California Probate - Law Offices of Janet Brewer Blog

Why Make Both a Will and a Revocable Living Trust?

If you are beginning to think about making an estate plan, you may wonder why some people have both a will and a revocable living trust. These two different estate planning structures serve different purposes but work together to give you peace of mind.

How a Pour-Over Will Works

People who set up both a will and a revocable living trust often use a device called a “pour-over will”. The will contains specific language indicating that some or all of the person’s assets will go straight into a trust upon his or her death. This trust is revocable (can be changed to some extent) during the person’s lifetime, and it becomes irrevocable upon death.

Since the person’s assets pour over into the trust upon death, the estate will not have to go through probate for them. Placing the assets in trust removes them from the probate estate. (Any assets that the person did not leave to the trust may need to go through probate, though.) In addition, the estate may realize tax benefits, such as lower estate taxes, because the assets are not part of the estate.

Other Benefits of Both a Will and a Revocable Living Trust

Further, having both a will and a revocable living trust may provide additional benefits. A will allows you to leave specific gifts outright to any people or organizations you choose. In other words, you can give cash or real estate directly to whomever you want upon your death. You also can specify that the estate should pay for certain funeral arrangements or other end-of-life wishes. Once you have legally executed a will, it remains in place for your entire life unless you revoke it or make a newer will.

In contrast, a trust allows you to give more slowly over time to a select group of beneficiaries. A trustee (often you during your lifetime) manages and controls the trust property for the beneficiaries’ benefit. When you pass away, a successor trustee takes over to continue managing the property. You can customize a trust to require distributions at certain times or on a discretionary basis.

During your lifetime, you can make changes to a revocable trust such as adding or removing assets, changing the trust language, or adding beneficiaries. Once a trust becomes irrevocable, no one can take property out of it (unless the trustee decides prudently to sell trust assets and reinvest the money).

In sum, wills and revocable living trusts provide different kinds of benefits for disposition of your estate. Consider using both as part of your estate planning structure.

Planning your estate? Look to Janet Brewer, Esq. for thorough and thoughtful estate planning advice. Janet’s more than 20 years of legal experience will give you confidence and peace of mind. To schedule a “Get Acquainted” meeting, visit Janet's website or call her office at (650) 469-8206.

Have a Prized Collection? Account for It in Your Estate Plan

If you have a prized collection, take the time to account for it in your estate plan. With a few key steps, you can have peace of mind that your collection will go to a deserving new owner when you are gone.

Get Your Collection Appraised

Whether you collect vintage automobiles, thrift store knickknacks, or fine art, you should have your collection appraised. An appraiser assesses the value of the individual pieces that you own, as well as the collection as a whole. Even if you think your collection is worth very little, an appraisal may still be worth it depending on the cost. Not only do appraisals provide an assessment of value, but you can use them to get insurance coverage for your collection. In addition, an appraisal could come in handy if your relatives need to know the collection’s value when distributing your estate after your death.

Incorporate the Collection into Your Estate Plan

To pass on your collection to the person or organization of your choice, be sure to mention them in your estate plan. Many people choose to make the gift in their will, which could be as simple as a sentence or two describing the collection and explaining who should inherit it.

Others choose to place the collection in trust, having a trustee manage the collection and make occasional distributions to beneficiaries (perhaps by selling less valuable items from the collection). If you don’t want anyone to keep the collection after your death or no one in your family will take good care of it, you could even require sale of the entire collection, with a trustee using the proceeds to benefit your family.

If you want to split up the collection items and give them to different people, be very clear about who should receive exactly which item. You would be surprised how often a vague description of a valuable item leads to estate disputes.

What About Giving the Collection to Charity?

When estate planning, some people may want to give their collections to charity. A charity auction of valuable items can bring in substantial funds to an organization in need. Or you might want to donate the items to a museum for display.

You have many different options for charitable giving of a collection. As mentioned above, you can make the gift in your will. Alternatively, you could set up a charitable trust, foundation, or fund benefiting the charity or charities of your choice. Whichever method of giving you choose for your collection, talk to an estate planning lawyer for help incorporating that choice into your estate plan as a whole.

