California Probate - Law Offices of Janet Brewer Blog

Should I Create My Own Estate Plan?

“The ongoing coronavirus pandemic has pushed many people to make long-delayed decisions about estate planning. Many people will try the do-it-yourself route via various websites or books. Internet DIY websites make it easy to download forms, but there are mistakes people make when they try do-it-yourself estate planning.”

US News & World Report’s recent article entitled “Do-It-Yourself Estate Planning Mistakes” provides some issues that do-it-yourself estate planners might encounter and why it is best to consult an experienced estate planning attorney.

What are the Right Questions to Ask? Completing a simple and straightforward form—like a beneficiary designation for your IRA— is one thing, but what about tax consequences, probate law, new legislation and court procedures? Are you ready to take these on? The trick is that you may not know what you don’t know. That’s why it’s money well-spent to employ the services of an experienced estate planning attorney.

Is My Situation Complex? Likewise, you may have property and assets all over the country (or world) that require expert advice. You must be certain that your planning, tax planning and financial planning all work together because they’re all interrelated. If you only work on one of these areas at a time, you may create complications in another area and unintentionally increase your expenses or taxes. It can also create headaches and expense for your heirs. If you have a child with special needs, a blended family, or want to control how and where a beneficiary spends your money, a cookie cutter approach won’t do. Instead, you should see an experienced estate planning attorney.

What are the Probate Laws in My State? Estate planning laws and taxes are different in each state.  Your state will have different rules and legal procedures for creating and administering an estate. There are many different state laws that govern inheritance taxes. There are 17 states plus DC that tax your estate, inheritance or both, and the tax laws can affect your situation when planning. Eleven states plus DC have only an inheritance tax. One state taxes both inheritances and estates.

If you mess up your estate planning documents, if could cause significant problems for your family. You best bet is to work with an experienced estate planning attorney in your state. Contact our office today to schedule your consultation.

Reference: US News & World Report (Dec. 18, 2020) “Do-It-Yourself Estate Planning Mistakes”

What Does an Estate Planning Attorney Actually Do?

“Estate planning is crucial, setting up a peace of mind for you, as you enter your senior years. Most people don’t create a will because they are afraid to even think about the possibility of death. It feels like too big of a responsibility.”

It’s critical to understand what will happen to your estate after your death. That’s where the help of an experienced estate planning attorney comes in, says VENTS Magazine’s recent article entitled “What Does an Estate Lawyer Do Exactly?”

An experienced estate planning attorney is a legal professional, upon whom you can rely to help protect your estate after your death or in the event that you become incapacitated.

He or she will make certain that your assets and property are handled correctly.

In addition to assisting you with your estate, an estate planning attorney can help handle any family members trying to get involved in your legal affairs.

It may be difficult to please everyone when creating your will. Having an estate planning attorney will help you make the best decisions when it comes to distributing your wealth.

Estate planning is critical—especially if you’re older, experiencing chronic illness, or just want to be smart about protecting your assets.

As we grow older, we can accumulate a long list of stressful issues and responsibilities. You may worry that your estate will be gobbled up by creditors once you pass away, or that your children will fail to distribute your assets as you intended.

Much of this stress is eliminated with the guidance and counsel of an experienced estate planning attorney. Having an estate plan allows you to enjoy a better quality of life, once you’re older. You won’t have to live every day with worry or stress about the future after you’re gone.

An experienced estate planning attorney is a valuable resource for your family, in the event someone tries to contest the will after your death. Estate planning attorneys also aid in distributing the wealth, protecting your property from creditors, and lowering estate taxes.

You can read more about how our process works, how we can make sure we are a good fit for your needs, and how to get started today right here.

Reference: VENTS Magazine (Sep. 28, 2020) “What Does an Estate Lawyer Do Exactly?”

What Is a Fiduciary and a Fiduciary Duty?

“A fiduciary is someone who manages property or money on behalf of someone else. When you become a fiduciary, the law requires you to manage the person’s assets for their benefit—and not your own.”

First, a fiduciary duty is the requirement that certain professionals, like attorneys or financial advisors, work in the best financial interest of their clients. By law, members of some professions with clients are bound by fiduciary duty.

