Clark Allison LLP

El Dorado Hills, Folsom and Sacramento Estate Planning

Probate and Trust Administration

Taking Care of Your Family

This afternoon I will watch El Dorado Musical Theater’s (EDMT’s) wonderful production of A Christmas Carol for the sixth time. Yes, my daughter is in the show. It is a fantastic performance based on the Charles Dickens story. It brings to mind what may be Dickens best novel, Bleak House, about years and years of litigation over a will.

Two of my lawyer friends are probate and trust litigators. They help family members protect their inheritance from what are at best greedy or at worst intentionally fraudulent executors or trustees.

How smoothly everything goes when an updated estate plan is in place. We do a lot of trust administrations, and by far the majority of them are done effectively without the need for court intervention and the costs and anxiety that go with litigation,

These trust administrations go smoothly because the parents named responsible people to serve as the role players in their living trust, will, durable power of attorney, advance health care directive and HIPAA, and they funded their living trust so their assets were owned by the trust and not subject to probate. And, they kept their estate planning documents up to date by reviewing them with their attorney every few years.

By the way, what goes unreported in A Christmas Carol is that after Scrooge’s change of heart following his experience with the ghost of Marley, and the ghosts of Christmas past, present and future, he worked with his estate planning attorney and executed an estate plan naming his nephew Fred as trustee and executor and leaving his fortune to Fred and the Cratchit family. And he kept his estate plan up to date until the day he died.

 

 

What Is an Estate Plan and Why You Need One – Part 1

An estate plan is simply a set of legal documents that instruct your loved ones how to manage your assets when you pass away, and if you have young children, it identifies the persons you want to raise your children. It also authorizes the persons you choose to manage your assets and make health care decisions for you if you become incapacitated. An estate plan can also leverage your assets to reduce or eliminate estate taxes and capital gains taxes, and it can be structured to significantly protect the inheritance you leave your spouse and children from divorce claims and lawsuits.

As you can see, estate planning has to do with death and taxes, and as Ben Franklin said, “in this world nothing can be said to be certain, except death and taxes.” Since everyone will have to deal with death and taxes, everyone needs an estate plan.

The type of estate plan you need will depend on your family, your assets and your goals. At a minimum, you will need a will, which lays out who you want to receive your assets, a durable power of attorney, which names the persons you want to manage your affairs if you become incapacitated and an advance health care directive and HIPAA, which authorize the persons you want to make health care decisions for you if you can’t. If you own a home, you will also want a revocable living trust so your estate won’t have to go through probate.

A Very Good Christmas Gift – For Yourself

I spend a lot of time teaching my estate planning clients how to avoid probate and how to protect their children’s inheritance from divorce and creditor claims. In a nutshell, this is what I tell them:

If you establish a living trust and transfer your assets to the trust, your family will not have to experience the hassles and costs of probate when you and your spouse pass away. In addition, we can design your living trust so that when you both pass away, your assets can be allocated to separate lifetime protection trusts for each of your children to protect their inheritance from divorce and lawsuits.

You will not directly benefit from your estate plan. Why? Because you won’t be with us at that point.

But what if you could benefit from someone else’s estate plan? Yep. I’m talking about your parents. A surprising number of my clients tell me that their parent’s do not have an estate plan. There are many reasons for this, but usually it’s because they though estate planning was too expensive and complicated.

What if you offered to pay for your parent’s estate plan as a Christmas gift to them  – knowing it’s really a Christmas gift to you? When your parent’s die, you will have the burden of administering the estate. Do you really want to go through probate? Wouldn’t you like your inheritance to avoid probate and be significantly protected from divorce and lawsuits?

Why not give your parents an estate plan for Christmas? You can pay the attorney directly, or even better, make a cash gift to your parent for the attorney fee. Just don’t ask them to disinherit your brothers and sisters and leave everything to you – that could be undue influence and get you in trouble.

As you already know, we make estate planning very easy and uncomplicated. Two attorney meetings and done in two to three weeks. Our typical fixed fees range from $1500 – $2000 for a comprehensive custom living trust estate plan, and we provide our clients unlimited access to our attorneys for questions for free.

Remember that sense of relief you felt when you signed your estate planning documents? Why not experience that again by making this month the month you help your parent’s get their estate planning done?

Is Your Living Trust Funded?

Although most families have not done their estate planning, many have, and many have established living trusts. The objectives in establishing a living trust are to avoid the high costs and hassles of a California probate and to provide an easy administration of the estate assets. Living trusts are great and will accomplish these objectives – if they are maintained.

Your estate will still go through probate, even if you have a living trust, if you have not transferred your assets to your living trust. We tell our clients to consider their living trust like a container. The trust will only control the assets that have been transferred to the container. If when you die, you left significant assets (real property, bank and investment accounts) outside the container, your loved ones may have to take your estate through probate. Probate is unwelcome to most families because it is expensive and generally takes at least a year in court.

Ask yourself these questions to confirm your assets are in your living trust. [Read more…] about Is Your Living Trust Funded?