1. Do I need a will if I have a trust?
Yes. The trust will only control assets which are titled or named in the trust. Often there are assets which have no titling (such as furniture) or assets with low value (such as a small bank account) which are not titled in the name of the trust. These assets will often be captured by the will and put (or poured-over) into the trust. Additionally, the will is the document that should name a guardian for any minor children.
2. What is a living trust?
A trust is a legal document that identifies the individuals who will act as trustees if you are unable to act and identifies the beneficiaries of the assets that are held in your trust. Essentially the trust is a will substitute. One of the main uses of a trust is to avoid probate. As the trust is a legal document, it can be controlled and managed outside the probate court and without the court supervision.
3. Can the Executor of my Will make my health decisions
No. In California the Advanced Health Care Directive is the medical power of attorney which allows you to name someone to make medical decisions for you.
4. Can I change my trust after I sign it?
Generally, yes, if you have capacity. Most trusts are revocable after signing. Though some trusts are irrevocable after signing or in some cases only revocable if both spouses are living. This is a provision that your attorney will discuss with you when you prepare your estate planning documents.
5. Who should be named as executor or trustee?
You may choose an individual person such as a family member or friend as your trustee or executor. Your trustee could also be a private professional fiduciary or even a licensed bank or trust company. You should have the utmost confidence in your trustee’s honesty and trustworthiness. The trustee or executor must have the organizational skills to manage multiple tasks efficiently and fairly and they must have the time and ability to devote to this task.
6. Who should prepare my estate planning documents?
A qualified attorney. Though your other advisors may be involved in your estate plan a qualified attorney should be the only person preparing your legal documents. Under California law, paralegals are not authorized to provide legal advice. Often, companies that promise trust documents for a low price generally have only one real goal – to sell you insurance based products for commissions. The California State Bar certifies attorneys as Certified Specialists in Estate Planning, Trust and Probate Law when an attorney has demonstrated proficiency in this specialized area of law.
7. How do you avoid Probate?
Assets held in a living trust are not subject to probate and neither are assets which have a beneficiary designation or a surviving co-owner. Additionally, there are simpler procedures if the value of the probatable assets are less than $150,000 or if the assets are owned with a spouse.
8. At what age should I think about starting my estate plan?
Anyone over the age of 18 years should at a minimum have powers of attorney for health care and finance. If you have a minor child you should also have a will to name a guardian. If you have assets and you are concerned about who will receive the assets after your death then you should have a will and likely a trust.
9. Is my main residence the only property that I can put in a trust?
No. You can put or transfer many different types of assets into your trust, such as bank accounts, stock accounts, partnerships and limited liability companies as well as tangible property. You cannot put or transfer your retirement-type accounts (IRAs, 401-Ks, etc.) into a trust but you can name the trust as the beneficiary for these types of assets.
10. How often should I update my estate plan?
You should review your estate plan annually. That does not mean that you have to make changes, but it will encourage you to think about the provisions of your will, trust and powers of attorney. You should formally review your estate planning documents when one of the parties has significant medical issues, if incapacity is becoming inevitable, in the event of a divorce, in anticipation of an inheritance, after a death or any other time where there are changes in the value of assets or in the condition of a beneficiary or a representative (trustee, executor or agent).