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Orange County Probate & Estate Administration Law Blog

Sorting out the estate of a family member

When a family member dies, someone has to take control of and appropriately distribute the estate. This can be an unpleasant task, especially if the deceased family member was a parent, grandparent or other close relative. Although no one really wants to consider financial affairs at such a sad time, it is better to sort things out early in order to avoid calls from creditors wanting to know when they will be paid. California residents may not know the law regarding debt collection after death.

If the deceased person left a will, he or she most likely named a person as an executor or personal representative. If no will exists, an administrator can be appointed by a probate court. It could be a surviving spouse, a child or another person competent to handle the affairs. An executor or administrator is bound by law to act in good faith to handle the estate openly and honestly and attempt to carry out the wishes of the deceased.

Actor reportedly refused to set up a trust for his children

California residents may be eager to know why Phillip Seymour Hoffman gave his entire fortune to his girlfriend. According to the will of late actor, his longtime girlfriend received the bulk of his estate while his three children received nothing. A trust was set up for his oldest son in 2004, however, the trust was only meant to be used if both he and the boy's mother passed away.

Reports say that he believed that his girlfriend, who is the mother of all three of his children, would take care of them properly. His will also stated that he hoped that his son would live in Manhattan, San Francisco or Chicago if an outside guardian had to be appointed to take care of the children. This was included in the will because he believed that the child should be exposed to the culture, arts and architecture of those cities. If it was not possible for a guardian to reside with them there, he asked that the visit those cities at least twice a year.

California residents should avoid Lou Reed's estate plan model

Lou Reed, lead singer and guitarist of The Velvet Underground, and his estate plan serve as a cautionary tale. Many rockers are known for their wild side, but Reed's wild tactics also seemed to manifest in his estate planning. Conscientious Orange County residents should take care to avoid the possible mistakes made in this particular estate plan.

Reed's estate was worth $30 million and potentially more. Filings with probate court show that he had earned over $20 million from his copyright, performance and publishing royalties since his death in 2013. Additionally, his estate had received a portion of this money from business deals contracted by his manager and friend, who was also one of the executors of his estate. According to the manager, there are assets valued at about $10 million for his wife and his sister as well as an additional half million that is to be used for the care of his 93-year-old mother that will pass to his sister to use on her behalf.

Heirs battling over inheritances becoming common

California residents could be interested in recent findings regarding the extreme effects of sibling rivalries leading to court battles. Many baby boomers are in line for part of the estimated $8.4 trillion that could be inherited by children of depression-era parents, according to a MetLife study on the transfer of inter-generational wealth. The study shows that the median inheritance amount is about $64,000.

Until recently, fighting over the family will was considered to be disgraceful, according to a trusts and estate lawyer. He went on to state that these are more desperate times and desperate people are no longer embarrassed about airing their grievances regarding money in public. Sibling rivalries are now tearing families apart as they take each other to court. According to a former committee chairman of the American Bar Association, disagreements leading to court battles over the family will are increasing. He also stated that usually the courts are referring those cases to some sort of mediation rather than a full-blown trial. When the inheritance issues are resolved via settlement, reconciliation between siblings is more probable in the future.

Choosing a proper trustee is essential

California residents often want to leave more specific instructions for their property than a simple will. It is possible to set up trusts that will administer their estate and carry out their last wishes in a variety of complex ways, but it is essential to choose a responsible and qualified individual to administer the trust as its trustee. The choice of trustee can be one of the most critical details of the trust.

The first and most important factor with any trust is the beneficiary. It makes an enormous difference in planning if the inheritor is a minor who needs only periodic payments until they reach an agreed-upon age as opposed to a beneficiary who is an incapacitated or unreliable individual who cannot be relied upon to make responsible financial decisions. There are also charitable trusts and those in which an organization benefits instead of a person.

Transferring a home without a tax burden

For many California residents, their home is their most valuable asset. Therefore, it may make sense to look into putting that home into a Qualified Personal Residence Trust as part of prudent estate planning. The trust is easy to set up and the owner of the home can still use the home after it has been transferred to its new owners as long as rent is being paid.

The QPRT is established by having an attorney draw up the appropriate paperwork. At the time that the trust is established, the homeowner will determine how long the trust will be in existence for. After the term is over, the property is transferred to the beneficiary. For example, if someone wanted to transfer a property to their children a decade from now, that person could do so with a QPRT.

Trusts as estate planning vehicles

Some residents of California might have experience in using trusts as part of an estate plan. Although some individuals may not believe that they should use a trust if they intend to allow their children to inherit their assets directly, establishing a trust may allow for a greater degree of control over how the assets are to be distributed. This can be especially true in cases where the intended beneficiary is not yet of age.

As an example, it might not be entirely beneficial to allow an adolescent to inherit a substantial sum of money before they are capable of being financially responsible with it. Designating a trustee and setting terms over the asset in question can allow the asset to be distributed incrementally over time rather than in a lump sum. This is the reason why some children do not come into their full inheritance until they reach a certain designated age.

Estate planning benefits those of all ages

Young California residents without children may think that estate planning is unnecessary or can be done later in life. However, that cannot be further from the truth. Leaving written instructions as to what to do with a person's assets if something should happen is extremely important, and the best time to do it is as soon as possible.

First, it is necessary to determine where wealth should go after the person's death. Some people without children leave assets to nieces and nephews, charity, close friends or even pets. The other benefit to estate planning for the young is to ensure that there is someone to carry out the person's wishes.

An estate plan is important for California residents

Individuals in varied situations may benefit from the development of an estate plan. It's possible to make assumptions about end-of-life needs, but as some California residents have discovered, the lack of formal estate planning may leave important decisions in the hands of the courts. In some such cases, the wishes of an individual may not be honored. For example, use of a notarized estate plan may produce unintended results because this approach is not recognized as valid in California.

Some individuals find that estate planning is important so that assets can be managed appropriately in both life and death. The early sale of properties, for example, could result in a higher tax burden in both the short term and in the disposition of the estate later on. A couple with only a single property, their residence, may similarly need assistance with planning for the sale and distribution of that property so that more than one beneficiary can share in the proceeds. Proper titling may be important to ensure that upon the death of one spouse, the other spouse continues to maintain possession of a property.

Daughter requires executor to access late mother's home

Planning for a future in which you're no longer around can be a daunting process. It can be painful for family to think about losing you and difficult for them to be impartial when it comes to the preparation of your will. Nevertheless, like many Californians, you may have an idea about to whom you wish your assets to go in the event of your death. However, it is important to go through the correct channels to ensure your wishes can be honored.

For one woman in Tennessee, the strain of bereavement was exacerbated by the discovery that she did not legally have access to her late mother's apartment. As any daughter might believe, she had hoped to enter the property in order to clear it out and collect items of sentimental value. However, although she and her sister are the only heirs to their mother's property, they now require an administrator or executor to help them get access to the residence.

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