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The Impact of Recent Estate Law Changes on Your Planning Strategy

Posted by James Burns | May 28, 2024 | 0 Comments

The Impact of Recent Estate Law Changes on Your Planning Strategy Recent changes in estate law have had a profound impact on estate planning strategies. According to a 2021 survey by WealthCounsel, 74% of estate planning professionals reported that legislative changes significantly influenced their clients' planning decisions. As you navigate this evolving landscape, it's crucial to understand how these changes affect your estate plan and take proactive steps to ensure your plan remains effective and aligned with your goals.


HIPAA Compliance in Trusts

In 1996, the Health Insurance Portability and Accountability Act (HIPAA) was enacted to protect individuals' medical information. However, many trusts created before 2003, when HIPAA's Privacy Rule took effect, may have missed essential provisions for HIPAA compliance. This oversight can lead to significant challenges when trustees need to access critical medical information to make informed decisions on behalf of the trust creator.


Actionable Tip: Review your trust documents to ensure they include language authorizing your trustee to access your protected health information. This is particularly important if your trust was created before 2003. If your trust lacks HIPAA language, work with an estate planning attorney to update your documents and ensure seamless trust administration.


Common Mistake to Avoid: Don't assume that your old trust automatically complies with HIPAA. Failing to address this issue could hinder your trustee's ability to manage your affairs effectively, leading to delays, frustration, and potential legal challenges.


The Portability Revolution

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 introduced the concept of "portability" for estate tax exemptions. This change, effective since 2011, allows a surviving spouse to use their deceased spouse's unused exemption amount. As a result, many traditional A/B trust structures, which were designed to minimize estate taxes, became less necessary for married couples.


Actionable Tip: If you have an A/B trust created before 2011, consult with an estate planning attorney to determine if a more streamlined trust structure could better serve your needs. By updating your trust to reflect current tax laws, you may be able to simplify trust administration, reduce costs, and ensure that your assets are distributed according to your wishes.


Common Mistake to Avoid: Don't leave your old A/B trust unreviewed. Failing to update your estate plan to reflect current laws could lead to unintended consequences, such as unnecessary tax liabilities, increased administrative burdens, and potential conflicts among beneficiaries.


California-Specific Considerations

In California, the Probate Code governs estate planning matters. For example, California Probate Code § 4264 allows for the creation of a "pour-over" will, which directs assets into a trust upon the testator's death. Understanding these state-specific laws is essential for effective estate planning, as they can impact the validity and enforceability of your estate planning documents.


Example: John and Mary, a married couple in their 60s, created an A/B trust in 2005. After John's passing in 2020, Mary discovered that the trust's outdated structure caused unnecessary complications and tax liabilities. Had they reviewed and updated their estate plan with an attorney familiar with California law, they could have avoided these issues, simplified the administration of John's estate, and ensured that their assets were distributed according to their current wishes.


The Importance of RUFADAA in Estate Planning The Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) has become a crucial consideration in modern estate planning. Enacted in most states, including California, RUFADAA addresses the management and distribution of digital assets after the owner's death or incapacitation. According to a recent survey, over 60% of Americans have some form of digital assets, making RUFADAA a critical component of comprehensive estate planning.


Understanding RUFADAA

RUFADAA provides a legal framework for fiduciaries, such as executors, trustees, and agents under powers of attorney, to manage digital assets on behalf of the original owner. This includes access to email accounts, social media profiles, cloud storage, and other online assets. Without RUFADAA, fiduciaries may face significant challenges in accessing and managing these assets, potentially leading to losses or complications in the estate administration process.


Actionable Tip: Ensure your estate plan includes provisions that align with RUFADAA. Work with an experienced estate planning attorney to incorporate language that grants your fiduciaries the necessary authority to manage your digital assets.


Common Mistake to Avoid: Don't assume that your fiduciaries will automatically have access to your digital assets. Failing to address digital assets in your estate plan can lead to unintended consequences and make it difficult for your loved ones to manage your online presence and assets.


Integrating RUFADAA into Your Estate Plan

To effectively incorporate RUFADAA into your estate plan, consider the following steps:

  1. Inventory your digital assets
  2. Provide clear instructions for managing these assets
  3. Designate a digital executor or trustee
  4. Update your plan regularly to account for new assets and changes in the law

Fictional Example: Sarah, a successful blogger, passed away without addressing her digital assets in her estate plan. Her family struggled to access her blog, social media accounts, and online payment platforms, resulting in lost revenue and a diminished online legacy. Had Sarah's estate plan included RUFADAA provisions, her family could have managed these assets more efficiently and preserved her digital presence.


The Importance of Staying Current

As technology continues to evolve, so too must your estate plan. Regularly reviewing and updating your plan ensures that it remains compliant with the latest laws and addresses any new digital assets you may have acquired. By staying informed about developments like RUFADAA and working closely with a knowledgeable estate planning attorney, you can protect your digital legacy and provide peace of mind for your loved ones.


Partnering with a Trusted Advisor

Navigating the complexities of estate law changes can be challenging without the guidance of an experienced professional. At the Law Office of James Burns, we have been helping clients in Aliso Viejo, Orange County, and throughout California for over 24 years. Our team stays up-to-date with the latest legislative changes to ensure that your estate plan remains effective and aligned with your goals.


How We Can Help

At the Law Office of James Burns, with over 24 years of experience in estate law, we are committed to helping you navigate these complexities. Whether you're in Aliso Viejo, elsewhere in Orange County, or anywhere in California, we can provide tailored advice that reflects the latest legal standards. Contact us today at (949) 305-8642 or visit our website at to ensure your estate plan is up-to-date and as effective as possible. Let us help you secure your legacy with confidence.

About the Author

James Burns

Estate Planning, Asset Protection, Business and Real Estate Transactions, nutraceutical Law and franchising:


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