Estate planning is the process of making arrangements for an orderly disposition of your assets after death so as to avoid legal and financial complications, excessive fees and expenses, and in some cases, avoid or minimize estate taxes. This generally involves making a Will or a Trust to define to whom your property will pass. If you do nothing, your property will pass by intestate succession discussed below.
A WILL is the least complex estate planning device and is less complicated and less expensive than other methods. Having a valid will ensures that your assets will be distributed on your death according to your wishes and not according to laws of intestacy. A Will also enables parents to nominate guardians for their minor children in the event of their untimely death and also determine who will manage any monies left for your minor children.
Under intestate succession, your property and assets will be distributed to your spouse and children, or, if you don’t have children or a spouse, it will be distributed to your relatives according to laws established by the State of California.
Probate is the legal process by which property owned by someone who has died without a Trust or some other probate avoidance method in place, is eventually transferred to their heirs. In other words, probate is simply determining who gets what assets when someone passes away, either by looking at the Will, or if no Will exists, then the laws of intestacy in California which determine the hierarchy of heirs-at-law.
During a probate, a court case will be opened and will remain open until the probate is closed, usually 12 to 15 months. The costs and fees are generally very high and will be paid by the estate before any heirs receive their property. We at Gilbert & Bourke try to plan to avoid probate with our estate planning clients, or find an alternative to probate for family members who retain us after a death, to find some method to transfer the assets in the most timely manner possible and at the least cost, so the heirs receive as much of the net estate as possible. We explore all option such as joint tenancy transfers, Community Property Confirmations, Spousal and Domestic Partner set-asides, Small Estate Affidavits, DMV transfers for motor vehicles and Department of Housing Transfers for “manufactured housing”
We always try to find the most economical and speedy method for transfer of assets to your loved ones.
If Probate is required, we represent Executors and Administrators in moving through the complicated Probate system with the least amount of costs, fees and delays.
A Trust is a legal document which assures that a decedent’s property and assets are transferred to his or her heirs according to their wishes. A Trust ensures more privacy because it does not have to go through the court (probate) system and the distribution is often more timely.
There are also tax advantages for those persons with a greater net worth. Further, the terms of a trust are typically not disclosed to the public, as the terms of a Will become public record at your death.
Keep in mind that although there are significant advantages to a Trust over a Will, a Trust generally costs more to establish than a Will. One should consult with a competent attorney to decide what is right for him or her.
With a Trust, the person who establishes the Trust manages his or her property before death or incapacity, as well as provides how Trust assets and the income earned by the Trust are distributed after death. If you become incapacitated or disabled, the Trust is in place to manage the financial affairs, usually by your named successor trustee, and can avoid the need for a formal Conservatorship being established. Therefore, a Trust provides for more comprehensive disability planning which, unfortunately, is becoming a more frequent occurrence.
After a Trust is created and the Trustor (the person that established the Trust) dies, there will be a trust administration. A Trustee is required to maintain the Trust and carry out the terms of Trust. Even a well drafted Trust will require a significant amount of work by the Trustee in order to ascertain and locate assets, pay legitimate debts, file income tax returns, distribute funds, and manage and control the Trust estate, as wells as sometimes preparing and filing an estate tax return. Attorneys are generally used to advise and assist Trustees in their roles if the Trust has numerous assets or the Trust provisions are complex.
Trustees must follow very strict rules and are accountable for the actions they take in their role as Trustee of a Trust. The California Probate Code sets out the duties of Trustees in the State of California. If you have any questions regarding your responsibilities as a Trustee you should seek our advice on how to perform your duties as a prudent Trustee and disburse the Trust estate as soon as it can be accomplished.