Frequently Asked Questions

What is a Will? 

A Will is the legal expression of an individual’s wishes about the disposition of their property after death; especially, a document by which a person directs is or her estate to be distributed upon death. In essence, it is a written instruction to the court who your heirs are and how much they are to receive. A Will by itself, does not avoid probate. However, it does provide the court with direction as to how your assets are to be distributed and who you would like to manage that process – your executor. Click here for more details. 

What is a Trust? 

A trust is a legal document that, among other things, is primarily used to hold assets (think real property or money) for the benefit of the beneficiaries. The party creating the trust is the trustor, while the one managing the trust is the trustee. Typically, these are the same people, although that is not required. Additionally, you can have more than one trustor and more than one trustee (such as a married couple). While there are some limitations, the trustor(s) have a lot of freedom as to who their beneficiaries are going to be and how they are going to receive their distributions. To break it down, a trust allows one party to pass assets on to another without the need for probate and with the ability to place restrictions on how that property is to be distributed or used. Click here for more details. 

What is Probate? 

Probate is the legal process of transferring a decedent’s estate (title) to the rightful heirs of the estate. The probate process involves (i) collecting and identifying the deceased person’s property, (ii) paying any debts and taxes, and (iii) identifying the proper heirs and distributing the estate property to them. While the court oversees this process, in most cases the work is done by the executor of the decedent’s estate with the help of an attorney. Click here for more details. 

Do all estates have to go to Probate?

No. Not all estates are required to go to probate. In California, there are two cases where an estate needs to pass through probate: if the decedent owned real property (i.e., land) with a gross fair market value over $55,245 or if the decedent’s gross estate value (that is real and personal property) exceeds $165,250. Keep in mind, these rules apply regardless of whether the decedent had a Will or not.

What if my estate does not meet the probate requirements?

Even where an estate is under $166,250 or had real property valued under $55,245, some court oversight might be required – particularly with real property. However, the process is typically shorter, less expensive, and less complicated. However, you should still speak with an attorney to make sure the proper paperwork is filed, and the proper parties notified. If the only asset is, for example, a bank account(s) with a total value under $165,250, a Small Estate Affidavit (sometimes called a §13100 Petition) may be presented to the holder of the asset (such as a bank) by someone entitled to the asset (for example, an heir) and the asset can be turned over then and there. This process is only available at 40 days after the date of the decedent’s death and an original death certificate will also be required. An estate planning attorney can provide you with a Small Estate Affidavit that complies with the California Probate Code’s requirement.

Why does a Will not avoid Probate?

The short answer is that a Will only directs the distribution of an asset, it does not provide a way by which the assets is to be distributed. The reason for probate is to have an authority, in essence, provide a legal seal of approval to pass ownership of something since the owner has passed away and therefore cannot consent to a change in ownership, legally referred to as “clean title.” Think about it this way; a Will is your vacation vision board, it shows what you would like to do, but does not lay out how to do it - what airline or car rental you will use, your hotel reservation details, your daily schedule, etc.

What assets avoid Probate?

As a rule of thumb, the assets that avoid probate are those assets with a beneficiary (or beneficiaries); assets held in joint tenancy; those assets under the probate threshold under $166,250 or $55,245 in real estate; and assets held in a living trust.

Does a Trust avoid Probate?

Yes, so long as assets are held in a trust, they do not count towards the probate threshold under $165,250 or $55,245 in real estate and therefore avoid probate. Please be aware, you need to have your asset(s) correctly titled into the name of your trust for them to avoid probate – simply having a trust alone is insufficient. An extremely common, yet avoidable problem our office deals with is where someone creates a trust using an online form yet does not title any of their assets into their trust – typically their home and/or a large savings account that did not have a beneficiary. You should speak to an attorney when setting up a trust to ensure that no assets are missed and that the trust conforms with the California Probate Code.

Do I need to leave someone $1 to disinherit them? 

No. This is one of the more common estate planning myths we hear about. You only need to explicitly disinherit anyone who would be considered a natural heir – typically children. Then, all that is required to disinherit them is a statement explicitly stating that you acknowledge them, but that you are intentionally leaving no provisions for them in your Will or Trust. No need to leave a nominal amount such as $1. Click here to watch our video regarding common estate planning myths. 

