7 Common Estate Planning Disasters and How to Avoid Them

Baby boomers are now aging in a tax era that is favorable to transferring wealth to loved ones of younger generations. The recent increase in the estate and gift tax exemptions thresholds, along with expanding wealth, work to create an atmosphere conducive to transferring extensive assets after death. But many people believe that because of this amicable atmosphere, the process of passing along their estate is now so simple that they are able to take care of their estate planning on their own. However, due to longer lifespans, higher incidences of multiple marriages, and blended families, the process of creating an estate plan that satisfies all of your needs may be more complicated than originally thought.

See Michael Feinfeld, 7 Common Estate Planning Disasters and How to Avoid Them, Market Watch, April 26. 2018.

Out of State Representative for a California Probate

In most cases, it is perfectly fine to have an out-of-state family member or other individual act as the personal representative (executor/administrator).

If you have questions regarding your status as a personal representative residing outside California, I encourage you to contact me. We are experienced in working with a personal representative who lives out-of-state and can make the process extremely efficient for you. Call us now for a no charge consultation: (858) 485-1990.

Why Do I Need Will if I already have a Trust?

A revocable living trust can only control the assets that have been transferred into it. This process of changing titles and beneficiary designations to your trust is called “funding your trust.” It is a simple concept, yet it is what keeps you and your family out of Probate in the event of your death; it also allows you to keep more control over the distribution of your assets to your beneficiaries.

While you may intend to put everything into your trust, you may inadvertently leave something out of it. For example, you could acquire new assets after creating the trust and simply not get around to titling the assets in the name of your trust. Your pour over will states that if a “forgotten” asset is discovered after you die, the asset is to go into your trust. It may have to go through Probate first, but at least your pour over will catches the asset and sends it back (pours it over) into your living trust so it can be distributed as part of your overall estate plan.

Remember, a pour over will is simply a safety net. It is not a substitute for changing titles and beneficiary designations while you are alive. If your intention is to avoid probate (which is probably a big reason why you set up a living trust in the first place), you must fund your trust.

If you are unsure whether your Trust is properly funded, please contact us today.

Funding Your Family Trust

What it Means to “Fund” a Revocable Trust

After an individual (the “grantor” also known as the “settlor” or “trustor”) creates a revocable family trust, the next step is to implement the trust by “funding” it. “Funding” the revocable trust simply means transferring ownership of assets owned by the grantor as an individual to the trustee of the revocable trust.

Why a Revocable Trust Should Be Funded

In most instances, a grantor should transfer all assets in his or her own name to the trust to take advantage of the benefits of a revocable trust. Important benefits of a revocable trust include:

  • Ease of management of assets during disability.
  • Probate of Avoidance.
  • Flexibility in disposing of non-probate assets.

Many clients believe that if they simply set up a revocable trust, all of the above benefits will follow automatically. Clients often forget, however, that only what is held in the name of the revocable trust avoids probate and ancillary probate at death and formal conservatorship in the event of disability. In addition, naming a revocable trust as the beneficiary of certain non-probate assets (such as life insurance proceeds, annuities, and death benefits) will ensure that these assets pass at death in accordance with the terms of a revocable trust.

Typically, the full benefit of a revocable trust will be realized only if most of the assets have been transferred into a revocable trust during the grantor’s lifetime.

USA Today Article: How to prepare financially for being a widow/widower

Married couples face many challenges in retirement. One that is unavoidable and that consistently derails retirement plans is the loss of a spouse. Studies show that the death of a spouse often leads to an economic decline for the surviving spoues. This may stem from a loss of income, an inability to cope with the loss, or the inability of the surviving spouse to competently manage their finances. A few steps couples can take to mitigate this risk include: 1) having an open discussion about money matters, 2) cover what-if scenarios, 3) delay social security as long as is feasible, 4) check and recheck beneficiary designations, 5) gather a financial team, 6) make sure the estate plan is current, and 7) possibly relocate to a smaller home that requires less maintenance and has lowers associated costs.

See Robert Powell, How to Prepare Financially for Being a Widow/Widower, USA Today, January 19, 2018.


Dear Clients, Friends and Colleagues:

We are pleased to invite you and your guests to our 2018 Annual Estate Planning Seminar. If your clients, advisors, successor trustees or children would like to attend, please let us know.

The seminar will be at no charge. We will provide you with seminar materials and refreshments. We will make sure there is plenty of time for questions.

Email your reservation to lorilipkes@trustlaw.us or give our office a call to let us know which seminar you prefer to attend and the number of guests.

We look forward to seeing you.

Roberta J. Robinson & Daniel J. Wilson

Overcoming Emotional Hurdles to Setting-up your Estate Plan: Changing your Estate Plan

Many people avoid setting up their estate plan because they feel that once they sign their documents, the decisions are finalized. Although the final version of the documents will come into effect at death, you can always revise your estate plan as things change.

This is why your Trust is referred to as a “Revocable” Living Trust. The fact that it’s revocable means that at any time while you are alive and competent you can change, modify, update, or completely revoke the provisions of the trust agreement.

The decisions that need to be made as part of the estate-planning process are significant. They are numerous and emotional. “Who will care for my children when I’m gone?” “What are my end-of-life preferences?” “When do I want the plug pulled?” Often, due to indecision, a client will do nothing.

In these days when changing your estate plan could simply entail copying and replacing a name throughout the documents on the computer, the feeling of permanency in setting up your estate plan shouldn’t prevent you from getting started.

If you are considering making a change to your estate plan (Will, Trust, Power of Attorney, Health Care Directive), we recommend speaking with an experienced estate planning attorney so that they can provide you with professional advice.

Our firm offers no-charge consultations to new clients to review their existing estate planning documents. Contact Us Today.

Did You Know?: You Can Access a Safe Deposit Box After a Death Before Probate

After a death, many people are left looking for a Will or a Trust. If people are unable to find any estate planning documents in the home, the last place to look often ends up being a Safe Deposit Box. The original Will is one of the few legal documents where an original is required.

There are some special rules under the California Probate Code which gives you access to a Safe Deposit Box to look for a Will or a Trust, if you meet certain qualifications.

Under Probate Code section 331, a person with a key may, even before starting probate, obtain access to a safety deposit box to look for a Will or a Trust. Additionally, the person may be allowed to access information regarding the disposition of the decedent’s remains.

In order to access a Safe Deposit Box of a deceased person, you must have:
1. The key to the Safe Deposit Box,
2. A death certificate; and
3. Proof of identity.

If you do not have the key to the Safe Deposit Box, but you know one exists, you will need to initiate Probate to obtain access to the Safe Deposit Box.

If are denied access to a Safe Deposit Box, you should contact an estate planning attorney to assist you with obtaining access to the Safe Deposit Box.

If you have located a Will or a Trust in a Safe Deposit Box, you are required to follow certain procedures. At that point, you should contact an attorney experienced in Probate and Trust Administration.