Find Answers to Your Questions from Our Orange County Trust and Will Lawyers
We believe in client service. That means that we field questions daily! Our Villa Park and Placentia estate lawyers compiled a list of the most frequently asked questions about California trust issues, California wills, and California estate planning. We hope you find the answers you need.
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How do I make sure my will is valid in California?
When creating your estate plan, it is important to seek guidance from an experienced attorney who can help ensure that your will is valid. Some people make the mistake of trying to execute a will on their own without understanding all of the requirements that are outlined under California law. If your will is determined not to be valid, the assets of your estate may not pass to the people you want to have them.
Requirements for a Valid Will
What are the requirements for a valid will? The following is an overview:
- The will should be in writing.
- The will must be signed by you, as the testator or testatrix, which means the creator of the will.
- The will can be signed by someone else if you’re unable to do it yourself. It must be signed by someone else in your name, in your presence, and at your direction. In the alternative, your will may be signed by your conservator.
- Your will must be signed in the presence of two witnesses. These people must be present at the same time, and they must either see you sign the will or see you acknowledge that you signed it.
- The two witnesses must also understand that the instrument they are signing is your will.
- The will must be signed when you are of sound mind. You must understand what you are signing, the nature of your property and who you are leaving it to, and you must not be under the influence of fraud, duress, or coercion.
In some cases, a will that does not comply with these requirements may still be valid, but this requires the guidance and assistance of a knowledgeable and experienced attorney. It is best to abide by the general requirements for a valid will under California law in order to reduce the likelihood of challenges down the road.
Creating a will that is valid is crucial to ensuring that your estate is carried out in the manner you wish after you die. Fortunately, we are here to help. To learn more, we encourage you to contact us today at (714) 459-5481.
How do I choose an investment advisor to assist with a probate or trust administration?
As you administer a trust or an estate, you may find yourself responsible for investing assets. This is an important responsibility that cannot be taken lightly. Fortunately, trustees and personal representatives are often entitled to seek guidance from professional advisors. This includes attorneys, accountants, and financial advisors. Choosing the right financial advisor to assist you can feel overwhelming with so much at stake.
8 Guidelines for Selecting an Investment Advisor During a Trust or Estate Administration
As you begin the process of choosing an investment advisor, consider the following guidelines:
- Consult with an experienced trust and estate administration attorney. Often, an attorney can help you choose an investment advisor to assist in carrying out your responsibilities.
- Seek recommendations from a trusted tax advisor.
- Review the credentials of any potential candidates. Be certain to review any special certifications that the investment advisor may have that may be beneficial when managing the assets of a trust or an estate.
- Ensure that the investment advisor is familiar with the unique guidelines and rules that apply to trustees and personal representatives when investing the assets of a trust or an estate.
- Ensure that the investment advisor is familiar with the California Probate Code and the Uniform Prudent Investor Act. As a fiduciary, you may be bound by these laws; therefore, your investment advisor must be familiar with their terms.
- Ensure that the investment advisor is comfortable reviewing a trust and is familiar with the terms of the trust that you are in charge of administering.
- Choose an investment advisor who is responsive and communicates well and clearly.
- Select an investment advisor who is responsible and diligent. Ultimately, it is your responsibility to manage and invest the trust assets, so it is crucial to find an investment advisor who will help, and not hinder, the administration process.
To learn more about administering a trust or an estate, contact us today at (714) 459-5481.
Can a non-family member serve as the conservator of my loved one’s estate?
When your loved one is no longer capable of managing his own affairs, it may be time to seek a conservatorship. A conservator is a person who is put in charge of handling your loved ones affairs, including managing and protecting the assets of his estate. A family member typically petitions the court to serve in this role. In some cases, however, a family member may not be the best option for serving as conservator. When this happens, a non-family member may be appointed.
4 Situations When a Family Member May Not Be the Ideal Choice for Conservator
When is a non-family member a better choice for serving as conservator of your loved one’s estate? The following are four examples:
- A family member is unavailable to serve in the role of conservator.
- A family member is incapable of serving in the role of conservator.
- The person who needs a conservator does not want a family member to serve in this role.
- The person who needs a conservator appointed someone to serve in the role and cited him in the estate plan.
When these situations arise, a non-family member can serve in the role of conservator. There are specific agencies and individuals who have the authority to serve when appointed by the court. For example, The Public Guardian is an agency that may be appointed as a non-family conservator. In addition, there are many non-profit organizations willing to serve in the role. Another option is to hire a private individual who is available to serve. These people are known as private professional conservators, and they are required to be licensed in the State of California to serve in this capacity. To maintain their license, these people must meet ongoing educational requirements.
How do I appoint someone to serve as the personal representative of my estate after I die?
Choosing a personal representative is an important aspect of creating a valid and an effective estate plan. This plan includes the documents that dictate what should happen to your assets after you die. The personal representative is the person who ultimately will be responsible for carrying out your estate’s administration and is appointed under the terms of your will.