Forbes’ recent article entitled “What Is Fiduciary Duty?” explains that in a fiduciary relationship, the person who must prioritize their clients’ interests over their own is called the fiduciary. The person getting the services or assistance is called the beneficiary or principal.

You will frequently see a fiduciary relationship with certain types of professionals, like attorneys and financial advisors. A fiduciary duty is a serious obligation, and if a fiduciary doesn’t fulfill his or her duties, it’s known as a breach of fiduciary duty. Fiduciaries must act in a beneficiary’s best interest. They have two main duties: duty of care and duty of loyalty. Fiduciaries may have different or additional requirements, depending on their industry.

With the duty of care, fiduciaries must make informed business decisions after reviewing available information with a critical eye. Lawyers must act carefully in performing work for clients. Care is determined by the prevailing standards of professional competence in the relevant field of law and geographic region. To abide by the duty of loyalty, fiduciaries must not have any undisclosed economic or personal conflict of interest. They can’t use their positions to further their own private interests. For example, fiduciary financial advisors might adhere to the duty of loyalty by disclosing recommendations from which they’ll receive a commission.

Other common professions or positions that require fiduciary duties include directors of corporations and real estate agents, as well as those discussed below:

Trustee of a Trust. When you want your assets to transfer to someone after you die, you can put them into a trust. The trustee who’s in charge of the trust has a fiduciary duty to manage the trust and its assets in the best interests of the beneficiary who will one day inherit them.

Estate Executor. The person who manages your estate and handles your affairs is your estate executor. He or she has a fiduciary responsibility to your heirs and next of kin to distribute the estate according to your wishes.

Lawyer. Your attorney must disclose any conflicts of interest and must work with your best interests in mind.

Financial Advisors. Financial advisors who are fiduciaries must act in the best interest of their clients and offer the lowest cost financial solutions to fit their clients’ needs. However, it important to note that not all financial advisors are fiduciaries.

Reference: Forbes (July 28, 2020) “What Is Fiduciary Duty?”

Resolving Estate Distribution Conflicts Among Family Members

When family members have a conflict surrounding distribution of a relative’s estate, everyone suffers. These kinds of conflicts cause stress, anxiety, and uncertainty at a time in people’s lives when they are already grieving. If you are dealing with an estate-related conflict, you can take a few steps to resolve the dispute.

Seek Professional Help

Talk to a lawyer about the dispute, if you haven’t done so already. Often you can schedule an initial meeting to discuss what is happening and the possible services and solutions the lawyer could offer. A local lawyer may come up with creative tactics to appease family members, or you may need help going to court instead.

Informal Resolution

Many estate distribution conflicts can be resolved through informal methods, such as having a family meeting, talking to those involved, or even mediation. Lack of communication is one of the top reasons that families end up in conflict.

Maybe a deceased relative left a prized possession to two family members and they are having trouble sharing because they never talk. Or one sibling might have removed valuable items from the deceased father’s house before the other siblings got a chance to sift through them. Talking out these problems is often a better solution than going straight to court.

Mediation might be an option for some families. In this process, a neutral mediator meets with people on both sides of the conflict throughout the course of a day. The parties to the conflict all have to show up on the same day at the same place and talk about the issues, which can often spur resolution. The mediator offers suggestions, teases out the bad facts, and helps negotiate solutions.

Probate Court

Your last resort for solving a conflict could be probate court. A judge in the county where the deceased person passed away (or sometimes where the property is located) can decide disputes over estate distribution. However, going to court for a family conflict can cost everyone a lot of money and time. Cases can drag on for months or years, depending on how busy the judge is. In the end, there may be little reward for the family members who have to pay legal bills and face the possibility that they will lose the legal battle. But if you do need to go to probate court, first contact an experienced lawyer who can represent you.

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.

Should I Create a Trust?

“The main reason that people choose to have a living trust instead of a will, is that it avoids the probate system. Probate is the legal proceedings to decide whether a will is legal and binding. It also is the court session to decide where the property will go, if there is no will provided.”

Just 40% of adults in the United States have any kind of estate planning documents in place. That leaves 60% of adults who don’t have their property and other assets protected in the event of death.

Without planning, their family and loved ones will have trouble trying to determine what to do next.

Frequently, when thinking of estate planning, we think of a will. However, there are other options. Creating a living trust may be a better option for you and your family, advises kake.com’s recent article entitled “What Are the Advantages of Creating a Living Trust for My Family?”

