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Archive for the ‘Trust Administration’ Category

Estate Planning: A Road Map

Sarah Savasky
September 17, 2014

Imagine that you are about to take a road trip to somewhere you have never been before. You may have a general idea of where you going but you don’t have a map. Now imagine that you have to drive the car while you are grieving, overwhelmed or confused. You may have family members along for the ride who are also dealing with strong emotions and they all want to go in different directions. It sounds like a recipe for disaster.

Now think about how much easier that road trip would be if you had been given a map. Creating an estate plan is like leaving a road map for your loved ones. They will still have to make a difficult journey, but think of how much smoother it will be if they have directions.

Newly Married: The Pros and Cons of Maintaining Separate Property

Ann Robbeloth
September 10, 2014

The decision to keep assets separate may be guided by a number of personal values. Common reasons to maintain separate property include a desire to protect assets from possible loss in divorce, maintain financial independence from a spouse, control the flow of inheritance, or to have general autonomy in relation to assets that belonged to one spouse prior to marriage or were inherited or gifted family assets.

If those considerations are not important to you, the single biggest advantage of “commingling” or turning assets into community property is the double step up in basis for capital gains purposes. Assets are commingled by putting both names on the title to the asset, and/or merging bank or brokerage accounts into joint community property accounts.

These community property assets will receive a full step up in basis at the death of the first spouse. This allows the surviving spouse to liquidate real estate or securities following the death of the spouse without paying capital gains.

Property that is kept separate, but is inherited by the surviving spouse through a trust or pay on death designation will also receive a step up in basis. However, those assets held as the separate property of the surviving spouse maintain their cost basis without any adjustment due to the death of the deceased spouse. Gains tax will be owed if an appreciated asset is sold by the surviving spouse from his or her separate property.

DIY Estate Planning

Sarah Savasky
September 4, 2014

I’m all for a good do it yourself project. I recently refinished a coffee table and attempted to make a slipcover for the chair my cat destroyed. But I wouldn’t recommend doing your estate plan yourself.

I might be a tad biased considering I am an estate planning attorney, but the chances of making a mistake are high and the consequences of those mistakes could be huge. Most DIY estate planning resources are one-size-fits-all, and you may recall me saying, estate plans are not.

When it comes to estate planning, details matter. If you make a drafting error or if your will is not witnessed properly, your documents could be invalid. If you have drafted a trust but the trust has not been funded, it will not work the way it was designed to work.

Add to that, common complications associated with a second marriage or a child with special needs, and the possibilities for error increase. The decisions you make in an estate plan can have unforeseen and unintended consequences. An experienced estate planning attorney can help avoid those pitfalls and achieve your goals in thoughtful manner.

Trustee’s Duty to Inform

Rachael Phillips
August 27, 2014

The California Probate Code imposes on a trustee the duty to “keep the beneficiaries of the trust reasonably informed of the trust and its administration.” While the Probate Code specifically requires a trustee to provide certain types of information to the beneficiaries at certain times, it does not include any definition of the phrase “reasonably informed of the trust and its administration.”

In many cases, the more information a trustee provides the better. A trustee is likely to encounter problems with beneficiaries who feel like they are being kept in the dark. The best way to avoid that is to be as open and forthcoming with information as possible. Even where the Probate Code does not require it, the beneficiaries will likely appreciate being informed of any significant actions the trustee plans to take, such as selling or distributing any trust property of significant monetary or sentimental value. On the other hand, it may be more efficient for a trustee to inform the beneficiaries of more routine actions through periodic updates, rather than individual notifications of each and every action taken. The important thing for a trustee to remember is that the beneficiaries have a right to request “information”; therefore, answering questions from beneficiaries is an important trustee responsibility under current California law.

Why Does Someone Need a Conservatorship Attorney?

Rachael Phillips
August 21, 2014

Conservatorships involve a number of steps that can be difficult to manage without experience.  There are many different forms that must be completed and filed with the Court to request appointment of a conservator, as well as deadlines that must be met and procedural steps to follow.  There are state laws that apply in conservatorship proceedings, contained in the California Probate Code, and there are also local rules which vary from county to county.  Many local rules dictate the procedural steps and timeline that must be followed.  A conservatorship attorney will be able to help you navigate the process and people involved, such as the Court Investigations Unit, Probate Examiner and ultimately the Superior Court Judge who hears your case. It is his or her job to make sure that you do everything in the correct manner to achieve the best possible outcome.

If you are seeking to have yourself appointed as the conservator, the conservatorship attorney will also help you understand the responsibilities that you will have as a conservator and the rules that you will be required to follow once appointed.  Conservators have ongoing requirements to provide information to the Court and to certain individuals.  A conservatorship attorney is in the best position to help you keep track of and fulfill these requirements.

The conservatorship attorney can also help you address any concerns of family members, friends or others who might disagree with your decisions or actions.  Sometimes the role of conservator can feel like it has a public relations aspect.  When communication is planned thoughtfully with the help of your attorney, it can go a long way to keeping all family members, case coordinators, Court Investigators and other interested parties happy with your efforts.

Where There’s a Will, There’s a Way

Sarah Savasky
August 7, 2014

It’s true that not everyone will benefit from a trust as part of their estate plan, but most people will benefit from a will. If you have a will you have a way to make very important decisions that could have a huge impact on your family after you’re gone.

Without a will you are letting the government make those decisions for you. Here are some of the decisions the state gets to make if you die without a will (also known as dying intestate).

The state gets to decide who your property goes to. mystatewill.com

1. The state gets to decide who will be the executor of your estate.
2. If you have minor children, the state gets to decide who will become their guardians and manage their estate.
3. Your estate will pay the government to make these decisions for you.

Most of us don’t want to think about our death, so we put off making important decisions, but it’s important to realize that if you don’t decide, the government will do it for you.

What Does A Trustee Do?

Rachael Phillips
July 31, 2014

A trustee manages the assets that are held in a trust.  When an individual or married couple places their assets in a revocable living trust, they often name themselves the trustee or co-trustees.  In that case, they are able to continue managing their assets in basically the same way that they did before they put them into the trust.  They can still use their bank accounts to pay their bills and make purchases just like they did before.  They can maintain their home or make renovations to it if they wish.  They can invest their assets and manage those investments however they choose.  When you are the trustee of your own trust, not much really changes about the way that you deal with your assets.

When acting as trustee of someone else’s trust, a trustee manages trust assets according to the terms of the trust.  If the trust terms state that the trust is to be used for an individual or group of individuals, then it is the trustee’s job to invest and manage the trust assets prudently and to pay the expenses of the beneficiaries according to the trust terms.  The trustee may be required to account to the beneficiaries, unless this requirement is waived.  There are a number of fiduciary duties that a trustee assumes when taking on the role of trustee.  Consulting an attorney familiar with trust administration is a necessary step to ensure each trustee is aware of his or her fiduciary duties.  There are very few blanket statements that can be made about all trusts, since the duties of trustees and rights of beneficiaries vary according to the specific trust document and its terms.