WHY YOU NEED IT:
An estate plan and living trust are not just for those with significant assets. Anyone with children or a spouse should, at a minimum, have a Nomination of Guardian, Durable Power of Attorney and an Advance Health Care Directive in case of emergency.
Further, a living trust will help to avoid the probate of your estate. Probate is the process whereby the Court re-titles ownership of your property via court order. Probate fees for attorneys are statutory in California and based on the GROSS VALUE of your estate. In other words, if you own real estate valued at $1,800,000 and have a $1,700,000 mortgage, the gross value of you estate is still $1,800,000 even though your net value is $100,000. The statutory probate attorney fees just for the house would amount to $33,000.00. If you have an $800,000 home with a $640,000 mortgage, the minimum statutory attorney fees are $19,000.00. This doesn't factor in the court costs or opportunity costs for the time it takes the probate court to act, which could be years.
ESTATE PLAN PACKAGE DOCUMENTS
LIVING TRUST AGREEMENT (REVOCABLE TRUST):
Your revocable living trust is an agreement between the “Trustor” and the “Trustee” to hold the trust assets for the benefit of the beneficiary of the trust. The Trustor is the person setting up the trust and the Trustee is the person who manages the trust. In order to form the trust, the Trustor transfers property to the Trustee to hold in the name of the trust. Since this is your trust, you are the Trustor and you are the initial Trustee of the trust. The trust provides that, for your lifetime, you are also the sole beneficiary of the trust.
The Trust is fully revocable or changeable during your lifetime. You should continue to use your Social Security Number on all accounts; as long as you are acting as the Trustee, no special tax identification number is required and no special accounting or tax returns need be filed. If you are a couple, the Trust names you both as the co-Trustees of your own property and, in the event you are both unable to continue as Trustees, the trust designates the successor Trustees.
A principal purpose of the Trust is to avoid probate of the assets of your Trust and the time and expense which is involved in a probate proceeding. The Trust essentially acts in place of a will to make sure that your property passes to the surviving spouse and, eventually, to your beneficiaries with a minimum of hassle and expense. It is extremely important that all assets which are to be included in your Trust (i.e., real property, savings accounts, stocks and bonds, etc.) are actually titled in the name of the Trust. There will be more detail on this when we return the executed documents to you. Another important advantage to your Trust is that it allows your designated successor Trustee to promptly take over the management of your affairs if you should become unable to manage your affairs due to illness, accident, Alzheimer's, etc. This avoids the potentially embarrassing, expensive and lengthy court process of a conservatorship.
DECLARATION OF TRUST:
Under certain, very limited circumstances, this Declaration could possibly be helpful after your death if you neglected to transfer a valuable asset to your Trust; it merely confirms that you intended to include all of your assets within your Trust. The Declaration is not a substitute for the requirement that you must transfer (“title”) your assets into the name of your Trust in order to avoid a potential probate of those non-Trust assets.
CERTIFICATION OF TRUST:
The Certification sets forth the existence of your Trust and your unlimited right as Trustee to deal with any account or asset held in the Trust. The Certification acts as a short version of the Trust Agreement and gives any third party all the information required from the Trust without getting into the dispositive provisions, which are (and should remain) confidential.
ASSIGNMENT OF PERSONAL PROPERTY:
The Assignment acts as the method of transferring all of your tangible personal property assets (generally such assets do not have a title or an ownership document) to your Trust (thereby avoiding the necessity or possibility of having to probate these assets); this Assignment also transfers your digital assets and/or rights (including any “social media”, on-line accounts and/or email accounts) to the Trust.
ASSIGNMENT OF BUSINESS INTEREST:
This optional assignment identifies any business interests you hold in an LLC, S Corp, Corporation, Partnership or Sole Proprietorship and places them into the trust. This is not a substitute for more complex business succession planning, but does allow for your successor-Trustee to step into you shoes and exercise your voting and decision making rights you possess in relation to your business ownership interest.
Your Will is commonly referred to as a “pour-over” will. Under the terms of the Will, any assets held by you which have not previously been transferred into your Trust will be added to the Trust at the time of your death (but may be subject to a probate administration in order to do so). The purpose of this is to make sure all of your assets (whether in the Trust or not) are distributed according to the dispositive plan set forth in the Trust).
NOMINATION OF GUARDIAN:
The Nomination of Guardian Form will designate the person or people whom you desire to raise and care for your children or dependents if the unimaginable occurs and both parents pass away. It is not necessary, or even recommended, that this person be the same as your designated successor-Trustee.
POWER OF ATTORNEY FOR CHILDREN:
Whether you have a planned absence, perhaps a vacation without your children, or you are worried about what would happen with your children if you were ever in an accident or incapacitated, this Durable Power of Attorney can be created to give a friend or family member the authority to make parental decisions regarding your children. It can be short term or long term and the powers granted can be limited or full.
HEALTH CARE DIRECTIVE FOR CHILDREN:
Similar to the Power of Attorney For Children mentioned above, but specifically created to allow a friend or family member to make health care decisions for your children in the event that you are unable to make those decisions due to an emergency or a planned absence.
SEPARATE PROPERTY AGREEMENT:
This optional agreement for married couples is designed to identify and confirm if any specific property is to be considered separate property rather community property. Property that is typically considered to be separate property is that property which you owned prior to marriage as well as any gifts or inheritance you received during the marriage.
DURABLE POWER OF ATTORNEY FOR MANAGEMENT OF PROPERTY AND PERSONAL AFFAIRS:
This is your “general power of attorney” which is primarily intended to give your named agent the power to deal with any trust or non-trust assets. Please be aware that this document gives your agent broad powers to dispose of, sell, convey and encumber your real and personal property; if you have any concern about granting such broad powers, please contact an attorney at once.
ADVANCE DIRECTIVE (also called a "LIVING WILL"):
The Advance Directive gives your named Agents the power to make medical decisions, sign consents and/or releases with hospitals and/or doctors [it conforms to the new Federal Laws (known as “HIPAA”) with regard to the releases]. It also acts as your “living will” for end-of-life decisions.
HIPAA AUTHORIZATION AND WAIVER:
The HIPAA Authorization and Waiver is a “stand-alone” document to authorize your health care providers to release information concerning your otherwise confidential medical information to the individuals you have designated to act on your behalf in the event of disability and to any other individuals who you would also want to have such access. Please note that state law requires that the form be generated in “14 point type-face”.
GRANT DEED TO REVOCABLE TRUST:
Transfer of any real property in California into or out of your Revocable or Living Trust is exempt from both the transfer tax and from any property tax reassessment. We will prepare both the Grant Deed and Preliminary Change of Ownership Report and record the deed with the county recorder.
INSTRUCTIONS TO TRANSFER ASSETS TO TRUST:
These Instructions explain which assets should be retitled into the trust and how to accomplish that.
FINAL DISPOSITION INSTRUCTIONS:
These Instructions give you the opportunity to specify how you wish to have your remains be dealt with (i.e., cremation or burial); to provide details of any prior arrangements and to designate the persons to carry-out your wishes.