Do I Really Need a Trust or is a Will Enough?

We get a lot of questions from our clients about whether or not they really need a Revocable Trust or whether a Will, a simpler legal document, is enough. Trusts are an increasingly popular estate-planning tool for a number of reasons. Trusts are private while a Will is a public document, available to anyone who wants to search public records. If your privacy is important to you, you want a Living Trust.

Let’s look at the case of the late North Carolina basketball coach Dean Smith

Smith died in 2015 and left $200 each to an estimated 180 players he’d coached over the course of his 36-year career. The small payouts come from his Revocable Living Trust—not a Will. Smith had set this up because he didn’t want attention on himself; rather, it was about his players, as it had always been. Coaching and mentoring young men, including Michael Jordan and James Worthy, was his legacy, and he was widely admired not just for his winning record but for running a consistently clean program with a high graduation rate; an estimated 97% of his athletes received degrees. Smith also helped promote desegregation by recruiting the university’s first African-American scholarship basketball player and pushing for equal treatment for African Americans by local businesses.

For Smith, each of his players was special and important

Each of Smith’s players who lettered received a check for $200 and a letter, suggesting he “enjoy a dinner out, compliments of Coach Dean Smith.” Because this was set up as part of a Revocable Trust, each transaction was completely private; it only became public when former players posted their letters and checks on social media and they went viral.

Other advantages of a Living Trust

• Revocable means that if you change your mind and want to dissolve the Trust at some point, you can do so without a problem or penalty.
• Assets that you transfer into the Trust don’t go through Probate when you die. Without a Living Trust, your heirs must go through Probate, and your Estate becomes a matter of public record. Probate can be time-consuming and expensive.
• Many of our clients are concerned that they will have forgotten to include some of their assets in their Living Trusts. For this purpose, there is a safety net that California Document Preparers includes in our Living Trust package called a Pour Over Will. It essentially transfers any remaining assets or property not previously transferred into the Trust—they “pour over” into the Trust so they may be distributed according to the terms of the Trust.
• As part of our comprehensive Living Trust package, we also include a Power of Attorney and Advance Healthcare Directive. We want our clients to be thinking about the full range of end-of-life document requirements and needs. Whom would you appoint to make healthcare decisions for you if you were no longer able to make these decisions for yourself and who is the best person to help with paying bills and managing your everyday needs.

One more thing: A Living Trust is meaningless if it’s not funded—your assets, including real property, must be moved into your Trust. Your Trust should also be updated with important life events—births, deaths and important investments.

Are you still putting off creating or updating your Living Trust? We prepare the legal documents and notarize them–most of our clients tell us they’re surprised at just how easy it was! Make an appointment today to get started on your Trust.

Divorce Finalized Within Six Months of Initial Office Visit

Sally and John came into our Walnut Creek office on a Saturday morning, seeking more information on uncontested divorce, what we call our friendly divorce. They knew their disintegrating relationship was affecting their two teenage sons; they’d tried both individual and couples counseling, but after 15 years, they had grown apart. While they hated the idea of shuttling their kids between two homes, they knew that it was better for their sons than the environment in which they were now living.

This couple had good jobs and assets

Sally was a nurse practitioner at Kaiser and John was an executive at Chevron. They had a home in Pleasant Hill, retirement accounts and other assets. They had tried do-it-yourself divorce packages, but quickly realized that they had neither the time nor the knowledge to properly prepare and file the legal forms. They heard about California Document Preparers from one of their neighbors, and because theirs was an uncontested divorce—they were in agreement about division of property and a parenting plan–we were a good fit for this family.

They had already identified division of assets and a parenting plan

Sally and John’s case was easier than many because they had already agreed on an equitable division of assets, and they’d worked out a parenting plan that fit their schedules, yet allowed for some flexibility as their family adjusted to the new normal. Both parents were prioritizing the wellbeing of their children, and it influenced all of their decision-making. Sally was keeping the family home in Pleasant Hill, and their sons would live with Sally during the week so they would stay in the same neighborhood and go to the same school. Sally and John believed this would provide the most continuity and least disruption for their sons. John planned to buy or rent a condo in the Pleasant Hill/Walnut Creek area so that he’d be close by to pick the kids up from sports and other activities. The boys would be spending weekends and some holidays, as well as half of their summer vacations with their dad.