Do I need an EIN/TIN/Tax ID Number to open a trust bank account? 

If your trust is a revocable trust, then no, you may still use your personal social security number to open a bank account under the name of your revocable living trust – just as you would an account under your named individually. An EIN/TIN is only required when opening an account under the name of an irrevocable trust, such as a special needs trust. If a trust has multiple trustor (such as a married couple), either party’s SSN may be used. As far as the IRS is concerned, the trust is still you and the assets are still yours. Click here for more details. 

What is Joint Tenancy?

Joint Tenancy is a form of holding title between two or more individuals. When property is held in joint tenancy, each party is considered to hold a 50% interest in the property but the interests are undivided, so each party is entitled to use the entire property. When property is held as joint tenants there is an implicit right of survivorship, so in the event of the death of either party (in the case of two joint tenants) the remaining party becomes the sole owner of the entire property. Holding property in joint tenancy may result in capital gains tax upon the sale of the property by the surviving tenant which might otherwise be avoidable by holding title in a substantially similar but distinct method (Community Property with Rights of Survivorship - CPWROS).

What are Tenants in Common?

Tenants in Common is a form of holding title between two or more individuals. Similar to holding title as "joint tenants", each tenant in common has a right to possess the entire property. Unlike "joint tenants", tenants in common provides no right of survivorship. Holding title in such form often leads to undesirable estate planning consequences, such as needing to probate an estate of a deceased tenant in common in order to administer the decedent's ownership interest.

What if my deed does not say joint tenants or tenants in common?

In California, property that is held by multiple parties is considered to be held as "tenants in common", absent language to the contrary.

I’m moving out of CA, do I need to update my estate plan?

We endeavor to author estate plans which will work as intended regardless of any future move to another state. For example, our trusts often include general provisions allowing the Trustee(s) to (A) move the Trust to a new situs, (B) change the controlling law of the Trust, and (C) amend the Trust to operate under new controlling law. Nonetheless, it is wise to have an attorney in your new resident state to review your estate plan in case of any state-specific measures that are wise to adopt. For example, certain states (e.g. Arizona) have an online registry for Advance Health Care Directives, if a certain form is adopted. In such a situation we would recommend executing a new Advance Health Care Directive to take advantage of state-specific advantages. If you have a revocable living trust executed in California which holds title to certain assets, those assets will remain titled in the Trust, safe from any court-required administrative process, regardless of your state of residency.

Should I give my children a copy of my trust while I’m still alive?

This is a matter of personal choice, and a decision often unique to each family.  You may make changes to the distributive provisions of your Trust, or your choice of fiduciaries, multiple times during your lifetime. Your children may be disappointed by your distributive choices, or your distributive changes over time. To avoid possible hurt feelings, sibling rivalry, or disputes among family members, it if often best to keep the Trust private and confidential, and instead simply let your children know that a Trust exists, that it remains private, and that in the event of your incapacity or death your children should contact your attorney for any advice or copies of documents they may need at such time. Our business cards are free and serve as great presents for your children!

Do I need to file a homestead declaration?

Homestead exemption in California is automatic, so you do not need to file a homestead declaration with your County Clerk. However, if you have equity in your home and serious financial problems, it is wise to formally declare your homestead. The automatic exemption applies only to preventing a forced sale of property by an unsecured creditor. A declared exemption applies to both forced and voluntary sales of the property, and proceeds from a voluntary sale are protected if another home is purchased within 6 months. A free and simple homestead declaration form can usually be found on the website of the County Clerk-Recorder's office for the County in which your property is located. As of January 1, 2021 the amount of the homestead exemption was increased, and the method of calculation simplified, as well as indexed to inflation, due to the passage of Assembly Bill 1885. The method of calculation is described in Section 704.730 of California’s Civil Code, but can generally be considered to be $300,000 (in 2021) for most counties in California..

Do I need to pay for a copy of my deed?

