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So You Want to Leave Your Estate to Your Housecleaner

California law makes it difficult for someone over 64 years old to leave an inheritance to her housecleaner. Probate Code section 21350 invalidates certain estate planning distributions from a dependent adult to her care custodian.┬áThe intent of the law is to prevent caregivers, who could be in positions of power and influence, to manipulate a vulnerable person. Probate Code section 21350 invalidates donative transfers to certain disqualified persons. Among its many definitions…

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Practical Asset Protection – Part 4 Charging Order Entities

Business entities like limited liability companies (LLCs) and limited partnerships (LPs) can provide great asset protection if they are set up correctly. Mostly used for rental property, these entities can shield your rental properties and your personal assets from lawsuits filed against your rental properties. Example: You own a rental property in an LLC. Your tenant trips and falls and sues the owner. The owner is not you. The owner is the…

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Practical Asset Protection – Part 3 Retirement Plans

Retirement plans can provide simple but effective asset protection. Federal law (ERISA) protects 401ks from lawsuits. If you get sued and lose, the judgment creditor cannot get to your 401k. California law doesn't give IRAs the same federal ERISA protection as 401ks. Under California law, IRAs are exempt from judgment creditors to the extent the account is necessary to support you and your dependents when you retire. A judge will determine that…

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