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San Fernando Valley Probate & Estate Administration Law Blog

Determining the legal viability of oral trusts

The basic premise of a trust is fairly straightforward: A person (the settlor) asks another (the trustee) to retain and manage an asset for the benefit of yet another (a beneficiary). Given the simplicity of that explanation, one might think that a trust is little more than a promise made between people in Woodland Hills. This may prompt the question of whether or not one can transfer assets through an oral trust.

The answer to that question depends on the type of property being considered. In terms of ownership, all property is defined as either “real” or “personal.” The main difference between the two is movability: personal property is movable, while real property is not. Examples of personal property might be a car, furniture, or cash. Land and anything attached to it (say, a house) are examples of real property.

How can one ensure the duties of a trustee are fulfilled?

Assuming the role of trustee for a trust created by a family member, friend or colleague in Woodland Hills is a huge responsibility, and certainly not a request you should consider fulfilling without first dedicating a significant amount of thought and care to it. By accepting such a responsibility, you assume a number of duties, both to the settlor and to the beneficiaries of the trust. To ensure that that you put forth your best effort in completing your duties as a trustee, interested parties to the trust may require a performance or surety bond.

Such a bond is secured by a guarantor who agrees to pay any designated obligees (most likely to be the trust beneficiaries, in this case) if you fail to fulfill your duties as trustee. According to the California Probate Code, it is only required that you (as the trustee) acquire such a bond in the following situations:

  •          If it is specifically mandated in the trust instrument.
  •          If the court believes that it is necessary to protect the interests of the trust’s settlor, its beneficiaries, or any other interested parties.
  •          If you were not named as the trustee by the trust instrument, but rather appointed to that role by the court.

Heirs see proceeds of sale of figurines 80 years later

Many in Woodland Hills may wonder what sort of assets make up their estates, and how far those properties can go in generating income and other benefits for their beneficiaries. Any tangible (and in some cases, intangible) property can qualify as estate assets. That means that one’s cash accounts, securities, real estate holdings, investment accounts, and precious items may all be made to benefit one’s family, friends, or other parties once he or she is gone.

The same holds true with any intellectual property that he or she may hold. This highlights the point that not only do the actual present values of estate assets benefit beneficiaries, but so too does their income-generating potential. Examples of this may include the authorized use of a protected work, the interest earned on an investment account, or the proceeds of the sale of an item.

You don't have to predict the future to plan for it

It is impossible to know what will happen in the future, but there are steps that you can take to protect yourself and your loved ones in the years ahead. In addition to an updated will and complete estate plan, you may also protect your interests by drafting advanced directives for your assets and health care.

Through a health care power of attorney and a living will, California residents can outline their wishes for health care and end-of-life care. While these are not necessarily fun things to think about, taking this step can provide you peace of mind and save your loved ones from making difficult decisions on your behalf.

Debt allocation after death

Many in Woodland Hills may joke about dying penniless and poor, yet in the case of many local residents, their financial circumstances may actually be worse than that. Recently, statistics seem to show that more and more people are dying in debt. Information shared by Fox Business shows that as many as 73 percent of Americans carry debt at the time of their deaths. The average amounts carried by those who do die in debt is just under $62,000.

It may be well understood by most that when someone dies, any claims against his or her estate are typically paid from its remaining assets. However, what if one were survived by a spouse? Along with the estate’s assets, would he or she also inherit the decedent’s debts?

Examining will revocation methods

Estate planning experts in Woodland Hills recommend that people begin planning for the transition of their assets early on in life. Those who do so may rest easy knowing such matters are covered. Yet given that they may live for years or even decades after having created their wills, these people may also want to know the methods through which they can revoke them if they so choose.

The different ways in which one may revoke a will are outlined in the California Probate Code. If one drafts a second will that expressly invalidates the terms of an earlier one, the initial will is then considered to be revoked. Inconsistencies in the terms between a first and second will may also be enough to invalidate the former. Along with canceling it, those who have a flair for the dramatic may also want to confirm the revocation of a will by any of the following actions:

  •          Tearing it up
  •          Burning it
  •          Destroying or obliterating it altogether

What duties come with power of attorney?

Much is made by people in Woodland Hills about the authority granted to those given power of attorney. What is often overlooked, however, are the duties that come with such a role. You may have been led to believe that whomever you entrusted to handle your affairs through power of attorney has carte blanche to do whatever he or she wants. That is not the case.

The duties of those entrusted with powers of attorney can be found in the California Probate Code. First and foremost, however, it should be understood that whomever you endow with powers of attorney is only obligated to fulfill those duties in those areas that you designate. In general, whoever is entrusted with power of attorney is expected to fulfill his or her obligations pursuant to the terms that the two of you agreed upon. He or she should complete those duties with the same judgment and care you would expect from a reasonably prudent person. If you chose to grant him or her power of attorney based on any special skills he or she claimed to have, he or she should be expected to act up to the standard one possessing such skills would.

Brothers and sister at odds over mandate of family trusts

Naming a reliable trustee may be the most important decision that a person in Woodland Hills can make after deciding to establish a trust in the first place. That trustee will be endowed with power to oversee much of the management and administration of the trust’s assets and properties. Oftentimes, as a way of balancing out that power, co-trustees may be chosen instead. In such a case, each co-trustee must typically agree on actions that affect the trust. However, that is not to say that there will not be disagreements and disputes amongst those that hold this role.

Such a dispute recently played itself in Los Angeles County Superior Court. The seeds for the dispute were sown in February of this year, when the daughter of the late owner of the Los Angeles Lakers (who now serves as the controlling owner of the franchise) fired her brother as the organization’s vice president of basketball operations during a restructuring of the team’s front office. The two siblings (along with another brother) serve as co-trustees of four family trusts through which a majority ownership of the team is maintained.

Is at-home or out-of-home long-term care right for you?

You will undoubtedly face many unexpected situations over the course of your lifetime. Some of those events may bring joy to you and your family, and other incidents may cause considerable stress and uncertainty. Though you cannot plan for all potential life events, estate planning could help you address the possibility of needing long-term care at some point in the future.

A substantial number of people end up in situations where long-term care proves necessary. The circumstances of needing such care can come from physical or mental impairments that result from injuries, illnesses or other factors. Because you probably do not want to place your family in a predicament that causes them to feel the burden of deciding how they should handle your care, you may wish to consider creating your own plans ahead of time.

Can you resign from being a trustee?

Assuming the responsibility of acting as the trustee for a trust set up by a family member or friend in Woodland Hills is a huge undertaking, and certainly one that should not be taken without a good deal of thought and careful contemplation. Yet even after having given your best effort, circumstances may make performing your duties as a trustee impossible. The question then becomes is there a method by which you can legally resign from the role?

California’s Probate Code does allow you to resign from being a trustee by certain methods. The first is through any methods detailed in the trust instrument itself. If there are none, and the trust is revocable, you can contact who has been given the power to revoke the trust (either the settlor or parties who have been given that privilege), and asked to be released from your role. If the trust is irrevocable, you need to have the consent of all of the adult beneficiaries of the trust in order to resign. The law also allows you to petition the court to accept your resignation as trustee.