Among the most important decisions you’ll make as you create your estate plan is naming the trustees and successor trustees of your trusts. A dishonest trustee can take all of your hard-earned assets and keep them from the loved ones and beneficiaries you intended to leave them to.

When considering whom you want to manage a trust, it’s essential to look for someone who not only is honest but has good judgment. You want to be wary of anyone who has financial problems of their own, as they may have problems managing money and/or be tempted to embezzle funds from your trust.

If no one in your family or close circle meets those criteria, you may want to consider a private fiduciary. Many financial institutions have trust departments, and there are trust companies that will handle these responsibilities (for a fee, of course). Placing an impartial third party in charge of a trust (and other parts of your estate) can help minimize family battles as well. Your family law attorney can provide you with some recommendations.

Family members can help prevent loved ones from choosing someone to be a trustee or other fiduciary who may be unscrupulous or ill-equipped for the role. Too often, elderly people choose someone who’s become close to them in their later years, like a caretaker, if their family members are spread across the country and are no longer in their lives very much. That’s why it’s wise to know something about your parents’ and other elderly loved ones’ estate plans while they’re still around.

If a loved one becomes incapacitated or dies and you have concerns about a trustee, you have the right, if you are a beneficiary of the trust, to stay informed about their actions. If you have concerns about the actions of a trustee, you should consult with your loved one’s estate planning attorney or an attorney of your own to determine what options you have to prevent the theft or mismanagement of your loved one’s assets.

Posted in Trustees Executors & Fiduciaries | No Comments »

It doesn’t matter if you’re creating an estate plan in California or facing the probate process after the death of a loved one, it’s critical to understand the finer details to ensure yourself of making all the right decisions.

There are times when the probate process is uncontested, with everything unfolding as planned. Contested probate is also possible, typically because a disgruntled heir is seeking more money or someone feels they were unfairly left out of a person’s estate plan.

The basics of probate

While there is a lot going on during probate and the process is never exactly the same for two estates, here are some basics that always come into play:

• Collection of all probate property
• Collection and payment of all claims, debts and taxes owed by the estate
• Collection of all outstanding income, such as final paychecks and retirement payments
• Settlement of disputes
• Distribution of all remaining property to the heirs outlined in the deceased individual’s estate plan

If everything goes as planned, these steps will typically unfold over the course of three to six months. However, if someone contests the will, it’s not out of the question for probate to drag on for a year or longer.

How much does it cost?

It’s natural to have concerns about the cost of probate. When creating an estate plan, make decisions to help simplify the probate process, with the idea of cutting down on costs for your heirs.

The costs associated with probate are based largely on the complexity of the estate and how long the process takes to complete. The most common expenses include:

• Court costs
• Personal representative fees
• Attorney fees

Uncontested probate will almost always cost less than contested probate.

Understanding what happens in probate can help you make the right decisions, either for yourself or your loved ones after your passing. It’s not always easy to think about this or tackle probate during a difficult time, but knowing what you can and can’t do will put you on the right track to success.

Visit our website and read our blog for more information on probate, estate administration and related matters in California.

Posted in Firm News | No Comments »

Many Californians are single parents raising young children. In some cases, the other parent has passed away. Maybe the other parent has no custody rights. Perhaps they’ve chosen to have or adopt a child on their own.

Whatever the case, it’s essential to ensure that your child will be cared for if you pass away or become incapacitated and unable to care for them. That’s why single parents need an estate plan.

Most single parents’ primary concern is finding the appropriate person or people to take on the responsibility of raising their child if anything happens to them. This is probably the most important decision you’ll make when drafting your estate plan. You need to find someone whom you trust who is able and willing to take on the full-time care of a child and raise them to adulthood as you intended.

You may also want to designate visitation and/or decision-making rights for others. For example, perhaps a sibling will assume guardianship of your child, but you wish to allow your deceased co-parent’s family members to have visitation rights and/or a say in the child’s education or health care decisions. Of course, giving too many people a say in these important matters can cause complications.

Single parents should also set up trusts to manage assets your child will inherit. The trust can also be used for funds received from any settlements or judgments. For example, if you die in a freeway crash caused by a drunk driver, your family may be able to file a lawsuit on behalf of your child against the driver and/or other defendants.

When setting up a trust, you’ll also need to name a trustee to manage and disburse the funds to and for your child. You can designate how the funds in the trust are to be used, from living expenses to their eventual college education.

Estate planning should never be postponed. No matter how young or healthy we may be, no one knows what the future will bring. However, if you are a single parent, having a detailed estate plan in place that designates your wishes and provides for your child can save that child and your other family members considerable stress and turmoil.

Posted in Estate Planning | No Comments »

If one or both of your parents have passed away, it is likely that they will have assets for distribution. As their child, you may expect that you will automatically be owed a share of the estate. While this is understandable, unfortunately, your right to inheritance depends on the instructions left within each parent’s estate plan.

If you are struggling to gain the inheritance that you believe you deserve from your deceased parents, it is important to understand all aspects of the law in California. This will help you to understand how the law applies to your situation. Generally speaking, your chances of gaining an inheritance from a parent is greater if they have not left a will than if they have left a will that does not include you. This is because of the laws of intestate succession.