Planning your estate? Look to Janet Brewer, Esq. for thorough and thoughtful estate planning advice. Janet’s more than 20 years of legal experience will give you confidence and peace of mind. To schedule a “Get Acquainted” meeting, visit Janet's website or call her office at (650) 469-8206.

Prudent Investing for California Trustees

California trustees must take care to follow the prudent investing laws when choosing how to manage the assets in trusts. Since trustees invest assets solely for the benefit of the trust beneficiaries, any unreasonable investment choices could be breaches of duty.

What Are the Prudent Investor Laws in California?

The Probate Code explains the prudent investor standard this way:

“A trustee shall invest and manage trust assets as a prudent investor would, by considering the purposes, terms, distribution requirements, and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill, and caution.” (Probate Code § 16047.)

In other words, a trustee making investments needs to take into account the trust language. He or she must make careful and reasoned investments, not impulsive decisions. For example, a trust document could state that the trust was to be for the benefit of grandchildren but the trustee could not make distributions until all grandchildren turned age 21. It would not be reasonable for this trustee to make high-risk, short-term investments when the trust is intended to benefit the grandchildren in several years.

Similarly, it would not be very prudent for a trustee to spend most of the trust’s funds on an apartment building in the middle of a bad real estate market. The law says that the trustee should make decisions “not in isolation, but in the context of the trust portfolio as a whole and as a part of an overall investment strategy”. Buying an apartment building would leave little money left to appropriately diversify the trust’s investments.

How Should a Trustee Pick Investments?

There is no one investment strategy that is appropriate for any trust. The trustee must take many factors into account, including the trust language and purpose, the economic situation, the role of each investment in the overall portfolio, and more. He or she can even consider the beneficiaries’ other resources in considering how to invest, as it could affect how soon beneficiaries need or want distributions from the trust.

The task of prudently investing a large trust is above some trustees’ heads because they lack a background in investing. Fortunately, the law allows trustees to delegate some investment decisions to others. Just like for other trust decisions, the trustee must make the choice of investment advisor prudently. The trustee should monitor and limit the investment advisor’s duties as needed. In this way, even an inexperienced trustee can follow the prudent investor laws in California.

Planning your estate? Look to Janet Brewer, Esq. for thorough and thoughtful estate planning advice. Janet’s more than 20 years of legal experience will give you confidence and peace of mind. To schedule a “Get Acquainted” meeting, visit Janet's website or call her office at (650) 469-8206.

Why to Make a Customized Estate Plan

If you are thinking about the future, you may want to make an estate plan. But printing out a few forms from a random estate planning website could be a very bad decision. Instead, take the time to customize your estate plan to your individual circumstances.

What’s Wrong with Using a Form?

Just because estate planning forms are widely available on the Internet does not mean you should use them. These forms simply do not take into account what makes your life unique from other people’s. There is little ability to customize a form or add in special information. The forms you find may not even cover the exact kind of inheritance you want to leave.

Plus, you have no way of knowing whether an online form includes the right language. Estate planning laws vary from state to state – and even more so from country to country. The laws change over time too. As a result, the form you print out could have fatal problems that make it unenforceable in your state. Or it might omit instructions on how to properly sign the document and have it witnessed if required. At that point, you might as well have not signed it in the first place.

Making a Customized Estate Plan

Instead of going with a pre-printed form, opt for a customized estate plan made by a qualified California lawyer. Your lawyer should take the time to go over all the little details with you, so that you have peace of mind about your estate.

The estate plan could include a will, a trust, an advance health care directive or living will, a financial power of attorney, or other estate planning structures depending on your situation. You may want to build in special kinds of planning for a child with a disability, a beloved pet, or gifts to charity. The plan could even help you achieve retirement goals or save for your children’s college education.

If you are interested in a customized, legally enforceable estate plan, reach out to a lawyer in your local area today. When you speak to the lawyer, share information about your life and be honest about your circumstances. For example, you could talk candidly about previous marriages, debts, and financial problems. This information will help the lawyer to tailor your estate plan – by, for example, specifically excluding an ex-spouse from inheriting by the will. Reach out to a lawyer today to get started.