The article provides some of the major benefits of a living trust.

It can save your family money. When a person with a living trust passes, the trustee takes possession and control over the trust property, according to the instructions provided by the trustor. It can be less expensive, because there are no fees that may be incurred in probate. Everything also moves faster.

Protection of your privacy. A living trust is much more private, because it doesn’t have to go through the probate court and won’t become public record. In contrast, a will becomes public record, that anyone can request to view as a court record.

A trust is for more than death. A living trust can be invoked at other times before death. The creator can add specific stipulations and conditions to the living trust to designate when the trustee can take over the management of property and finances.

More difficult to challenge. A will can be contested in court, if a family member thinks that she is entitled to more of your assets than was outlined in the will. A judge can rule that your will isn’t valid, and the contesting family member can possibly get more than you intended. With a living trust, there is much less chance that this will happen.

Creating a living trust takes legal expertise, so work with an experienced estate planning attorney. You can then discuss an entire estate planning strategy. You can read more about how our process works, how we can make sure we are a good fit for your needs, and how to get started today right here.

Reference: kake.com (April 20, 2020) “What Are the Advantages of Creating a Living Trust for My Family?”

Downsides to Probate Court and How to Plan Around Them

Many people decide to plan their estates so that they can avoid or limit the need for probate court. Having an estate go through probate has several significant downsides, including cost and time.

Why Might You Need Probate Court?

Before some estates can be distributed to heirs, a probate court judge must review the will, oversee the executor, and approve the final estate distribution. The executor gathers all estate assets, notifies and pays creditors, and completes the distribution of assets to the heirs.

Not all estates must go through probate court. Very small estates, including those that do not include real estate, may be exempt from probate requirements. In addition, estates that pass directly into trusts or other estate planning structures besides wills may not have to go through probate.

Moreover, any disputes regarding the contents of wills are resolved by probate courts. They handle trustee and beneficiary disputes too.

The Cost of Probate Court

Distributing an estate through the probate court process costs a lot of money. The estate will owe fees based a percentage of its total value, and the fees grow if the estate is larger. These fees pay the executor for his or her services and also cover legal fees for the executor’s attorney. Fees can cost the estate thousands of dollars – money which will not go to the heirs.

In addition, the estate must pay the costs associated with probate court filings. Many documents must be filed with the court, and each one comes with a filing fee.

The Time Probate Court Takes

It takes quite some time for an estate to go through probate. With delays in court scheduling due to busy dockets, the first court date might not be scheduled for several weeks or months after the family first makes a court filing. There are mandatory time period for the executor to complete certain tasks, but creditors also must have a notice period during which to make claims against the estate. Also, any disputes about the will or distribution of the estate could delay the process. All in all, probate could take nearly a year, or even more if there is a dispute.

As a result, structuring your estate to keep as many assets out of probate as possible could benefit your heirs and executor in the long run. With the help of an estate planning attorney, you can move assets into a trust or use other methods to avoid these downsides of probate court.

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.

Do You Have an Estate Planning Blueprint?

“When it comes to estate planning, not having a plan is a plan. However, it is not a good one.”

That warning is applicable to people of all ages. Your assets can go to one of four spots:

• Your family
• Your friends
• Charitable organizations or
• The government.

Therefore, to avoid the last choice, sit down with an estate planning attorney and ensure that your assets are being allocated how you want them to be.

Forbes recent article entitled “How To Create An Estate Planning Blueprint” reminds you to make sure your plan is optimized, so your beneficiaries can avoid probate and make the most of the gifts you plan to leave them.

Here are some ideas on how to make sure your estate is as planned as possible.

Set Regular Check-Ins. Estate planning isn’t a “set it and forget it’ task.” It needs regular reviews. Your estate is constantly evolving because of life events, changing laws and your financial circumstances. You need to talk to your attorney to make certain that all your assets, as well as circumstances, such as the birth or adoption of a grandchild, are recognized in your will. These meetings should be held every few years—but may be more frequent due to occurrences, such as a births, deaths, or divorces.

Think of the Future. Forecasting into the future can give you peace of mind now and make things easier for your beneficiaries. Failing to plan can create future problems for your heirs.

