Estate Planning
What is a will?
A will is a document by which one directs their estate to be distributed upon their death.
Who may make a will?
An individual 18 or more years of age who is of sound mind may make a will.
What happens if one dies without a will?
One is considered to have died 'intestate' in when they do not effectively dispose of their property by will. In this case, their property passes to their heirs according to the Probate Code.
What are the costs of probate?
There are several costs associated with the administration of an estate through a probate proceeding. Examples of the costs incurred include, court filing fees, representative bonds (if required), personal representative fees, attorney fees, and referee fees.
In California, the fees for the ordinary services of the personal representative are determined according to the following schedule:
(1) Four percent on the first one hundred thousand dollars ($100,000).
(2) Three percent on the next one hundred thousand dollars ($100,000).
(3) Two percent on the next eight hundred thousand dollars ($800,000).
(4) One percent on the next nine million dollars ($9,000,000).
(5) One-half of one percent on the next fifteen million dollars ($15,000,000).
(6) For all amounts above twenty-five million dollars ($25,000,000), a reasonable amount to be determined by the court
In California, the fees for the ordinary services of the personal representative's attorney are determined according to the following schedule:
(1) Four percent on the first one hundred thousand dollars ($100,000).
(2) Three percent on the next one hundred thousand dollars ($100,000).
(3) Two percent on the next eight hundred thousand dollars ($800,000).
(4) One percent on the next nine million dollars ($9,000,000).
(5) One-half of one percent on the next fifteen million dollars ($15,000,000).
(6) For all amounts above twenty-five million dollars ($25,000,000), a reasonable amount to be determined by the court
Can one avoid probate administration?
Yes, one can establish an inter vivos or revocable or living trust to avoid probate administration. For example, a $500,000 estate administered through probate will incur $26,000 of administration fees (see above schedules) which often exceed the costs that one would expect to administer an estate where the assets were in a living trust.
What is a living trust?
A living trust is also commonly referred to as a revocable living trust, revocable inter vivos trust, or a grantor trust.
A living trust is a written instrument that partially substitutes for a will. The person who creates the trust is referred to as the trustor, settlor, or grantor. After establishing your living trust, you put your assets in the name of the trust, and administer them for your benefit during your lifetime. Upon your demise, your beneficiaries receive the assets. Most people name themselves as trustee but they are not required to do so.
Distribution and transfer of assets according to a will or a trust must be handled with care to avoid impairing the rights and interests of the beneficiaries.
Every trust involves a grantor, a trustee, and a beneficiary or beneficiaries. Trust administration is a specialized area of practice and often involves complex considerations that may not be apparent to the trustee or to the trust beneficiaries. It is important that you seek the advice of a knowledgeable and skilled attorney on wills, trusts, and other testamentary instruments and estate plans. Unlike most other legal exercises, the testator cannot alter the terms of wills and trusts after the testator's death, which is when they become effective. That makes it very important that the testamentary instruments embody the testator's exact intent.
I also have experience with estate litigation matters. When a testator's will or trust is ambiguous or when beneficiaries dispute an estate scheme, the aggrieved parties need help resolving the conflict. Contact us right away if you are a beneficiary and if you feel that the trustee has squandered trust assets, or if you are being treated unfairly in an estate distribution. I can provide effective counsel and advice and will represent your interests effectively, whether at the settlement table or in court.
If you have a question about estate planning, wills, trusts, and probate needs, including probate litigation, estate and trust administration, and charitable gift planning contact me today. Timing is important in legal matters generally, so please look into them to ensure that your rights are protected.