Estate Planning Blog

Prince Could Have Used an Estate Planning Attorney

To turn a well known cliché on its head, pop singer/songwriter Prince is proving that where there is not a will there is a way for probate to devolve into an unmitigated quagmire of nonstop conflict and relentless expense. With some reasonable assistance from an estate planning attorney most of this consternation could have been avoided. Now barely over a year since the wildly successful musician passed away the litigation in the Minnesota probate courts is really just getting warmed up.

 

Probate Problems

Probate is the court supervised administration of an estate and is required in California if a person passes away either without a will (like Prince) or with a will but with more than $150,000 in gross assets held outside of a trust. Because probate is a public proceeding (unlike the administration of a living trust) it is a venue for purported or actual heirs to vent their grievances with the assistance of a variety of well compensated professionals. In California you can opt out of this often painful process with a living trust and you generally should.

 

The High (or low) Lights of the Prince Probate

-A woman who alleged that she was married to Prince but that the CIA covered it up (seriously)

-Multiple discredited claims of paternity

-An estimated estate value in excess of $300 Million

-Lady Gaga’s former manager named as entertainment adviser for the estate

-Comerica Bank named as the second administrator replacing Besemer Bank

-Conflict between the heirs regarding a licensing deal

Abject Failure in Planning

As much as this case represents the frailty in the process of administering a complex estate without a will, it moreover represents an abject failure in estate planning. By taking the proper steps, you can have the peace of mind that your wishes will be followed outside the purview of the California probate courts. Please call for a free consultation about how to properly set up and understand your California estate plan so that you and your family are properly protected.

Post Tax Time Estate Plan and Living Trust Priorities

Congratulations! Your tax return has (hopefully) been filed and you can move on to far more exhilarating activities like finally taking care of (or revisiting) your estate plan. So when starting the estate planning process what should be your top priorities? Although probate avoidance is often the most talked about goal in the process, incapacity planning and the nomination of guardians if you have minor children are just as, if not more important.

Nominate Guardians for Minor Children in Your Will

By executing a simple will, you can nominate potential guardians for your minor children. Although a judge would need to make the official appointment if anything happened to you, your nomination will carry a lot of weight in the decision making process.

Incapacity Planning

In California, if you are alive but incapacitated and have not appointed an agent to act on your behalf for both health and personal care as well as financial decisions you will be subject to the court supervised conservatorship process. However, you can opt out of this system by creating an Advance Healthcare Directive for personal and healthcare decisions and a Durable Power of Attorney for financial decisions.

            Advance Healthcare Directive

By creating and signing an Advance Healthcare Directive you can document your healthcare wishes and appoint an agent to carry them out in the case where you are incapacitated.

            Durable Power of Attorney

The financial corollary to the Advance Healthcare Directive is the Durable Power of Attorney for Finance. With this document you appoint an agent to carry out enumerated financial actions on your behalf if you are incapacitated.

 And Yes, Probate Avoidance Also

Don’t think that I was going to forget about the mortal enemy of all estate planning professionals, the probate process (cue ominous music). While nominating guardians for minor children and planning for potential incapacity are top priorities avoiding probate is still vital to protecting your assets and ensuring an easy transition for your heirs. By setting up a living trust and transferring assets into it you can avoid the unnecessary expense and delay of California probate.

In addition to probate avoidance a living trust can provide with more complex distribution schemes than a will which can provide for mixed families and avoid giving large outright gifts to beneficiaries who may not be ready for such responsibility.

If you have any questions about how you can get the peace of mind that only comes with knowing that your family is protected, please call my office for a complimentary consultation.

 

Title to Real Estate as Joint Tenants or Community Property in California?

How Should a Married Couple Hold Title to Their Home in California?

Do you know in what form you hold title to your home? Most people do not know but there are important legal consequences to taking title in different ways. Holding title as joint tenants can have major negative tax consequences for a married couple.

 

Co-ownership of Real Estate as a Married Couple in California

The landscape for joint ownership of real estate is markedly more complicated than that of the sole owner. Married co-owners of real estate most commonly hold title as joint-tenants with the right of survivorship, as husband and wife as community property, or as trustees of a jointly settle revocable living trust.

 

Dangers of Holding Title as Joint tenants

Joint tenancy is formally known as “joint-tenancy with the right of survivorship.” The major feature of joint-tenancy is that when one owner passes away, their interest automatically passes to the surviving joint-tenant(s). Because of this characteristic, property held as joint-tenants avoids the scourge of the California probate process at the passing of the first spouse (although not the second). Holding title as husband and wife as community property also avoids probate at the passing of the first spouse. However, holding title as joint-tenants can create severe negative tax consequences for a married couple. As a married couple in California you never want to hold title as joint-tenants.

 

Holding Title in a Revocable Living Trust

The third common way of holding title to real estate specifically as spouse co-owners is through a jointly settled revocable living trust. The property is titled in the name of the spouses, as trustees of their revocable living trust. This is the clearly preferred method from an estate planning perspective. Even if one of the other methods is initially used, eventually the surviving spouse will need a trust to best pass the property to their heirs outside of probate and in the most tax efficient way possible. If you have questions about the negative consequences of holding title as joint-tenants or the benefits of a living trust please call our office and we will be happy to speak with you.

