Common Estate Planning Questions

In the state of California, property that exceeds $150,000 held outside of a living trust must be distributed through a process called Probate. While most bank accounts may not reach this sum, most homeowners will exceed this amount due to the value of real estate in our glorious State. Probate can take years to complete and the fees for the process are set by the court and the state. It can be quite costly and time-consuming to make sure the property ends up in the right hands.

Absolutely. The owner of the property placed in the Trust is called the Settlor or Trustor.  This is the person who created the Trust relationship. This person can also be named the Trustee.  This is often the case with a husband and wife relationship but it can be done with domestic partners or co-owners as well.  The Trustee is responsible for the on-going direction of the Trust and thus, still has control over the day to day operations of the property governed by the Trust.

A lot of people put off creating a Trust because they do not know who to turn to or who to trust.  But there is more danger that can occur if you do not take the time to create a Trust, such that the question should be, “How soon can I start the process.”  Tragedies can create a sense of urgency, but it is preferable to embrace the protection you will receive once your trust is completed rather than focusing on events out of your control that are not triggered by creating a Trust.

Trusts must be created while a person is alive and the property must be delivered to the Trust in order for the property to be governed by its terms.  While there are some exceptions, it is generally wise to complete the process as soon as you own real estate in California.  If one of your parents is still alive, then you can still create a Trust which will govern the real estate.  Relying on California’s marital laws, one parents can inherit from the other and then create a Trust from that date forward.  This may allow you to protect the property from Probate and avoid unnecessary taxes.

A power of attorney is a document in which you designate a person, or persons, to act on your behalf if you are unavailable.  Our Trust package comes with two of these documents; one governs your personal property and one takes effect for health care decisions (sometimes referred to as a Living Will).  Being “unavailable” can take on many forms.  It can mean that you are incapacitated and mentally incompetent but it can also mean that you were in an accident or traveling out of the country.  You can choose when these documents will be effective and how they will work.  They can provide invaluable assistance and save you thousands of dollars if you become “unavailable” while conducting your affairs.

Unfortunately, no it isn’t.  Some families add their children’s names to their bank accounts and their homes in order to make sure someone will be available if something were to happen to the parents, but this tactic only puts you in more jeopardy.  Once you put your children’s names on your property it is considered a “gift”.  Then, your chidlren can spend your money without recourse.  And, the IRS only allows each person to give away up to $14,000 per year without triggering a “gift tax”.  But more importantly, once your children’s names are on your property, your property is now subject to the claims of your creditors, and any person who sues them, including their spouses in the event of a divorce.

While relatives are the most likely persons to distribute your property to, you may have other interests that you would rather provide a benefit to before you give that property to the state of California.  Many charities would love to receive a portion, or all, of your property if you were to pass away without relatives who were available.  Do you have a certain passion for something?  These charities often would not exist if it weren’t for generous donors, such as yourselves.  This office is well connected to many charities, sometimes even local concerns of whom you may not be aware.  The State of California certainly needs your money but our cherished charities could continue to benefit society if they were to receive donations to fund their programs, especially when these donations are being curtailed.  Causes for which you have a passion will be a more appropriate place to reward with your hard earned financial resources.

No.  While in a Joint Tenancy, your property may transfer upon death to the surviving joint tenant but there are a host of issues that can arise with friends and family members before that time occurs.  Also, a joint tenancy is not appropriate where there are different ownerships and rights between the tenants.  Your investment will be tied up during any divorce or separation between any couple, and is subject to both or all of their creditors.  You need to protect your investment from these outside sources with a Trust.

Creating a Trust is not time-consuming once the Settlor/Trustor has decided what he/she/they want to accomplish.  You should allow 4 to 6 weeks to create the process but in case of illness or exigent circumstances, faster creation is possible.  Every family is different which makes it difficult to quote a price without more information.  Making it easier to afford, Living Trusts are often completed for a flat fee.  Call our office and make an appointment.  Our free consultation will help you consider the price of this valuable service and help you set-up affordable arrangements.

We understand.  Call and make an appointment.  Grace St. Clair has an especially approachable style that will put you at ease and our complimentary consultation will help point you in the right direction. 

Text Content Here