Sebastopol Trusts & Estates Law Blog

I usually recommend that my clients tell their family about the details of their Estate Plan. This is true in the case of a child who for whatever reason may feel shorted as compared to his or her siblings, or even a child who is disinherited.

I find that this open and frank discussion with one’s family often quells suspicion, and give the children an opportunity to ask questions. I find that most Estate Contests, or at least bad feelings even when no legal action is initiated, are the result of anger after a parent dies. For example, a disinherited child who didn’t not know that he or she is to be disinherited may be angry at the parent, but since the parent is then deceased, he or she takes out the anger on his or her siblings in the form of a Will Contest. The problem is even if the other siblings prevail, as they usually will when the estate plan is properly prepared and executed by a qualified attorney, the financial and emotional costs are still very high for the family. If a disinherited child has an opportunity to express his or her anger to the parent for being disinherited, while in the short term it can of course be unpleasant, in the long term the family is often better off.

So….at Thanksgiving this year will you be talking about your desires regarding funeral and burial?

By the way, for a video and transcript of Warren Buffet’s testimony to congress about Estate Taxes click here.
-Ken

Where should you keep your original Living Trust, Will, and other Estate Documents? The common answer I get is, “In my safe deposit box.” However, you must consider that while that sounds like a good place to keep these documents, it is in fact “locking the key in the safe”. The reason is simply that it is those estate documents that will allow your trustee/executor to get into the safe deposit box in the event your your death.

There are legal procedures to retrieve estate documents out of a safe deposit box when the owner dies. Nevertheless, I strongly urge you to keep your Living Trust, Will, and other Estate Documents at home in an accessible place. You will need then from time to time, especially your Living Trust, for your own business transactions. Put a photocopy in your safe deposit box, or leave it with a trusted family member or friend as a backup in case something happens to your original.

I also often hear that, “My lawyer kept the original”. I do not think this is a good idea. One, this may seem cynical, but I think many law firms “safeguard originals” primarily as a way of guaranteeing future business. Two, law firms and lawyers go out of business, move, die, retire, etc. For these reasons I strongly feel clients should keep their own original documents, with the lawyer holding a back-up copy.

One last thing….Do you have someone else on the signature card of your safe deposit box who can access it if you become disabled or die?

-Ken

The first question I get from many clients is, “Which is best for me, a Will or a Living Trust?” There is no quick and easy answer to that questions, but I can offer some general advice.

In California an estate usually must go through probate when the estate value exceeds $100,000 in market value (not equity value). Probate is the court process to administer an estate with or without a Will. In other words, having a Will does not avoid probate, in fact, it generally guarantees probate. Probate is something most families want to avoid. It is very costly, takes many months to over a year, can be required in multiple states, and is generally a hassle for everyone.

There are many ways to avoid probate. Account beneficiary designations (TOD or POD accounts) and Joint Tenancy are two of the most common. However, each of these also has a downside in many cases. There are of course situations where these methods work, but in many instances problems occur.

This leads us to the best way to avoid probate for most clients: The Living Trust. A Living Trust not only avoids probate, it is usually the quicker, easier, cheaper, and most hassle-free way to administer an estate. For married couples it can minimize or completely avoid Estate Taxes. It handles situations where someone becomes incapacitated. In many cases it is more likely to achieve one’s wishes regarding estate distribution than other alternatives.

In short, for most Californians who have an estate with a market value over one hundred thousand dollars (meaning just about anyone owning real estate), a Living Trust is the preferred estate planning document. To read more about Living Trusts on my website click here.

-Ken