6 Steps for Appointing a Personal Representative of Your Estate
How do you appoint someone to serve in this important role? The following are six steps to follow:
- Consult with an experienced attorney for assistance in creating your estate plan.
- Craft a last will and testament that outlines your goals and wishes.
- Name a personal representative who will be in charge of administering your estate after you die. Name this person, in writing, in the will.
- Consider whether you want to name a co-personal representative to serve alongside your initial choice. There are pros and cons to choosing co-personal representatives. Your attorney can help you decide which choice is right for your needs.
- Name an alternate personal representative to serve in this role in the event that your initial choice is unavailable or unwilling to act in this capacity.
- Execute the will in accordance with the laws of California. Every state has its own requirements for executing a valid will. For example, you may need a certain number of witnesses, a notary, and other parties present. You also must be of sound mind and acting under your own free act and volition when signing the will.
Creating an estate plan should always be done under the guidance of an experienced and knowledgeable attorney. To learn more, we encourage you to contact us today at (714) 459-5481.
What should I do with my estate plan now that I’ve been diagnosed with early stage dementia?
As health care improves and people begin to live longer, the number of people who will eventually face a dementia diagnosis during their lifetime is increasing. Unless medical breakthroughs begin to better treat this condition, these numbers will only continue to grow over time. People suffering from dementia typically lose their memory, cognitive ability, and language skills. As a result, it is crucial for people receiving or concerned about a dementia diagnosis to update their estate plan while they still have legal capacity to do so.
5 Steps for Updating an Estate Plan After a Dementia Diagnosis
What should you do to update your estate plan after a diagnosis of dementia? We recommend that you take the following steps:
- Make sure that your durable power of attorney is up to date.
- Review the provisions of your advance health care directive to ensure they are current and reflect your wishes.
- Review and update your will to ensure that it reflects your current goals and needs and appoints someone who is available to serve as the personal representative of your estate.
- Review the beneficiary designations on your various assets. Typically, assets such as life insurance policies, retirement accounts, and certain types of bank accounts allow you to name a beneficiary to receive the asset when you die. This avoids the need for the asset to pass through the probate administration process if you are to die.
- Consider adding a living trust to your estate plan or updating your existing trust. Your trust can include specific provisions that address what should happen with your assets in the event you become incapacitated. You can include guidelines for your trustees that state your needs and wishes during any period of incapacity. The trustee will have authority to manage the assets in your trust without court involvement. You can also include a provision that dictates exactly how and when you should be deemed to be incapacitated.
Modifying an estate plan requires the guidance of an experienced attorney. To learn more, we encourage you to contact us today at (714) 459-5481.
When creating an advance health care directive, can I limit the authority of my agent for health care decisions?
When creating an estate plan, most people opt to execute an advance health care directive. This important document allows you to appoint someone to make health care decisions on your behalf. It is important to note, however, that you can limit some of the authority given to this individual. To do so, you must specifically address these limitations when creating the document.
10 Options for Limiting an Agent’s Authority Under an Advance Health Care Directive
What are some of the limitations that you can impose on your agent? You can limit your agent’s ability to do the following:
- Consent or refuse consent for specific types of care, treatment, service, or procedures.
- Select or discharge your health care providers or institutions.
- Approve or deny specific diagnostic tests, surgical procedures, or programs of medication.
- Decide whether or not you should receive artificial nutrition or hydration.
- Decide whether or not you should receive cardiopulmonary resuscitation.
- Make anatomical gifts.
- Authorize an autopsy.
- Allow for you to be cremated.
- Withhold or administer life-sustaining treatment.
- Withhold or administer pain medications.
Deciding how best to craft an advance health care directive that meets your needs and goals is an important part of the estate planning process. Your attorney can walk you through each option to ensure that you fully understand the decisions you make when creating this important document. Your attorney can also help ensure that you are making the best choices for your estate plan.
How do I divide up the trust property in an A-B trust after the first spouse dies?
When a married couple creates an estate plan designed to minimize estate taxes, these plans often involve trusts known as A-B trusts, credit shelter trusts, or bypass trusts. The purpose of these trusts is to set aside a certain amount of trust assets after the first spouse dies, in order to preserve the first spouse’s estate tax exemption amount. Successor trustees of these trusts will be called upon to divide the trust assets into two sub-trusts, the “A” trust and the “B” trust, after the first spouse dies. The “A” trust is sometimes referred to as the marital trust, and the “B” trust is referred to as the bypass trust or the family trust.
5 Tips for Dividing Trust Assets Between Sub-Trusts in an A-B Trust
Dividing the trust assets between the sub-trusts is an important task that requires careful consideration of tax and other consequences. The following are five helpful tips:
- The court is typically not involved in the division of the trust assets between the two sub-trusts.
- The trustee must first obtain the fair market value of all of the trust’s assets. This value is determined as of the death date of the first spouse.