Generally, no. When a deed is submitted to a County Recorder by mail, the recording and return of the deed can take several weeks. Once a deed is recorded, it is publicly available in the County's records but it can still take a number of weeks for the deed to travel through the County's mail system, to the post office, to be delivered and finally arrive in your mail box. The day the deed was recorded there are a number of companies in California which will routinely search county records for new recordings and will rush letters to the property owners offering to provide a copy of the recorded deed for a fee. In 2021 the stated fees of these companies are typically between $75 and $100.  If the property owner ignores these letters then within a week or two the property owner will typically receive the original recorded deed returned by the County Recorder's office. There is therefore no reason to pay money to such companies for a photocopy of a deed which you will otherwise receive for free in due time. We consider these companies, that send such letters, to be deceptive in nature and a public nuisance. We do not encourage anyone to send money to such companies.

If you have lost the deed to your property, or if you do not receive your recorded deed despite a significant passing of time, you can request a copy directly from the County Recorder's office. Copies direct from the Recorder tend to be provided at a very reasonable cost, mandated by state and local government.  For example, a 2-page deed may cost $4.00 - significantly cheaper than the private companies described above.

Do I need a Will if I have a Trust?

A Trust is not a replacement for a Will. A Trust describes your distributive wishes for property expressly titled under the Trust.  A will describes your distributive wishes for any and all of your property not expressly titled under the Trust (or those with designated beneficiaries, like pensions, retirement accounts, and life insurance policies). Typically your home and your larger financial accounts (savings, investment accounts, money markets, etc.) are titled in the Trust but how do you formally title all of your small and lesser value tangible personal property in the Trust?  You could write an assignment listing absolutely all of your property to the Trust, but what of property obtained after signing of the assignment? This is where a Will is of benefit. If you have a Trust then you should also have what is commonly referred to as a 'pour-over' Will, so named because it 'pours over' all of your assets not held in Trust, into the Trust, so those assets can be distributed pursuant to the terms of the Trust. If you do not have a Will which directs your assets to the Trust, family members may claim those assets under California's intestate succession statutes. This may result in the same distribution as your written wishes under the Trust but in the event of a difference, beneficiaries of your assets may be counter your heartfelt wishes.

If I am Agent for health care, can I overrule the principal over whom I have power of attorney?

If the principal of the power of attorney has capacity, in that they are able to make and express their own decisions with respect to their care, then you cannot overrule them. You have a fiduciary duty to act on their behalf in their best interests and consistent with their known wishes. If you find yourself in a situation wherein you believe they are not capable of making a decision due to, for example, a level of dementia, then you should encourage a physician (preferably their usual general practitioner) to examine the principal to determine the principal's level of capacity.   

Do I need a letter of incapacity?

A power of attorney typically has a provision describing who may determine the principal's capacity, and how. Such a document should be reviewed to determine exactly what is required. The documents we prepare tend to require the written opinion of two (2) physicians to confirm incapacity. While it is possible to change this requirement and even allow family members to make a determination of capacity, this tends to increase the possibility of elder abuse and fraud, and is therefore not recommended.

When is my real property transfer effective?

The transfer of real property is legally effective immediately upon execution of a qualifying deed of transfer. While a deed should absolutely be recorded with the County Recorder's office in which the property is located, the deed is the legal document accomplishing the transfer of ownership, and the act of recording the deed is simply the manner of officially updating the County's record of ownership.

Can I just handwrite changes on to my existing estate planning documents?

No. You should avoid writing directly on your existing estate planning documents. It is impossible for other parties to know whether you had capacity when making handwritten changes, or whether you were unduly influenced in doing so. This is why your estate planning documents are either notarized, or in the case of your Will, witnessed by two qualifying individuals. Amendments can be made to your estate planning documents for a lesser fee than their original creation. We strongly recommend changes be made with the assistance of a legal professional, otherwise what may appear a simple change to some could in fact have far reaching effects or even unwind a carefully developed and intricate plan for your estate.

My parent doesn't have current ID. Is it still possible to do an estate plan for him/her?

