FAQ’s

FREQUENTLY ASKED QUESTIONS ABOUT CALIFORNIA ESTATE PLANNING

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Why Do I Need a Will, Trust or Estate Plan?

Unfortunately, dying without a will, trust, or estate plan will leave your loved ones in limbo. Legally referred to as dying intestate, such an occurrence mandates that your property be distributed per the laws of intestate succession of the state in which you reside in upon your death. In order to assess and distribute your assets, your loved ones will be required to petition to have a personal representative named to administer your estate. This petition must be made to a probate court, and the process can be quite lengthy. In the state of California, all property is divided among spouses and living relatives in order of priority that is determined by law; a portion of your property is distributed to your spouse or registered domestic partner, and a portion is distributed to your children and other relatives based on the established priority. If you do not have a spouse, registered domestic partner, or living relatives, all property goes to the State of California. Thus, per California law, your friends, unregistered domestic partner, and favorite charities will receive nothing upon your death.

In addition to ensuring that your loved ones receive the correct assets and/or property upon your death, creating and maintaining a mindfully structured estate plan can help protect your property from unnecessary estate taxes and allow your beneficiaries to avoid probate court. Because any estate with more than $150,00 in assets is required, by California state law, to go through the probate process, a successful estate plan can avoid probate entirely if structured properly. When such an estate plan is put into place, all details about your estate are kept private, and the probate court does not become involved with the administration or distribution of your assets. More importantly, a well-constructed estate plan ensures that your heirs will receive their allocated distributions from the estate quickly and easily because an administrator and beneficiaries have been named in advance rather than through a court proceeding. Additionally, your heirs will receive more of their assigned assets from an estate plan than they would if the same estate were to go through probate proceedings, as such proceedings incur more expense and taxes that must be deducted from the estate.

In addition to the allocation of assets, an effective estate plan should also include documents like durable powers of attorney and advance health care directives. These documents designate the individual or institution that will oversee and manage both your health and your finances in the event you become incapacitated during your lifetime.

Why Can’t I Just Use a Form From the Internet or Do-It-Yourself Software?

While it may seem straightforward and easily accomplished online, a truly effectual will, trust, or estate plan is much more complex than what a simple form can readily accommodate. Often known as Do-It-Yourself wills, the speed, convenience and ease of use of such software-based programs can be tempting to those who have limited time and a limited budget. However, these programs, which are often quick and cheap to complete, offer users a false sense of security regarding their assets and the distribution of those assets after their death. In reality, such form-based, generic wills may be either partially or wholly invalid if they fail to meet legal requirements. Even the process of signing such DIY wills may invalidate them, as most wills must be completed under the supervision of “qualified” witnesses. Moreover, any inaccurate or incomplete forms may negatively impact the will’s effectiveness. If you are unsure of, or do not fully understand the meaning of certain legal terms — such as beneficiary, residual beneficiary, alternate beneficiary or executor — your will or estate plan may not accomplish what you intended. Ultimately, it’s very risky to attempt to create a will without experienced legal counsel to guide you.

What is a Living Trust?

A living trust is a formal legal document that can partially substitute for a will in specific circumstances. To set up a living trust, the grantor, or person creating the trust, transfers property or assets into the trust, often acting as the trustee during their lifetime. The trustee then administers the trust for his or her own benefit with the understanding that the trust is revocable and can be changed or terminated at the grantor’s discretion at any point during his or her life. However, a living trust becomes irrevocable after the grantor’s death. Thus, it is necessary for the grantor to name a successor trustee to administer the trust after the original trustee’s death.

If I Have a Will, Do I Need a Living Trust?

Generally speaking, a will and a living trust are not mutually exclusive documents, therefore they may address different aspects of your estate. In California, it is essential to have a living trust even if you have a will if your your property is valued at more than $150,000. This living trust will protect your assets from probate proceedings. Conversely, a will is still needed to address assets that were not transferred into the living trust during your lifetime in the event that your named beneficiary predeceases you. Such assets may include proceeds of life insurance policies and/or retirement accounts. Additionally, a will allows you to name the executor for your estate, nominate guardians for minor children, and appoint a trustee to administer any assets to those minor children.

What are the Powers of a Trustee in Administering a Trust?

As the person or institution that administers a trust, the trustee is endowed with considerable authority and responsibility over the estate. More importantly, this authority is exercised outside of the direct supervision of any court. Thus, it is crucial to carefully and thoughtfully appoint a trustee. By California law, the trustee is responsible for administration of the trust and management of all asset distribution to trust beneficiaries, along with other specific duties, including: 

 

  • Maintaining Trust Integrity: the trust must be managed solely in the interest of the beneficiaries.
  • Managing Trust Impartially: the trustee must administer the trust as designated, without partiality towards any one beneficiary.
  • Safeguarding Trust Property: the trustee must protect the trust property.
  • Avoiding Commingling: trust assets must be kept separate from the trustee’s own property and from other property.
What is a Living Will?

A living will is a legal document that provides written instructions regarding your preferences for medical care in the event that you become incapacitated or otherwise unable to make decisions for yourself. Alternatively known as an advance directive, advance healthcare directive, or medical directive, this document gives guidance to doctors and caregivers if you become terminally ill, are seriously injured, suffer from dementia, or otherwise become unable to make decisions about your own health and care. It is recommended that anyone who is concerned about their future care create a living will. Such documents not only dictate the type and extent of medical care you would like to receive, but also alleviate the strain placed on family or loved ones when faced with critical or end-of-life decisions.

Who Will Make Decisions for Me If I Am in a Coma or Incapacitated?

To ensure that your health and finances are properly safeguarded during a time of incapacitation, it is crucial that you adopt a thorough, well-constructed estate plan. To address personal or medical care, a living will, or advance health care directive, should be created to provide guidance to doctors, caregivers, and loved ones regarding your wishes. To address financial management, a durable power of attorney, also known as a financial power of attorney, should be created to designate a person or institution that will oversee your finances until you are capable of managing them yourself.

What is Probate, and Why Do I Want to Avoid it?

Generally speaking, probate is the process through which an estate is managed and administered and the assets of that estate are distributed to the beneficiaries. This process is mandatory for all estates that have more than $150,000 worth of property, and is a court-supervised proceeding. In addition to being costly and time-intensive, probate court is a highly public process, the details of a probate are available for anyone to see. Thus, many people seek to shorten or even avoid probate; to accomplish this, it is imperative that you create a thorough estate plan, including a living trust, so that your estate can avoid the time and cost inherent in the probate process. Most importantly, estates that avoid probate through the use of an estate plan avoid the associated taxes and fees, leaving more assets to be distributed to their intended beneficiaries

How Does the Probate Process Work in California?

In California, the execution of probate depends on the existence of a will. If the recently deceased had a viable will in place, the probate process begins with the executor named in the will. He or she is responsible for filing a petition in probate court to seek appointment. However, if the recently deceased does not have a will, it is the responsibility of a relative or other party to petition the court for an appointment. Once the petition has been submitted, the court appoints an administrator, or personal representative to collect all assets and property, pay any outstanding debts or other expenses and distribute the remainder of the estate to the beneficiaries upon court approval. If disputes or disagreements arise among the beneficiaries or the administrator of the estate as to the correct management of the property, assets, etc., these disputes are resolved by the probate court. It should be noted that probate court is required in the state of California for all estates valued at over $150,000, but more streamlined processes are available for smaller estates.

Other Areas of Practice

Trusts

 

Estate & Trust Administration

 

Advance Health Care Directive

 

Power of Attorney

Wills

 

Probate

 

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