798 University Ave. Sacramento, CA 95825
+1 916-488-9784

AT the Law Offices of Daniel Hunt

How often should I review my estate plan?

We recommend that our clients review their estate plan a minimum of once every 5 years. In addition, if certain changes occur in your personal circumstances, you may want to consider reviewing your estate plan before the 5-year mark. Here are some examples of situations that may necessitate updating your estate plan:

 

CHANGES IN FAMILY RELATIONS:

  • Dissolution of Marriage (divorce)
  • Death of a spouse
  • Marriage of a single person
  • Changes regarding children, grandchildren, or other beneficiaries including: Birth of a child, marriage of a child, marriage dissolution of a child, adoption of a child, severe illness of a child, economic change (good or bad fortune), attitude change toward testator/testatrix, or financial irresponsibility.

 

CHANGES IN ECONOMIC CONDITIONS:

  • Asset value increase or decrease
  • Change in insurability - life insurance
  • Change in employment
  • Change in business interests (new partnership or corporation)
  • Property acquired in a different State
  • Change in health of testator/testatrix or spouse
  • Retirement from business or profession

 

EXTERNAL CHANGES:

  • Changes in laws: State and Federal Income tax law changes, estate tax law changes and gift, property, trust or Probate law changes
  • Change of residence to different State
  • Death of executor, guardian or beneficiaries under the Trust/Will

How should I prepare to meet with my estate planning attorney?

It is helpful to prepare an updated list of assets (Schedule “A”). Be sure to list each asset’s current approximate value and vesting of title (meaning how the account or asset is held, i.e. jointly, in trust, individually, etc.). Bring this list to your appointment to discuss and later place in your estate planning file.

It is also helpful to bring a prepared list of questions regarding your estate plan. This will help ensure you don’t forget important during your meeting with the attorney.

Existing clients sometimes ask if they need to bring a copy of their trust documents to a trust review appointment. This is not necessary, as our office keeps copies of our clients’ documents on file.

Do I need to transfer all of my assets to my trust?

Not all assets can be transferred into your trust. For example, pay-on-death bank accounts, retirement accounts and life insurance policies are handled by filling out a beneficiary designation form with the institution.

That being said, we generally recommend that all of our client’s assets that are available for transfer into their trust are transferred. However, individual circumstances may vary. You may want a particular asset to pass outside of your trust to a specific individual. Due to the variations in each individual circumstance, we recommend consulting an experienced estate planning attorney for regarding transferring assets to your trust.

How do I transfer my assets to my trust?

Generally, asset transfer is accomplished by providing the financial institution with a copy of your Certification of Trust. (Note: the California Probate Code states that a copy is fine; an original is not needed, nor is a copy of the trust document itself.) The financial institution will then prepare transfer documents for execution to move the asset into your trust.

Real property transactions are typically handled by an attorney who drafts a deed transferring title to the trust, and then records that deed in the County where the real property is located.

Does an executor or successor trustee receive compensation?

California law allows trustees to receive “reasonable compensation”. Family members often choose to waive this compensation, but they are still legally entitled to reasonable compensation. You can define the compensation that your trustee is entitled to take within your trust, as long as the definition is “reasonable”.

Executor compensation is set by California Probate Code statute and is a percentage of the assets of the probate estate. It is equal to 4% on the first $100,000; 3% on the next $100,000; 2% on the next $800,000; and 1% on the next $9 million.

Does an executor or successor trustee have to serve if named in my documents?

No, a named executor or successor trustee does not have to serve in this role. They serve at their own discretion. If named, they can decline their appointment and it would fall to the next in line.

What happens if an original will cannot be located?

If the original document cannot be located, there is a court procedure which allows a copy of an original to be probated. It must be determined by clear and convincing evidence that the original will was lost and not destroyed by the creator of the will.

What happens if someone contests a will or trust?

The Probate Court retains jurisdiction to decide will and trust contests. Typically, attorneys are retained to represent each party’s interests in these disputes.

Most will or trust disputes are resolved prior to a trial through the use of alternative dispute resolutions, such as mediation and informal settlement discussions between the parties. If necessary, the Probate Court can resolve all estate planning disputes between parties.

Beneficiaries who contest trusts without reasonable cause often risk losing the inheritance they may otherwise have received if their contest is unsuccessful.

Trustees and executor fees to defend the will or trust are paid for from the estate. Generally, beneficiaries or heirs must use their own funds to contest a will or trust, but if successful, their fees may be reimbursed from estate assets.

How should I title my pay-on-death bank accounts, retirement accounts and life insurance policies?

Payable-on-death accounts transfer directly to the beneficiary named on the account. Therefore, we generally recommend that spouses name each other as the beneficiary, with the trust as an alternate beneficiary.  Sometimes circumstances arise where a spouse wants to leave an account to another individual. They can do so, but this sometimes requires the consent of the spouse. We recommend consulting with an attorney for your individual circumstances.

If I re-finance my house, do I need to do a new deed transferring it back into my trust?

Many banks remove your home from your trust in order to refinance the existing mortgage and do not place your home back into your trust upon completion of the refinance. This leaves your home exposed to probate, unless the title to your home is placed back into your trust after your refinancing.

Consult with an experienced estate planning attorney to ensure that your home’s title is correctly held to avoid probate. If the title is no longer in trust, this can be resolved by having the attorney draft and record a deed changing the title on your home back to your trust.

Who usually serves as a trustee or executor of an estate?

Most individuals select a trusted family member or child to serve as trustee or executor. If this is not an option for you, our office can recommend a trustworthy professional fiduciary who can handle any kind of estate administration, from the most simple to the most complex.

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