A Will requires two qualifying witnesses sign alongside the principal. The Witnesses are required to know the principal, and so no ID would be required for the Will.  The balance of documents are notarized, and a notary prefers to rely on current ID, required to be entered into their journal. However, it is possible for a notary to identify the signer through two credible identifying witnesses under certain situations. A credible witness is an individual who personally knows the signer and can vouch for the signer’s identity to the Notary. According to Government Code 1185(b)(1)(A), a credible witness may be used when a signer does not possess an identification document listed in the statute and it would be difficult or impossible to obtain one. In addition, a credible witness may be used when the witness is not named nor financially interested in the document. A credible witness must know the signer well enough to swear or affirm five certain simple facts to the Notary. Just like signers, a credible witness cannot be identified based on the Notary’s personal knowledge. Every credible witness must present a written form of qualifying ID to the Notary.

Do I need to keep my old estate planning documents now that I have new ones?

Mountains of paper can be overwhelming for some, but it is good form to keep some old estate planning documents, even when they appear superseded. You can staple a sheet on top of such documents, clearly write "SUPERSEDED" on the cover sheet, and then file them in a box for storage. The reason to keep old documents, a Will or Trust specifically, is in case your existing documents are challenged and deemed void by a Court, for some unforeseen reason or another, the backup can prove useful in avoiding a probate of your estate. If you amend and complete restate a Trust, it remains important to keep all prior iterations of the Trust back to and including the original Declaration of Trust (/Trust Agreement).  It is very common for third parties (including County Assessors, for example) to demand ALL amendments to a Trust, and the original creating document. They may wish to ensure that each amendment was duly authorized under the terms of the prior document.  For this reason, we strongly recommend keeping all Trust-related documents, regardless of status, at least until the Trust is terminated through complete exhaustion of its assets (and then for a number of additional years in case of an audit or legal challenge). Where Powers of Attorney are concerned, you may destroy old versions, especially if they authorize fiduciaries to act on your behalf which is at odds with your current wishes.

Can my California Trust hold property in other states?

Absolutely. It is very common for California Trusts to hold title real properties located in other states, as well as business interests of entities incorporated or organized in other states.  We recommend discussing further with an attorney to ensure the Trust is the most suitable vessel for holding such assets.

My assets are specifically listed on Exhibit A of the Trust. Is this all I need to do in terms of trust funding?

No. It is extremely important to formally title assets in the name of the Trust, as opposed to the simple general assignment represented by an Exhibit to the Trust. For example, if your home is referenced on Exhibit A but remains titled in your individual name alone in the records o the County Recorder, then a probate of your estate will likely be required. We endeavor to transfer title to real properties as part of our estate planning work, but you will still need to direct your bank or preferred financial institution to transfer title of your accounts into the trust. They will likely have proprietary forms for you to complete, and we remain available to our clients to assist with completing those forms. While a checking account is often fine to keep titled outside of your Trust, this is not the case with your savings, investments, and money market accounts.  If the total of your assets held outside of a trust without designated beneficiaries total a value of $166,250 (in 2021) or greater, a probate of your estate will likely be required.

Do I need to transfer my house out of trust in order to refinance my mortgage?

While technically and legally not necessary, it is common for refinancing companies to require a customer to first remove their real property from the trust in order to refinance a mortgage. This is done to simplify the refinancing process without needing to involve attorneys to review the customer's trust for compliance. This is such a common requirement that it is likely quicker to capitulate than to seek a company without such requirement. We strongly recommend you ensure the refinancing company returns title to your Trust, by providing you with a deed to sign transferring title to the trust, and recording the deed with the County Recorder's office.  If a client of this law office is concerned the title of their property may not have been returned to the Trust we are happy to investigate whether this has been done, and if not, we remain available to prepare the necessary transfer documents.

Why do I need a Trust if I only have my home and I can record a Transfer on Death (TOD) Deed?