Planning your estate? Look to Janet Brewer, Esq. for thorough and thoughtful estate planning advice. Janet’s more than 20 years of legal experience will give you confidence and peace of mind. To schedule a “Get Acquainted” meeting, visit Janet's website or call her office at (650) 469-8206.

What Happens If a Non-U.S. Citizen Dies in the United States?

If a non-U.S. citizen dies in the United States, relatives probably have many questions about what to do next. From an estate planning perspective, this is usually not an obstacle to distributing the estate according to the deceased person’s wishes if proper planning was done before.

Practical Problems When a Non-Citizen Dies in the U.S.

When a non-United States citizen dies in the United States, his or her family often want the body buried in the country of origin. It can be expensive and difficult to transport a body overseas. As a result, people making their estate plans who want to be buried in other countries may want to account for the cost of transport by specifying that funds may be used for this purpose.

In contrast, some people want to be buried in the United States although they are not citizens. Others die without estate plans and their families cannot afford the cost of transporting the body overseas. It is perfectly legal for a non-citizen to be buried or cremated in the United States. Further, the burial location does not affect probate or estate distribution at all.

Probate and Estate Distribution for Non-Citizens Who Died in California

When a non-citizen dies in California, the California probate court may have jurisdiction to oversee the distribution of his or her estate. Usually the court has jurisdiction if a deceased person was domiciled in California (lived here permanently or for a long time) and owned property located in California. If, for example, someone had lived in California full-time for several years and owned a home here, then the probate court could oversee a California personal representative. That representative (also called an executor) would then distribute the home and other California assets to heirs.

In contrast, if someone owned property in California but was not domiciled here, then the probate court might need to open an “ancillary proceeding”. This probate action would cover only real property such as a home located in California. All other assets would get distributed according to the laws in another state or country. If someone neither is domiciled here nor owns property here, then the probate may take place in another state or country altogether – usually the one where the person did have significant assets.

Further, the estate executor or representative may need to file United States and California taxes for the deceased person, including both regular income taxes for the year of death and an estate tax return. The estate also may owe taxes in other states or countries. Families confronting the death of a non-U.S. citizen in California should talk to an estate planning lawyer about what happens next.

Planning your estate? Look to Janet Brewer, Esq. for thorough and thoughtful estate planning advice. Janet’s more than 20 years of legal experience will give you confidence and peace of mind. To schedule a “Get Acquainted” meeting, visit Janet's website or call her office at (650) 469-8206.

Choosing the Right Estate Planning Lawyer for Your Family

There are a lot of estate planning lawyers out there, but not all may be right for your family. When choosing an attorney, ask yourself a few key questions along the way.

What Are Your Goals in Estate Planning?

Think about the goals you want to achieve by making an estate plan. For example, would you rather get a basic plan done very quickly, or spend a bit more time tailoring the plan? You may think that you need only a will or only a trust, but after talking to a couple of attorneys it could become clear that you need more planning done. You also may have the goals of peace of mind that your plan is done, and comfort in working with a lawyer who understands you.

What Are Your Expectations for Your Lawyer?

Also think about your expectations for a lawyer, and talk to potential lawyers about those expectations when you meet them. You might prefer communication via email only, or you might want to meet in person several times. You might want to review all documents in advance before you sit down to sign them. Or you might want the lawyer to show you where each of your wishes are listed in your estate plan. Different lawyers have different styles of working and communicating, so thinking about what you prefer can help you decide whether someone is a good fit. But also be aware that most lawyers are very busy and may not respond to your emails or calls right away, though they should get back to you within a few days.

Do You Have Any Special Circumstances?

One big reason that you might want one lawyer over another is special expertise in a certain area. Your family might have circumstances that require a lawyer with related knowledge to make a proper estate plan. For instance, you might need a particular lawyer if you:

• Are not a U.S. citizen or have relatives who are not citizens
• Own a small business
• Have a child with special needs
• Are wealthy or earn a high salary
• Own a lot of real estate

Some estate planning lawyers focus on clients who need international estate planning or who have tax and business planning needs. Others have special knowledge of disability planning, high net worth estate options, or real estate management. Your needs can help you narrow down the pool of estate planning attorneys to find a good fit.

