legal solutions to help you manage and plan the future of your estate. To contact an estate planning lawyer visit or call 800.244.9424.

Gilfix & La Poll to hold living trust seminar with special guest Len Tillem

Attorney Michael Gilfix of Gilfix & La Poll Associates will present a seminar titled “A Unique Living Trust Seminar: How to Protect Family Assets” on October 28 at the Crowne Plaza in Palo Alto, California.

Attorney and radio personality Len Tillem has been invited to speak at the event as a special guest during the 2:30 to 4:30 pm session. There will also be a second session of the same seminar from 7 to 9 pm.

Gilfix, who has authored over 50 books and articles, will address a range of estate planning topics including how living trusts address your asset protection needs and how to protect the assets you leave for your children from divorce, litigation and estate tax exposure.

He will provide useful information on protecting your home and other assets in the face of long-term care for you or your parents. Gilfix will also discuss how special needs trusts can provide a lifelong safety net for your special needs child without losing out on public benefits.

Those interested in attending the seminar are encouraged to call 650-493-8070 or register online at

The Gilfix & La Poll Team

Pioneers of Elder Law - For over 30 years, Gilfix & La Poll Associates LLP has innovated creative legal solutions to help you manage and plan the future of your estate. To contact an estate planning lawyer visit or call 800.244.9424.

Survey reveals more than one-third of wealthy individuals lack estate plans

The CNBC Millionaire Survey has found that 38 percent of 750 millionaires surveyed have not consulted a financial expert to establish an estate plan. The poll conducted by Spectrem Group for CNBC revealed estate planning was the most prevalent among individuals with investable assets amounting to at least $5 million, with 68 percent having worked with a financial advisor.

Despite being business-savvy, wealthy Americans have demonstrated a reluctance toward thinking about estate planning. The lack of estate plans can be attributed in part to the constant changes in federal estate tax law, which has resulted in what estate planning attorney Michael Gilfix calls “estate-planning fatigue.”

A higher federal estate tax exemption of $5.43 million per person this year could be another reason high-net-worth families have placed a lesser priority on estate planning, holding the view that it is primarily a way to reduce estate taxes. There is more to estate planning, however.
When it comes to protecting and providing for loved ones when you are no longer around, estate planning is one of the most basic and critical steps a person can take. It provides control over what happens to your assets and how you will provide for your children, along with specific instructions about end-of-life wishes that will avoid unnecessary stress and fighting later on.

Inherited assets can be protected if a child endures divorce. Such assets can be protected from litigation, explains Gilfix.

Establishing a sound estate plan involves drafting documents such as wills and powers of attorney, as well as setting up living trusts and addressing property management. Without a plan, you risk leaving life’s important decisions in the hands of the courts and having the care of your children and their inheritance fall into the wrong hands.

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Michael Gilfix in Trusts & Estates Magazine: Addressing Financial Elder Abuse


We wanted to share an article that Michael Gilfix published in the prestigious Trusts & Estates magazine late last year. The article discusses issues related to elder abuse and diminished capacity as individuals age. In this article, Michael presents a new paradigm for thinking about this. He presents ways that families can keep an eye on things and deal with these issues as they arise.

We encourage you to take a look by clicking here. If you have any questions about these issues, we are, of course, available to meet or discuss these with you at any time. We hope you enjoy this article.

The Gilfix & La Poll Team

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Preventing Elder Financial Abuse

Michael Gilfix speaks at this year's Wealth Counsel conference.

Michael Gilfix speaks at this year's Wealth Counsel conference.

On July 16, 2015, Michael Gilfix presented a session/program on this topic at the annual conference of Wealth Counsel, a nationally known and leading estate planning organization. 
What distinguishes this talk is its emphasis on avoiding financial abuse.  Virtually every other article published by attorneys about financial elder abuse focus on litigation, court involvement, and other reactions to abuse after it has taken place. 
Financial abuse can afflict anyone at any time.  50% of financial abusers are family members. 
We at Gilfix & La Poll have extraordinary experience in addressing this issue in a positive, preventive way.  When it takes place, we have been remarkably and consistently successful in recovering assets for victims of financial abuse.
If you or any of your family members or friends have experienced these problems – or if you are worried about them – call us for a consultation. 
Do not let elder financial abuse happen. 