Our family law team helps our clients identify financial responsibilities

John was keeping his Chevron retirement and 401K, which was nearly double Sally’s retirement plan. We ran the numbers for them, so John knew his child support would be $1,800/month. Sally was getting a substantial promotion in a few weeks, and they agreed that $1,500 would be enough. They also agreed to split 50/50 all other expenses for their sons, including school and sports activities, clothing, summer camp, music lessons, etc.

Sally became the petitioner and John would be the respondent

• Within two days, we had Sally’s first documents and the disclosures completed and Sally came in to sign them.
• We took everything to court and filed the documents the following day.
• John came in to be served just one week from the day they had first visited our office.
• Within seven dayswe had everything established with the court.
• One month later Sally and John came in together to sign their settlement agreement.
• When Sally and John left our office they each hugged each other—they were happy to be finalizing their divorce, remaining on good terms to share parenting responsibilities.
• They were legally divorced six months after their initial visit to our office.

Best of all: our one flat fee is inclusive. No surprises. 

Follow-up: A Living Trust for Sally

As a single mother, Sally felt new responsibilities, and she came back into our office to create a Living Trust to protect her assets for her children, and she had encouraged John to do one as well.

Divorce is never easy, but our family law specialists are compassionate and accessible. We’re available by phone and email throughout the process, and most of our clients tell us they’re surprised at how easy it was. If you have questions about getting an uncontested divorce, contact one of our three Bay Area offices today. Helpful. Compassionate. Affordable.

Mom’s Sudden Death Results in Probate

A client came into our Oakland office in late January to ask if we did Probate, and we assured him that we do. His father had died of cancer in 2015 and his mother had died over the Christmas holidays--a long, sad holiday for the entire family. His mother was just 75 and vigorous—always busy and active. She still lived alone, exercised regularly, loved to travel and get together with her many friends. He had often talked to his mother about creating a Living Trust and a Power of Attorney in case he needed to be making decisions for her, and she always added it to one of her many lists—but she never followed through.

She tripped and slammed her head on the railing

In December, she was on one of her daily walks when she tripped on debris, slammed her head on the iron railing of a bench and crashed to the sidewalk. Local schoolchildren saw her fall, ran over and called 911. She was rushed to the hospital, but she never regained consciousness and died in late December.

Facing both the loss of a loved one and Probate

Now our client was facing both the loss of his mother and the time-consuming, expensive prospect of sorting out her estate in Probate court. He knew it was going to become complicated; while his parents weren’t rich, over the years, they had acquired assets, and they had prepared for a comfortable retirement. The Piedmont home where he and his sister had grown up had appreciated significantly in value. There was a life insurance policy, and they had invested in artwork. There was an expensive car, antiques and jewelry. To complicate matters, his parents had owned a timeshare in Hawaii—the whole family looked forward to their yearly vacation together.

Uncontested Probate--no heir is seeking a larger portion of the estate 

California Document Preparers helps our clients with uncontested Probate—that in which no heir is seeking a larger portion of the decedent’s estate--which saves them a significant amount of money on legal fees. In this case, our client and his sister were the heirs and neither was contesting the estate.

The Court-appointed administrator’s role

As part of Probate, the Court appoints a personal representative, or administrator, to settle the estate, so we work with that administrator throughout the Probate process. In this case, the son became the administrator, who is responsible for:

• Collecting all Probate property of the decedent
• Paying all debts, claims and taxes owed by the estate
• Collecting al rights to income, dividends, etc.
• Settling all disputes
• Distributing or transferring the remaining property to the heirs

Access to the decedent’s accounts

The Court-apppointed administrator will be able to gain access to all of the decedent’s records–bank statements, savings accounts and income tax returns, to fully understand the financial landscape. This may include valuing assets, taking physical custody of assets and selling assets, as necessary, to pay off debts or expenses.

During Probate, the deceased’s estate becomes a separate tax entity, so the administrator must obtain a federal identification number and open a bank account in the name of the estate, from which to pay creditors. It is also necessary to file the estate’s tax return and a final individual tax return.

Distribution of remaining assets

Once all taxes and debts have been satisfied, the Court will then distribute any remaining assets according to state law. In California, as in most states, the first priority is given to the deceased’s spouse, followed by the deceased’s children.

If you’re facing Probate, call one of our three Bay Area offices today to schedule an appointment. Better yet, avoid Probate and get started on your Living Trust! Most of our clients tell us they’re surprised at how easy it was. Make it even easier by purchasing this from our secure online storefront—we’re still available by phone and email when you have questions.