FAQ: Wills & Trusts

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Ask these questions:

  1. How long have you been in practice?
  2. What is your bar number?
  3. What areas of law do you focus on?
  4. How long have you practiced in this area of law?
  5. What percentage of your practice is devoted to elder law or special needs law?
  6. Are you a member of the National Academy of Elder Law Attorneys?
  7. Are you a Certified Elder Law Attorney or a Certified Specialist in Probate and Estate Planning?
  8. Are you a member of the local bar association? What sections have you joined? Have you held any offices?
  9. How much education specifically related to Medi-Cal, veterans’ benefits, conservatorships, elder law, and estate planning do you have?
  10. What other organizations are you a member of?

It depends on a variety of factors, including the size of your estate, your family situation, if you have a spouse who will need care when you die, and whether or not you want to force your family into probate court so that the decisions of the child handling the money and heirlooms are supervised by a judge. There is no easy answer — you need legal advice to determine whether a will or a trust is best suited to meet your needs.

A will takes effect after you pass away. Generally, if your estate is over $150,000, and if you have a will, your estate must go through probate. Most wills end up in probate court.

If you do not have a will, the state of California has an estate plan for you, known as the “laws of intestacy (dying without a will).” This is basically a division of property among your living heirs, depending on who survives you. Unfortunately, such a distribution may not agree with your own wishes.

A will is a public document. You can find a copy of many famous people’s wills on the internet. Walt Disney’s will is available to all.

In addition to people knowing who you left your money to, the court requires the filing of an inventory and appraisal of all assets. This means that anyone can find out what you own when you die. Every day, the court is full of people pulling files and looking at the papers filed. Our office gets letters from all kinds of people looking to find venerable beneficiaries.

Even if you have no will, you have a will. Your assets will go to your “heirs at law.”

Half of your separate property must be put into a separate court-supervised trust for each of your children, restricting your spouse’s ability to use the money.

100% of the assets will be distributed when your child is 18, regardless of maturity level or financial savvy. Most people do not like the idea of the State deciding who gets their property, and the Judge deciding who will take care of their children without any input from their parents. You will want to Dispose of your property in accordance with your wishes and values.

There are many types of trusts. A Living Trust is the type of Trust that most people have. Most Living Trusts are designed to avoid probate. Living Trusts are also known as “revocable trust” or grantor trusts”.

With a living trust , you, as the creator or “grantor” of the trust, maintain complete control over the trust and your property while you are alive. You may amend (change) or revoke (terminate) your trust at any time. You may sell or give away that property as well since you are not restricted in any way.

You are also able to name beneficiaries, appoint a person to be in charge (“the trustee”) and decide how your property will pass at your death, as with a will.

The most important reason to have a living trust is to avoid probate. Unlike with a will, if your property is held in the name of your living trust at your death, your property will pass to the beneficiaries named in the trust, outside of probate.

Distribution from a living trust is often simple and straightforward, enabling your heirs to avoid the costs and delays associated with probate.

Another important reason to have a living trust is to provide for the ongoing management of your trust assets in the vent of your incapacity. If you become incapacitated, your trustee is authorized to act on your behalf, with respect to the property that is held in the name of the trust, if you become ill or incapacitated.

What’s the difference between a will and a trust? Doesn’t having a will avoid Probate? Why would I want a Living Trust?
These are questions that regularly come up in our office. A will is a legal document that provides for distribution of your Probate estate at your death.

Probate assets are those owned by a person in his or her own name alone, with no beneficiary, without being “payable on death”, or “in trust for”, or in a Living Trust. A will must be verified by the Probate Court before it can be enforced and the assets distributed to the heirs. Because Probate is a court proceeding, it is time-consuming and expensive.

Assets that are jointly held in trust for someone, or in a Living Trust avoid Probate. Beware the pitfalls of joint ownership. It may be difficult to have the property returned on request to its original owner during his or her lifetime. Joint assets may also be subject to the control of the new owner and the new owner’s creditors.

Joint ownership between spouses won’t eliminate Probate but will only delay it until the death of the surviving spouse. Joint ownership can also have adverse income and Estate Tax consequences.

A Living Trust is an enormously flexible and useful vehicle. Assets of the owner(s) are re-titled into the name of the trust. The original owner(s) becomes his or her own trustee and maintains control of the assets, which are not subject to Probate. To avoid guardianship, the owner appoints a successor trustee to manage the trust property if he or she becomes incapacitated.

Among its many benefits, a living trust:

  • Avoids Probate delays and expenses
  • Represents opportunity for professional asset management
  • Permits distribution over a longer period of time
  • Allows prompt transfer of management upon disability
  • Avoids guardianship
  • Reduces the likelihood of will contests
  • Coordinates distribution of assets through one vehicle
  • Is especially important with out-of-state real estate
  • Provides maximum privacy
  • Is inexpensive and easy to set up and maintain
  • Prevents court control of inheritance by minors

Upon the death of the creator of the trust, the family may need to “administer the trust”. Somewhat like a Probate in that it “wraps up the estate”, there is no court involved, making this procedure less timely and less expensive.

Probate is a Court supervised method of transferring assets. Probate is required if a decedent has more than $150,000 in his or her estate. All Wills are subject to Probate, and must be lodged with the Court.

When a person dies with a Will or without a Will the assets must be probated to transfer title. Some assets are not subject to Probate, these assets include but are not limited to, joint tenancy property, and insurance proceeds not payable to the estate, and retirement benefits not payable to the estate.

The Probate process starts with filing the Original Will with the appropriate Court, or if there is no Will filing a request that the Court determine who the heirs are so the property can pass by intestate succession. The Court will determine the validity of any Will. Whether or not there is a Will, the Court will appoint a person to Administer the estate, that person is known as an executor, administrator or personal representative.

The personal representative must collect the assets subject to probate, pay debts and death taxes, and request Court authorization to distribute assets to the person named in the will or to the decedent’s heirs.
It is always stressful when a loved on dies. Our office works with families on many difficult issues, distribution of wealth being one of them.

The child’s other parent has the legal right to be the sole guardian of a child if a parent dies unless parental rights have been terminated. However, the right is not necessarily automatic. If you’re Will names a guardian the Judge has some guidance as to who you would want to take care of your child.

The fact that you name someone other than the other parent does not mean that the person you select will be chosen, but if you don’t have a written document telling the Judge who you would want to take care of your children the Judge will not know.

If you have assets you may want a Living Trust to avoid probate, and should select someone you Trust to take care of the money. The person who takes care of the money can be totally separate than the person who will take care of your children. This person (or professional) should be someone who has the training and experience to invest funds, and to make sure funds are used for the child not for to enhance the lifestyle of the child’s guardian.

It is tempting to do your own Will or Trust. No one likes spending money on attorneys, and the ads from the do it yourself people make it seem so easy.

It is easy if you don’t own your home and you have only a small amount of savings, and a family where there has only one marriage and all the children belong to the marriage, and no one in the family has a disability or dementia.

However, if your family is not perfect and you own a home and have some assets you need help. If you do it yourself you may never know you filled the forms out wrong, but your family will and fixing errors requires going to court, and court is always expensive.

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