Readers: It is my goal to share important information and situations that could affect us when it comes to our financial and estate planning. I believe we share the mutual goal of making sure that what happens when we “go” is what we wanted and intended. I recently attended a week-long seminar on tax and estate planning and wanted to share some of the highlights with the hope that you will be better prepared when considering your own situation.

Homeowner’s Property Tax Exemption: Nearly one-third of California homeowners do not sign up for the Homeowner’s Exemption resulting in more than $30 million in extra tax payments by roughly 435,000 households. The exemption, when filed, can reduce the assessed value of your home, for property tax purposes, by a maximum of $7,000. While it is true you may only see your property tax go down by some $70 or so, over time this can add up to considerable savings on taxes.

Maybe more importantly, if you plan to leave your home to a child, a homeowner’s exemption must be in place when you die so your child can take advantage of Proposition 19 — which can result in significant reductions in their year-to-year property tax.

More information along with the forms to file for an exemption can be obtained by calling the Monterey County Assessor’s Office at (831)755-5035.

Pretermitted Heir: When we prepare our wills or trusts, it is essential to name all children we have — whether they are born out of wedlock, during marriage, or if they are stepchildren. Along with naming them, we need to state clearly how each will be treated regarding an inheritance from our estate. Should we fail to acknowledge a child in our documents, that child is considered a pretermitted heir, which means we knew about them but just didn’t name them.

In a recent case, a stepchild made a claim to his stepfather’s. In this case, the father failed to make a will and so his estate was probated by way of intestate succession (when you die without a will). Normally, the estate would go to the father’s wife, if any, and then to his children.

The stepchild filed a claim to the stepfather’s estate and, because a relationship existed between them when the stepchild was a minor and because a “natural child/parent relationship” existed, the stepchild was allowed to inherit from the stepfather’s estate.

First lesson, make sure you prepare a will or trust and, second, name your heirs and whether you want to give them something or you want them to get nothing.

Probate Attorney Fees: If you are named as an executor, never allow the attorney working for you to take their fees before the court has approved those fees! In probate, set statutory fees will be paid to the attorney and to you for your work as executor. These fees need to be approved by the court and only then can they be paid.

In the case reviewed at the seminar, an attorney took his statutory fees during the probate with the permission of the executor. The State Bar suspended the attorney’s license for 15 months. Moreover, the executor in a situation like this can be removed.

Most attorneys are well aware of this issue but, if you find yourself acting as an executor, be aware that you could be removed (without being paid for your work) if you pay your attorney without court approval.

Arbitration and the Advance Health Care Agent: Say you are mom’s health care agent named under an Advance Health Care Directive.

Mom needs more help and support and you both decide to move Mom to a health care facility. Invariably, health care facilities will ask you, as the agent, to agree to arbitration should any issues arise with the facility. Do not sign the arbitration agreement. Arbitration is a financial decision, not a health care decision and you should not agree. You should also know that not agreeing to arbitration cannot be grounds for the facility to deny admission.

This arbitration issue with health care facilities seems to come up year after year in the courts so I am sure we will hear more about it in the future!

Liza Horvath has over 30 years of experience in the estate planning and trust fields and is the president of Monterey Trust Management, a financial and trust Management Company. This is not intended to be legal or tax advice. If you have a question call (831)646-5262 or email liza@montereytrust.com