LIVING TRUSTS

Published on: July 11, 2017

California Legislature Clarifies Pour-Over Will Laws

A living trust is a common California estate planning tool that helps you avoid probate. In theory a trust is relatively straightforward. You sign a document creating the trust and naming a trustee–usually yourself during your lifetime–and then transfer various assets into the trust. For major items like your home, you will actually need to sign a new deed transferring the real property from you as an individual to you as the trustee of the revocable trust.

Living trusts are not foolproof. There will likely be some assets that you neglect to transfer into the trust while you are still alive. To address this, it is a good idea to have a “pour-over” will, which is basically a last will and testament that gives any remaining property in your probate estate to your living trust at death.

Trusts Can Now be Created After Pour-Over Wills

Published on: May 26, 2017

When is a Trust Not a Trust?

by Scott C. Soady

The term “trust” refers to an arrangement in which one person holds property for the benefit of another. In estate planning we commonly use revocable and irrevocable trusts as tools to bypass traditional probate. You give your assets to a trustee, who then administers the property for the benefit of the persons you name in the trust instrument.

Sometimes the word “trust” is used to signify something else. For example, you may have heard the term “Totten trust” used by banks. A Totten trust is really not a trust; it is a type of payable-on-death bank account. The person establishing the Totten trust has the unrestricted ability to withdraw money from or close the account. The “beneficiary” is simply the person who receives the remainder of the account, if any, upon the account holder’s death.

Court Imposes “Constructive Trust” After Stepson’s Mistake

Published on: April 19, 2017

Have You Talked to Your Family About Estate Planning?

by Scott C. Soady

Estate planning is a process that affects your entire family. The decisions you make today regarding your will and trust can affect your spouse, children, and other relatives years down the line. This is why it is important to make sure your family is aware of your estate planning intentions.

52% of Americans Have No Will

BMO Wealth Management, an international bank based in Montreal, recently released the results of a survey it conducted of 1,008 American adults about their attitudes towards estate planning issues. The report, called “Estate Planning for Complex Family Dynamics,” offers some interesting insights into how the average American views the estate planning process, in particular how they responded to their own experience with inheritances.

Published on: April 18, 2017

Does Your Will Need a “Titanic” Clause?

by Scott C. Soady

If you are married or in a long-term relationship, your estate plan will likely name your partner as the principal beneficiary under your will or trust. But what if you both die in a common accident? The law in this area can get a little complicated.

California’s 120-Hour Rule

When a California resident dies without a will, the state’s intestacy law dictates the distribution of property. If you have a surviving spouse but no children, the spouse automatically inherits everything. If you have children, your spouse inherits all of your community property and splits any separate property with the children.

Published on: March 4, 2017

Using a Trust to Manage Property in Different States

by Scott C. Soady

One of the main benefits of a living trust is that it can make it easier to administer property you own in multiple states. Probate is handled at the state level, so if you own a house in California and a rental property in Arizona, your probate estate would need to open a separate proceeding in each state after your death. However, if you have a properly funded trust, your successor trustee can administer both properties without having to go through probate at all.

New Hampshire Defers to California in Trust Dispute

Even if you have a trust, you still need a will. Typically you sign what is known as a “pour-over will,” a document that basically transfers any remaining probate property at death to the successor trustee of your trust. This is important because it confirms your intent to distribute all of your property through the trust.

Published on: February 24, 2017

The Importance of Properly Funding a Living Trust

by Scott C. Soady

As any estate planning lawyer can tell you, a living trust can help you avoid probate, as assets in a trust do not pass under your will, which can save your heirs time and money. However, an improperly executed trust can lead to unnecessary confusion and even litigation.

Courts Sort Out Conflicting Trusts

Trusts do not fund themselves. Once you create a trust you must legally transfer title of your assets to the trustee (which is usually yourself). If you later decide to revoke the trust, you must similarly transfer title from the trustee back to yourself as an individual.

Published on: February 22, 2017

The Significance of Separate and Community Property in California Estate Planning

by Scott C. Soady

California is a community-property state. This means that assets acquired during the course of a marriage are considered the equal property of both spouses. For estate planning purposes, one spouse may only dispose of his or her 50% share of community property by will or trust; the other 50% remains with the surviving spouse. Of course, one spouse may always leave his or her share of community property to the other.

Drafting Mistake Leads to Dispute Over Status of Marital Home

It is important when making your estate plan to clearly delineate between community and separate property. This is not always a simple matter, especially if one or both spouses have remarried and retain separate property from prior relationships. While California law allows couples to freely decide whether to convert property’s status from separate to community and vice-versa, a process known as “transmutation,”it is important that a will or trust is consistent on this point.

Published on: February 10, 2017

Father’s Trust Not Liable for Failing to Help Daughter Keep House

by Scott C. Soady

Parents often create a trust as part of their estate planning to ensure their children have ongoing access to financial resources. When you create a trust, the trustee has certain legal and fiduciary obligations to the beneficiary. But how far does that duty actually extend?

“Opportunities Lost” Not Grounds for Breach of Duty Lawsuit

A California appeals court recently looked at this issue. The question was whether or not an adult child could sue the former trustees of a trust created by her father because of “opportunities lost” due to the trustees’ alleged neglect. Specifically, the child said she lost her house because she was never informed that she had access to the financial assets in the trust.

Published on: January 21, 2017

What Happens to My Dog After I Die?

by Scott C. Soady

Carrie Fisher, the writer and actress remembered by millions of fans as Princess Leia in the “Star Wars” films, passed away in late 2016. A number of stories published after Fisher’s death mentioned her French bulldog, Gary, a service animal who helped her cope with bipolar disorder. To the relief of many fans, Fisher’s daughter took custody of Gary.

Creating a Pet Trust

Unfortunately, many pets are simply abandoned or forgotten after their owners die. Some people just assume a family member will assume responsibility for a pet, but that is often not the case. This is why it is important to include your pet in your estate planning.

Published on: January 20, 2017

How Should I Dispose of My House in My Estate Plan?

by Scott C. Soady

Dealing with real estate is often the most complicated part of estate planning, particularly if you want to provide for multiple family members. Unlike cash or stocks, it can be logistically difficult to divide a house or a rental property among multiple children. In many cases it makes sense to direct the executor of your estate (or the trustee of your trust) to sell the property upon your death and divide the cash proceeds among your designated beneficiaries.

Leaving it Up to Your Trustee

Then again, there are cases in which you might want to afford one member of your family the chance to keep the property. For example, your will might give one person the right to purchase your house upon your death. Such provisions must be carefully drafted by a qualified attorney to avoid any misunderstanding or confusion.