Wills & Trusts

Are your Santa Ana, CA estate affairs in order?

What is a Will?

A Will or “Last Will and Testament” is the legal document that sets forth how to distribute your property to the person or persons of your choosing. A Will allows you to choose the beneficiaries to receive specific items from your estate, and other beneficiaries to receive the remaining assets of the estate.

The person designated to carry out your wishes is called the “executor”.

A Will also gives parents of minor children the opportunity to nominate a guardian for the children. Although the court makes the final decision when appointing a guardian for your children after your death, but the court will usually accept your nomination. The responsibility of a legal guardian is to provide for your child’s physical welfare.

What happens if I don’t have a Will or Living Trust?

When a person dies without a Will, the legal terms is dying “intestate”. When you do not specify through a valid Will or Living Trust who will receive your property, California state law controls who will inherit your estate.  In some instances, this may result in your estate assets transferring to someone you would otherwise prefer to take nothing. Furthermore, if you fail to nominate a guardian for your minor children, the state may appoint someone as a legal guardian, whom you would not prefer. Also, by failing to appoint your own personal representative to manage your estate, the Court can appoint anyone to be the administrator of your property.

Costs of a Will.

Although it costs less to prepare a Will than a Trust, a Will needs to be probated through formal Court proceedings. The cost to probate a Will in California can be substantial. Additionally, any estate property held “out -of-state” will require probate proceedings in that state, as well.

A Will must be Administered Through Probate Court.

Unlike, the administration of a Trust, the administration of a Will requires court supervision, which means a probate proceeding must be initiated to administer the estate. A benefit of court supervision is that the Court will oversee beneficiary challenges and creditor disputes.

Will Becomes Public Record.

A Will becomes public record at the time of your death. The Will is to be submitted to the Court, upon initiating probate proceedings.

Requires additional Documents to Manage Assets During your Lifetime.

Although you may feel secure in that fact that your Last Will and Testament sets forth how you wish to distribute your estate assets, you must also consider that you may need someone to manage your financial affairs, in the event, you lack the mental capacity to do so yourself (i.e. coma, stroke, dementia, Alzheimer’s Disease, etc.)

What is a Revocable Living Trust?

A living Trust is a popular alternative to the traditional Will. Unlike a Will, which only comes into play only after you die, a living trust is administered and operates while you are still alive.

A living trust is prepared and established during your lifetime. Most trusts are “revocable”, which means that the trust can be revoked, modified, or amended during your lifetime. When you establish your trust, you will transfer substantially all of your property into the trust. This is called “funding” the Trust. Any omitted assets can be transferred into the trust at the time of death through the use of a document called a “Pour-over Will”. A Pour-Over Will should always be prepared and executed at the same time you establish your trust.

A living trust is a mechanism used to:

1) manage your property before and after your death;
2) appoint successor trustee(s) who will take over the management of the Trust after your death, incapacity, or disability;
3) set forth how the assets of the trust estate, and any income earned by the trust, are to be  distributed after your death;
4) avoid lengthy and costly probate proceedings;
5) take advantage of estate tax exemptions.

A married couple can establish a “joint living trust”, where the husband and wife can combine their assets into a single trust, governed by a single trust document. Such trusts generally become “irrevocable” upon the death of the first spouse.

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