Orange County's friendly and caring estate planning law office. The Law Office of Tracy Murphy is located in the city of Irvine, in Orange County, California. Tracy Murphy represents individuals, families, and small business owners in estate planning, business planning, tax planning, trust litigation and probate litigation. Tracy Murphy is a knowledgeable estate planning attorney who understands the value of establishing trustworthy, long-term relationships with each client. Clients appreciate the availability of house calls and hospital visits at no additional cost.

Tracy Murphy, Attorney At Law sets the highest standards in Custom Estate Planning, dedicated to today's needs and tomorrow's realities. Thorough and thoughtful evaluation of your needs guarantees the optimum solution for your circumstances - no matter how simple or complex.

Your attorney should be your advocate. I will help you
plan one of the most important aspects of your future - your legacy. With information assembled in one-on-one meetings, we will personalize a trust that will put a legal frame to your needs and anchor your financial legacy. We also do Trust Litigation and Probate Litigation to protect you or help you from inadequate or irregular distributions of funds, mismanagement of trust assets, illegal disposal of trust assets, diversion of assets to the trustee, undue influence, and conflicts of interest in the management of the trust.

Together we will set objectives, address concerns and custom-build an Estate Plan tailored to reflect your needs, lifestyle and goals. Caring continuing attention to the administration of your estate offers comfort to loved ones and helps avoid unnecessary family hardship.

"I believe the most important estate planning objectives are protecting what you have earned, and planning to provide for your loved ones" - Tracy Murphy.

Call us today at: (949)916-6020

Legal Services:
SERVICES		WILLS & TRUSTS
	Estate Planning: Wills, Trusts, Probate,		Revocable Living Trusts (inter vivos trusts)
	Special Needs Planning		Last Will & Testament
	Incapacitation Planning		Special Needs Trusts (Disabled)
	Buy Sell Agreements		Pour-over Will
	Marital Agreements		Accumulation and Maintenance trusts
	Domestic Partnership Agreements		Living Wills (End of life choices)
	Trust Transfer Documents		Discretionary Trusts
	Property Deeds and Affidavits		Incentive Trusts
	HIPAA Releases		Codicils
	Powers of Attorney		IRA Trusts
	Guardianships		Life Insurance Trusts (ILIT)
	Trust Administration		Irrevocable Trusts
	Small Business Planning		Qualified Terminable Interest Trusts (Q-TIP)
	Federal Estate Tax Planning		A/B Trusts
	Advance Directives		ABC Trusts
	Marital Property Agreements		Credit Shelter Trusts
	Durable Power of Attorney for Finances		Bypass Trusts
	Durable Power of Attorney for Health Care		Exemption Trusts
	Charitable Giving		Disclaimer Trusts
			Testamentary Trusts
			Charitable Trusts
PROBATE ADMINISTRATION
	Settling any disputes
	Collecting all probate property of the decedent
	Paying all debts, claims and taxes owed by the estate
	Collecting all rights to income, dividends, etc.
	Distributing or transferring the remaining property to the heirs

TRUSTS

A trust is an agreement under which money or other assets are held and managed by one person for the benefit of another. Different types of trusts may be created to accomplish specific goals. Each kind may vary in the degree of flexibility and control it offers. Advantages of a trust is its ability to avoid Probate and to reduce or eliminate estate taxes.


Trusts are flexible documents and can allow you to:

Provide for and protect beneficiaries with poor spending habits;
Provide beneficiaries with incentive for education;
Provide for a current spouse and children, while securing inheritance for your children from a. ...........previous relationship;
Reduce the burden of Federal Estate Taxes to heirs;
Provide for disabled loved ones while preserving his or her eligibility for government benefits;
Restrict beneficiaries from cashing out an IRA, and require "stretch benefits" (continuation of ..........tax deferred plan with annual distributions).

For more information on Trusts and Living Trusts call us at (949)916-6020.


SPECIAL NEEDS PLANNING
An outright inheritance can disqualify a disabled individual from eligibility for government benefits. Special Needs Planning will protect a disabled individual's eligibility for government benefits, while providing for his or her ongoing needs.

