Law Office of Edgar Saenz

Trusts and Estates

QUESTIONS REGARDING WILLS

Q. What happens if I die without a Will?

A. Generally, a court will determine who gets your estate. If you have minor children, a court will choose the guardian of the children and their estates.

Q. Why should I prepare a Will?

A. There are many reasons, but underlying them all is the theme that you make the decisions that are important to you. You get to choose who to leave your property to and who becomes guardian of your minor children. If you don’t leave a will, your assets will be distributed pursuant to California’s law of intestate succession. Very often, this scheme is not how you would have passed your assets. For example, spouses in a blended family may wish children from their first marriages to receive a greater share than the law would give them. Either a will or a living trust can carry out your wishes. For a vast majority of clients, a living trust is a more powerful and efficient method than a will.

Q. What’s the difference between a Will & Living Trust?

A. A living trust gives you more control than a will because a trust can accomplish everything a will can and more.

  A trust will reduce or avoid probate, whereas a will must go through probate. This means you accomplish the distribution faster and cheaper than with a will. Probate is the court supervised administration of a decedent’s estate through which all creditors are paid, potential beneficiaries are notified, and distributions are ordered. With a trust, there is usually no need to go to court.

  A trust provides a way to care for you and your property in case you become disabled. If you become incapacitated, the successor trustee will then take over as the new trustee and manage the trust property for your benefit. This avoids the delay and red tape of expensive court-ordered conservatorship. A trust is private; whereas a will is a public document filed with the court.

Additionally, property held in a living trust will save the administrative costs of probate.


QUESTIONS REGARDING PROBATE

Q. How expensive is probate?

A. Probate fees are set by law and are based at the gross value of the estate. To illustrate: Suppose decedent leaves an estate of $300,000. In California, the minimum statutory fees are $9,000 to the administrator or executor plus $9,000 for the attorney.

The same $300,000 estate with a living trust would save this $18,000 in administrative expense.

Q. How long does the probate process take?

A. Right now in California because of budget pressures on government, even a simple estate will probably not be completed within eight months. This means that your estate will be tied up for a considerable period during which your spouse, children, and other beneficiaries will wait for their bequests.

Q. Do I need a lawyer to prepare my will?

A. Not necessarily. If you have a small estate, no real estate, and no children, you might be able to satisfactorily prepare your own will. California even has a statutory will, which can be found at California Probate Code § 6240. But that will is rather inflexible; you cannot make changes to the format of the statutory will.

Planning an Estate

GENERAL QUESTIONS

Q. Why do I need to plan my estate? I don’t even have an estate.

A. There’s a misconception that only rich people have “estates.” But a person’s estate is whatever he or she owns, whether it be a car, bank account, retirement accounts, a home, or antiques. Estate planning is timely after any of life’s milestones, such as marriage, divorce, death of a spouse, the arrival of children and grandchildren, the purchase of a home, or the accumulation of wealth. Clients may call upon us before departing on a vacation or extended business travel, when they are concerned about their long-term health, after getting married or having a child, or when they are trying to organize their affairs for their families and friends.

Q. What should be done when my spouse passes?

A. You should seek the advice of an attorney to determine whether a probate is required or whether any administration under your living trust is required.

Q. What are the key documents of an estate plan?

A. There tend to be four coordinated documents that form the estate plan: (1) living trust, (2) pourover will, (3) powers of attorney, and (4) advance healthcare directive. There are other related documents (such as assignments and deeds of trusts) that we prepare, but these are the key ones.

Q. How long does it take to prepare my estate plan?

A. Not long. Typically, we complete your estate documents within two weeks after the initial client meeting. If you face time constraints, be it an upcoming trip or medical procedure, we can work with you to accelerate the preparation.

QUESTIONS REGARDING ESTATE TAXES

Q. What is the 2012 estate tax exemption?

A. $5.12 million in assets per individual. Double it for a married couple.

Q. What happens in 2013?

A. The exemption will drop to $1 million. The top tax rate will climb to 55 percent.


Q. Does California have either an estate or inheritance tax?

A. It does not.

Q. Is a Will a public document?

A. Yes, when a will is probated, it becomes a public record. There might be good reasons, such as avoidance of family embarrassment or jealousies, to wish to keep the distributions out of the public eye. This is another way a living trust can help the client.

QUESTIONS REGARDING PROPERTY TAXES

Q. Does transferring my California property into a living trust trigger a reassessment?

A. No. The law does not consider this transfer to be a "change in ownership".

Q. Does transfer incur a documentary transfer tax?
A. No. There is an exception for transfers to and from a living trust. California Revenue and Taxation Code § 11930.

QUESTIONS REGARDING ESTATE TAXES

Q. What is the 2012 estate tax exemption?

A. $5.12 million in assets per individual. Double it for a married couple.

Q. What happens in 2013?

A. The exemption will drop to $1 million. The top tax rate will climb to 55 percent.


Q. Does California have either an estate or inheritance tax?

A. It does not.

Q. Is a Will a public document?

A. Yes, when
a will is probated, it becomes a public record. There might be good
reasons, such as avoidance of family embarrassment or jealousies, to
wish to keep the distributions out of the public eye. This is another
way a living trust can help the client.

QUESTIONS REGARDING PROPERTY TAXES

Q. Does transferring my California property into a living trust trigger a reassessment?

A. No. The law does not consider this transfer to be a "change in ownership".

Q. Does transfer incur a documentary transfer tax?
A. No. There is an exception for transfers to and from a living trust. California Revenue and Taxation Code § 11930.

 

The material available on this website is intended for informational purposes in California only, and does not constitute legal or other professional advice. Reading this website or contacting the Law Office of Edgar Saenz does not constitute the forming of an attorney-client relationship, which can only be established by entering into a written retainer agreement.

While we intend to make every attempt to keep the information contained in this website current, we do not promise or guarantee that the information is correct, complete, or up-to-date. The Law Office of Edgar Saenz is not responsible for any third-party content which is accessible through this website.

Estate Planning FAQ

Law Office of Edgar Saenz, 8939 S. Sepulveda Blvd. Ste. 102, Los Angeles, CA 90045