You have dedicated a good part of your life to working hard and building wealth—and assets. Now that you are at midlife or beyond, you’re likely asking yourself: Who will manage my assets and wealth that make up my estate when I’m no longer able to make decisions? After I pass away, who should inherit them? Estate planning is about answering these critical questions.
Estate planning allows each of us to leave clear instructions as to who will make important personal and financial decisions on our behalf when we’re no longer able to do so, how we desire to have our estate managed, to whom we wish to leave our assets. Without an estate plan, the court could determine your estate’s division, without regard to your wishes.
If you don’t have an estate plan in place, it’s never too early to make one.
The first step in effective estate planning is to talk to a reputable attorney with proven experience in writing wills, setting up trusts, and handling other aspects of the estate.
The wills & trust attorneys at Weiner Law are here to guide you through the entire estate planning process. We can help you assign financial and medical power of attorney, write a last will and testament under California law, set up a trust, and much more. We’re here to ensure that your wealth and assets remain adequately safeguarded, as well as to provide for long-term security for your family and loved ones.
Contact us to schedule a complimentary, no-obligation evaluation with a member of our San Diego estate planning attorney firm to find out more about our process.
Writing A Will In California
What Is A Will?
One of the most fundamental and essential components of an estate plan is a will. A will is a statement to the court instructing the judge as to how you wish the court to handle your wealth, property, and other affairs after you’re gone.
Suppose you die without a will in California (the legal term is dying “intestate”). In that case, the court will divide any assets in your name among your surviving family members according to state law, without regard to your wishes.
A will names the beneficiaries who will receive your assets—property, wealth, business interests, and so on—in the event of your death. In addition, it allows you to designate an executor: a person who will represent your interests in court, take care of your taxes and outstanding debt, appoint someone as the guardian or custodian of any minor children, and ensure that your assets get distributed according to your wishes.
Who Can Write A Will In California
In California, any individual over the age of 18 who is of sound mind can make a will. You can use a will to distribute the entirety of your own separate property as well as, if you’re married, one-half of any community property you possess.
In order to be valid, the will must be in writing (handwritten, typewritten, or printed). It should also have a signature and date by the testator—the person making the document (that’s you)—and contain the signatures of two adult witnesses.
It is advisable to have an attorney assist with preparing your will to ensure that it clearly expresses your intentions and desires in precise legal terms. Legal terminology for a handwritten will is a “holographic” will.
California residents also have the opportunity to submit a statutory will. The statutory will is the simplest form of will, consisting of a standardized form completed by the testator and signed by two witnesses. Statutory wills may be suitable for very simple situations. Depending on your situation, a statutory will may not adequately address your needs.
You can leave the money to whomever you want:
• an individual, such as a family member, domestic partner, or friend
• a corporation
• an organization, such as a charity
• a city, county, state, or country (even a foreign country)
After you and the witnesses sign the will, deposit it in a safe place, such as a safe or safety deposit box. To avoid any delays, make sure that your attorney and family know where you have stored the will.
A will does not become effective until after your death, so you can change, or amend, your will at any time. But, again, consult with an attorney—crossed out words or added words on a will (or any legal document) could result in a court determining that the will is invalid.
Wills & The Courts: Potential Problems
Unlike a trust, a will does not allow your heirs and beneficiaries to avoid probate court. Before a court can divide any assets, it must first determine if the will is valid or not. Some situations arise when a person could contest a will. However, in California, only a person with “standing”—that is, a personal financial stake in the estate—can do so. A court can rule a will invalid if it shows that the testator wrote some or all of the terms of the will under duress, menace, fraud, or undue influence.
Establishing A Trust In California
What Is A Trust?
Trusts are a legal tool an individual can use to manage their assets while they’re alive and after they’ve passed. The main difference between a will and a trust is that a trust only becomes effective upon death. A trust, on the other hand, can be effective immediately and can help avoid the need for court proceedings if you are living but incapacitated.
Who Creates A Trust, & How?
Any person can create a trust. The trust creator is known as the settlor, trustor or grantor. The settlor places their property into the trust and names a trustee. The trustee holds legal title to the property; their duty is to manage the property in the trust so that it benefits the person the trust document names as beneficiary. The beneficiary is the person who will benefit from the trust.
The trustor, trustee, or beneficiary can be different people, or all be the same person. For instance, you can create a trust and name yourself both trustee and beneficiary.
Types Of Trusts
Two of the most common types of trusts are testamentary trusts and revocable living trusts. In addition, you might want to consider other types of trusts, including bypass or credit shelter trusts, charitable trusts, life insurance trusts, intentionally defective grantor trusts and other irrevocable trusts.
Testamentary Or Will Trust
A testamentary trust is the same as a will trust. In a will trust, the beneficiary cannot begin receiving benefits from the trust until the trustor has died. The terms of a testamentary trust are irrevocable, and no one can change or alter it after the will maker has died. A testamentary trust comes into effect after probate proceedings for the will have completed.
Revocable Living Trust
Unlike a testamentary trust, a revocable living trust allows the trustee to hold the settlor’s property on behalf of the beneficiary. A living trust allows a person to be the trustee, beneficiary and settlor all at the same time if desired. With a living trust, the settlor can retain complete control of their property and have the right to enjoy all the benefits as long as they are living.
Benefits Of A Living Trust
Here are some of the main benefits of setting up a living trust.
Avoiding Probate Court
Creating a revocable living trust and transferring title to certain assets and re-designating beneficiaries on others will avoid the need for your family to have to endure the long and expensive California probate court process.
Saving On Taxes
Depending on the kinds of provisions included in your living trust, there can be tax advantages in having your assets owned by a living trust at the time of your death.
Maintaining Control Over Beneficiaries
A living trust allows you to control how your beneficiaries will receive their inheritance after you die.
Keeping Details Confidential
A trust is not a public record, so only you and the beneficiaries know what assets are in the trust. This is in contrast to a will, which must be filed with the probate court. That filing is a public record.
Considerations When Creating A Trust
When creating a trust, you may need to develop additional documentation, including:
• Certificate of Trust: Certificates serve as proof that a trustee possesses the authority to act on behalf of a trust
• Assignment of Personal Property to Trust: You need this document to transfer assets into a living trust (NOTE: One cannot use this document to transfer real property, such as a house
• Medical or Financial Power of Attorney: This document authorizes another person to make medical decisions while you’re still alive but incapacitated or to handle financial affairs on your behalf while you’re still alive and after your death.
San Diego Estate Attorneys
When it comes to estate planning, which is better: a will or a trust? The answer depends on many different factors—in some situations, you may need both. Deciding how you want your estate managed and distributed after you’re gone may be the most important thing you’ll ever do for your family and yourself. That’s why it’s so essential to make informed decisions about the best way to manage your estate.
It’s never too early to take steps to protect and manage your assets.
At Weiner Law, our San Diego estate attorney team is dedicated to providing our clients with the honest, professional advice they require to make the wisest decisions possible when it comes to planning their estate.
To set up a evaluation at no cost, please schedule a complimentary evaluation with one of our attorneys to learn how to start the process. We serve clients throughout California.