Wealthy American Parents Face Inheritance Dilemma

Can a large inheritance do more harm than good? According to a new article from the American Association of Retired People (AARP), many wealthy parents still struggle with decisions about how much money should be left to their children, and how that inheritance should be structured.

Wealthy parents from Bill Gates to Sting have publicly declared that their children will have to make their own money. And according to a recent article in CNBC, a number of Bay Area parents are following suit, fearing the implications of handing down too much money.

But increasingly, a number of private individuals and wealth advisors are expressing more nuanced views.

Wealthy parents have a unique opportunity to raise their children to be responsible and principled wealth managers, regardless of the size of their inheritance. Parents with the opportunity to engage in significant charitable giving can and should involve children in the process of examining opportunities and deciding how to give. In addition, many experts recommend that parents engage teens in setting up and managing retirement funds.

On the flip side, some parents must face the reality of a child or family member with personal problems, such as addiction or frequent legal trouble, that cause irresponsible financial decision-making. Wealth experts point out that in these cases, when an inheritance really can do more harm than good, parents now have a host of options for trusts that support their child in meaningful and structured ways.

For most experts, the consensus seems to be that it is not the inheritance that will make or break the child, but rather the understanding of how to use and manage wealth. Regardless of the choices that parents make about the size and distribution of an inheritance, experts agree that clear and open communication with one's children about the what and the why of inheritance decisions is crucial.

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Planning for family — to protect family assets — during the holiday season

As the holiday season approaches, the thoughts of many turn to family. It is a season of picking out gifts and planning celebrations for loved ones.

This time of year can also be a reminder to consider long-term planning for our loved ones, and to consider the gifts that can last not just a season, but for generations.

For all adults, but especially those lucky enough to have children, grandchildren, or a close extended family, the Family Protection Trust™ (FPT) can ensure that any assets left to loved ones are protected and tax implications are minimized.

An FPT allows the person creating it to design the distribution structure so that assets can continue to benefit not just children, but also grandchildren and great-grandchildren. In addition, the assets in the trust will not be taxed upon the death of a child, so the assets will not be dramatically reduced for each succeeding generation as they would be in some other inheritance plans.

Another benefit of the FPT is the protection it provides from unexpected attack by creditors. Even if family members are financially responsible, an unexpected accident, illness or divorce could leave traditionally willed assets at risk. Assets held in an FTP have a high level of protection from creditors. Best of all, some say, is protection of inherited assets in the event of a divorce. An FPT serves as a pre-nuptial agreement for kids and grandkids.

Your children's return home and visits from other family members may offer an ideal time to talk together about planning for the future. We hope this holiday season will be full of fun and happy moments for you and your family.

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Crummey trusts can maximize benefit of annual exclusion

The annual exclusion to gift taxes is rather straightforward: tax-free, someone can give away up to $14,000 per year. Spouses, through gift-splitting, can effectively double that annual exclusion to $28,000. As a basic precondition, the gift must consist of present interest (or an asset that the recipient can immediately use), such as cash.

Gifts given to many types of trusts do not satisfy this requirement. However, there is one means of employing the annual exclusion to fund trusts while meeting the “present interest” requirement. It is often called a “Crummey trust.”

First, gifts are made to an irrevocable Crummey trust. Children or other designated beneficiaries are given the right to withdraw the gifts from the trust for perhaps 30 to 60 days. Often, the beneficiaries do not withdraw the gifts, instead leaving them in the trust until reaching a (much older) designated distribution age. Crummey trusts can be a great planning tool when used in conjunction with life insurance policies and life insurance trusts.

Every year, trustees must send a notice to the beneficiaries to remind them of their right to withdraw their share of annual gifts made to the trust. That notice, called a Crummey notice, is named for the plaintiff in a 1968 Ninth Circuit Court of Appeals case that sanctioned the use of the process to circumvent the present interest requirement.

Because these trusts allow tax-avoiding gifts to trusts, the Obama administration has proposed their elimination as a way to increase tax revenue and help meet the government’s budget. But for the time being, Crummey trusts remain viable. Anyone considering a Crummey trust must consult with an experienced estate-planning attorney — like those at Gilfix & La Poll Associates.

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