The Law Office of  Robert I. Long    

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Answers to some  Frequently Asked Questions  regarding  Estate Planning:

 
  • Should I have a Will? 

                  Not everyone needs a Will. In the case of very small estates, it may be appropriate to own your bank accounts and even your home ‘jointly,’ meaning the accounts and property will transfer automatically to the surviving joint owner(s).  Note that once you add someone to an account or your property, that he or she can only be removed with their agreement, in a writing to the bank or in a deed in which they join in signing. There may be property-tax consequences if not done properly, and you will not take full advantage of potential capital gains tax-avoidance for the person receiving the property.

                  For many people, the main reason to have a Will is to designate the person that you prefer be appointed as your personal representative. A Will can also nominate who you prefer take custody of your minor children, and can even include provisions for setting up a Trust for the benefit of your children following your death. A Will is also necessary: when you do not want your property to go in equal portions to your heirs; if you want to leave a specific item of property to an individual; to provide for disproportionate giving; or to include recipients who are not your heirs at law.

 

  • What happens if I die without a Will? 

                  Contrary to rumor, the State does not get your property.  Dying without a Will (called ‘intestacy’) results in your property going to your spouse or heirs.  If all of your property was acquired in California during your marriage it is community property and will pass to your spouse provided, of course, he or she survives you. Note that whether or not you have a Will, if you die owning substantial assets or an interest in real property that does not automatically pass to someone else when you die, your estate will likely need to be ‘probated’;  a court proceeding by which legal ownership of your assets is transferred to your heirs and beneficiaries. 

                 If you are not survived by a spouse, your property will go to your children (or grandchildren in the case of a dead child).  If you die possessed of separate property, such as property you received before marriage or by inheritance or gift, your children may be entitled to a portion of it even if you are married at the time you pass away.

 

  • What is a Revocable Living Trust?  

                  A Trust is considered revocable if it provides that, while you are alive, you may continue to treat property as your own even though you have transferred it into the name of the Trust, and you remain free to amend the Trust or even abandon it altogether and put the property back into your own name. Typically, a Trust will provide that the power to revoke or amend is personal to you, and when you die or someone takes over trust administration duties (the ‘Successor Trustee’) after you, the original Trustee, are no longer able to continue as trustee, the Trust becomes irrevocable (no longer amendable). This helps ensure that your wishes expressed in the Trust are carried out.

                  Once the exclusive domain of the wealthy, trusts are now popular with middle-income families with moderate estates. They are extremely flexible devices that can be designed for almost every imaginable family situation, such as to meet the special needs of a disabled individual, protect against rapid dissipation of wealth by an irresponsible child, or ensure a source of funds and incentives for a specific objective such as college for children and grandchildren. A Trust can also provide savings for your family by avoiding probate-related expenses and maximizing the amount of wealth that can be passed to the next generation free of estate taxes. While there are limitations on what a Trust can do, it is mostly only limited by imagination and can be tailored to meet the needs and situations of most individuals and couples, including unmarried individuals.

 

  • Should everyone have a Trust?

                        No. As the name implies, it is important that you have absolute ‘trust’ reposed in the individual(s) you appoint to carry out your wishes after you are gone or have become incapacitated, especially since it is intended to avoid the oversight of a probate court. Appointing an irresponsible person as Trustee will not transform him or her into a responsible person. Just the opposite, appointing them in charge of a Trust will likely provide the very vehicle for them to demonstrate just how irresponsible and untrustworthy they are.

 

  • If I have a Trust, will I still need an Advance Health Care Directive  (AHCD)?

                  Provided you have someone you trust to make decisions regarding your personal care in the event you are unable to communicate those decisions yourself, you should execute an AHCD. Your Trust generally speaks to financial matters, not to the topics covered by an AHCD which include:  end-of-life decisions regarding extraordinary measures to keep you alive; giving your agent power to change the facility where you are housed (e.g., if the agent determines you are not receiving proper care); and generally setting out your wishes with regard to your personal care.  Note that the agent you name in you AHCD can be a different person than the persons you designate as Executor of your Will or Successor Trustee in your Trust.

 

 

 

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