 

If you have any questions about how you should hold title to your home, please contact the estate planning and trust attorney Daniel DuRee at our Walnut Creek, Marin County, San Francisco, San Mateo, or Mountain View offices.

California Revocable Living Trust and Estate Plan Checkup

Happy almost 2016! As another year soon unfolds before us we both reflect on where we have been and look forward to where this winding patch is taking us. If you are anything like me, there are a few things you resolve to accomplish in the coming year that you just didn’t quite get around to in 2015.

For many people, estate planning is one of the items that lurks on the periphery of the subconscious “to do” list that we all harbor. While it may seem daunting, the estate planning process is straight forward and once completed, can be checked off that list to make room for other more exciting activities, such as cleaning out the rafters in the garage.

To make it easier on you, I compiled a list of estate planning issues to check on (and check off) in the new year.

Do you have a revocable trust? ( and is it up to date?)

A revocable living trust is crucial to avoiding the legal procedure equivalent of water boarding that is the California probate process. Make sure that all of your assets are currently held in the name of the trust.

Do you have a will nominating guardians for minor children?

It is vitally important to ensure that your children are raised by people (or a person) you choose.

Is your advance healthcare directive current?

In my opinion, a properly executed advance healthcare directive is even more important that a trust. Put your health and personal care wishes in a valid legal document to ensure that they are carried out.

Did you create a durable power of attorney for financial management?

More than 75% of people that pass away do not have legal capacity to make decisions at the time of their death. Make sure to appoint an agent to make financial, tax, and benefit decisions on your behalf.

Are your beneficiary designation forms current?

Retirement accounts, pensions, life insurance policies, and annuities are passed to others through a beneficiary designation form. Make sure that they reflect your current wishes. It is possible to designate a trust as a beneficiary so that the assets will be distributed according to the trust distribution scheme.

Going through this five point checklist will ensure that your assets are properly protected and that your wishes are carried out should anything happen to you. If you need assistance, give me a call. I am happy to help. In a couple of short meetings uncertainty can be traded for peace of mind. Wishing you and your family a happy and healthy 2016 from the Law Offices of Daniel L. DuRee.

Choosing a Living Trust Successor Trustee

One of the primary considerations in the estate planning process is deciding who will administer your affairs if you are incapacitated and then when you pass away. In a revocable living trust, this person is called the successor trustee. The living trust successor trustee takes over management of a trust when the original trustee or co-trustees are no longer able to fulfill their duties. The successor trustee is called a fiduciary because they have a legal (“fiduciary”) duty to act in the best interest of the trust beneficiaries.

When deciding who will be your successor trustee, you can appoint a layperson or a professional, licensed third party fiduciary. The type of successor trustee that works best for you depends largely on your particular circumstances and goals.

Layperson as Successor Trustee

The vast majority of people have a family member or members as successor trustee or co-trustees. The successor trustee is largely guided by the terms of the trust and although conflict is possible most trust administrations are a fairly straightforward and amicable process. Often, people will choose one of their children, a sibling, or a trusted friend. You can appoint co-trustees, who will act together in the trust administration. In choosing a layperson as a successor trustee, it is probably best to choose from among the beneficiaries to ensure that their personal interest is aligned with the beneficiaries of the trust. In California, even a layperson trustee is entitled to reasonable compensation unless the trust explicitly requires the trustee to waive compensation.

Professional Third Party Fiduciary Trustee

The primary benefit of choosing a professional third party fiduciary is that you know your wishes will be carried out without the potential conflict encountered when a family member is the trustee and is dealing with other family members who are beneficiaries. The primary drawback of a professional trustee is the cost. A professional fiduciary will usually have a minimum fee and also charge fees based on the size of the estate. These fees could run into the tens of thousands of dollars depending on the size and complexity of the estate. The other potential problem with a professional fiduciary is that the person you choose may no longer be working or even alive when you need them. One way of dealing with this issue is by allowing the beneficiaries to choose by a majority vote which professional fiduciary to hire as trustee. The one major drawback to this scheme is that the beneficiaries will need to be aware of the trust and have access to a copy of it should something happen.

A third option is to combine a layperson and a professional fiduciary as co-trustees. The main downside however is the expense of the professional fiduciary. Deciding who to designate as your successor trustee or co-trustees is an important choice. The successor trustee is the gatekeeper ensuring that your wishes are carried out. It is not a difficult job to be a successor trustee but you should take care to choose a successor that you and your beneficiaries can trust implicitly. Please call or fill out the contact form for a complimentary discussion about how I can help you with all of your will, trust, probate, and estate planning needs.

 

5 San Francisco Bay Area Offices

Walnut Creek
Estate plans and living trusts

1535 North Main Street, Suite 240
Walnut Creek, CA 94596

(925) 210-1400

(925) 210-1400

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Estate plans and living trusts

800 West El Camino Real, Suite 180
Mountain View, CA 94040

(650) 933-7122

(650) 933-7122

San Mateo
Estate plans and living trusts

951 Mariners Island Blvd, Suite 300
San Mateo, CA 94404

(415) 373-8335

(415) 373-8335

San Francisco
Estate plans and living trusts

75 Broadway Street, Suite 202
San Francisco, CA 94111

(415) 373-8335

(415) 373-8335

Marin County
Estate plans and living trusts

700 Larkspur Landing Circle, #199
Larkspur, CA 94939

(415) 373-8335

(415) 373-8335

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