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By Peter 07 Jun, 2017

These days, many people who have legal issues turns to the internet for solutions. If you want a will or trust, or have a probate or estate litigation matter, when you type those terms into “Google”, you often get a flood of advertisements from LegalZoom, Nolo, or other sites trying to entice you with a “free will” or “living trust for $250”. You may also see a paralegal or legal document assistance in your local area trying to earn your business for a discount fee.

So why pay an attorney high fees to create your estate plan, will or trust? Why not go to a legal document assistant or paralegal to prepare your probate forms? The answer is simple. Doing so will cost you less in the beginning but likely cost thousands if not tens of thousands more in the long run.

Take “William” for example. William created his living trust through a “paralegal”. The person claiming to be a paralegal was not one at all, but only a legal document assistant. What people don’t know is that the law has recently changed and paralegals can only offer services if they are under the supervision of an attorney. A new category of persons who create wills and trusts for clients are legal document assistants. This legal document assistant may have very little training or experience and in any event can only legally create the will or living trust document based on the specific information you give them. He or she cannot advise you on what the will or living trust can say or how you should properly plan your estate to avoid issues later with probate or will or trust contests.

William signed the living trust and had it notarized. He created a pour-over will and had it properly witnessed. He was sure he was going to avoid probate. After all he had a living trust right? What he didn’t have was a properly funded living trust. He had a document that was titled William’s Trust but he never funded it. Funding a living trust is the process of transferring assets into the trust. Why, did William not have a properly funded living trust?  Because the internet program sold him a living trust but did not give him the proper advice on how to make that living trust, will and other supporting documents like an advanced healthcare directive and durable power of attorney, actually work for him.

William did not fund his home worth $300,000 in to the trust. Due to other issues with his living trust his children ending up fighting over not only the wording of the living trust but also the mismanagement of the living trust by the named trustee. In the end, there was probate that cost $9,000 and an estate litigation case that cost almost $40,000 which all went to attorneys. $49,000 was spent because William decided to pay $500 for a legal document assistant to create a document that was not properly done. Had he paid $2,500, he could has saved his children approximately $50,000 and possibly saved their relationships.

 Yes attorneys are expensive. That is because attorneys spend 3 years in law school and then have to pass a very difficult, 3 day test, in order learn the law. They then usually spend most of their career learning and trying to prefect the actual practice of law and how to ensure that trusts and wills are properly administered.

While this is a proven fact, many people still often look for alternatives to paying a large attorney fee bill by looking to the quick fix offers on the internet. But all these websites will actually give you is a boilerplate will or trust and walk you through creating the documents for low prices. They do not advise you how to make the trust actually hold your assets and how the trust works. They also do not advise you about how to deal with blended families or children who do not get along. Failure to properly create a complete estate plan that is tailored to your specific family can end in expensive legal fees with the family members fighting over the terms of the living trust or will in court.

This is where actual planning comes in and why it is important for you to have an estate planning attorney assist you in creating your will or trust. That estate planning attorney can ask you important questions and give legal advice (which a website, legal document assistant or paralegal cannot legally do). It will save thousands if not tens of thousands of dollars in the long run.

By Christine James 13 Feb, 2017

The complex legal minefield involved in trust and will lawsuits – Ensuring you get what you are entitled to

 As you grow older, you start to consider your legacy and what you can leave to your children and family. What assets do you have that can be transferred over? Do you have any savings accounts? What about your 401k and pension funds? Do you have a property portfolio? Your estate includes many things and you should take the correct precautions and measures to ensure that it is managed correctly and that your assets are transferred as you intend. What can you do to ensure that your beneficiaries receive your assets in a timely fashion? What happens if an asset is transferred to someone else and not as intended in your family members will? Knowledge is the key factor here – The more you can understand about trust and will lawsuits, the greater chance you have of getting things right and correctly managing your or your family member’s estate.

 

What assets do you have and how are they titled?

 An important aspect of estate management is the titling of assets. How an asset is titled can have a direct effect on how it is transferred. Many people make the mistake of believing that all their assets can be bunched into one chunk and will be transferred to the recipient in your will regardless – This is not always the case and each asset should be individually managed and titled.