WILLS
Last Will & Testament allows for the disposition of property to intended beneficiaries. A Pour-Over Will transfers assets held outside of a Trust into the Trust.

APPOINTMENT OF GUARDIANSHIP
The most important decision parents can make is who would raise their children in the event that the parents could not. If the parents do not make this decision, the State will. Without a nomination of guardian, family and friends may disagree about which would be the best guardian for the child or children. Such disputes result in high legal costs, family feuds that never heal and instability for the children.

PROBATE
Probate is the court proceeding in which the court either verifies a Will, or determines disposition of property according to State law for those who die without a Will or other estate plan. Real property not held in Trust or joint tenancy must go through probate before distribution to the heirs of the deceased owner. Money and assets exceeding $100,000 in value, that is not held in Trust, joint tenancy or covered by a beneficiary designation is also subject to probate. A simple probate lasts approximately 6 months. For more information on Probate Administration call us at (949)916-6020.

INCAPACITATION PLANNING
Incapacitation Planning allows self-determination regarding finances and health care decisions.

A Durable Power of Attorney allows a person to designate an agent or agents to handle financial matters, such as the payment of mortgages, utilities and medical bills in the event of incapacitation and circumvents appointment of a court appointed conservator.
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An Advance Health Care Directive allows a person to direct medical personnel regarding the continuation or withdrawal of artificial life sustaining machines and treatments, if desired, in the event of terminal illness or injury. This form also allows designation of an agent or agents to make health care decisions in the event of incapacitation.

BUY-SELL AGREEMENTS
A Buy-Sell Agreement is a lifetime contract protecting business owners in the event of retirement, disability or death. A buy-sell agreement also provides for the transfer of a business interest, such as in a corporation, partnership or limited liability company to surviving owners, while providing heirs with the cash value of the deceased owner's interest.

MARITAL AGREEMENTS
A Marital Agreement (Pre-Nuptial or Post-Nuptial) is an agreement made by a couple either before or after marriage that concerns financial issues such as control, possession, division and distribution of separately owned and jointly owned property and assets in the event of divorce or death. A martial agreement is an important planning tool, especially for couples with children from previous relationships.

DOMESTIC PARTNERSHIP AGREEMENTS
A Domestic Partnership Agreement is an agreement that explains the legal rights and responsibilities of each partner when a couple decides to form a long-term committed relationship, including same sex couples. A domestic partnership agreement addresses issues concerning separately owned and jointly owned property and assets.

TRUST TRANSFER DOCUMENTS
Trust transfer documents are needed to transfer your property into your Trust, such as real property deeds; corporate stock assignment; assignment of partnership interest; and transfer of sole proprietorship interest.

TRACY MURPHY carefully advises clients on estate planning matters. Whether you want to plan for a growing family, are starting a new business venture, or are in need of basic or advanced estate planning. You will receive personal attention and an efficient and effective estate planning, you will receive personal attention and an efficient and effective estate plan that helps you accomplish all of your goals.

The estate planning law practice of TRACY MURPHY, ATTORNEY AT LAW serves all cities in Orange County, including: Irvine, Aliso Viejo, Laguna Niguel, Aliso Viejo, Mission Viejo, Coto de Caza, Lake Forest, Foothill Ranch, Rancho Santa Margarita, Laguna Hills, Laguna Woods, Leisure World, Laguna Beach, San Juan Capistrano, Capistrano Beach, San Clemente, Dana Point, Newport Beach, Corona Del Mar, Huntington Beach, Santa Ana, Seal Beach, Anaheim, Brea, Buena Park, Costa Mesa, Cypress, Fountain Valley, Fullerton, Garden Grove, La Habr,a Placentia, Tustin, Villa Park, Westminster, and Yorba Linda and more.

ALL ABOUT TRUSTS:

What is estate planning?

Estate planning is a process. It involves other people, such as your family, other individuals and, in many cases, charitable organizations of your choice. It also involves your assets (your property) and the various forms of ownership and title that those assets may take. And it addresses your future needs in case you ever become unable to care for yourself.

