FAQs

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FAQs

Estate Planning FAQs

Here are answers to your most frequently asked questions about living trusts and estate planning. If you have additional questions not answered below, please contact us.

Living Trusts

Do i need a living trust?

If you own your house, you need a living trust. If you are married and own your house together, you should create a family/marital trust. If you want to set up a trust fund for someone or give someone the right to live in your house after you die (but not own it outright), you need a living trust. And most importantly, if you want to protect your assets from going through probate, you need a living trust. Have an experienced estate planning attorney prepare your living trust.

What are the benefits of a living trust?

The main benefit of a living trust is that assets that pass through your living trust avoid probate, thus allowing quick and easy transfer to your loved ones. If you are married and create a family/marital trust, there may be estate tax advantages for the surviving spouse. And a living trust is a document that protects your privacy (unlike a will which is filed with the court and is part of the public record anyone can see).

Should i transfer my house into a living trust?

Yes, you should transfer your house to your living trust. By filing a trust transfer deed with the county where your house is located, you ensure your house will pass through your trust and not be subject to probate. This will save thousands of dollars that can go to your loved ones and not to lawyers or the court. But you want to be sure the transfer is handled correctly to avoid possible reassessment of your property taxes. And make sure to have an experienced estate planning attorney handle the transfer of your house into your trust in order to avoid title problems when the house is eventually sold and to avoid probate.

Are living trusts only for the very wealthy?

No, everyone who owns their house, land or even a manufactured home needs a living trust. There are many people who do not have a lot of money in the bank, but they own their house or manufactured home when they pass away. You do not have to be “wealthy” to benefit from a living trust. And your loved ones will thank you later when they do not have to go to probate.

Why should i update my existing living trust by a restatement instead of an amendment?

If you already have a living trust or family/marital trust and you want to update it, the best way to do this is by a restatement. A restatement allows you to “republish” your trust and replace the original trust, thus updating the entire document, including your distribution plan and naming your trustee, but without creating a whole new trust. Also with a restatement, all assets currently titled in your trust stay exactly the way they are (no need to re-title existing trust assets, like your house). With an amendment, you only update one part of your trust but the original trust document stays in place. The biggest advantage to a restatement over an amendment is that when it comes time to administer your trust, your beneficiaries and heirs only see the most current restatement. With an amendment, your beneficiaries and heirs see the original trust document and all subsequent amendments, so if you treated them differently in the amendment, they will know it. A restatement protects your privacy and avoids the unpleasant disclosure to beneficiaries of changes in your distribution plan.

Wills

Do i need a will?

Yes, everyone needs a last will. Even if you do not need a living trust, you need a will to direct who will inherit your estate. Without a will or a living trust (but you may not need a trust), the State of California will determine who will inherit your estate – and that person may not be the person you want. Preparing a last will is simple and easy, but there are requirements under the CA Probate Code that you want to be sure are followed so your will is valid and enforceable upon your death. The best way to do that is to have an experienced estate planning attorney prepare your will.

Does my will avoid probate?

No! A will definitely does not avoid probate. This is a common misunderstanding. If you only have a will and your assets are just in your name with no beneficiaries, your will is going to have to go through probate in order for your loved ones to inherit your estate. This will require a long, expensive and document intensive process that could have all been avoided – but likely not with just your will.

What is a pourover will?

A pourover will is a will done with a living trust. Your living trust names your beneficiaries while your pourover will names your living trust as the beneficiary of your will. If you create a living trust but leave assets out of your trust, or you acquire assets later that you do not transfer to your trust, the pourover will “pours” or transfers any left-out assets back into the trust. The pourover will is basically a safety net to make sure any assets left-out or acquired later are redirected to your trust and distributed according to your trust.

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Durable Powers of Attorney & Medical Directives

Do i need a durable power of attorney?

Yes, everyone should have a Durable Power of Attorney (DPOA) for legal, financial and property matters. If you become incapacitated and are unable to manage your finances, a DPOA will be invaluable to your loved ones. If you are incapacitated, without a DPOA your loved ones will have to go to court to be named your conservator. But if you already have a DPOA in place, you will avoid the need for a conservatorship (the same way a living trust avoids probate). Have an experienced estate planning attorney prepare your DPOA.

What is the difference between a springing durable power of attorney and an immediate durable power of attorney?

A “Springing Durable Power of Attorney (DPOA)” only takes effect upon a doctor’s declaration of your incapacity (which means you lack the cognitive ability to take care of your affairs). Until your DPOA agent has a writt