 

What happens if an asset is titled in a descendant’s name?

 For example, what happens to your property if it is only titled in a descendant's name and there is no joint tenancy? In this instance, the property will come from the probate estate and will controls. If one of your family members or spouse is not happy with this decision they will have to instigate a will contest. Do not simply assume that because something has been agreed, this constitutes a legally binding contract – Tenancy, titles and wills can all affect how an asset is transferred.

  

How are joint tenancy issues solved?

 A further example can be seen in the advent of a joint tenancy asset. For example, what would happen to your property if you had a joint-tenancy with your partner, but you had actually separated and your will stated that the property should be transferred to your children? In this instance the joint tenancy would be the overriding factor and the property would still be transferred to your ex-partner. If your children want to contest this, they will have to challenge the initial joint-tenancy agreement, or petition the probate estate and contest the intentions of the asset transferal.

 

How does the transferal of trusts differ?

Trusts present a different scenario again and have to be treated differently to wills and joint tenancy agreements. For example, maybe your parents created a trust for you and your siblings including various assets? What if this trust was changed and became unfavorable to you? What if the trust was created without your knowledge or did not include you but you are a beneficiary in your parents will? Regardless of the reason, if you want to contest the trust, you will have to file a trust contest lawsuit which differs again from a probate will contest.

  

Communication, planning, and forethought are key to a smooth process

 It is not uncommon for a person to have to deal with several different relating asset transferal issues. You may have any one of the above issues or even a combination of several. If you are lucky, you may have no hassle at all and the whole process will be straightforward and pain-free. The main consideration from this situation is to prepare yourself, discuss your options and ensure that everything has been accounted for. Do you understand how your assets will be transferred? Are your dependents aware of how your estate has been managed? Do they know how your assets are managed and will be transferred? If you are the recipient of an asset, you should speak to the transferee and ensure that there is a clear understanding between the two of you to ensure you get what you are entitled to.

By Christine James 23 Jan, 2017

 Trusts are increasingly more and more common. As more people create trusts however, more of them are ending up in litigation.

  Estate litigation can happen when family members disagree with each other over a trust created by a parent or other family member. Of course estate litigation also happens between non-family members but that is less common.

  Often times, a parent names one of their children as the trustee of their trust. That child is usually the oldest or most educated or chosen for some other specific reason. The parent does not know they are setting up a situation that could lead to a fracture of the relationship between their children and an expensive situation down the road.

  Ask yourself this – does the child you are considering naming as trustee know what is required of them as trustee? The answer is almost definitely no. Do they know they are required, within 60 days of the death of the creator, to give specific notices to the heirs and beneficiaries? Do they know they will need to get a tax-id number and file a tax return for the trust? Do they know they are considered a fiduciary and held to a higher standard than if they were managing their own money? Are they aware they will have to keep detailed records and account for their actions?

  Most people feel honored to be named as trustee of someone’s trust. It seems pretty simple when you think about it but making sure all of the requirements of a trustee are met and in the end all the beneficiaries of the trust are satisfied can be harder than it seems. Certainly you have heard the phrase “no good deed goes unpunished”. That is almost always true when it comes to acting as a trustee. When money is involved and added to the stress and grieving of losing a loved one, even a trustee with the best of intentions can run into problems.

  Certainly many trusts are created with a child named trustee, and those trusts are administered without any issues. Let’s face it, it is almost always easier and less expensive to name your best and brightest as trustee. But it can also cost more than you ever imagined. If the child you named as trustee does not move quick enough or is not transparent enough, often time the other family members get frustrated, speak with their own attorney, and end up in a lawsuit against the trustee. If your children don’t get along that great to begin with, or you are part of a blended family of children from different relationships the odds of a lawsuit increase dramatically.

  A simple way to avoid this issue is to name a disinterested person or professional fiduciary as the trustee of your trust. Of course this can be stressful as well because picking the right person will certainly be more difficult and time consuming than naming your oldest child. There will also likely be a greater cost to hiring a disinterested trustee. That said, the saving of the family relationship and expense of litigation is much more cost effective in the end.