Through estate planning, you can determine:

Many people mistakenly think that estate planning only involves the writing of a will. Estate planning, however, can also involve financial, tax, medical and business planning. A will is part of the planning process, but you will need other documents as well to fully address your estate planning needs.

What can I accomplish with an estate plan?

Through estate planning, you can determine:

Many people mistakenly think that estate planning applies only to individuals with a large net worth. However a proper estate plan is not only important for those with large wealth, but for those with moderate and smaller estates. An estate plan ensures what you do have passes to those you intend, in the way you intend while incurring the least amount of expense possible.

Who needs estate planning?

Everyone, whether their estate is large, moderate or small. Either way, you should designate someone to manage your assets and make health care and personal care decisions for you if you ever become unable to do so for yourself.

If your estate is small, you may simply focus on who will receive your assets after your death, and who should manage your estate, pay your last debts and handle the distribution of your assets.

If your estate is large, your plan can focus on preserving your assets for your beneficiaries and reducing or eliminating the amount of estate tax which otherwise might be payable after your death.

What is included in my estate?

All of your assets. This could include assets held in your name alone or jointly with others, assets such as bank accounts, real estate, stocks and bonds, and furniture, cars and jewelry.

Your assets include life insurance proceeds, retirement accounts and payments that are due to you (such as a tax refund, outstanding loan or inheritance).

The value of your estate is equal to the fair market value of all of your various types of property after you have deducted your debts (your car loan, for example, and any mortgage on your home.)

The value of your estate is important in determining whether your estate will be subject to estate taxes after your death. Ensuring that there will be sufficient resources to pay such taxes is another important part of the estate planning process.

What is probate?

The process by which the provisions in your Last Will & Testament are carried out following your death is known as "Probate."

Probate is the court-supervised process developed under California law which has as its goal the transfer of your assets at your death to the beneficiaries set forth in your will, and in the manner prescribed by your Will, or if no Will then by State law.

The Probate court is accustomed to resolving disputes about the distribution of your assets in accordance with defined rules. However, Probate is public in nature, meaning that the provisions of your Will and the value of your assets become public record. Also, because lawyer's fees and executor's commissions are based upon a statutory fee schedule, the expenses may be greater than the expenses incurred by a comparable estate managed and distributed under a living trust. Time can also be a factor; often distributions to beneficiaries can be made pursuant to a living trust more quickly than in a probate proceeding.

Can I Change My Trust in the Future?

Yes. You should review your estate plan periodically because, if it is not up to date when you die, your estate may not be distributed as you wish.

Your trust can be changed by a simple amendment. Your Will can be changed through a "codicil" which is an amendment to your Will.

Your Trust or Will must not be changed by crossing out words or sentences or making any notes or written corrections on it. You should seek the advice of a lawyer when you marry or divorce. You should also review your Trust when there are any major changes in your family (such as births and deaths), when the value of your assets significantly increases or decreases, and when it is no longer appropriate for the persons named as Trustee, guardian or executor to act in that capacity.

Can I name alternative beneficiaries?

Yes. You should consider alternative beneficiaries in the event that your primary beneficiary does not survive you.

Who should be my executor or trustee?

That is your decision. You could name your spouse, choose an adult child, another relative, a family friend, a business associate or a professional fiduciary such as a bank. Your trustee does not need any special training. What is most important is that your chosen executor or trustee is organized, prudent, responsible and honest.

The Trustee of your living trust may assume responsibilities under the trust agreement while you are still living (if you ever become unable or unwilling to continue serving as trustee yourself).

Discuss your choice of trustee with your estate planning lawyer. There are many issues to consider. For example, will the appointment of one of your adult children hurt his or her relationship with any other siblings? And will the person named as Successor Trustee have the time, organizational ability and experience to do the job effectively?

How should I provide for my minor children?

Most important is to nominate a guardian or guardians to raise your child or children until he or she is 18 years old. This nomination is made in your Last Will & Testament.

Your nomination of a guardian could avoid a tug of war between well-meaning family members and others.

You should also consider setting up a Trust to be held, administered and distributed for the child or children's benefit at the age of your choosing. A Trust can be set up no matter how large or small your estate. For example, many individuals set up Trusts using only life insurance as the Trust Property.

