Estate Planning Practice Blog

Spouses: Make Sure You Have Beneficiaries for Your Accounts.

If you and your spouse keep separate financial accounts and/or retirement accounts (for whatever reason), please make sure you have a beneficiary designated for these accounts.

Nearly every financial product, whether it be life insurance, annuity, IRA, brokerage account and even your basic run-of-the-mill savings account at a credit union has a payable on death provision available for you to indicate who should get the funds in that account when you die.

This is even more important between spouses especially if you want your spouse to get the funds after you die. (Well, it really isn't more important, but it is just more painful when a surviving spouse has to deal with this when it could have been taken care of.) You would be surprised how many men have accounts opened up and fail to designate a beneficiary and leave their widow at the mercy of the financial institutions.  Or maybe I am just the one who gets surprised when it happens to clients.

Sometimes you may not want your spouse to be the beneficiary, but in some states you may not have a choice especially in a community property state. If it is a separate property account, it is still a good idea to have beneficiaries named to make your wishes known when you die. If it is not separate property or you think you have a community property interest in that account, some states have procedures to petition for your share. In California, it is called a Spousal Property Petition.

As always, if you have questions about naming beneficiaries, talk to an estate planning attorney or other advisor for guidance.

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Estate Planning, Probate and Trusts involve complex areas of law. Individual circumstances must be considered before any advice can be given.  The general information above is not to be construed as legal advice, which can only be given after consideration of the unique facts of each matter. Please seek the advice or counsel of your attorney, financial advisor or CPA as it may be appropriate.

Initial Probate Filing Fees Changed for 2008.

The filing fee paid directly to the court to open a probate case (e.g., file a petition for probate) has been modified in 2008.

The filing fee is based on the value of the estate as it will be inventoried to the court.

The initial filing fee is now $320.00 for probate matters.

Before the filing fee was based on the estimated value of the inventory and was payable at the time the petition for probate was filed.  The filing fee schedule is set by California Government Code Section 70650 et. seq.

For example:

The fee is $320.00 for estates or trusts under $250,000;
the fee is $385.00 for estates or trusts of at least $250,000 and less $500,000;
the fee is $485.00 for estates or trusts of at least $500,000 and less than $750,000;
the fee is $635.00 for estates or trusts of at least $750,000 and less $1,000,000;
And so on ...

Now, the fee to file a petition for probate is $320.00 and when the estate closes the estate then pays the graduated filing fee amount based on the actual final inventory prepared during the probate.

So if the estate ultimately comes to $501,000, the total filing fee is $485.00 and since $320.00 has been paid initially, the estate will pay directly to the court clerk an additional $165.00 before the court will order the estate closed. This is a good thing because usually at the outset the heirs or beneficiaries of the estate tend to have little or no cash to pay for these filing fees and can pay these fees directly from the estate at the time it closes.

And in case you are wondering, attorneys fees and personal representative fees are also set by statute and payable when the estate closes.

Litigating Trusts and Estates Matters

One of the skills that has become invaluable in the estate planning/wills/trusts and probate practice area is the ability to handle a litigation matter when it arises. This is when someone disagrees with how an estate is being handled (either through a trust or probate proceeding) or feels that they are entitled to a portion of an estate or for a myriad of other reasons.

Tredway, Lumsdaine & Doyle, LLP, attorneys are very experienced in handling litigation matters in trusts and estates matters.

We have four attorneys who handle routine estate planning matters for clients. We have three attorneys who handle routine probate matters for clients. We have seven litigation attorneys who routinely handle litigation matters as it relates to trusts and estates.

Typically, a client who has a litigation matter will consult with the appropriate practice area attorney (estate planning or probate) and then once the client retains the firm, a team approach is used to put together the best attorneys for the matter that is most cost effective and follows the desired litigation strategy for our clients.

But the Only Asset is a House.

A common question in a probate matter ...

My mother died and left her home in her name. That's all she had. And she didn't have a Living Trust. What happens when I want to keep the home, but we have to pay for probate expenses like attorneys fees and credit card bills?

The answer, in most cases ...

The home must be sold to pay debts and expenses unless the heirs buy it from the estate for the amount of debts and expenses. This means that the heirs have to come up with the money to pay for the expenses incurred in administering the estate in probate and it needs to be dealt with in a manner that will be approved by the court.

Attorneys fees for probate in California are set by statute and approved by court. See California Probate Code Section 10810.

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Estate Planning, Probate and Trusts involve complex areas of law. Individual circumstances must be considered before any advice can be given.  The general information above is not to be construed as legal advice, which can only be given after consideration of the unique facts of each matter. Please seek the advice or counsel of your attorney, financial advisor or CPA as it may be appropriate.

Beneficiary Designations.

Having properly designated beneficiaries is a crucial component of estate planning.