What are the laws of intestate succession?

If your parent has not left any type of estate plan, this means that they have died intestate, and their assets will be subject to the laws of intestate succession. This means that assets will be distributed according to the surviving heirs, which count as spouses, children, parents, siblings and more distant family. If your parent did not have a spouse at the time of their death and died intestate, it is very likely that you will be set to gain an inheritance.

What can I do if I have been excluded from my parents’ wills?

If you are not included in the estate plan of either of your parents, you may have to simply accept their wishes. However, if you believe that this was not their true intent and that their will is invalid in some way, you may be able to take action to dispute the will. You may be able to do this by proving that the will is not valid because it was subject to fraud, or that your parent was manipulated by undue influence.

If you have not been included in your parents’ wills or if you are finding it difficult to gain the inheritance that you believe you are entitled to, it is important to take swift action and assert your rights.

Posted in Firm News | No Comments »

Many people who are creating their estate plans believe that they’ve given their children every advantage in life to become successful, financially independent adults. Instead of leaving them a substantial amount of money or other assets when they die, they prefer to leave the bulk of their wealth to various worthwhile charities. They may even want to set up a scholarship fund to help students at their alma mater pay their educational expenses.

There are various types of charitable planning vehicles available for people who want to leave a legacy of philanthropic giving. These include donor-advised funds and charitable trusts — specifically charitable remainder trusts (CRTs) and charitable lead trusts (CLTs). These allow people to manage their charitable giving while they’re still alive and provide direction for it after they’re gone. They carry some tax advantages as well.

Another charitable planning vehicle is a private family foundation. Many people choose to establish such a foundation as a way to involve their children and other family members in their philanthropic goals and teach about the importance of giving back. A private family foundation can also strengthen family ties across a clan that is spread out geographically or perhaps is not particularly close. It can give them a shared purpose, and they can be proud to have their name associated with.

A private family foundation can be set up as either a trust or a corporation. The donor (the person who establishes it) and their family are the trustees or board of directors, depending on how the foundation operates.

Setting up a private family foundation is not a simple task. You’ll need to consult with financial and tax professionals in addition to your attorney.

If you’re looking for a way to continue to make a difference in the world long after you’re gone, you should discuss these and other charitable-giving options with your estate planning attorney. They can help you determine how best to achieve your goals.

Posted in Estate Planning | No Comments »

A comprehensive estate plan is often comprised of a number of documents. It’s crucial that they don’t contradict one another. This can cause confusion, delays and expense when it comes time for your executor(s) to settle your estate. Therefore, if you make changes to one document, your estate planning attorney can advise you if similar changes need to be made to other documents to ensure continued consistency.

Two documents that sometimes end up with conflicting information are revocable living trusts and wills. Many people have both because they serve different purposes. However, they need to be consistent.

A living trust often undergoes changes while a person is alive. You may sell a home that was included in your trust. You may open new bank accounts that you include in it. If you want to place a new asset — whether it’s a home, car or account — in your trust, it’s important to do as soon as you acquire it.

Because most people are more familiar with wills than trusts, they often assume that the will takes precedence over the trust. That’s not the case. If a person dies with a revocable living trust and a will with one or more provisions that conflict, the trust will take precedence. That’s because it’s operative during the person’s life, while the will doesn’t take effect until they died.

Another important difference between the two documents is that trusts are considered separate from the individual. Assets included in the trust are technically owned by the trust — not by the grantor of the trust. Trusts don’t go through probate as wills do. That’s one reason why many Californians choose to have them.

If you make changes to the assets included in your living trust, it’s a good idea to review your other estate planning documents to make sure that there are no conflicts. It’s also wise to review your entire estate plan every year and whenever you have significant life events, like marriage, divorce, new children or grandchildren and deaths in the family.

Your estate planning attorney can advise you of any necessary changes to your estate plan and help you ensure that it reflects your current wishes.

Posted in Trustees Executors & Fiduciaries | No Comments »

It is recommended that people plan their estate as early as possible because passing away without a will can lead to complex issues. When a person dies without an estate plan, this is known legally as dying intestate.

When a person in California dies intestate, their assets will be distributed according to California law. This means that assets will be distributed to surviving relatives in a certain order. If you have a loved one who passed away intestate, it is important that you gain a good understanding of how the law works in California.

Distributing assets to their spouse and children

If a deceased person is survived by a spouse but no children, the surviving spouse will inherit the entirety of the deceased person’s probate estate. If the deceased person is also survived by children, the spouse will inherit all community property and up to 50% of separate property. The children will then inherit the remaining estate in equal proportions.

Distributing assets to their parents

If the deceased person is survived by parents and has no children or spouse, they will inherit all property after probate. If the person is also survived by a spouse, the surviving spouse will inherit all community property and half of the separate property. The surviving parents will then inherit the other half of the separate property.

Siblings’ rights to inheritance

If there are no surviving parents or descendants, siblings will have a right to the inheritance. They will be entitled to half of the separate property, with the surviving spouse inheriting the rest of the estate.

