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Frequently Asked Questions
Why Would I Want A Living Trust?
Revocable living trusts, if properly funded, will help to avoid a probate process which in California, can take anywhere from 9 months to 2 years. The fees are statutory, meaning that they are based on set percentages of the gross estate. An example of fees would be if your estate consisted of $750,000 (gross - not net) in assets, the compensation for an attorney and the personal representative would be $18,000 or more in California, and potentially thousands in Arizona. An investment in a living trust is much less - our trusts are competitively priced and include a comprehensive estate plan, powers of attorney, healthcare directives, and all trust funding. We also include instructions and direction paperwork for heirs and/or those settling the estate so they know what needs to be done and have peace of mind!
Does a Will Avoid Probate?
Generally, no - unless the estate's assets are worth less than $150,000 in California or equity in real estate is $100,000 or less and personal property is $75,000 or less in Arizona. Small estates in which the decedent owns a home may be able to avoid probate through other estate planning completed in combination with a Will. Having a living trust-based estate plan is usually the best way to avoid probate and streamline the process for the family.
What is A Durable Power of Attorney for Healthcare and a Living Will?
A durable power of attorney for healthcare names a person ("agent") to make medical decisions on your behalf when you cannot and gives your agent the information on what your wishes are with respect to healthcare. A Living Will expresses your desires for prolonging your life or not, and other choices surrounding these hard decisions that your agent must make. Living Will language is often incorporated into the durable power of attorney for healthcare document.
If you do not have an executed DPOAHC and are admitted to a hospital, this could cause big problems for your family, especially during the current COVID-19 crisis.
What If I Became Incapacitated? Do I need A Financial Power of Attorney?
Yes - If you cannot manage your finances and have been deemed incapacitated, someone else must step in an take over the responsibilities. Institutions will require a power of attorney to allow a spouse, other family member, or friend to become your agent and obtain the legal ability to oversee your financial affairs. If a valid power of attorney is not in existence, a court proceeding is often necessary which is costly, cumbersome, and takes time. Also, some institutions will not accept a power of attorney which was executed years before it is needed. It is best to often update this document on a regular basis - the cost is very inexpensive.
Do I Have to Fund my Living Trust and What DOes This Mean?
Funding a living trust means just that - transferring assets into the trust so that legal title pertains to the trustees (yourself during your lifetime) of the trust. You do not lose control over assets placed in a living trust. So you need to make sure that the proper assets are titled in the trust, otherwise those assets outside of the trust may be subject to a probate proceeding down the road. Our office completes all the funding of a living trust with instructions for future assets; however it is common for prior clients to ask us for assistance with new funding, especially on a purchase of a new home.
Are All Assets I own Subject to Probate?
No - IRA Accounts and other assets that have a beneficiary designation set in place will avoid probate. However, what often happens is that people do not update their beneficiary designations or forget about this after circumstances change. Sometimes an ex-spouse receives an inheritance which was not the decedent's intention! We review these assets and beneficiary designations with all our clients as needed.
WHAT Happens if my spouse needs long term care and we don't have insurance for that?
Your spouse may be eligible for MediCal (California) or Medicaid (Arizona) to pay for a large portion of the long term care in a nursing home or other arrangement. There are different ways to plan ahead in case this happens and there are also things that can be done if someone already has been admitted to a facility or such a transfer is imminent. Long term care costs per month vary based on location but usually cost $6000 and higher - you may not know how long your loved one will need long term care and this can literally take a family's financial savings away for good. Book a complementary consultation to get the facts and options to see what can help.
Who Should I Appoint for My Executor, Trustee, and Agent(s)?
You need to have a good understanding of your proposed named individual's personality in terms of their dealing with money, responsibility, emotions, and other issues that you may have concern over. An individual may need someone outside the family who is better suited to take on a specific role or roles. These discussions should always be considered during any estate planning that is being completed.