When does estate planning involve tax planning?

Estate taxes are imposed upon estates that have a net value of $2 million or more. That amount will increase to $3.5 million in 2009. In 2010, the estate tax will disappear completely.

Then, unless Congress passes an extension, the exemption will revert back to $1 million in 2011. For estates that approach or exceed these amounts, significant estate taxes can be saved by proper estate planning.

What happens if I become unable to care for myself?

You can help determine what will happen by making your own arrangements in advance. Through estate planning, you can choose those who will care for you and your estate if you ever become unable to do so for yourself.

If you have not made any such arrangements in advance and you become unable to make sound decisions or care for yourself, a court could appoint a court-supervised conservator to manage your affairs and be responsible for your care.

Who Should Know About My Trust?

Other than your lawyer, no one needs to know what your Trust says. But the location of your original documents should be known by your Trustee and other close friends or relatives.

Will My Beneficiaries Have to Pay Estate Taxes?

Assets that are transferred to either your spouse (if he or she is a US citizen) or to charitable organizations are not subject to estate taxes. Assets passing to other individuals will be taxed if the net value of those assets exceed $2,000,000 for 2008 (See Applicable Exclusion Chart above). For estates which approach or exceed this value, significant estate taxes can be saved by proper estate planning. That planning must usually be accomplished before death and, in the case of married couples, before the death of the first spouse.

What Other Planning Should I Do?

DURABLE POWER OF ATTORNEY FOR PROPERTY MANAGEMENT. In this document you appoint another individual (the "attorney-in-fact") to make property management decisions on your behalf if you are incapacitated. The attorney-in-fact manages your assets and must do so in a prudent manner accountable to you and solely in your best interests.

DURABLE POWER OF ATTORNEY FOR HEALTH CARE ("Advance Health Care Directive"). This document allows the appointed person or persons to make health care decisions for you when you can no longer make them for yourself. It may also contain statements of wishes concerning such matters as life sustaining treatment and other health care issues, and instructions concerning organ donation.

By considering your options early, you can ensure the quality of life that is important to you and avoid having your family "guess" your wishes or having to make critical medical care decisions for you under stress or in emotional turmoil.

Can I create my own estate planning documents?

Yes. It is possible for a person to do his or her own estate planning with forms or books obtained at a stationery store or bookstore. However, keep in mind that Trusts, Wills and related documents are legal documents and can have serious legal and tax ramifications if not completed properly.

For more information call us at (949)916-6020.

Annual exclusion - Each individual can give away up to $11,000 per recipient per year without gift taxes. Not all gifts qualify for the annual exclusion; only outright gifts or gifts to certain types of trusts qualify.

Charitable lead annuity trust ("CLAT") - A trust under which the charitable beneficiary has the right to receive an annuity amount each year during a stated term. The annuity amount is calculated based upon the initial value of the trust assets at the creation of the trust. After the stated term, the remainder of the trust is distributed to the non-charitable beneficiary.

Charitable lead unitrust trusts ("CLUT") - A trust under which the charitable beneficiary has the right to receive an annuity amount each year during a stated term. The annuity amount is calculated based upon the value of the trust assets at the beginning of each year of the trust. After the stated term, the remainder of the trust is distributed to the non-charitable beneficiary.

Charitable remainder trust - A trust under which a charitable beneficiary receives the remainder of the trust after payment of amounts over time to a non-charitable beneficiary. Often used to facilitate diversification of single low-basis stock holdings, and to maximize charitable gifts and deductions, while providing income payments to the grantor.

Disclaimer - A refusal by an individual, usually in the form of a written document, to accept some or all of his or her legal rights to property. A disclaimer qualified under the Internal Revenue Code as a non-taxable transfer must be accomplished within 9 months after the date of the transfer.

Generation skipping transfer tax - A transfer tax imposed at a rate equal to the highest estate tax rate (currently 50%) on gifts or estate transfers where the transferred assets pass, or will pass, to recipients two or more generations below the donor, without being subject to the imposition of estate tax at the intervening generations. Each donor has an exemption of $1,120,000 (in 2003, $1,500,000 in 2004) from the tax.