In such a situation it is understandable to want to avoid the cost of a Trust and instead simply file a Transfer on Death deed to address the transfer of your home to your chosen beneficiary(ies). Keep in mind that County real property records are publicly available and so there is no real privacy in who you have chosen to inherit your home. This may cause division among family members, or hurt feelings, where a private choice could have at least delayed such feelings to a much later time. There are limits to who may use a TOD deed. A single-family residence on agricultural property in excess of 40 acres cannot use a TOD deed. Likewise, a residence with more than four residential dwelling units is also prohibited. Previously set to expire on January 1, 2021, and extended by the legislature, the law allowing TOD deeds in California is set to expire on January 1, 2022. Anyone wanting to use a TOD deed should remain vigilant with changes to this law which may result in disallowing such transfers in the future and could even retroactively affect their efficacy or suitability.  With a Trust, you instead rely on long-established law which faces no such jeopardy. Under the terms of a trust we tend to name contingent beneficiaries in case your preferred beneficiary predeceases you. If the individual(s) you name under a TOD deed predecease you, especially at a time when you have lost capacity and are incapable of enacting a legal change to your estate planning, a probate of your beneficiary's estate will now be required. With a TOD deed, the property may still be subject to a Medi-Cal estate recovery if you were a recipient of Medi-Cal benefits.

Why do I need to update my Will when I update my Trust?

When a Trust is amended we typically recommend a codicil (amendment) is made to the principal's Last Will and Testament, to reference the latest amendment to the Trust and help ensure the amendment is respected for any property later transferred to the Trust through the Will upon death. If a number of codicils exist and the principal prefers to simplify their estate planning with less effective documents required for review by their successors, a new Last Will and Testament can instead by executed.

What do I do if I cannot find my original estate planning documents?

First you should try to contact the law office/attorney who assisted in preparing your estate planning documents. Were you provided the original documents, or did the attorney hold on to the originals? In prior generations it was common for an attorney to maintain originals, often in the hope of additional business in the form of amendments, overseeing a probate proceeding, or even estate planning for the children of their former clients. Nowadays, mostly due to liability, attorneys rarely maintain original documents. If you were provided the original documents then the first step would be a thorough search of the most likely storing areas - a home safe, filing cabinet, that unmarked box of papers in the garage, or a safety deposit box.  Copies of powers of attorney tend to be sufficient for all purposes. While a copy of the Trust will usually suffice for all administrative purposes following your passing, the original Will is much more important to maintain. You can restate and re-execute your Trust, or have the authoring attorney provide a certified copy from their records if possible, but if the original Will cannot be found then we strongly recommend you execute a new Will.

What do I do if I cannot locate a named beneficiary, and no-one in the family knows them?

A valiant attempt should be made to locate a beneficiary, even if unknown to the family.  An obituary published in a local publication can help track down beneficiaries, who may contact the family to express their condolences. The Executor of an Estate or Successor Trustee of a Trust may also earmark a reasonable sum from the estate/trust to engage a private investigator to assist. Private Investigators, many of whom are former law enforcement officers, invariably have access to tools to locate individuals beyond what is available to the general public. Online services are also plentiful in helping track down individuals, though there is no shortage of scam websites in this field so be sure to do your due diligence before spending money! If a photo of the beneficiary is available then one should not overlook social media.  Unknown beneficiaries can often be found with just a name and a face thank to the likes of Facebook, Instagram, TikTok, etc. Finally, death records should be searched at the county, state, and even national level.  If all attempts to locate the beneficiary fail, the Executor of the Estate or Successor Trustee of the Trust should set aside the property or monies earmarked for the missing beneficiary for a reasonable duration in their sole discretion. If a beneficiary was to receive monies, the amount should be placed in an interest-bearing account or low-risk investment portfolio to ensure responsible growth until the beneficiary is discovered. This amount, or the property in question, can be considered part of the reserve maintained by the fiduciary, with the balance of the estate/trust distributed.

A beneficiary is currently incarcerated/homeless/irresponsible with money. Can I avoid giving them their inheritance?

A Trustee is often empowered with a level of discretion in providing beneficiaries with their inheritance. Unless the power to postpone or withhold distributions is clearly expressed in the terms of a Trust, a beneficiary maintains a legal right to receive their inheritance and often will not delay in seeking legal counsel to assist in their receipt. You should review the Trust (or Will) thoroughly to see what opportunities may exist. Some trusts contain provisions such that in the event of an incarcerated, homeless, irresponsible, divorcing, or drug-addicted beneficiary, their inheritance can remain in trust, managed by the Trustee, and distributions made to or for the benefit of the beneficiary under a set of rules or conditions. Key words for such provisions may include "holdback", "spendthrift", or "special needs".