- The terms of the trust dictate how much of the trust assets should be allocated to each sub-trust. This is typically done through a variety of methods, such as by using various types of formulas, disclaimers, or what’s known as a Clayton election.
- The trustee must carefully consider whether the assets will appreciate or depreciate when determining what should be used to fund a sub-trust. Since the assets going to the “B” trust are valued as of the date of death of the first spouse, with no estate tax due on these amounts until the surviving spouse dies, it often makes sense to place higher appreciating assets into the “B” trust.
- The assets can also be split between the two sub-trusts.
Successor trustees are advised to seek assistance from tax advisors and an experienced attorney when dividing assets in a trust into sub-trusts. To learn more, we encourage you to contact us at (714) 459-5481.
If I use a Crummey trust in my estate plan, what are the tax consequences?
When meeting with your estate planning attorney, you may want to minimize potential estate taxes when you die. Many people feel they do not want the wealth they worked so hard to build to be minimized by these taxes. In order to reduce the size of their estate and potentially avoid the tax, various techniques may be utilized. One such example is to create a Crummey trust to remove assets from your estate, such as a life insurance policy.
6 Potential Tax Consequences of a Crummey Trust
What are the tax consequences of using this type of trust? The following is an overview:
- Your irrevocable trust may be responsible for paying income taxes. This is true if the trust earns more than a certain amount each year.
- Depending on how the trust is drafted, the trust may need to obtain its own tax ID number. In other cases, if the trust is deemed a grantor trust for tax purposes, the grantor’s social security number is used.
- The trust may need to issue K-1s to the beneficiaries of the trust each year.
- If the grantor of the trust makes gifts to the trust in excess of the annual gift tax exemption amount, the amount exceeding the exemption may be deemed a taxable gift. A gift tax return would then need to be filed.
- If the proper criteria are met during your lifetime, upon your death, the trust assets will not be included in your estate for estate tax purposes.
- The beneficiaries of the trust will not have to pay income taxes on the life insurance proceeds that they ultimately receive.
Creating an estate plan that meets your needs and goals requires assistance from a knowledgeable professional. We encourage you to get started. Contact us today at (714) 459-5481 for more information.
Who receives my loved one’s airline miles during the administration of the estate?
Initially, airline miles and club memberships may seem less important than other assets during the administration of an estate, but these assets can sometimes prove to be quite valuable. This may be true from either a personal or financial standpoint. For example, if the decedent was a frequent traveler and earned many airline miles, he or she could have amassed a great deal of valuable points. In addition, if the decedent enjoyed many previous memories with a loved one spent golfing at a golf course, the decedent’s country club membership may have significant personal value to a beneficiary. For these reasons, it is important to understand how certain items are designated and who receives certain assets under the terms of the decedent’s estate.
5 Guidelines for Distributing Airline Miles and Memberships
Airline miles and similar assets are handled according to the decedent’s estate planning documents. The following are five general guidelines for estate administrators:
- Airline miles, rewards points, season tickets, and club memberships typically are not considered “tangible personal property.”
- If the will or trust specifically defines “tangible personal property” to include these items, however, that serves as an exception.
- If the asset is not considered tangible personal property, it will not pass to the beneficiaries outlined under that provision in the will or trust.
- The asset will, instead, be considered part of the residuary estate. The will or trust will direct who should receive these assets.
- The will or trust may, in some cases, specifically address these assets separately and distinctly from the other assets of the estate. In these cases, the asset should pass according to the decedent’s instructions.
It is crucial for estate administrators to understand how every asset of an estate should be distributed. Doing so can help avoid costly disputes during the administration process. We encourage you to learn more by contacting us today at 714-459-5481.
Do I need to update my power of attorney if it does not contain a HIPAA provision?
Most people should have an attorney review their estate plan every few years to determine whether updates are needed. Some clients may require more frequent updates. It is important that during these reviews, all of the documents that make up the overall estate plan be assessed. This includes a durable power of attorney. The power of attorney names an agent, or an attorney-in-fact, to make financial decisions on behalf of the person creating the document. There are several reasons why a power of attorney may need updating, including if the document is missing a crucial provision relating to the HIPAA Privacy Act.
4 Facts About HIPAA and Necessary Updates to a Power of Attorney
Why does a power of attorney need to be rewritten if it lacks reference to the HIPAA Privacy Act? The following is an overview:
- The Health Insurance Portability and Accountability Act was enacted by Congress in 1996.
- The HIPAA Act requires that privacy rights and responsibilities be addressed in a power of attorney.
- In order to receive protected health information about a person, the power of attorney must include important HIPAA language authorizing the release of the information to the attorney-in-fact. Additionally, the ACT must be specifically referenced.
- If a power of attorney does not contain the necessary references to the Act, it should be revoked, and a new power of attorney should be signed.
To update the power of attorney with this missing information, the old power of attorney must first be revoked, and a new power of attorney should then be executed. We can help to ensure that this is handled properly. To learn more, contact us today at (714) 459-5481.