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San Fernando Valley Probate & Estate Administration Law Blog

The importance of leaving behind a written will

While dealing with the loss of a loved one is never easy, California residents know that the process can be a bit easier when the deceased family member leaves behind a will. According to a recent report, many individuals today do not have a written will prepared in the event of their death. In fact, the report noted, only about 30 percent of individuals below the age of 34 actually have a written will.

Without a valid will in place, the decedent's property will be distributed in accordance with state laws of intestacy, and the court will appoint an administrator who will manage the decedent's assets. Besides being a lengthy process, there are fees that must be paid to the court and to the lawyers. These fees are deducted from the estate property.

Learn the details of Robin Williams' estate plan

Fans of late actor Robin Williams may be interested to learn the fate of his two California homes and other assets. Although Williams was reported to be worth $130 million in 2012, that number may have changed significantly as a result of his two divorce settlements. In an interview, Williams reportedly said that he was close to bankruptcy and had made a return to TV in order to "pay the bills." Williams' publicist, however, has said that those comments were not serious and he was in no financial trouble.

According to reports, Williams used some sophisticated estate planning techniques that may help simplify his estate administration and may have ensured that his assets and loved ones are well taken care of, if early indications are accurate. A waterfront home in Tiburon and a Napa Valley mansion Williams owned were both placed in a holding trust in order to minimize estate taxes. A separate trust Williams created in 2009 after his second divorce transferred three equal portions of funds to his three children when they reached the ages of 21, 25 and 30, respectively.

Involvement of various parties in a living trust

Because the probate process in California can be drawn out and difficult, many residents may consider living trusts as an alternative to a will. However, it is important to understand the difference between a revocable and an irrevocable trust due to the long-term implications of each. For example, some people may think that an irrevocable trust protects an estate from creditors, but such benefits could change in the future. At the same time, changes to an irrevocable trust may be difficult to accomplish because of the nature of this type of estate planning document.

Issues could arise with irrevocable trusts if a trustee becomes unavailable because that individual typically has ownership of the assets. There is also the potential for mishandling of funds by a trustee. In a family scenario, an adult child might promote the idea of an irrevocable trust to keep an inheritance from being consumed by debts accrued from their parents' medical issues later in life. However, parents might reject the idea of becoming bankrupt to protect their assets. With a revocable trust, many of these issues may be avoided due to the benefactor also acting as the trustee until the point at which they become incapacitated or die.

Exploring the reasons for setting up a comprehensive estate plan

California residents who have an interest in estate planning may be interested in an article discussing why it is needed. By following a few principles, a plan can be set up to help ensure that a person's estate is disposed of as they wish.

An estate plan is a series of legal documents that directs what happens to a person's assets and personal affairs when they die or are incapacitated. Most often, these documents dictate actions related to disposing of the person's property, taking care of their minor children, deciding what to do medically and financially if they are unable to make those decisions themselves and continuing to run a business when they are no longer there to do so. Estate planning experts recommend that people face these end-of-life issues head-on and actually create their estate plan with the assistance of an attorney, rather than avoiding the issue. A properly-designed plan can help to give the person peace of mind.

Hoffman's estate plan leaves assets to his girlfriend

Readers in California may be interested to know that Philip Seymour Hoffman, the acclaimed actor who died in February following a drug overdose at the age of 46, reportedly went to great lengths to protect his children from the pitfalls of becoming overly reliant on his wealth. Court documents released in the months since the actor's passing show that his estate plan included provisions that left the majority of his fortune to a girlfriend rather than his three children. Hoffman and his girlfriend, who is the mother to the three children, had been together for many years prior to his passing.

The documents state that Hoffman had reiterated his wishes that his entire estate be left to his partner as recently as the year before his death. The actor's lawyer and accountant, who repeatedly asked the actor to set up trust funds for his children, wrote the will. The document names his girlfriend as the sole heir and executor of his estate, suggesting that she would be able to provide for their children's best interests.

California credit card debt after death

In many instances, credit card debt does not die with an individual, but unless an account was opened jointly, a surviving friend or relative will not have to pay off the debt in most cases. During the estate administration, it is an executor's responsibility to pay debts with the deceased person's assets. If there are not enough assets to cover all the debt, creditors cannot typically hold relatives liable for the outstanding balances. However, since California is a community property state, spouses might fall under one of the exceptions to that general debt liability rule.

When people pass away, their assets become the property of their estate, and this estate has to settle credit card and other debts before beneficiaries can collect their inheritance. If a will appoints an executor to handle distribution of assets, he or she must complete this process, but if there is no will, than the state will appoint an administrator to handle assets. If a spouse passes away and their partner lives in California but was not named on the credit card, he or she might be responsible for the debt if the estate cannot pay.

Unmarried partners need protection

Couples in California who decide to live together rather than marrying may think that their estate will automatically go to their partner without benefit of a will. The truth is, it probably will not because marriage offers several automatic protections for issues such as estate planning and medical directives that are not available to unmarried partners.

Even couples who have lived together for many years should take care that their wills and other legal documents specify who will get their personal and real property upon death. An example of this would be a couple who have lived together for 20 years in a house that, in this case, belonged to the woman. If she dies without a will, the house will likely pass to her family members under state intestacy law, and this could potentially leave her partner homeless because the family can ask him to move out of the property.

It's important to review estate plans regularly

Readers in California who are considering creating a plan to distribute their wealth may want to know that just making a plan and filing it away often isn't enough to assure that everything goes smoothly. Estate planning documents that have been drafted more than a few years ago may fail to take into account life changes such as divorce, a new business venture or changes in the tax code. Wealthy individuals are usually careful to check their plans annually, and this is a good idea for those with fewer assets as well.

Estate plans that are out-of-date or inadequate can cause expensive squabbles between the heirs. In most cases, these issues can be avoided if everyone is willing to face what can sometimes be unpleasant conversations about the death of a loved one. A financial adviser is often helpful in such cases since a third party can more easily bring up difficult topics and help bridge the divide over family differences.

Important considerations when choosing a trust administrator

California residents who are looking into estate planning may be interested in an article discussing one vital aspect of creating a trust that is often overlooked. Determining who will administer the instrument can be an extremely important decision.

When a trust is created, the trustee has an ongoing duty to administer that trust, whether they are tasked with investing trust funds, distributing money or buying and selling trust property. There are several factors that should go into deciding who will be the trustee. When choosing a trustee, the person setting up the trust should consider the purpose of the trust in order to get a general overview of the aims that the trustee should be striving for. Also, the beneficiaries of the trust may require certain things, due to their age, income or any disabilities that must be taken care of by the trust.

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