I spent months caring for the decedent. Can I be reimbursed for my time and costs?

In the absence of a written agreement expressing the terms of employment, compensation, and reimbursement, then any compensation for time and costs will be at the discretion of the decedent's fiduciaries responsible for administering their estate/trust.  If all beneficiaries agree that your time and costs should be reimbursed then the Executor/Trustee may do so from the decedent's estate. In the event of dissent by a beneficiary, you will likely need to prove that care was provided with an expectation of reimbursement, and that out-of-pocket costs were incurred with the expectation of reimbursement rather than gifts to the decedent out of care and compassion for their well-being. We strongly recommend that before caring for an individual, or incurring out-of-pocket costs on their behalf, a written agreement be executed to ensure that an individual's time can be reasonable compensated, and out-of-pocket expenses be reimbursed.

Can my Trust hold cryptocurrency?

A regular revocable living trust is indeed capable of holding title to cryptocurrency. However, it is recommended that you inform the drafting attorney that either you hold or are considering holding cryptocurrency so they can consider provisions which will better aid and protect holding title to such assets, not least of which is arranging for the secure transfer of information to ensure the cryptocurrency can be accessed following your passing.

 Do I put my pension/401k/IRA's in Trust?

Pensions, 401k's and IRA's tend to have designated beneficiaries, listed on proprietary forms with the holding company, such that they avoid probate and typically avoid the involvement of a Trust. If a Trust is named as a beneficiary of such an account, the Trust is limited to receiving a cash lump sum and the termination of the account. If an individual is named as a beneficiary then often additional options are available to them, to add to their own existing retirement/pension, or to roll over the benefit for as long as a decade to offset tax implications. Therefore we currently recommend that your preferred beneficiaries be listed in their individual capacities.  If the proprietary form includes space for a contingent beneficiary then you may wish to name the Trust as the contingent beneficiary as an ultimate safety net, to ensure funds don't result in the probate of either your estate, or the last named beneficiary in the event they predecease you.

Do I title my vehicle(s) in Trust?

We currently do not recommend vehicles be officially titled in the name of the Trust in the records of the Department of Motor Vehicles (DMV), so as to not subject other assets of the Trust to liability in the event of a vehicular accident exceeding insurance levels. In the case of a rare, exotic, or classic vehicle of particularly high value which exhibits mainly as a showpiece and is rarely if ever driven, such vehicles can be titled in the Trust. There is no substitute for maintaining appropriate levels of driver's insurance!

I don't have any friends/family members who can serve as a fiduciary. What are my options?

Options include employing a professional fiduciary company to serve in the desired fiduciary capacity(ies). These tend to be quite expensive, but are licensed, bonded, highly experienced, and in the event an individual can no longer serve, the company will typically have many employees who can replace the existing individual with seamless transfer of records and without a step being missed. Professional fiduciary companies tend to be more bureaucratic, less responsive than an individual, and less flexible in permitting distributions.

Alternatively, an individual professional licensed fiduciary can be named. While still expensive, they are often less expensive than a fiduciary company. Individuals still tend to be licensed and bonded. In our experience individual fiduciaries have proven more attentive, responsive, and flexible toward the unique situations that can often occur.

Regardless of which you choose, we recommend interviewing a number of options before deciding on a fiduciary, as well as naming multiple contingent fiduciaries to protect against the unlikely situation that all named are unable or unwilling to serve when such service is required.

Can I hold my business interests (LLC/Corp/sole proprietorship) in Trust?

