It’s true.  Sometimes referred to as “companion animals”, California Probate Code §15212 specifically provides for the creation of a trust to care for your beloved dog, cat or other companion animal after you pass.

An “animal” is defined as a “domestic or pet animal” (California Probate Code §15212(i))…. could be a horse or pot-bellied pig so long as it can fit the definition.

Per the statute, any money left for the care of the animal can only be used for the animal’s care; not for the benefit of the trustee (California Probate Code §15212(b)(1)).  Further, when the trust terminates (presumably after the passing of the animal), the remaining money goes in accordance with the terms of the trust or in accordance with a residuary clause in the decedent’s will (California Probate Code §(b)(2)).

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A frequent question that comes up when doing estate planning in my Newport Beach, California office is why should one pay for a trust, when a will is so much cheaper.  My response is are you thinking long-term or short-term?

If you are thinking short-term, a will is always going to be cheaper than a trust.  The cost, however, comes at the end, because you have virtually guarantied that there will be a probate of that will.  Probate fees will far exceed the cost of any trust.

Probate fees in California are set by statute.  As an example, if you have an estate valued at $500,000.00 that is subject to probate, the statutory fees for the attorney are $13,000.00.  That is a number of times more expensive than the cost of establishing a trust. Continue Reading

Virtually every decision regarding probate is based on title to or value of assets owned by the decedent.

Title is important because ownership can transfer as a matter of law (e.g. joint tenancy with right of survivorship, where the surviving joint tenant takes by recording an affidavit, death of joint tenant); or a bank account might be titled to a trust (e.g. John Doe and Mary Doe, trustees of the John Doe and Mary Doe 2015 Family Trust), in which case the trust controls what is in the account.  In these instances, for those assets, a probate would not be necessary.

However, where there are no joint tenancy assets, payable on death accounts, trusts or other legal means by which property transfers to another without probate, one must then look to value.

In general, if the total estate of the decedent (not counting those assets which pass because of their title as described above) is $150,000.00 or less and does not include real property, California law permits the heirs to use an affidavit procedure (Probate Code §13101) to obtain ownership of the assets.  This is very easy when the sole account of the Decedent is $149,000.00.  However, if the assets exceed $150,000.00, probate will be necessary to have those assets transferred to the decedent’s heirs.

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In other words, must there be a full-on probate in California because the real property asset (assuming a value in excess of $20,000.00, no joint tenancy or transfer on death provision in the deed) was in the decedent’s name alone when he/she died?

Likely the answer is no.  Assuming that there is a trust and for purposes of example, a surviving spouse, there will have to be a petition filed in the probate court (per Probate Code §850) to get the real property asset transferred to the trust, but that is not the same as a full-on probate.

Consider this set of facts:  Husband, in California, acquires a parcel of land while he is married and fails to have his wife’s name put on it.  In fact, let’s say that he takes title as a married man, as his sole and separate property.  He dies.  There is a family trust and if someone had thought about it, the decedent would have been counseled to place the property into the name of the trust, thus avoiding any probate proceeding.  Alas, that was not done.  Please note, I am ignoring any Family Law issues in this discussion.

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By California Trust Litigation Attorney – Ted Hankin

Over the years I have watched many attorney-themed television programs.  I understand, given the time allotted, one must take the case and try it to conclusion within the obligatory one hour format.  Unfortunately, this perception of a sprint to the finish line is not reality; litigation is more in the nature of an endurance contest in California.

Much of the time involved in a litigated case (let’s take a business case as an example) involves discussion with the attorney to insure that he/she has a complete understanding of the facts, analysis by the attorney to determine what rights have been violated by the actions of the other side, and drafting a complaint.

Once the complaint has been drafted and approved by the client, it then is filed, with an accompanying summons, with the court.  After filing, it is sent out for service on the defendant.  Once the defendant has been served, the defendant, in California, has thirty days in which to respond.  A response can be an answer (the case is then “at issue”) or a demurrer.  If a demurrer (everything in the complaint may be assumed to be true, but still doesn’t give the plaintiff a right to the relief sought), the court might set it out three or more months before scheduling a hearing (for oral argument).

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In California, over the years, I have handled many cases involving disputes between family members over the estates of a deceased relative. Brothers against sisters, sisters against brothers, uncles against nieces, nephews and others.  Some cases go to trial; other cases settle.  In all events, however, someone is going to be disappointed with the outcome, which disappointment can occur even if they prevail.

If you have been disinherited, you believe that the instrument that disinherited you was obtained by undue influence or when your deceased loved one (or relative) was incompetent, your recourse is the courts.  Let’s say that you succeed in getting the offending instrument (a will or a trust) thrown out.  What then?

The court may say that if there is no other earlier instrument, the estate will go by intestacy (as if the decedent died without a will) and it will then be divided among the heirs of the decedent.  However, if there is an earlier instrument (perhaps a will) in which you have also been disinherited, then prevailing in the trust contest only sets you up for the next contest, which is to challenge the will (presumably on the same grounds as you challenged the trust).

Let’s say you prevail on that contest; again, the result is that the estate goes by way of intestacy.  You will get your share.