Planning your estate? Look to Janet Brewer, Esq. for thorough and thoughtful estate planning advice. Janet’s more than 20 years of legal experience and her knowledge of international and tax issues will give you confidence and peace of mind. You can read more about Janet here. To schedule a “Get Acquainted” meeting, visit Janet's website or call her office at (650) 469-8206.

Do You Need a Durable Power of Attorney for Finances?

If you have never considered signing a durable power of attorney for finances, you might want to think about it. This document can make the difference if you are unable to make financial decisions yourself at some point in your life.

What Is a Durable Power of Attorney for Finances?

In California, you can make a power of attorney that covers just your finances. This is a legal document that gives another person permission to make decisions about your money. The other person is referred to as an agent.

When Does the Power of Attorney Go Into Effect?

A “durable” power of attorney only goes into effect if you are incapacitated – unable to make decisions for yourself. The legal document must have specific language in it to count as durable. If at some point you stop being incapacitated, then the agent’s legal power to act ends.

If you want a general power of attorney for finances that works when you are not incapacitated, you can make one of those too. It should specify when the agent may act for you and when the power ends. Some people sign these before they leave on international trips to allow an agent at home to handle finances.

Which Kinds of Finances Can the Agent Handle?

While you can make a broad durable power of attorney that just covers “finances” or “financial matters”, you may prefer to specify what the agent can do with his or her power. For instance, the agent could have the power to conduct banking for you, pay rent and utility bills, and open mail. Or you might allow the agent to make investing decisions and oversee your real estate.

Who Should Make a Durable Power of Attorney for Finances?

A durable power of attorney for finances could come in handy for many people. People who are small business owners, landlords, or caretakers for relatives want to sign these powers of attorney so that someone else can carry on their business if they cannot. People travelling on long trips or out of the country also may want one. If you are interested, get a lawyer to prepare the power of attorney to your specifications.

Planning your estate? Look to Janet Brewer, Esq. for thorough and thoughtful estate planning advice. Janet’s more than 20 years of legal experience will give you confidence and peace of mind. To schedule a “Get Acquainted” meeting, visit Janet's website or call her office at (650) 469-8206.

Pros and Cons of a Guardianship Designation in Your Will

If you want to make sure that the right person cares for your children if you cannot, you may prefer to make a guardian designation in your will. What you may not know is that guardianship designations have some upsides, but also some downsides.

A Guardianship Designation Gives You Choice

Making a guardianship designation in your will allows you to choose who you wish to be your children’s guardians if you cannot care for them. Your children may need a guardian if you become incapacitated or if you pass away unexpectedly. A guardian takes over where you left off, providing for your children’s needs. You can list your choice of guardians in the will document itself. It is usually a good idea to list more than one person in case your first choice cannot serve.

But the Court Doesn’t Have to Follow Your Choice

Your will does not officially appoint a guardian. Instead, the court must make the appointment in an official legal proceeding. The judge assigned to the case can decide to disregard the preference that you express in your will. This could happen for many reasons, including that the guardian you chose is no longer fit to serve or does not want the position. As a result, making a guardian designation is no guarantee that your wishes will be followed.

If Your Will Is Invalid, the Designation May Be Invalid

Many people choose to list the guardians of their choice in a will. Unfortunately, though, if a will is not valid, then the designation may not be valid either. Wills may become not valid for many reasons, such as improper witnessing of the document or incapacity to make a will. As a result, some people decide to complete a separate “Nomination of Guardian” form instead of listing the guardian choices in their wills. If executed properly, this document has the same legal effect as a guardianship designation in a will – it expresses the maker’s choice of guardians but is not binding on the court that ultimately appoints the guardian.

A Guardianship Designation Is a Gateway to More Estate Planning

Making a simple guardianship designation in your will or in a Nomination of Guardian form could open a gateway to more extensive estate planning. Your concern for your children might make you want to form a trust, open a college savings plan, or complete powers of attorney. An estate planning attorney can help you properly complete a guardian designation as well as expand the rest of your estate plan.

Planning your estate? Look to Janet Brewer, Esq. for thorough and thoughtful estate planning advice. Janet’s more than 20 years of legal experience will give you confidence and peace of mind. To schedule a “Get Acquainted” meeting, visit Janet's website or call her office at (650) 469-8206.