Holding your business interests in Trust is both common and recommended, to guard against a probate of your estate on account of such interests.  Before transferring your interests to Trust you should first check whether the business entity or its governing document (e.g. Operating Agreement, Bylaws, or Partnership Agreement) includes any stock transfer restrictions. A transfer to the member/shareholder/partner's revocable living trust is typically an allowed exemption provided in such transfer provisions. With each transfer it is wise to seek legal counsel to ensure there are no unknown factors which could cause complications or increase risks. For example, if you hold an interest in a small business corporation ('S-Corp') in your Trust then upon your death if the trust has more than one beneficiary, or if the trust does not distribute all income each year, the small business election of the corporation could be unwound, causing a taxable event for other shareholders and increasing tax reporting requirements. A well-written trust may include provisions to mitigate such problems by providing that upon death the business interests are held in a separate share trust, and such requirements followed in order to protect the business interests.  Key words or terms for such provisions would be "QSST" (Qualifying Subchapter S Trust), and ESBT (Electing Small Business Trusts).  While an Assignment Separate from Certificate can be executed to transfer a business interest to the Trust, we strongly recommend that the membership ledger/stock transfer ledger be updated to reflect proper title, along with issuance of a new member/stock certificate reflecting title in the name of the Trust.

Does a living trust provide creditor protection?

Creditor protection typically requires that either you do not have unfettered access, or unlimited control of assets. In the case of a revocable living trust, if you are the Trustor (with a retained right to revoke the Trust), the Trustee (with administrative control), and a lifetime beneficiary of the Trust, then the Trust provides no effective creditor protection. Creditor protection is typically provided in the form of an irrevocable trust, whereby either you do not serve as Trustee (or an Independent Trustee exists to limit you authorizing distributions directly to yourself), or distributions to you are limited by a set of rules and conditions. If you have particular creditor concerns you should discuss them directly with an attorney to determine a plan that is both as unrestrictive as possible, yet appropriate and protective in nature.

I am getting a divorce. Can I take my one-half of the Trust and move it elsewhere?

In a divorce, there is a legal requirement that each spouse must disclose all assets, income, and debt as part of the financial disclosure process. It is not uncommon for a spouse to hide assets or misrepresent the values of marital property, and spouses may also understate their income or claim inflated expenses. In the process of a divorce you will be required to swear to the accuracy of your disclosure under penalty of perjury. Therefore, we recommend that when a divorce is underway, or even an imminent possibility, assets should not be transferred or sold but instead remain in place for the duration of the divorce proceedings.

Should I title my rental properties in Trust?

It is common for owners of rental properties to hold title to such real estate in their Trust, to guard against a probate.  It is important to carry appropriate insurance so as to avoid subjecting the balance of trust assets to liability in the event of a lawsuit exceeding insurance coverage. Some owners prefer to title rental properties in a limited liability company to limit the liability to just that piece of real property, or properties in the event more than one property is funded to the same LLC. This can provide the balance of your estate with some protection against any lawsuit involving the properties, but an LLC mandates an $800 minimum annual tax to the Franchise Tax Board that serves as a deterrent for many looking to take this approach. There is an argument that the $800 would be better spent on additional insurance for the property. The property, its value, rental income, and location, can all effect what is the best choice for you and your rental property.

I have a lot of collections. Should I name the beneficiary for each in the Trust?

You can include as much or as little detail as you wish in your Trust as to the beneficiary(ies) of specific gifts and assets.  We typically recommend that if you want to provide items to a single beneficiary, that you limit the gifts documented under the Trust to higher value assets, gifts of money, and gifts of items that may prove contentious (e.g. your wedding ring to just one of your three daughters or granddaughters). The balance of specific gifts can be listed on a Letter of Instruction or similar writing, in your hand, dated and signed, and kept with your original estate planning documents. To guard against such list being 'lost', or not shared with the rest of the family by the discoverer of the list, you can always provide our office with a copy, for our records. By keeping a handwritten list, you can easily modify or restate lists and change beneficiaries, or remove assets following a sale or lifetime gifting, without any expense of an attorney.

I have a collection of guns. Can I title them in the Trust?

Guns can typically be held in Trust, but the Trust must abide by laws and regulations governing who can inherit a gun, and their qualification. Due to ever-changing laws in California, we recommend that you approach an attorney who advertises a specialty in Gun law in California, to ensure you are fully informed as to all relevant requirements. A Gun Trust specifically for firearms is growing in popularity in California, as a legal method to assure that NFA weapons and other types of guns do not have to be turned over to local law enforcement officials upon the death of the owner.