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San Fernando Valley Probate & Estate Administration Law Blog

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Estate plans that are out-of-date or inadequate can cause expensive squabbles between the heirs.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.

The ways heirs may inherit debt

California residents may be interested in a recent article that described how a deceased family member's unpaid bills may have a dramatic effect on inheritance. On most cases these expenses will simply consume a sometimes great portion of the inheritance the heirs are expecting. The most common debts include mortgage or medical debt, unpaid credit cards and unpaid taxes.

Other forms of liability may also affect a living person upon the death of a relative. This can happen most often with co-signed loans. When a signer on a loan dies, many lenders cause the full balance of that loan to immediately become due regardless of the loan's status or good repayment history.

Steps to help avoid inheritance conflicts

Few things have more potential to jeopardize peace within a California family than arguments over a deceased loved one's estate. A parent who gives a new spouse his or her inheritance while omitting children, for example, can cause extreme frustration and stress for would-be heirs who may have benefited substantially from the inheritance. Individuals who are in the midst of establishing their wills can make some general considerations in order to avoid pitting their surviving relatives against one another in the future.

Adequate communication with family members is vital to the process. Things with major sentimental value to certain relatives might get lost in the shuffle without advance communication, possibly leading to conflict. Along these lines, setting up a will and related documents while one is healthy can help ensure that the decisions made within are logically sound. Fairness in the division of assets should help to avert tension between heirs. A possible situation in which this could hold especially true may involve one child having held greater responsibility for an ailing parent's care than the others.

Planning a special needs trust

California parents of children with special needs want to make sure their offspring are well taken care of throughout their lives. Parents facing this challenge know they won't live forever, and they worry about what will happen to their special needs dependents once they're gone.

Legal experts say that one of the most efficient strategies for ensuring special needs individuals continue to receive the care they need involves the creation of a special needs trust that designates the special needs child as its specific beneficiary. In order to qualify for government assistance, special needs individuals can't have significant assets. Leaving money directly to a special needs individual will almost certainly disqualify them from receiving state-funded services that can be of benefit.

How exes can become unintended beneficiaries

Many California residents who have thought about their loved ones and want to protect their future may have established a will years ago. However, in some situations, individuals may leave unintentional beneficiaries such as ex-spouses because they have neglected to make the necessary changes.

One problem occurs when an individual creates a new will but does not change beneficiary designations. A will does not supersede beneficiary designations that are on retirement accounts, 401(k) plans and other financial instruments. Individuals who have not changed beneficiary designations may have their assets given to an ex-spouse. Rules regarding some of these types of accounts mandate that the assets in the account automatically go to an individual's spouse when he or she dies unless the spouse relinquishes his or her claim and the person completes and files the necessary paperwork. Even if the spouse filed a prenuptial agreement, this will not suffice without the appropriate beneficiary designation completed.

Do you need a living trust?

The phrase “estate planning” conjures up images of old guys in smoking jackets and their trophy wives figuring out who will get to inherit their palatial mansion when they die. But, if you’ve been paying attention, you should already know that having an estate plan is essential for everyone in California. Regardless of your income, wealth or current holdings, everyone should have, at minimum, a will, a power of attorney and a medical power of attorney.

But what about a living trust? What does it do and do you need one? A living trust — so called because it functions while you’re alive — accomplishes a couple of different objectives. One of the primary goals is to avoid probate proceedings, which can be complex and costly. This is because everything that’s a part of the living trust is not considered part of the probate estate. It’s your trust and you get to decide what’s done with it. At any time, you can add or take things out, charge terms or end it entirely.

Widow of Mickey Rooney challenges his will in California

Many Californians make the mistake of thinking that their estate is too small to need a will. But officially naming beneficiaries, regardless of the size of the estate, is a critical step in ensuring your wishes are carried out after your death. If not, the situation can become contentious as the family tries to determine your wishes after you’re gone.

As you might recall from a previous post, legendary actor Mickey Rooney—who had a career that spanned 90 years—recently passed away and left an estate that totaled just $18,000. Who he left it to has become a source of great debate for the remaining family members. Rooney disinherited his wife and eight biological children, leaving everything to a stepson who had been his caretaker for the final two years of his life. 

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