• FAQs

What is the difference between a Will and Trust?

A Will takes effect after you pass away. Generally speaking, if your estate is valued at over $150,000 or you own real estate in California and you have only a Will, your estate will to go through Probate. A Living Trust is the type of Trust that most people have. A Living Trust is created during the lifetime of the Trust-maker and if the Living Trust is properly funded will avoid Probate upon the death of the Trust-maker.

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What is probate?

Probate is the court proceeding to administer an estate when one passes away.  There are several steps to the probate process, which causes the length and cost of an otherwise avoidable ordeal.  First, the court appoints a person to be in charge of the decedent’s estate.  This person is called the personal representative.  The personal representative gathers the decedent’s assets; has the decedent’s assets appraised by the probate referee; pays the decedent’s appropriate bills; he or she may sell certain assets of the decedent’s assets, if necessary; files the decedent’s final state and federal tax returns; prepares an accounting to be reviewed by the court; and, upon approval by the court, distributes the decedent’s assets to the appropriate persons or entities.  All of this is done under the court’s strict supervision.

Who needs estate planning?

You do—whether your estate is large or small. Either way, you should designate someone to manage your assets and make health care and personal care decisions for you if you ever become unable to do so for yourself. If your estate is small, you may simply focus on who will receive your assets after your death, and who should manage your estate, pay your last debts and handle the distribution of your assets. If your estate would otherwise be subject to probate, you need a living trust. Either way, however, if you fail to plan ahead, a judge will simply appoint someone to handle your assets and personal care. And your assets will be distributed to your heirs according to a set of rules known as intestate succession. Your relatives, no matter how remote, and, in some cases, the relatives of your spouse will have priority in inheritance ahead of the State of California. Still, they may not be your choice of heirs and an estate plan gives you complete control over who will inherit your assets after your death.

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Who should have a Living Trust?

Whether you are young or old, rich or poor, married or single, if you own real estate or have assets in your estate valued over $150,000 and want your loved ones to avoid court interference at your death or incapacity, you should have a Living Trust. A Living Trust allows you to bring all of your assets together under one plan.

What is a Living Trust?

A Living Trust is an agreement with three parties: the Trust-makers, the Trustees (or Trust Managers), and the Trust Beneficiaries. For example, a husband and wife typically name themselves all three parties to create their trust, manage all the assets transferred to the trust, and have full use and enjoyment of all the trust assets during their lifetimes as the beneficiaries. Further “back-up” managers may step in under the terms of the trust to manage and administer the trust assets should the couple become incapacitated or die. With proper planning the Living Trust should allow them to accomplish all this outside of any court proceeding.

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Do I lose control of the assets I put into my Living Trust?

Absolutely not. You keep full control. As trustee of your Living Trust, you can do everything and anything you could before including buying, selling, investing, gifting, etc. Nothing changes but the name on title to the assets of the Living Trust as they would be retitled in name of the Trust-creator as Trustee of the Living Trust.

If I have a Living Trust, do I still need a Will?

Yes. Your Living Trust plan should include a pour-over Will, which acts as a kind of safety net. When you die, the pour-over Will “catches” any forgotten assets and sends them to your Living Trust. The assets may require court involvement as part of your overall estate plan. Also, if you have minor children, a guardian over your minor children will need to be named in your Will.

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What is a Durable Power of Attorney and when do I need one?

If you do not already have Durable Powers of Attorney, you need them now. Durable Powers of Attorney allow you to appoint someone you know and trust to make your health care and financial decisions in the event you are incapable of making those decisions. If you become incapacitated without these legal documents in place, then you and your family will be involved in a proceeding known as a conservatorship. This is the court proceeding where a judge determines who should make these decisions for you under the ongoing supervision of the court.

What is a Will?

A Will is a document that a person signs to provide for the orderly disposition of assets after death. Wills do not avoid probate. Wills have no legal authority until the Will-maker dies and the original will is delivered to the Probate Court. Still, everyone with minor children, at the very least, needs a Will. The Will is the only way to appoint a guardian over a minor child in the event of death of the parent.

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What does it mean to "fund" a Living Trust?

Once a Living Trust is created, you must ensure that your assets are either owned by you as trustee of your trust (real estate, mutual funds, savings accounts, etc.) or name the trust as a primary or contingent beneficiary (life insurance, retirement funds, etc.). That means that you must transfer all your assets, like the title of your home, into the name of the Living Trust and name the Living Trust as the beneficiary of things like your life insurance, retirement fund, etc.

What is so bad about Probate?

There are number of challenges with Probate. First of all, it’s costly. For example, Probate fees to simply change title to real property from your name to your heirs upon your death would be approximately $22,000. And, since all the decisions are in the court’s hands, it can take a long time for things to be figured out – in California, typically a year or more. Plus, the information is no longer private which means predators are able to see personal information about your family and young children. Plus, all decisions regarding your family and assets may be left up to the court. They would make the decision on how to distribute your assets and when. The court would also make decisions on the well-being of your children, including who will care for them and who will be in charge of their finances. With a properly drafted estate plan, including a Living Trust, the decisions are all in your hands and you can determine how much your children will get and when.

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Who may act as my agent under a Durable Power of Attorney?

In general, an agent may be anyone who is legally competent and over the age of majority. Most individuals select a close family member such as a spouse, sibling or adult child, but any person such as a friend or a professional with an outstanding reputation for honesty would be ideal. You may appoint multiple agents to serve either simultaneously, but it is usually more prudent to appoint one individual as the primary agent and nominate additional individuals to serve as alternate agents if your first choice is unwilling or unable to serve.