Look at Your Options. If you decide to create a trust, know your options and discuss different setups—and their tax implications—with an experienced estate planning attorney. Working through the pros and cons of options, can help you to determine the best options for you and your situation.

Tell Your Beneficiaries about Your Wishes. Let your beneficiaries know what you’re planning, so there are no surprises or hurt feelings. There’s no need to detail all of the financial details. Just give a summary of what you anticipate, as well as details about who will be the trustees and executors of your estate.

When it comes to your estate, paying for the professional services of a qualified estate planning attorney now can help you and your family avoid issues in the future. Contact our office today to schedule your consultation.

Reference: Forbes (April 1, 2020) “How To Create An Estate Planning Blueprint”

What’s the Best Way to Provide for My Family when I’m Gone?

“Estate planning involves making a plan for the transfer of your property upon your death or incapacity. Your estate is all of the property you own, which can include cash, jewelry, cars, houses, clothes, land, retirement, investments and savings accounts. The goals of estate planning are to make sure most of your estate is transferred to your beneficiaries, you pay minimal taxes on the estate and children are assigned guardianship.”

The estate planning process should begin when you’re at least 18 years old, of sound mind and as free as possible from emotional stress, suggests Essence’s recent article entitled “Death And Money: How To Protect And Provide For The Loved Ones You Leave Behind.” You don’t want to do this kind of planning when you’re on your sickbed or when your mental capabilities are in decline.

If you’re new to estate planning, here are the necessary steps to ensure you start the process on the right foot. Work with an experienced estate planning attorney to be certain that your plan is correct and legal.

A will. This is a legal document that details how to distribute your property and other assets upon death. A will can also nominate guardians for minor children. Without this, the state will dictate how to distribute your assets to your beneficiaries, according to the laws of intestate succession. If you already have a will, be sure it’s updated to reflect an accurate listing of assets and beneficiaries that may be changed with a divorce, financial changes, or the birth or adoption of a child.

Life insurance. This is a great idea to protect and provide for your family when you’re gone. Life insurance pays out money either upon your death or after a set period. Even if you have a life insurance policy as an employee benefit, this coverage isn’t portable, which means it doesn’t follow you when you switch jobs. This can result in gaps in coverage at times when you may need it most.

Work with a legal professional. Estate planning is not a DIY project, like cleaning the garage. You should have the counsel and assistance of an experienced estate planning attorney to help you create a comprehensive estate plan. An estate planning attorney can also coordinate with your financial advisor to manage your estate’s finances, such as making recommendations and funding investment, retirement and trust accounts.

An estate planning attorney also can make sure that all of your beneficiaries and secondary beneficiaries are up-to-date on your investment accounts, pensions and insurance policies. An estate planning attorney will also help you with the best options for maintaining your estate after death or in the event of incapacity. In addition to preparing a will, your attorney can create a living trust that details your desires regarding your assets, your dependents and your heirs while you’re still alive. He can also draw up your power of attorney for your health care, verify property titles and create legal document to ensure a succession plan for your business.

Finally, an estate planning attorney or probate attorney can help the personal representative or executor of an estate with closing responsibilities setting up an estate account, tax filings and paying the final distributions to beneficiaries.

A key to estate planning is to get (and stay) organized. Know the location and passwords (if applicable) of all your important legal and financial documents. You should also communicate the location of these files to trusted family members and to your estate planning or probate attorney.

Reference: Essence (Jan. 29, 2020) “Death And Money: How To Protect And Provide For The Loved Ones You Leave Behind”

What Do You Really Need? A Will? A Trust? Both?

The common way to reduce the cost of probate, is through trusts but not always.

The benefit of trusts in estate planning is primarily a question of state law, according to The Houston Chronicle in “Elder Law: Which should I have—A Living trust or a will?”

In some states, probate is not an expensive or overly time-consuming issue. Texas, for example, has what is called an independent administration. Executors handle the tasks involved in settling an estate and distributing assets to beneficiaries. As a result, there’s very little court involvement. However, that’s not the case everywhere. An estate planning attorney in your area will be able to explain the details of your state’s procedures and discuss whether a trust is right for your estate. They’ll also explain the difference between different types of trusts.

The trust most frequently used to avoid probate, is known as a revocable management trust, living trust or an “inter vivos” trust.

