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Estate Planning Overview

Do I need an Estate Plan?

My general recommendation is that no one needs an estate plan; however, it is a polite means of asking and enabling people to help you protect your kids, health and property when you are sick and a cost-effective means of transferring property on death.

Anyone who has a family that will argue about who should make what decisions is in a special situation where planning can prevent a lot of heartache in your absence.

Please review any of my standard intake forms to learn more about the questions you will be asked at our first meeting, an overview of the relevant law, what documents you will need to collect, and the specifics of my billing practices.

What is an estate plan?

An estate plan is a set of documents that tells the court, family members, and financial institutions who you want to be in charge of making decisions on your behalf if you are not capable of making decisions on your own and a set of instructions for how to make decisions about family, kids, and property.

An estate plan, no matter what attorney you use, includes:

  • Will or Trust: Designate who is going to be in charge of distributing property and how they should distribute it. May also include clauses nominating a guardian for your children.
  • Advance Health Care Directive: Designates who will make health care decisions for you and what decisions you would like them to make.
  • Durable Power of Attorney over Finances: Designates who you want to be in charge of managing your finances if you are incapacitated.

I also include:

  1. Nomination of guardian form and caregiver affidavit. Rather than putting the nominations in the will, I put them in a separate form in order 1) protect the clients private choices – the form can be thrown away when the kids are adults without amending the will 2) the form authorizes short-term guardianship if the parents are sick or out of town. I also include a caregiver affidavit so if someone other than your nominated guardian is taking care of the kids and there is an emergency, they can authorize medical care (or educational decisions in longer absence cases).
  2. Pet Trust Provisions. My standard recommendation is that if you have a pet, or may have a pet at the time of your death, that you appoint a trusted party to care for the animal. My form directs the person to keep the animal, or to find an alternate situation for their care. I also recommend a pet support gift because animals cost more as they age, and it is not to give the adoptive parents some support.
  3. Gates Memo. This is an attachment to the trust for gifts of personal property and updates to burial or cremation instructions. The purpose of this form is that it can be amended easily without an attorney that way if gifts are changed several times over the course of one's life, they don't have to come back into the office (although I request a you email me a copy so we have matching sets, no fee).
  4. Property List and Agent Contact Information. It makes a trustees job a lot easier if they have list of what was owned, not owned, and where the accounts are held. That way they are not shuffling through paperwork trying to figure out if the person had life insurance. I also include contact information for key persons in your life, having a phone number or an email address to a couple of people in your spouse's family can go a long way.
  5. Asset Transfer Authorization and Certificate of Trust. This is a useful tool to quickly transfer property to the trust. It is a letter that explains how to hold title to different types if accounts, and has a synopsis of the trust, and your trustee's contact information attached. I put a couple copies in the back so that as you age and get new stuff, you can grab a copy and give it to the financial institution or title company, and your property will be properly titled in the name of the trust.
  6. Medical Records Release. This form makes it possible for your agent to pick up medical records on your behalf.

What is a trust?

A trust is a contract that tells title companies and financial institutions that they do not need a court order to transfer title to assets on death. Instead of a court order, the trustee will submit an affidavit that says they are the trustee; they are taking control of the assets, and attach a copy of the death certificate.

The trustee under a trust and an executor under a will have the same exact responsibilities to beneficiaries, the only difference is whether the probate court is overseeing the process or whether you trust your trustee to act without supervision.

In trusts, the beneficiaries are "supervising" the trustee. The trustee has to send the same notices and reports that are required under the probate code. If a beneficiary suspects something is wrong, it is their responsibility to request that trustee act differently.

When is a will and/or an estate plan most important?

Outside of the minor children and property issues discussed below, here are my top six situations where the default rule doesn't work and you need a contract:

  1. You have a child with special needs. Parents who have children who are dependent and will be dependent on the public benefits to care for their children, need to draft a special needs trust for their child. This is because if you pass away and the child inherits property, it will kick them off their benefits, then they have to burn through the money and re-apply to get back on benefits. This not only wastes the assets in the estate, but can cause a disruption in services. Further, having a fund that can be used to allow your child to buy Christmas presents for family, stay in a nicer place, receive non-covered medications, or do some personal shopping adds a tremendous amount to their quality of life.
  2. You have a child with someone whose biological parent is abusive or otherwise not suitable as a parent. The court will presume that the other biological parent is the best parent for the child. If this is not the case, I strongly recommend that you sign an affidavit detailing the problems and noting where police reports or other evidence of the problem can be found.
  3. You are not married, but want your significant other to inherit or make decisions on your behalf. Many couples decide not to get married even after having kids and mixing property. The state default rule is that your parents will be your executor, health care agent, and financial agent. Doing an estate plan skirts the issue of marriage while giving your partner the legal protections.
  4. You are not married, and you have parents or adult children that do not get along. The state default is that your adult children or parents are the default executor, health care agent, and financial agent. There are no clear rules on what parent or child should be the agent. Designating someone can avoid family feuds and keep everyone focused on the task at hand. *Marital couples, please see the note below.
  5. You are a same-sex couple that leaves the state of California. Other states are supposed to give full faith and credit to the laws of other states, but that doesn't prevent individuals who are not comfortable with same-sex couples from making things difficult. Having executed wills, advanced health care directives, a power of attorney over finances, and a guardianship agreement gives you the option to not even mentioned you are married if you do not think it will help.
  6. You are married, and you do not want to leave everything to your spouse. Make it clear in your will, and don't forget to provide something for your spouse's support for the first year if they cannot support themselves (spousal support does not end at death).**Note for second marriages.

