Wills, Trusts and Estate Planning Q&A

The probate Court decides who will administer your estate, who will become guardian of your minor children.

The State of California makes a Will for you and decides who gets your money and you belongings.


  • The wrong person is selected by the court to administer your estate.
  • An inappropriate guardian is selected by the court.
  • Children receive their share when they become “adults”, at the age of eighteen (18) years.
  • Beneficiaries are not those you wanted.

Handwritten Wills are easily challenged because of unclear (non-legal) language and lack of witnesses to prove the person writing the Will was legally competent.

Lawsuits challenging the Will are expensive and usually result in a compromise, with the beneficiaries you wanted to eliminate getting part of your estate.

Caution: Do not attempt to change a Will prepared by your attorney by writing on the document. Adding words or crossing out language could invalidate the entire Will.

If a coupled is married, holding assets in joint tenancy between spouses is okay, but not ideal. Married couples living in a community property state can obtain a “step-up” in basis in both the decedent’s half of community property as well as the survivor’s half, but they lose this advantage by keeping assets in joint tenancy.

     However, adding anyone else as a joint tenant can create other problems, such as:

  • The new joint owner could misappropriate the asset. After all, you gave it to him/her.
  • Did you file a gift tax return when you added his/her name to your asset? Adding a name to an asset is a gift.
  • Do you really want to expose your money to someone else’s problems (for example, adding children or relative as joint tenants)? If the joint tenant gets involved in a divorce, bankruptcy or lawsuit, your asset may be tied up in a long legal battle and you lose your money.
  • Joint tenancy means “automatic right of survivorship” so the surviving joint tenant will get the entire asset regardless of what your Will says.

A simple Will does not avoid probate. If your assets exceed $100,000.00 at your death, probate will take at least one year and 6%-8% of your estate before your beneficiaries receive any money. (See Appendix “A” for approximate probate expenses.)

Trust provisions within a Will can prevent an 18-year old from inheriting his/her entire share in one payment.

People with large estates will create a tax for their beneficiaries from 37% to 50% of the amount exceeding $1,000,000 by relying on a simple Will or joint tenancy. Utilizing tax provisions in your estate documents help protect your heirs from estate taxes.

A trust can protect what you want your children to inherit.

A Living Trust avoids probate, thereby avoiding delay and expense. A Living Trust avoids the need for conservatorship if you should become incompetent or incapacitated. A Living Trust provides possible tax savings.

     A Living Trust can continue for the benefit of:

          Your loved-ones

          Minor Child/ren

          Elderly dependant parents/s

          Adult child/ren with drug or alcohol problems, mental, physical, or educational special needs, or developmentally adult children on SSI.

Yes, for several reasons:

  • If you want to leave specific items (such as jewelry or furniture) to certain individuals.
  • As a safety net to pour assets into your Trust in case you have forgotten to put something into it.
  • To provide for the care of your minor children or other dependants.

Yes. Financial Powers of Attorney are extremely important if you have only a Will. With a living Trust, a Special Financial Power of Attorney allows your Agent to transfer assets to the Trust, sign income tax returns, deal with Social Security , pensions, IRA’s, insurance, and other legal documents outside Trust where your signature is required.

You need a special document known alternatively as a Durable Power of Attorney for Health Care or an Advance Health Care Directive. This document is invaluable in the event. You become in incapacitated for whatever reason, since it allows you to designate who will make health care decisions for you if you are unable to make them for yourself. Without such a document, you may be required to go through an expensive, time-consuming and public conservatorship proceeding before anyone will be allowed to make such decisions for you.

Health Care Powers of Attorney should contain correct addresses and telephone numbers of your named agents, and should typically have an unlimited duration.



ADVANTAGES                                              DISAVANTAGES

·        Specialized in handling estates/Trust.·        Usually little familiarity with family.
·        No emotional bias.·        Administrative fees may be higher.
·        Impartial – usually free of conflicts of interest with the beneficiary·        May go out of business or merge with a Trust department you find unsatisfactory
·        Never moves or goes on vacations 
·        Never dies or get sick 



ADVANTAGES                                              DISAVANTAGES



·        More familiar with the family.·        Probably not experience in handling estates or Trusts.
·        Administrative fees may be lower.·        May not be impartial
 ·        Could have schedule conflict or live too far away to do the job properly.
 ·        Could be incapacitated at times or no longer competent when you need their assistance

NO! If you do so, the entire of your retirement account will be immediately taxable.

If you have a “Roth” IRA, its benefits will not be taxable to your children or your estate. If you have a “Non-Roth” IRA and your children or anyone other than a spouse is the beneficiary, there will be a tax. If you are married and your spouse is the only beneficiary or your retirement account, taxes can typically be deferred on your “Non-Roth” IRA.

Despite a potential tax disadvantage, some people consider designating the Trust as beneficiary of all or a portion of their “Non’- Roth” IRA in order to care for special needs children who would otherwise receive the IRA portion outright.

Yes. Leaving part of your estate to a special-needs child who is receiving disability of Medi-cal payments could have the effect of terminating those payments until the child has exhausted the entire amount of the bequest. If you find yourself in this position, discuss it with us privately and carefully consider what you should do before you make any decision.

We normally recommend that you name your revocable living Trust as the primary beneficiary of your life insurance. If you are married, your surviving spouse is typically the Trustee of the Trust and the beneficiary of the Trust, and thus would manage and insurance proceeds paid to the Trust for his or her benefit. In the event that the surviving spouse is legally incapacitated, the successor Trustee will step in to manage and distribute the insurance proceeds for the benefit of the incapacitated surviving spouse. If you are single, or your spouse predeceases you, the proceeds are paid to the Trust and the successor Trustee then administers and distributes those funds to your contingent beneficiaries (children, grandchildren, etc.) in accordance with the distribution provisions you have outlined in your Trust. This is particularly beneficial for beneficiaries’ who are still minors.

In the event that the net value of your insurance policy(ies), when added to your remaining estate, will cause your estate to exceed the estate tax exemption limit (currently $5,5000,000) we recommend establishing a special irrevocable Trust for you life insurance to remove the proceed value from your taxable estate.