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John B. Sturges, IV

Attorney John Sturges advises his clients on making and updating their estate plan.  John is experienced in contract drafting, negotiation, and review, and in real estate transactions of all kinds.

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These are the documents that might be part of your estate plan.

Last Will & Testament

Every adult should make a Will to appoint an Executor to handle his or her financial affairs at death, including collecting a final paycheck, filing tax returns, and collecting property of the estate to transfer to a trust or the beneficiaries named in the Will.

 

A Will also appoints a Guardian to take custody of minor children and their inheritances.

Revocable Trust

Revocable Trusts are used to take property out of a person's "probate estate" so the beneficiaries don't have to wait for a probate court to approve distributions.  

 

While Trusts still remain the most popular estate planning tool in California, we can present clients with practical and effective alternatives that don't require a fiduciary to transfer the estate. 

Health Care Directive

An Advance Health Care Directive is essential to select the best person to make important health care decisions when needed.  

 

This document also tells the person selected as health care agent what they need to know when making serious health care decisions and overseeing pain management.  

Durable Power of Attorney

A Durable Power of Attorney (DPOA) appoints a person you trust to deal with your property and financial affairs.  The attorney-in-fact must follow your instructions and act in your best interests.  A DPOA can ensure that absence, illness, or severe injury won't create an obstacle to concluding any transaction or completing important paperwork if you become unavailable or unable to manage such responsibilities.

Assignment of Ownership

 

Business owners need to make sure that there is a plan of succession in place.  

 

One way to transfer business interests at death is by assigning them to a revocable trust.  Another way to ensure a smooth leadership transition is to adopt a Transfer-on-Death registration policy for the business interests.

Revocable Beneficiary Deed

 

In 2016, California began to recognize the Revocable Transfer-on-Death Deed as an estate planning tool.    

A TOD Deed takes effect at a person's death and has no effect on property taxes.  If you plan to name an adult to receive your real property when you die, a TOD Deed is an excellent tool.  Unlike a Revocable Trust, a TOD Deed transfers property without any action by a trustee and without delay.

Common Estate Planning Questions

Is Probate really a bad thing?

Not always. Probate gets a bad reputation due to the costs and the lack of privacy with the public nature of Court proceedings that reveal both the deceased’s property and family structure. However, probate administration under Court supervision is both predictable and transparent. Here are some unique benefits worth considering: PERSONAL REPRESENTATIVE SELECTION PROCESS. The first step in probate administration is appointment of a personal representative. If the deceased made a Will, the person appointed is based on the Will but still must be approved by the Court. If there is no Will, family members can petition the court to be selected as personal representative; and, if another family member disagrees with the person asking to be appointed then they can object. By contrast, when an estate is settled through a living trust, the family members generally don’t have a choice about is in charge because that person is appointed based on the trust terms and without Court orders. FLEXIBLE TIMING. Whereas the trustee of a trust must take over the deceased’s property right away due to the strict fiduciary responsibility that comes with the job, there is no deadline for starting a probate. Although a Will must be delivered to the Clerk of Court within 30 days after the person’s death, the first petition for probate can be filed 5, 10, even 20 years after a person’s death. TRANSPARENCY. Before probate property can be distributed, the personal representative must appraise the property and notify potential creditors. Creditor claims are only paid when they are approved by the personal representative and legally enforceable debts against the estate. The Court will only allow distribution of the estate upon a full accounting unless the accounting is waived by all the heirs or beneficiaries. Contrast that process with trust administration, which is handled without Court supervision and without automatic accountability. Even though California law requires the deceased’s family members and beneficiaries to be notified of their rights by the trustee, many people are not aware of the requirements and so a trustee can easily ignore the law and the rights of the beneficiaries. SECURITY AGAINST LOSS. Before the personal representative can obtain the documentation showing their authority, a form of insurance must generally be obtained to protect the interests of the heirs or beneficiaries. There are two ways to satisfy the requirement. The first is for the personal representative to post a bond in whatever amount the Court deems sufficient based on the value of the estate and the amount of unsecured debt. With a bond, the bond company becomes obligated to pay damages to cover any loss caused by the personal representative. The second way is a Court-blocked account. Instead of requiring a bond, the Court can allow money to be deposited into a special account where it can only be touched with specific Court approval. Probate transfers the deceased’s assets to the heirs or beneficiaries in much the same way and over a similar length of time as a trust would but requires Court oversight. As explained above, that may or may not really be a bad thing!

If I make a Will, do my assets still go through probate?

If your estate plan ONLY includes a Will, your assets still need go through probate. Making a Will serves some important functions nonetheless, including, but not limited to: (1) designating the person who represents your estate after your death (called your “Executor”), and (2) designating who inherits your property. Whether a probate is needed depends on whether you transferred your most valuable assets out of your probate estate before death. Only assets held in sole ownership and without a designated beneficiary go through probate, which excludes assets that you transferred to a living trust or to an LLC. It also excludes death and retirement benefits that pass to a designated beneficiary. And even if you have a living trust and/or beneficiary designations in place, you should still make a Will that places any assets that fall outside of the trust or have failed beneficiary designations into your living trust at your death. Even if your assets don’t need to go through probate, an heir or beneficiary can ask the probate court to authenticate your Will due to a question concerning its validity. After the Will is authenticated, no further estate administration is necessarily required if you file the right paperwork with the probate court.

I already put my property in joint tenancy, can I still transfer it to my Trust?

Unless the other joint tenant(s) participate in the transfer, only part of the property can be transferred to your trust. That is because once another person is added to legal title, they cannot be taken off by the original owner. Another consequence of transferring only part of a joint tenancy is that it can sever the joint tenancy, severing the right of survivorship. It is highly recommended that you discuss the potential implications of transferring the property with your attorney before proceeding.

Will a revocable trust protect my property from creditors?

A Revocable Trust will not protect your property or assets from creditors because you can revoke the trust at any time. Under current law, however, putting your home into a revocable trust will protect it from Medi-Cal Estate Recovery after death.

What if I want to make changes to my Will or Trust?

You can make changes to your Will or Trust as long as you are of sound mind. Just like with any other legal document, changes require the same formalities to be observed as with the underlying documents. Small changes can be made with a Codicil to the Will or an Amendment to the Trust. For more extensive changes, revoking or restating the Will or Trust often makes more sense.

Do I need to put all my assets in a trust?

If incapacity planning is a primary motivation for creating a living trust, then most assets should be transferred to the trust so that the trustee can take over day to day management when there is a change of trustee. Business assets may or may not need to be transferred to a trust, depending on the management structure of the business and whether the business interests can be transferred at death without a probate proceeding.

Can I name my Trust as a beneficiary?

It is becoming increasingly common to name a trust as the beneficiary of real estate, life insurance, retirement accounts, and even bank accounts. One important consideration with trusts that receive income-producing assets is the higher income tax rate that trust income is subject to if it is not distributed.

Revocable Trusts 101

At Broaden Law LLP, we are committed to helping you plan for your future and ensure that your wishes are carried out. Revocable trusts can be used to give your successor trustee flexibility and control over your assets.  However, it is important to note that to function properly, all property must be transferred to the trust. 

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