*Note for married couples, if you still fall into the category of having parents or adult children who do not get along, I highly recommend that you put an estate plan in place so that your nomination for your back-up agent is written down somewhere. Marital couples can get in joint accidents, but more commonly, they die within a year of each other and it is uncommon to update your estate plan while mourning the death of a spouse.

**Note for second marriages with a will executed before marriage. If you are married, and want the will or trust you signed before your marriage to work than once you marry, you need to sign a separate statement that says you do not want to leave half your property to your spouse and you do not want them to be executor, health care agent, or financial agent. The state default rule is that there is a presumption that you forgot to update your will.

California's Special Living Trust Situation

There is a lot of confusion around living trusts. Many clients hear from friends and relatives that they do not need a trust. If you have real property or kids (minors), don't listen to them. It is not that your friends and relatives are totally wrong, but California has a special set of rules that make living trusts much more important here than in other states.

In California, the executor, executor's attorney and the probate referee are entitled by statute to a percentage % of the value of the estate. Because property values are so high in California the fees leaving the estate are also very high (3%-7%). If the asset is in a trust, the fees are based on hourly attorney work.

Let's consider an example of Josh and Rachel. Josh and Rachel and smart people who hold title to their property as joint tenants with rights of survivorship, they also have all beneficiaries designated on all of their accounts to pay to their spouse first and then to their two kids. They have a house in the mission worth approximately $900,000 with a mortgage of $450,000.

If Josh and Rachel were in an accident together or they get old and pass without updating the title on the house to be in a trust, before the kids get access to the money, here are the relative probate fees:

House: $27,000 (3% of the market value of the asset - no deduction for the mortgage) to the attorney and Executor = $54,000 + Probate Referee fees, publication, and filing and closings costs = ~$58,000.

To transfer title under a trust administration case would cost between $2,500 and $5,000 (ten to twenty hours of attorney time at $250 per hour). There are no filing fees or publications fees unless there are litigation claims or or unknown creditors.

The percentage fee system is such a windfall for attorneys that my malpractice insurance recommends that if my clients decide not use a trust and they have real property, I send a separate written statement to my clients specifically disclosing the fees an attorney would receive in a probate case.

When people in other states say you don't need a trust unless you are incredibly wealthy, what they are discussing are trusts that protect the estate against inheritance tax. That is generally true, but is not relevant to families in California with real property. Even a small estate generally has the family home as the primary asset and the percentage fee system is rarely a fair or reasonable fee for these families.

What if I did not get my property in the trust?

It is very common for families to create a trust, put their home in the trust, and then when they refinance, or buy another home, they forget to put it back in the trust.

As long as there is evidence that this was unintentional, the best practice is a Heggstad Petition. This petition asks the court to transfer the title to property back to the trust without a formal probate. It can save clients $30,000. I do these often and tell clients to plan on about ten hours of attorney time plus the filing fee of ~$450.00. The petition can also be used for financial accounts that were not titled in the name of the trust (as long as there is some evidence that they were intended to be in the trust.)

When do I not need a trust?

If you do not have real property or kids and you update all your beneficiaries on your bank, retirement and life insurance, than I don't see a problem with it.

I recommend and believe it still polite and financially responsible to do a will, health care directive and power of attorney over finances.

The will lets your family know who you want to be in charge of your funeral, sorting out debts, and generally being in charge. This can be a big relief if multiple parties want to take charge. The power of attorney over finances serves the same purpose if you are disabled and makes it much, much, easier for a caring friend or family member to help.

The advance health care directive lets your family or friends know who you want to make health decisions on your behalf and some basic instructions on what types of decisions you would want them to make.

Be sure to contact a knowledgeable Oakland estate planning lawyer from Summerall Law, P.C. today. I provide free initial case consultations for all potential clients. Download and review the corresponding intake form before our meeting.​ Call now at (415) 944-9406!

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Summerall Law, P.C. - Oakland Estate Planning Attorney
Located at 3873 Piedmont Avenue, Suite 8,
Oakland, CA 94611
Phone: (415) 944-9406
Local Phone: (415) 944-9406
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The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.

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