Many financial products (for example, life insurance policies, bank accounts, retirement accounts, savings bonds and annuities) allow you to designate a payable on death beneficiary,which, in most instances, will avoid probate of that particular asset upon your death. This passing to your designated beneficiary after death is called a nonprobate transfer.

It is a good idea to review at least annually your beneficiary designations for your financial accounts and ensure that they are in line with your estate plan. Be sure to also tell your estate planning attorney what financial products you have and who you have designated as your beneficiary as it becomes an important component of your estate plan. There can be unintended consequences for making certain beneficiary designations in certain financial products.

Also, if you are divorced and have named your former spouse as as beneficiary, California Probate Code Section 5600 states that any beneficiary designation involving a former spouse made before or during the marriage may be subject to automatic revocation to that former spouse once the divorce is finalized. There are exceptions. If you wish to leave a certain asset to your former spouse, you will need to make this clear after the date of dissolution. Don't rely on this code provision after a divorce -- review all your beneficiary designations and update them especially after a divorce or death in your family.

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Estate Planning, Probate and Trusts involve complex areas of law. Individual circumstances must be considered before any advice can be given.  The general information above is not to be construed as legal advice, which can only be given after consideration of the unique facts of each matter. Please seek the advice or counsel of your attorney, financial advisor or CPA as it may be appropriate.

Trust Administration After Someone Dies

Living Trusts require administration after the death of a settlor (the person who created the trust).

Upon a person's death -- there are many steps that need to be taken in accordance to California laws to properly administer their Living Trust:

To start, California Probate Code Section 16061.7 requires notification by trustee to beneficiaries/heirs of the person who passed away as the first step.  See our blog post on this notice requirement.

California also requires a trustee to give notice of death to the Department of Health Services as it relates to Medi-Cal benefits. This notice allows the Department of Health Services to determine whether the decedent was receiving Medi-Cal benefits and if there is any right by the state for reimbursement.

Real property assets held in trust need to have titled cleared. An Affidavit of Death of Trustee is commonly filed along with other Trust Transfer Deeds to properly distribute the property as directed by the Living Trust.

Trust assets need to be appraised and otherwise handled.

And tax issues need to be considered and handled with the assistance of a qualified CPA or accountant experienced in estate matters.

And, lastly, it is prudent to wrap up the administration of a Living Trust with an agreement signed by the trustee and all of the beneficiaries to protect the parties.

This is a quick run down of the trust administration issues and is not meant to be all inclusive. Please consult with an attorney for specific advice regarding your trust administration matter.

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Estate Planning, Probate and Trusts involve complex areas of law. Individual circumstances must be considered before any advice can be given.  The general information above is not to be construed as legal advice, which can only be given after consideration of the unique facts of each matter. Please seek the advice or counsel of your attorney, financial advisor or CPA as it may be appropriate.

Estate Planning & Organization Go Hand in Hand.

Don't you love it when you walk into stores this time of the year and you see stacks upon stacks of clear plastic containers and other paraphernalia for getting your house and life organized for the new year? Whether or not you love it, it is a good reminder that being organized and going through your things every year helps with clutter and creating a clean slate for the new year.

With that in mind, Leanna Hamill, an estate planning attorney from Massachusetts, posted about a NY Times article and the importance of keeping your estate planning documents organized and at the ready. Read her post here.

Two Questions from a Reader.

A reader wrote last year: 

"Two questions came to mind that maybe your other readers (and perhaps future clients) might be wondering.  First, if an unmarried couple holds title to a home in Joint Tenancy, is there really a need to add the property to the trust since title would pass outside of probate to the survivor anyway?  Second, do settlors/grantors have to record their living trusts in California in order to effectuate it?  (E.g., do banks, etc. want to see that the trust has been recorded with the County recorder?)"

While there are easy answers to these kinds of questions, it really depends as legal advice regarding estate planning must be specific to that client's needs, desires and situation especially as it relates to the first question.

The second question, to answer it first, a living trust does not need to be recorded to be effective in California. It can be recorded. Reasons for recording a trust should be explored with your attorney as recording a trust makes it a public record.

The best answer to the first question is that while an unmarried couple may acquire property as joint tenants with right of survivorship, it only delays probate of the property upon the death of the second joint tenant after the first joint tenant has died. Also, sometimes a couple may decide that tenants in common ownership is preferred. All the more reason to consult with your attorney, tax advisor and others to determine the best way to hold title to property and how it affects estate planning decisions.

Thanks for the questions. We will try our best to answer them when asked to do so in this blog.

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Estate Planning, Probate and Trusts involve complex areas of law. Individual circumstances must be considered before any advice can be given.  The general information above is not to be construed as legal advice, which can only be given after consideration of the unique facts of each matter. Please seek the advice or counsel of your attorney, financial advisor or CPA as it may be appropriate.