  Professional fiduciaries can be found in many ways. To learn more and start the process, you might consider going to the Professional Fiduciary Association of California’s website to learn more and search a directory of professional fiduciaries. Meet with more than one and make sure it is a good fit not only with you, but with your children. If you feel comfortable, it may also be a good idea to have your children meet with the professional fiduciary as well as they will be the ones working together when you are gone.

  If you do name a child as the trustee, speak to your children about your decision, why you made the decision you did, and encourage all of them to work together. Also encourage the child you named as trustee to seek the advice of an estate planning or probate attorney to help them administer the trust. This will ensure that the trust is administered properly and that the trustee is protected from potential estate litigation. Trust administration is far less expensive that estate litigation which can easily cost $30,000-$50,000 or more depending on the situation.

  Speak with your estate planning attorney about your options. Discuss carefully your children, how they interact with each other, and be honest about potential problems that may arise after you are gone. A good estate plan with specific thought to who will act as your trustee and why, is important to a successful trust administration and increases the chances of avoiding estate litigation and the fracture of relationships.

By Peter 19 Dec, 2016
It is understandable for many people to attempt to go the “DIY” route when they are conducting estate planning. Estates are very useful ways for individuals to leave behind properties and other assets for their spouse, children or other loved ones. In the past, estate planning was always conducted with the help of a professional attorney, who dealt with such matters on a daily basis. However, the popularity of the internet means many people are able to go online and find a wealth of information about estate planning, which they can use to try and plan their estate independently.

Avoiding Errors
While it is a good thing for individuals and families to want to learn as much as they can about estate planning before they set up their estate, it is not such a good idea to complete the planning without the help of an experienced estate lawyer. When you have spent many decades working hard and investing intelligently to accumulate your wealth, and you are looking to set up the estate so you can leave behind some of the assets for your beneficiaries, it is very important to get everything right. The last thing you want is for a clerical error to cost you money, or to cause your loved ones any legal problems after you pass away.

When Planning and Execution Meet
DIY estate planning is a very noble idea, because it implies that you want to take responsibility for the estate and finish off all the planning yourself. But it is not the most practical solution, because you are probably not an expert on estates and how they work – from a legal point of view. I can recount many cases over the past few months and years where new clients have come to me for assistance with their estate. But they do not always come during the planning stages. Instead, they come to me when they realize they made a mistake during the planning and execution phases of setting up their estate. And while I am able to help many of these people in correcting their mistakes, it can be an inconvenience for them and their progress, time consuming, and an extra expense.

There are also cases where people do not even notice they made a mistake with their estate planning, and the error is only spotted when a lawyer attempts to go through all the estate information after the individual who set up the estate passes away. You really do not want to put your loved ones in a situation like this, because correcting mistakes after you have passed away is much more problematic and time consuming for your beneficiaries – and sometimes cannot be corrected at all.

The Better Solution
The best solution is to contact an estate lawyer when you are still in the pre-planning stages of setting up an estate. There is a lot more to estate planning than leaving certain properties to particular family members in a will. If it were that easy, estate lawyers would not exist! The reason we work with clients daily is because we want to make sure each aspect of their estate planning is 100 percent correct and by the book.

There are plenty of mistakes you could end up making when you are attempting DIY estate planning. I have seen many of my clients make the mistake of thinking the legal documents they obtained and filled out through a website would qualify as a trust.

Other clients were acting on information they got from one or two sites, but they never verified the information to ensure its accuracy. Acting on information and the advice of bloggers is never a good idea, especially not for something as important as estate planning.

Taking an Active Role
If you want to play an active role in your estate’s planning, read up on how the process works.
The more you know about the process, the better you will be able to explain your wishes to an estate attorney. However, I strongly urge everyone to let the experts handle the legal aspect of estate planning. Talk with a lawyer about what you want and let them handle the paperwork. They will make sure everything is properly written, double-checked, notarized and filed. Proper planning right now will make things much easier for you and your loved ones down the road.

For more information, please feel free to contact me today for a consultation. Serving Loomis, Whitney, Rocklin California and surrounding areas.
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