Protect Your Family with a Living Trust and Guardianship

Every family right now is frightened by the magnitude of the coronavirus. They may be thinking about whether or not they should create a Living Trust. For those families with children under 18, an important part of our Trust package is the Will, where you can name a Guardian to care for your children if something should happen to you.

Naming a Guardian and a Creating a Will are parts of our Living Trust package

If both you and your spouse should die, your children will need a Guardian. If you do not leave instructions in the form of a Will, the court will not have any guidance from you, the parents of the children, and will therefore choose the Guardian. While it is painful to think of leaving your children, it can be reassuring to know that in the case of this unlikely eventuality, they will be properly cared for by someone you love and trust.

Using a Trust to control your children’s inheritance

Sometimes it’s not simply a matter of ensuring that your children inherit your estate after you are gone. You may want to guide and control that inheritance–especially if your children are still young. That’s where a Living Trust comes in.

A Living Trust can manage any assets the children receive if their parents die. If you’re worried about your children getting a large sum of money when they are too young to handle the responsibility, as might happen with a Will. You can identify the age at which they will gain control of the funds.

Rather than getting the entire amount at 18, for example, they would gain control of the money when they are older and better prepared to inherit a large sum of money. It’s reassuring to remember that most parents of young children live long enough to see their kids safely to adulthood. But sometimes the unexpected happens. Having a Will or Living Trust in place now can provide peace of mind about your children’s future.

During this health crisis, many are feeling an urgency to create a Living Trust 

Our Trust package includes a Will, Power of Attorney and an Advance Healthcare Directive. We guide you through the process and prepare the legal documents. At California Document Preparers, for most of our services, we charge one flat fee. We’re helpful, compassionate and affordable. Schedule an appointment today at one of our three Bay Area offices in Dublin, Walnut Creek or Oakland. 

We service the entire East Bay and North Bay areas

Berkeley, El Cerrito, Richmond, Pinole, Alameda, San Leandro, Castro Valley Newark, San Lorenzo, Concord, Alamo, Danville, Lafayette, Orinda, Moraga, Pleasant Hill, Martinez, Pittsburg, Antioch, Brentwood, Oakley, Discovery Bay, Pleasanton, San Ramon, Livermore, Tracy and Fremont. Our clients also live in the Napa Valley, Benicia, Vallejo, Martinez, Fairfield.

The Slippery Slope of Multiparty Bank Accounts

Mary had just turned 79 and was recovering from a heart attack and open-heart surgery—a major health event that had made her rethink her life. While Mary still lived alone in the family home, she got a lot of help from her adult children, who lived nearby. Her daughter Alice paid her bills, did her grocery shopping and took her to appointments. Mary decided to add Alice’s name to her checking account. It gave her peace of mind to know that if she became ill or incapacitated and could no longer sign checks, Alice would be able to seamlessly step in to pay bills and manage her affairs.

Alice’s name on her account gives her access to all of Mary’s money

Mary’s assets include her home and a checking account with a significant amount of money. By adding Alice’s name to this account, Mary was giving Alice access to virtually all of her money. Mary was grateful for Alice’s help, but she was also close to her son, Bill, whom she counted on for help with her yard and household repairs. Did Mary realize that this wasn’t just a convenient solution: she was giving all of her money to Alice, exclusive of Bill.

Mary’s son Bill: Concerned that all of the money will go to Alice

Not surprisingly, Mary’s son Bill’s reaction was less than enthusiastic. “Giving anyone access to all of your money, unchecked, sounds unwise. What happens when you die? Will Alice get all the money left in your account? Her name is on the account, and everything will default to her.”

Mary reassured Bill that Alice would share whatever was left in the account with him, that access to her account was only for the purpose of taking care of Mary’s expenses. The reality? She had no way of knowing if Alice would share the remaining account balance with her brother. Bill suggested creating two accounts, one for household expenses and the other for savings, giving Alice access only to the smaller checking account, but Mary liked the simplicity of keeping all of the money in one account.

A mother, a daughter and two bank accounts help jointly

In another case, two bank accounts were held jointly by a mother and daughter, and the decedent’s son disputed their ownership. At the time of the mother’s death, the accounts held nearly $500,000. The daughter saw the mother five-six times a week and was responsible for scheduling and overseeing her mother’s medical care, hospital transportation and other matters. The mother opened the joint accounts so it would be easier for her daughter to help. The daughter testified in a lower court that her mother asked her to meet at a bank to open the accounts and that she signed a signature card that gave her complete access to both accounts. The daughter testified that her mother informed her that the money in the accounts was for her use.

Funds belonged to daughter by Right of Survivorship

The son claimed the funds that remained in those accounts after the decedent’s death were intended to pass to several Trusts established by his parents during their lifetime. However, the court could find no evidence of such intent and ruled that the funds belonged to the daughter by Right of Survivorship.

Right of Survivorship: A joint account passes to the surviving account owner

• According to the California Court of Appeal, unless there is clear and conclusive evidence to the contrary, ownership of a joint bank account passes—as a matter of law–to the surviving account owner by Right of Survivorship.
• In both of these case studies, the money defaults to the daughters by Right of Survivorship. Regardless of intent, giving their daughters access to their accounts means that when these women die, their daughters will inherit all of the cash in these accounts.

Joint bank accounts are often used when planning for incapacity

In both of these cases, the families established joint checking accounts to help care for a parent. They provide easy access to money for incidental expenses, healthcare payments and emergencies. But as our case studies demonstrate, when there are other family members and potential inheritances involved, there is room for conflict.

Multiparty accounts may seem like a good solution for incapacity planning, but there are better solutions:

• Create a smaller joint account linked to a larger account in the name of the Trust. This provides the necessary liquidity, but since it is linked to the Trust account, there is no right of survivorship.
• Open an account in the name of the Trust, with both parties listed as co-trustees. This ensures that upon the parent’s death, the funds remain in the Trust.
• Establish a Payable Upon Death (POD) account. The account owners—in our cases, both mothers–designate who should receive any money that remains in the account upon their deaths.
• Insert “in trust for” to the account title. This would clearly indicate the purpose of the account and the intended beneficiaries.

Contact California Document Preparersat one of our three Bay Area offices today to create a Living Trust. A Trust is a much better way to plan for incapacity of your loved ones. Our dedicated team is helpful, compassionate and affordable.