The estate tax looms large when you are planning your estate and it can erode your assets considerably if you are not properly prepared. The first thing to take into consideration is whether or not the overall value of your estate exceeds the estate tax exclusion, and the reality is that this is easier said than done because the exclusion is a moving target. At the present time the estate tax exclusion is $5 million and the rate of the tax is 35%. This framework is in place as a result of the … [Read more...] about Estate Tax At A Glance
If an in-law draws up a Will or Trust for the parent of his or her spouse, does that void his/her spouse’s share of the inheritance?
I was asked whether or not a daughter, whose husband prepared a will for the daughter's mother, is disinherited because of her husband's involvement, specifically in reference to Probate Code Sections 21380 and following. The answer is more complicated than the question. Probate Code Section 21380 does not "disinherit" anyone. What it does is create a "presumption" that the instrument (such as a will or a trust, or other dispositive document) was obtained as a result of fraud and/or undue … [Read more...] about If an in-law draws up a Will or Trust for the parent of his or her spouse, does that void his/her spouse’s share of the inheritance?
Stocks in the Name of Deceased Spouse
A client recently presented me with the following factual situation. Her father, a California resident, had approximately $150,000 of stocks held in his individual name at the time of his death. His wife (the client’s mother) survived him, and the stocks were acquired during the marriage using community property funds. Her father had written a Will, but no Living Trust. The company issuing the stocks would not transfer title of the stock to the surviving spouse, even though it was presented … [Read more...] about Stocks in the Name of Deceased Spouse
Optional Claims Procedures for Trust Administration
One of the major advantages of having a living trust is that upon death, assets of the trust are not subject to the probate process. But occasionally there are situations where probate might be an advantage. One of those would be where the decedent has legal obligations that are unknown or undefined. The decedent's creditors would have a right to bring suit to collect on their claims against the trust for one year after the decedent's death. If the decedent's estate were being probated, the … [Read more...] about Optional Claims Procedures for Trust Administration
Use of a Special Needs Trust to Shelter an Inherited Home
I was recently asked to address the following fact situation. Mother is elderly and in failing health with limited assets other than the family home. Should she need to be admitted to a skilled nursing facility, it is likely Medi-Cal would end up footing the bill. Daughter is disabled, receives public assistance and wants to know if there is any way she can inherit the home without impacting her public benefits. My response was as follows: If your mother goes into a skilled nursing facility … [Read more...] about Use of a Special Needs Trust to Shelter an Inherited Home
Beneficiary’s Rights to Trust Copy and Accountings
Under California law, when a decedent dies and their living trust become irrevocable, the trustee is required by Probate Code Section 16061.7 to give any beneficiary notice of that fact and advise that the beneficiary has a right to receive a copy of the trust and periodic accountings and that the beneficiary has the right to contest the trust within 120 days after receipt of such notice. Having received no such notice, the beneficiary's right to contest the trust is four years unless there are … [Read more...] about Beneficiary’s Rights to Trust Copy and Accountings
Rights of a Surviving Spouse
What are the legal rights of a surviving spouse to the deceased spouse's assets where the decedent spouse leaves the bulk of his/her estate to a child from a prior marriage? California is a community property state. Many people are confused about what constitutes community property. Basically, community property is everything a married couple acquires as a result of their labors commencing with the date of marriage. Community property does not include many things, such as separate property … [Read more...] about Rights of a Surviving Spouse
Probate of Testamentary Trust
What state laws apply to a decedent's Will? Well, it depends. First, many states have laws which require the filing, recording or lodging of a Will after the decedent's death. On that issue, the law of the state where the decedent was residing applies. But where do you bring the probate action? Real property must be probated in the courts of the state where the real property is located. For instance, if a Colorado resident dies owning real and personal property, a probate proceeding is … [Read more...] about Probate of Testamentary Trust
Decedent’s Credit Card Debt
I was recently asked to address the question of whether or not a surviving spouse is liable for a deceased spouse's credit card debt. Assuming this is a small estate and there is no probate estate or a trust holding assets, the following three questions need to be answered: First, are you contractually liable for any of the credit card debts? If you and your spouse applied for the credit cards using your joint credit (applied for the card jointly), then both of you are liable for the debt. If … [Read more...] about Decedent’s Credit Card Debt
Funding a trust
I am frequently asked what assets should not be funded into a Trust. The first asset that I list is retirement accounts. First, let's distinguish between the owner of a retirement account such as an IRA or 401k and its pay on death beneficiary. For example, if you were to change the ownership of an IRA to the name of the Trustees in their capacity as Trustees of the Trust, the IRS would consider this retirement account to be "terminated" and would tax the entire contents of the IRA in the year … [Read more...] about Funding a trust