Selecting the best type of trust for each situation is different. Here are some advantages of living trusts:

Avoiding probate. The cost of probate alone is not reason enough to use a trust. However, if your assets are in trusts, you may not need to file an inventory listing your assets with the court. That’s not always required in every jurisdiction, but if it is required where you live, a trust can help keep your asset list private, by ensuring that it is only seen by beneficiaries.

Asset management for incapacity. A living trust goes into effect, while you are alive. If you become incapacitated, an alternate trustee can step in to manage assets, pay bills and ensure that finances are taken care of.

Avoiding probate in another state. If you own out-of-state property, your estate may need to be probated in your home state and in the other state. If you have a living trust, out-of-state parcels of land can be deeded into the trust during your lifetime, thus avoiding the need for probate in another state. After your passing, your trustee can handle the out-of-state property in the living trust.

Administrative ease. There are, unfortunately, instances when Power of Attorney can be challenged by financial institutions. The authority of a trustee is more likely to be recognized, by banks, investment companies, etc.

There are some questions about whether it’s better to have a living trust or a will. The most complex part of having a living trust, is the process of funding the trust. It is imperative for the trust to work, that every asset you own is either transferred into the trust or retitled into the name of the trust. If assets are left out or incorrectly funded, then probate will probably be necessary. This can occur, even if only one single asset is left out.

If an asset is controlled by beneficiary designation, then the trust may not need to be named a beneficiary, should you want it to pass directly to one or more beneficiaries.

Funding the trust becomes complicated, when retirement accounts are involved. Consult with an experienced estate planning attorney, if you want to make the trust a designated beneficiary of a retirement account. This is because very specific and complex rules may limit the ability to “stretch” the distributions form the account.

An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances. You can also read all about Janet's extensive history in working in Palo Alto, California here.

Reference: The Houston Chronicle (Feb. 15, 2019) “Elder Law: Which should I have—A Living trust or a will?”

For the Record: Not All Wills are Probated

So, just what is the process?

The purpose of the probating process is to determine who will receive the assets of the decedent. An article in nwi.com recently reviewed the procedure in “Estate Planning: Do wills need to be probated?” An estate plan can be established, without opening a probate estate. Not all wills are probated.

Bear in mind that the only assets subject to probate, are those that are controlled by the will. Assets that the decedent owned in his or her name alone without beneficiary designations are probate assets. If the asset is owned in two people’s names or contains a beneficiary designation or is a POD—Payable on Death—or TOD—Transfer on Death—those assets are not probate assets.

One reason to probate an estate, is to determine who receives the property of the person who has passed. If the account is owned jointly in two people’s names, typically a husband and wife or parent and child, then the surviving joint owner becomes the full owner at the time of death. A bank or financial institution will probably want to see a death certificate to verify that the other person on the account has passed.

This is also true for a CD—Certificate of Deposit—if there are two names on it.  It also applies to any real estate held in two names. Ownership for these assets, properly titled in more than one name, are not a big deal, if the titles have been done properly.

Therefore, using joint ownership or naming beneficiaries for most or all of the assets, removes the need to probate much of the will. However, in some instances, some attorneys like to present the will for probate, but ask that a personal representative not be appointed, and no estate opened. This is called “spreading the will for record” and it preserves the will. Wills need to be presented for probate within the statutory deadline for your state. These timeframes can range from six months to within three years of the death of the decedent (your estate planning attorney will know your state’s laws on this matter). If this is not done, then the will may not be accepted by the court as valid.

By spreading the will, the will is preserved in the outside chance that an asset is uncovered in the future, even after the statutory timeframe has expired. When the beneficiaries of the will are not the same as family members found under intestate statutes, like a pour-over will, where the trust receives all the property under the will, it makes this strategy especially valuable. Spreading the will further ensures that the trust estate plan will be carried out. Trusts are rarely presented to the court for probate.

In some regions, probate is a quick and relatively painless process. Depending on the situation, there may be little gained by over-engineering the estate just to avoid probate.

An estate planning attorney can advise you in creating an estate plan that fits your unique circumstances and meets the requirements of your state laws. Contact our office today to schedule your consultation.

Reference: nwi.com (Jan. 20, 2019) “Estate Planning: Do wills need to be probated?”