President Trump signed an executive order which will ultimately nullify the new regulation which was to go into effect in April. That regulation would have required financial planners to place client's interests first in recommending products. As a result, the continual policies of allowing planners to recommend "suitable" products, even if they are more profitable to the planner will remain.
Under California Law, your Living Trust is a private document. Unlike a Will, the Living Trust is not filed and made a public record on your death. No one has a right to see your personal private provisions except for very limited purposes. For example, the Assessor's Office may require a copy to ensure that a distribution is being transferred from a parent to a child to qualify for the exclusion of reassessment of property taxes. That is the extent of it --the Trust is not filed as a public record. When banks ask you for a copy of your Trust to arrange a Trust bank account you should give them your Certificate of Trust, not your entire Trust Agreement.
Effective January 1, 2017
In a new law to go into effect January 1, 2017, a Living Trust may be utilized to protect assets from Medi-Cal claims for individuals dying after that date. This is a revolutionary law that elevates the advantages of a Living Trust in California to a new high. Previously, a Living Trust provided no protection from such claims - beginning next year it will.
Time and time again we see cases of inadequate powers of attorney which fail to provide sufficient authority to act. These documents usually obtained on-line through legal providers or Trust mills provide generic, basic provisions that can fall short of a client's needs. The recent case of Metlife Insurance Company v. Sumner is an example. In that case, the wife attempted to change an old beneficiary designation of husband's life insurance from the husband's adult children from a prior marriage to a Trust for the benefit of their minor child. She utilized the power of attorney which provided a general authorization clause giving the wife powers in which the principal (owner/husband, who is now incapacitated) possessed over the policy. The Court held that the general powers clause was insufficient to give the wife specific power to change the beneficiary designation without express power to do so in the document.
As indicated in an article I wrote on May 3, 2016 regarding the withholding of death benefits by insurance companies, there have been some new developments. The insurance industry has had a long standing policy of holding death benefits if they were not contacted by the beneficiary. In other words, the burden was placed on the beneficiary to contact the company and make a claim. Many times, beneficiaries are unaware that they have been designated as a death benefit beneficiary. As a result, no claim was ever filed even though insurance companies have contact information related to the beneficiaries in their database. There was an attempt to obtain federal legislation to change the burden of contact to the insurance companies which was strongly opposed by the industry and its lobbyists. Unbelievably, the insurance companies opposed any change in the law which allowed them to use unclaimed benefits as reinvestment funds for their own gains.
As a member of the National Academy of Elder Law Attorneys (NAELA), we were alerted to a new regulatory law being proposed by the Obama Administration. It bears directly on your investments, which are determined by financial advisors for many of us. As an attorney, I must place the interest of my client first. I know ever Bar Association in which I have been affiliated requires this policy, ethically and legally. I could never place the interest of a law firm or company in which I'm affiliated before the client as an attorney.
Unlike Living Trusts, all Wills must be filed in California. Wills not only identify beneficiaries, but also the assets and property in the estate. It becomes a matter of public record with property and asset values for anyone to see.
If you saw 60 Minutes on CBS Sunday night you had to be astounded by the absolute greed and thievery of life insurance companies. Many of them, mostly all of the large companies, are being sued in a class action for failing to pay death proceeds to deserving beneficiaries. Roughly $7.5 billion have been withheld by these large companies over the years although the companies were aware of the insured's death. All insurance companies have means to accumulate decedents' names, from a death role, which is checked daily through their database. A spokesman for the insurance companies stated that it as the responsibility of the beneficiary to make a claim. If no claim is made, the company basically continues to use the funds gained through premiums and further invest the proceeds and reap further dividend or interest benefits, as its own. It was also indicated that the companies would continue to use cash value in the policies to pay premiums even after knowing of the death of the insured. Unbelievable! If the proper authorities can't identify this within the definition of criminal felony theft, I don't know how it could be further defined.
New California Law: Transfer on Death (TOD) Deed