What happens if a deceased person is not survived by immediate family?

If a deceased person dies intestate and has no parents, children, spouse or siblings, the inheritance rights will pass to any nieces or nephews that are living. If this is not successful, the inheritance will pass to grandparents, aunts and uncles, and more distant relatives. If an attempt to find a surviving relative is unsuccessful, the probate estate will escheat to the State of California.

If you have a loved one who has died intestate, it is important to take action so that the rightful survivors are able to gain their inheritance in a timely manner.

Posted in Firm News | No Comments »

If your family doesn’t involve a spouse of the opposite sex and a couple of kids that you had together, you’re not alone. Family dynamics have evolved considerably in recent decades. The term “modern family” has largely replaced “traditional family.” A family can easily be comprised of an unmarried couple (of the opposite sex or the same sex), a single parent, grandparents raising their grandchildren, stepparents and stepchildren and other variations.

Regardless of what your family looks like, you want to make sure that your loved ones are provided for if something happens to you and that they inherit the assets you’d like them to have after you’re gone. State probate laws — even those in California — still tend to recognize “traditional” family relationships when determining who inherits an estate if a decedent dies without a will (“intestate”).

Therefore, if your family isn’t what might be considered “traditional” by I Love Lucy-era standards, it’s essential to designate your wishes to ensure that they’re carried out. This can help you protect and provide for a partner who may not be your legal spouse and children whom you haven’t officially adopted but are raising as your own, for example.

With a will, trust and other beneficiary designations, you can state who will get your property and other assets. Many people prefer trusts — in part because they don’t have to go through probate and are more private.

If you have a nontraditional family, it’s wise to put other estate planning documents in place that will designate who has the authority to manage your financial affairs and make health care decisions if you become incapacitated and unable to make your wishes known or handle your own affairs. You can do this with an advanced health care directive and powers of attorney.

It’s wise to discuss your wishes with an experienced estate planning attorney. They can help you develop an estate plan that will protect you and those you love.

Posted in Estate Planning | No Comments »

Some important aspects of estate planning are done outside of “traditional” estate planning documents like wills and trusts. One of these involves something called the Uniform Transfers to Minors Act (UTMA). Each state has its own UTMA. In California, it’s called the California Uniform Transfers to Minors Act (CUTMA).

You can establish a CUTMA account at most financial institutions in the state. It allows you to gift some of your assets to a young family member. The money in the account legally belongs to the child, but a designated custodian is able to transfer assets to the account for the child. Although the custodian has access to the account, the assets in it must be used for the minor’s benefit only. Income earned on the funds in the account is reported under the minor’s Social Security number.

The child can’t access the assets until they turn 18. (In some cases, you may be able to delay access until they’re older.) At that time, the custodian is required to close the account, terminate the custodianship and transfer the assets to the minor.

If you want to use a CUTMA to set aside money for your child, grandchild or another minor, you must establish a separate account for each one. Each account is allowed only one custodian. However, you can name a successor custodian if you choose.

There are many options for setting aside money for a child while you’re still alive while still ensuring that they don’t have access to it until they’re adults. A CUTMA account is just one of them. If you’re considering a CUTMA account, it’s wise to consult an experienced estate planning attorney to help determine the pros and cons of all of your available options and decide which is best for you and the child.

Posted in Estate Planning | No Comments »

You’ve inherited part of a family member’s estate. Maybe they designated you as a beneficiary in their will. Perhaps they died without a will (“intestate”) and you are due a portion of the estate under California’s probate laws. What if you don’t want or need the inheritance? You’d prefer that someone else receive it — or at least a portion of it? Maybe you have a sibling who has greater need for the money (or property) than you do.

You can make what’s called an “assignment.” You assign (transfer) all or part of your interest in the estate to someone else. This is not just an informal transfer. There are legal steps that need to be taken since the assignment contradicts what the decedent designated or what the law requires based on familial relationship.

There are also tax implications for both the person who makes the assignment (the assignor) and the person who receives it (the assignee). The assignment has to be filed with the probate court before the distribution can be made to the assignee.

Note that inheritances from a trust typically cannot be assigned to someone else. Most trusts prohibit assigning an undistributed trust inheritance. This is often done to prevent creditors from being able to claim assets in a trust.

An assignment should not be confused with a disclaimer. A disclaimer is when someone refuses an inheritance. If you want to disclaim an inheritance, you don’t have any direct say in what happens to it. Legally, the assets involved are treated as though the person designated to inherit them predeceased the person whose estate is being settled. That means it could go to the next person in the line of succession, such as the children of the person who disclaims the inheritance.

There are legal restrictions on disclaiming an inheritance. There are time constraints, for example. Further, you can’t have received any benefit from the inheritance (like income from a property) before you disclaim it. Unlike an assignment, an inheritance from a trust can be disclaimed.

Whether you want to make an assignment or a disclaimer, it’s essential to take the appropriate legal steps. Trying to do it informally can create legal issues for the estate and everyone involved. Discuss your intentions with an estate planning attorney who can help you follow the proper legal procedures.

Posted in Estate Administration | No Comments »