Gift tax - A transfer tax imposed at a rate equal to 18% to 50% on transfers made by a donor during their lifetime. Each decedent has a federal unified credit exemption ($1,000,000 in 2003, and $1,500,000 in 2004) from the federal gift tax, and, if not used during lifetime, the exemption will exempt transfers at death from the federal estate tax. Also, each donor can make an unlimited number of annual exclusion gifts each year without incurring gift tax.

Grantor - An individual(s) or institution(s) who transfers real or personal property in trust to a trustee or trustees under directions to the trustee, usually contained in a written trust instrument or agreement, to hold, manage, invest, account for and distribute the property to the beneficiary or beneficiaries on the terms set forth in the trust instrument.

Grantor retained annuity trust ("GRAT") - An irrevocable inter vivos trust under which a grantor transfers his or her interest in real or personal property to the trustee to hold during a specified term. During each year of the term, the grantor receives an annuity amount based upon the value of the assets at the creation of the trust. Upon expiration of the term, the trust property passes to the remainder beneficiary or beneficiaries. Primarily used to gift property to the remainder beneficiary that is susceptible to application of valuation discounts and actuarial discounts based on the grantor's age and the term of the trust, and is most beneficial if the property is expected to appreciate in value.

Intentionally defective grantor trust - An irrevocable inter vivos trust created by a grantor for the benefit of beneficiaries other than the grantor that attributes all income tax incidents to the grantor. Typically used where the grantor desires to irrevocably gift the property to the beneficiaries and exclude the property from the grantor's taxable estate for estate tax purposes, but intends that the transfer be ignored for income tax purposes. Often used in conjunction with a sale of discounted assets by the grantor to the trust, to avoid capital gain on the sale of the assets.

Irrevocable Trust - A trust that is not amendable or revocable by the grantor. Can be created during a grantor's lifetime, often called an "inter vivos" trust, or upon a grantor's death, often called a "testamentary" trust. Some common types of irrevocable inter vivos trusts include life insurance trusts, gift trusts, generation skipping trusts, qualified personal residence trusts ("QPRT"), grantor retained annuity trusts ("GRAT"), intentionally defective grantor trusts, charitable remainder annuity trusts and charitable remainder unitrust trusts ("CRAT") and "CRUT"), charitable lead annuity trusts and charitable lead unitrust trusts ("CLAT" and "CLUT"). Some common types of testamentary trusts include, unified credit exemption trusts, marital trusts, generation skipping trusts, testamentary charitable remainder trusts and charitable lead trusts.

Limited partnership - A limited partnership is a partnership created under the limited partnership laws of each state. A limited partnership has both general partners and limited partners. The limited partners do not participate in the management of the partnership and, thus, are not subject to the claims of the creditors of the limited partnership. On the other hand, the general partners of a limited partnership are subject to the claims of the creditors of the limited partnership. The general partners generally have the ability to control the operations of the partnership, as well as the amount, if any, of any distributions to the limited partners. In addition, partnership agreements often restrict the ability of a limited partner to sell or otherwise transfer his or her interest in the limited partnership.

Marital deduction - An unlimited deduction against the estate tax and gift tax for transfers made outright or in qualifying trusts to the spouse of the transferor.

Non-profit corporation - A corporation created under applicable state law, which is exempt from income taxes and is required to operate in accordance with applicable state law and tax laws. Typically, the board of directors or trustees consist of family members, making it appealing to donors who desire to control the gifted assets until they are distributed to charity.

Postnuptial agreements - Contracts entered into by a husband and wife after marriage, defining the rights of each spouse in their marital, non-marital and jointly-owned property in the event of divorce, legal separation or the death of one of the parties. A postnuptial contract is considered to be valid and enforceable if it complies with the statutory requirements for prenuptial agreements. Though historically not utilized as widely as prenuptial agreements, a recent modification of the Minnesota statues makes it likely that postnuptial agreements will become a more commonly used contract.

Private foundation - A trust or nonprofit corporation that provides for distributions only to charitable recipients during its term. May be a perpetual trust or corporation.

