The Washington, D.C.-based Employee Benefit Research Institute has released a study showing that 47 percent of American workers aged 56-62 – the Baby Boomer group – have not saved enough to last through their retirement.

In addition, the study found that 44 percent of workers aged 36-45 are also likely to run out of funds during their retirement years.

The EBRI researchers noted that the longer a person has been invested in a 401(k) retirement plan, the more likely it is they will have enough saved for retirement.  However, the researchers also said that most retirement account balances are still relatively low – meaning that more Boomers will need to work well past the traditional retirement age, and younger workers need to engage in retirement planning as soon as possible.

In addition, the study showed that higher income workers are also at risk – albeit a smaller risk — for financial problems in retirement due to escalating healthcare costs.

If you’re concerned about having the financial ability to maintain your desired lifestyle during retirement, contact our California estate planning law firm.

Probably the biggest inspiration for estate planning by young couples is their children.  Developing an estate plan that will protect your children in the event of your untimely death or incapacity, however, is more complicated than just choosing a guardian.   You need to consider:

• Who your kids should live with and if that person(s) is financially, physically and mentally able to care for your children.  You should also consider how your children feel about the person(s) you choose as their guardian.
• If the person(s) you choose to raise your children is the same person(s) you would choose to manage their money or should you select a financial advisor as well?
• Discussing your selection with your other family members and, most importantly, with the guardian(s).
• If your children have any special needs that may dissuade your chosen guardian(s) from taking care of them.
• Naming alternate guardians in case something happens to your first choice and they are unable to fulfill their duties.
• Ensuring you have the proper financial instruments in place to provide for your children’s physical and educational needs.

A growing trend in estate planning is the establishment of a pet trust, a legal document that ensures your pet receives the necessary care after you die.  Probably the most infamous example of a pet trust is the one in Leona Helmsley’s 2007 will, which left $12 million to her white Maltese, aptly named Trouble.

Obviously you don’t need $12 million to ensure your pet is appropriately cared for after you go.  A qualified California estate planning lawyer can assist you in executing a pet trust as part of your estate planning process.

In a pet trust, you give your pet and enough money or property to sustain it to a trustee, someone you trust to care for your pet according to your wishes.  The trustee is usually different from the pet’s eventual caregiver; a trustee is charged with executing the terms of the trust so even if the caregiver becomes incapacitated or for some reason can no longer care for your pet, the trustee is responsible for finding another suitable caregiver.

A California estate planning attorney can help you determine how much property or money you need to leave for the care of your pet.  Leaving an amount that is too large can cause the court to reduce the amount, which it eventually did in the Helmsley case.

An estate planning attorney can also advise you of different financial instruments available for funding your pet trust, such as a life insurance policy or annuity.

A court order seeking to block the auction of some of actress Lucille Ball’s awards and love letters was both won and lost by Ball’s daughter, Lucie Arnaz Luckinbill, in a Los Angeles Superior Court last week.

The judge agreed to block the sale, but imposed a bond of $250,000 on Luckinbill to get a restraining order issued – a financial condition she could not meet.

Luckinbill was at odds over the sale with Susie Morton, the widow of Gary Morton, who was Ball’s second husband.  Ms. Morton had consigned several items that belonged to her deceased husband and Lucille Ball to a Dallas auction house for sale, including a Rolls-Royce, love letters, photos and some of Ball’s personal effects, including several achievement awards.

Luckinbill had sought to stop the sale of the love letters and awards, which she wanted to go to a museum honoring her mother.

Morton’s lawsuit claimed that Luckinbill had forfeited her right to the letters and awards after Ball’s estate was distributed following her death in 1989.

Although high visibility because of the actress’ great popularity, this kind of case happens more often that you would think because people fail to update their will.  Anything you believe will be of value to heirs should be distributed according to your wishes and spelled out in your will – especially if you are part of a blended family.  A California estate planning attorney can help you create and update your will.

Last weekend, the Wall Street Journal had a prescient article entitled, “Too Rich to Live?” Three days later, another billionaire – Yankees owner George Steinbrenner – died at age 80, taking the 2010 billionaire death tally to three (Dan Duncan and Walter Shorenstein being the other two who passed in this, the year of no estate taxes).

Tax historian Joseph Thorndike was quoted as saying that there is a “death incentive” every time Congress raises the estate tax, but with the potential estate tax “re-set” next year to a top rate of 55 percent and only a $1 million deduction, 2011 could see the largest increase in a major tax in history – and a potential escalating number of “gruesome” cases as the clock runs out on 2010.

Many estate planning advisers are telling clients to look carefully at their powers of attorney documents this year, and to also pay close attention to their health care proxies.

The WSJ article said that many Washington insiders think that Congress will not act this year because of an already crowded legislative agenda and the fall election.

The Senate is currently divided between three possible solutions – the pre-Bush rate of 55 percent, a 35 percent rate with a more generous exemption and a return to the old 45 percent rate and $3.5 million exemption per individual.