What to Do If You Receive an Inheritance from a Relative

If you receive an inheritance from a relative, you may not realize that doing some estate planning of your own is a good idea. The inheritance can generate the need for some thinking about the future and money management.

Understanding Your Inheritance

After you learn about the inheritance, learn more about it. You might have received an inheritance consisting of:

• A lump sum of cash
• Distributions from a trust
• Payments from a pension or annuity
• Securities, such as stocks or mutual funds
• Real estate
• Objects, like valuable jewelry

What you do with the inheritance may depend on what you received. For instance, if you received cash, you may want to invest it. If you received real estate, you may need to rent it out or hire a property manager. For valuable objects, consider getting appraisals and taking out insurance.

Making Your Money Grow

An estate planning attorney can help you understand what you own as well as plan for the future. Depending on the size of your inheritance and if you plan to spend it, you may want to make a will to leave your money to the people of your choice. If you have children or a spouse that you support, you may want to create a trust, place the inheritance in it, and make your family the beneficiaries. A trustee also can assist with investing money or assets placed in trust. This can grow the inheritance’s value over time.

When you receive a valuable inheritance, you may need different advice than people who do not have much money in the bank. Fortunately, estate planning attorneys can create customized estate plans for people with any amount of assets. Having an inheritance may require some tax planning so that your estate does not owe expensive estate taxes after you pass away. If you plan to give some of your inheritance to others during your lifetime, you need to consider gift tax liability too. Talk to an attorney today to learn more.

Planning your estate? Look to Janet Brewer, Esq. for thorough and thoughtful estate planning advice. Janet’s more than 20 years of legal experience will give you confidence and peace of mind. To schedule a “Get Acquainted” meeting, visit Janet's website or call her office at (650) 469-8206.

What Trust Beneficiaries Need to Know about California Trusts

Trust beneficiaries should know a few key pieces of information about trusts. This information can help them understand how a trust works, make sure their rights are protected, and benefit from the trust assets.

What Exactly Is a Trust?

A trust is a structure for holding property created by state law. The trust’s creator (also called a settlor) gives the trustee legal title to a set of assets. The trustee is entrusted with prudently managing and investing the assets for the benefit of other people. These other people are called beneficiaries. Each trust has a defined group of beneficiaries or just one beneficiary. In addition, many trusts designate a successor beneficiary who receives the trust assets when the primary beneficiaries pass away.

What Are Beneficiaries’ Rights?

In the United States, beneficiaries have certain rights to receive information about the trust from the trustee. For example, trustees need to do regular accountings of all the trust assets, which beneficiaries can request. Also, beneficiaries can ask to see the legal document that creates the trust and can ask the trustee questions about how he or she is investing trust funds.

Can a Beneficiary Ask for Money from the Trust?

Trusts come in different types with different methods of distributing money to beneficiaries, depending on what the settlors choose. Common types of trusts have required distributions on a regular schedule, a distribution when a certain event happens, discretionary distributions, or distributions only for the beneficiary’s support. You can determine which kind of distributions a trust requires by reading the trust document or asking the trustee. If the trust allows discretionary distributions, then beneficiaries can ask the trustee to give them money from the trust. But the trustee has discretion to deny the request if he or she has a good reason.

What If a Beneficiary Thinks the Trustee Is Doing Something Wrong?

Unfortunately, beneficiaries sometimes realize that a trustee might be doing something wrong. For instance, a trustee might tell a beneficiary who requested a distribution that there is no more money in the trust – when this is very unlikely to be true. Beneficiaries who suspect trustee wrongdoing must speak to a qualified lawyer in their area as soon as possible. A lawyer can advise the beneficiaries of their legal rights and advise on next steps for securing those rights. Going to court to require that the trustee follow the law may be one option.

Planning your estate? Look to Janet Brewer, Esq. for thorough and thoughtful estate planning advice. Janet’s more than 20 years of legal experience will give you confidence and peace of mind. To schedule a “Get Acquainted” meeting, visit Janet's website or call her office at (650) 469-8206.