Probate estate - The assets of the decedent as of the date of death which are titled only in the decedent's name, or which are payable to the decedent's "estate" or personal representative. Property held in joint tenancy with rights of survivorship are not included in the decedent's probate estate. In addition, the proceeds of life insurance, annuities, IRAs or qualified retirement benefits will not be included in the decedent's estate unless the beneficiary designation specifically designates the decedent's estate.

Qualified personal residence trust ("QPRT") - An inter vivos trust under which a grantor transfers his/her interest in a personal residence to the trustee to hold for the grantor's use and occupation during a specified term, and, upon expiration of the term, the residence passes to the remainder beneficiary or beneficiaries. Primarily used to gift the residence to the remainder beneficiary that is susceptible to application of valuation discounts and actuarial discounts based on the grantor's age and the term of the trust, and is most beneficial if the residence is expected to appreciate in value.

Settlor - See grantor.

Trust - A legal arrangement under which a grantor or settlor transfers real or personal property to a trustee or trustees under directions to the trustee, usually contained in a written trust instrument or agreement, to hold, manage, invest, account for and distribute the property to the beneficiary or beneficiaries on the terms set forth in the trust instrument.

Unified credit exemption - An amount of assets that can pass without imposition of an estate tax or gift tax on the transfer. The amount of assets equates to a credit against the estate tax or gift tax. In 2003, the federal estate and gift tax exemption is $1,000,000. In 2004 through 2006, the federal estate tax exemption increases to $1,500,000, and is scheduled to increase until 2010; the federal gift tax exemption is scheduled to remain at $1,000,000. Minnesota's exemption is $700,000.

ABOUT ORANGE COUNTY WHERE THE MAJORITY OF OUR CLIENTS ARE:

Orange County is a county in Southern California, United States. Its county seat is Santa Ana. According to the 2000 Census, its population was 2,846,289, making it the second most populous county in the state of California, and the fifth most populous in the United States. The state of California estimates its population as of 2007 to be 3,098,121 people, dropping its rank to third, behind San Diego County. Thirty-four incorporated cities are located in Orange County; the newest is Aliso Viejo.

Unlike many other large centers of population in the United States, Orange County uses its county name as its source of identification whereas other places in the country are identified by the large city that is closest to them. This is because there is no defined center to Orange County like there is in other areas which have one distinct large city. Five Orange County cities have populations exceeding 170,000 while no cities in the county have populations surpassing 360,000. Seven of these cities are among the 200 largest cities in the United States.

Orange County is also famous as a tourist destination, as the county is home to such attractions as Disneyland and Knott's Berry Farm, as well as sandy beaches for swimming and surfing, yacht harbors for sailing and pleasure boating, and extensive area devoted to parks and open space for golf, tennis, hiking, kayaking, cycling, skateboarding, and other outdoor recreation. It is at the center of Southern California's Tech Coast, with Irvine being the primary business hub.

The average price of a home in Orange County is $541,000. Orange County is the home of a vast number of major industries and service organizations. As an integral part of the second largest market in America, this highly diversified region has become a Mecca for talented individuals in virtually every field imaginable. Indeed the colorful pageant of human history continues to unfold here; for perhaps in no other place on earth is there an environment more conducive to innovative thinking, creativity and growth than this exciting, sun bathed valley stretching between the mountains and the sea in Orange County.

Orange County was Created March 11 1889, from part of Los Angeles County, and, according to tradition, so named because of the flourishing orange culture. Orange, however, was and is a commonplace name in the United States, used originally in honor of the Prince of Orange, son-in-law of King George II of England.

Incorporated: March 11, 1889 Legislative Districts: * Congressional: 38th-40th, 42nd & 43 * California Senate: 31st-33rd, 35th & 37 * California Assembly: 58th, 64th, 67th, 69th, 72nd & 74 County Seat: Santa Ana County Information: Robert E. Thomas Hall of Administration 10 Civic Center Plaza, 3rd Floor, Santa Ana 92701 Telephone: (714)834-2345 Fax: (714)834-3098 County Government Website: http://www.oc.ca.gov