Probate, Estate Planning and Trust Law
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San Fernando Valley Probate & Estate Administration Law Blog

Strategies to avoid probate in California

If real estate is the only asset that an individual owns at the time of his or her death, it may be possible to avoid probate. One such strategy is to title the real estate in the name of a living trust. This allows the owner of the property to name a beneficiary who will receive the property after the current owner passes away.

Another way to avoid probate is to create a joint tenancy situation with survivorship rights. In that scenario, the person who is also on the deed will receive sole ownership of the property after the other person on the deed passes on. In community property states, it is important to note that real estate is community property that is to go to a surviving spouse.

Estate planning for different stages of life

Residents of California should keep in mind that estate planning is a lifelong endeavor, and an individual should periodically return to and update their estate plan. A young, single individual should have documents that give someone the ability to make health care and financial decisions for them if they are incapacitated. They will need a durable power of attorney appointing someone to manage finances, a health care proxy naming someone to make medical decisions, a HIPAA proxy appointing someone to have access to medical records and a living will that discusses life-sustaining and end-of-life care.

An individual who is in a committed relationship may wish to write a will that leaves their assets to their partner while an engaged individual may want to add a prenuptial agreement to the estate plan. After marriage, the previously discussed documents should be revised, and beneficiaries on retirement accounts and insurance plans should be updated as well.

Avoiding common pitfalls when setting up a trust

California residents may be unaware about the most common mistakes people make when planning an estate trust. While it may be difficult to think about, not taking precautions when arranging a trust can cause major dilemmas in the future. For example, many individuals make the mistake of believing that a trust exists after signing a document; however, a trust does not stand until it carries assets. Creating a trust is only the first step in the process.

Often, people assume that the state will handle their financial affairs upon death. Even if one has a written will, it only indicates which family members will receive what is specified. An estate may have to be handled by a public probate process, which can be costly. Establishing a revocable trust may help to eliminate the probate case, ensuring that an individual's privacy is upheld.

Examining the estate planning steps a newlywed couple should take

For California newlyweds, estate planning may be the furthest thing from their minds. However, some simple steps may help to protect assets and ensure that a couple's estate is treated in the right way should unexpected circumstances arise.

One simple fix that newly married couples can take care of up front is adjusting their insurance policies and bank accounts to name their spouse as the beneficiary if desired. A third party can also be the secondary beneficiary on these accounts should both spouses pass away at the same time. In addition to this, some important documents should be drafted by an attorney. These include a health care power of attorney and advanced health care directive. These are used in situations where one spouse is incapacitated and cannot tell doctors about their desired medical care, from tube feeding to life support. A financial power of attorney will allow the person's spouse to control their finances when they are incapacitated as well.

Situations that make it necessary to change one's will

Some of the biggest changes in people's lives might necessitate a change to one's will. Comprehensive estate planning could be beneficial to loved ones when someone passes away, but if one creates a plan when they are young, they will likely want to change the terms as they age, acquire more assets and add to their family.

Having a child or having another child is an event that might necessitate creating a new will if one wants offer the child a specific portion of the estate. Getting married is another time to reconsider one's will because in most cases a spouse does not become the primary beneficiary automatically. People who are living together but are not married might need to put their partner in their will as well.

Wills and estate planning

In California, one of the best ways to plan for the future is to create a will. Wills are legal documents that direct how a person's estate will be distributed after they have passed away. Without a will, the distribution of a decedent's property will be conducted by a probate court. This could mean that a person's last wishes for their property and possessions will not be considered in the distribution.

In order to create a will, certain requirements must be met. The person who creates the will, known as the testator, must be at least 18 years of age and must be able to understand what they are doing. The will must include a statement specifying that it is a last will and testament, and it must name an executor. An executor is a person who is entrusted by the testator to make sure that the will is carried out according to their wishes.

Estate planning and trusts in California

People who are deciding how to handle their estates may have heard of trusts but may be uncertain of exactly what trusts do. Because their uses are diverse, there are also many different types of trusts available. The type of trust a person may choose to establish will largely depend on the goals they are seeking to accomplish.

Trusts may be inter-vivos, which mean they are set up to operate during the grantor's lifetime, or testamentary, which means they are established in the testator's will and take effect upon their death. Trusts may also be revocable or irrevocable. Revocable trusts are those that can be amended or revoked at any time by the grantor. The grantor of a revocable trust maintains control over the assets contained within the trust. Irrevocable trusts may not be changed, and the assets are owned by the trust itself. Changes are only allowed by the agreement of the trust beneficiaries. Irrevocable trusts are not subject to estate taxes, while revocable ones are.

The importance of writing a will

It is very important for every adult who resides in California to have a legal will prepared because without one, the decedent's assets will be automatically distributed by a court according to the state's laws. In most cases, the assets will go to the decedent's nearest relations, such as a spouse or a child. This can be problematic for some families, and it may also incur unnecessary costs.

A will reveals the testator's exact wishes addressing a number of details regarding the distribution of his or her assets. The will allows the testator to select a fiduciary to handle all of his or her affairs. The fiduciary can be an individual, bank or trust company. Furthermore, if the testator has underage children, a guardian can be appointed in the will to care for them, and a trustee can be named to manage trust fund assets designated for the children's care. A testator who acts as a child or grandchild's custodian of assets, as outlined in the Uniform Gift (or Transfers) to Minors Act, may also appoint a successor custodian in the will.

When should someone change a will?

As many California residents may know, life events may necessitate changes in a person's will. This may be done by rewriting the original will to ensure that the decedent's wishes are followed. Knowing when a will needs to be changed and keeping it updated is important.

Marriage is a milestone that marks new beginnings, and most advisers urge a recently married couple to set up wills to mandate how their estates will be handled. State intestacy laws provide a surviving spouse with a percentage of the estate if the other spouse dies without a will. In common law marriages, legal in some states, if qualifications are met, the percentage of the estate given to a survivor may be the same as if they were married. Non-married partners are not routinely given a percentage of an estate in states without common law marriage.

Why California residents may wish to consider trusts

California residents with assets of $100,000 or more may be wise to consider using trusts as part of an estate plan. Trusts allow an individual to stipulate when and how their estate will be distributed, and they can provide peace of mind by ensuring that all heirs will receive their inheritance. Trusts may also mitigate the impact of estate and gift taxes.

Trusts may be a valuable estate planning tool when a significant amount of the estate consists of assets such as real estate, art and antiques or a business. Trusts also allow for payments to be made at specific times such as when a child comes of age or graduates college. Using a trust may also be a consideration for those who worry that their estate would be exhausted before their children come of age. Another benefit of trusts is that they allow disabled relatives to be provided for without impacting their qualification for assistance programs such as Medicaid.