Without going to trial, you might be able to negotiate a settlement with your offending relatives.  This gets you money or other assets and the certainty that you would not have if you went to trial.  It also ends the case, completely and totally.

Which is my point:  Winning, by trial or settlement, only results in obtaining money.  It may not give you the emotional surcease that you seek … but that is our system.  Problems are resolved by awarding monetary damages or assets with value.  There is no mark of Cain, no public shaming or other non-monetary retribution to be achieved in court.   Just money.

In California, a typical estate planning tool is the revocable trust. A husband and wife usually create one jointly, with the two of them serving as co-trustees until one dies. Then the other becomes the sole trustee. When the surviving spouse dies, the trust will usually name a successor trustee to take over the responsibilities of trustee.

A key feature of a revocable trust is to recognize that what was once a revocable trust becomes an irrevocable one when both of its creators/settlors/grantors die ( a portion of it could become irrevocable on the first death, depending on the language of the trust).

As the successor trustee, one of your responsibilities is to notify all named beneficiaries of the trust and heirs of the decedent that the trust has become irrevocable. This is as set forth in California Probate Code §16061.7, which prescribes the notice that is to be given by the successor trustee.

The notice is typically served by mail and the statute provides that it is to be sent within 60 days following the death of the surviving settlor (i.e. within 60 days of the event that made the trust irrevocable).

Generally, in at least 10 point boldface type, the notice must, among other things, separately state that:

“You may not bring an action to contest the trust more than 120 days from the date this notification by the trustee is served upon you or 60 days from the date on which a copy of the terms of the trust is mailed or personally delivered to you during that 120-day period, whichever is later.”

This language starts a 120 day statute of limitations; if no one contests the trust within that 120 day period, no trust contest is generally possible by anyone given proper notice. This is a benefit, in that it provides some certainty to the trustee that the trust can be administered and the property distributed without fear of litigation, once the 120 day period has run out.

It is also a detriment to one unhappy with the terms of the trust; they only have 120 days to decide whether to file a contest, no more. If you are the contestant, consult competent counsel in a timely manner before deciding whether to litigate.

In California, Probate Code Sections 15300-15301 protect the principal and income of a spendthrift trust from judgment creditors. A spendthrift trust is one where there is a restraint written the trust instrument to prevent a transfer of a beneficiary’s interest. This protection does not exist with respect to distributions from a spendthrift trust, once the distributions become due and payable (Probate Code Section 15301(b)); it also does not exist with respect to support orders for spousal or child support that exist against the beneficiary of the trust (Probate Code Section 15305).

Further, under Probate Code Section 15306.5, up to 25% (but no more) of the principal of a spendthrift trust may be reached by judgment creditors. Additional rules apply if there are both support orders and judgment creditors, with the general rule being that the support orders have a priority over those of judgment creditors.

The take away is that while spendthrift trusts are useful, they are not 100% bulletproof. Some portion of them will be made available to creditors regardless of the grantor’s intent.

Roughly 10,000 Baby Boomers will turn 65 today, and about 10,000 more will cross that threshold every day. (Pew Research)

With the massive increase in baby boomers retiring over the next decade, proper estate planning is more important than ever! When you are looking for an estate lawyer to assist you with planning — experience and knowledge from a reputable attorney is key.

What is estate planning? Estate Planning isn’t just about protecting assets, it’s about peace of mind for you and your loved ones. Our comprehensive approach is a cost-effective “no homework” way to protect your assets and prevent disputes that might arise in the future.

Don’t be tempted by “Do It Yourself” guides and kits. I have known experienced professionals whose loved ones have seen estates ruined by poorly thought-out cookie cutter solutions that left families vulnerable to taxes, litigating family members, probate, guardianship issues and unknown creditors.

Here are a few questions to consider:
• How do I insure the financial security of my spouse and children?
• How do I avoid family conflicts and ensure equitable treatment of my children?
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I have represented three sisters against their brother over their mother’s will.

I’ve represented a child who was adopted and thought she had a great relationship with her presumed half-sister and then found out the sister wanted all of the deceased father’s estate. We had to find tissue and get DNA testing to resolve that matter despite all of the family photographs.

I’ve represented cousins against a decedent’s lover, who got the decedent to leave his entire multi-million dollar estate to the lover. We showed up for trial at 1PM. The judge sent us to discuss settlement … three different times I announced that I would proceed with the trial because there could be no settlement, and three different times the other side blinked. We finally settled at 7:30 PM (kudos to the judge and his staff for staying so late).

I’ve had to represent a probate estate against a former business partner to get what was due the decedent pursuant to the buy-sell agreement.

I’ve represented grandchildren against their father, who was named as trustee by the grandparents, to get him to account and give up the money, many years after it was supposed to have been distributed to the grandchildren.

And there have been so many more……

So is there a human cost to estate planning; yes there is…. It can be minimized if there is harmony in the family and the choices of individuals to serve roles (e.g. executor, trustee) are good choices. But if there is not, or there is a bad actor influencing the situation, the cost can indeed be a high one.