Estate Planning Information

Estate planning encompasses a number of different documents, such as wills, trusts, and powers of attorney. All these various tools may be used, alone or in combination, depending upon the needs and desires of the particular person and the circumstances of his estate   This is a difficult and complex area that requires the advice of a qualified attorney.  The following is a brief discussion of wills, trusts and probate. Powers of Attorney are discussed under the topic of Incapacity Planning.

Wills

A will is a legal declaration of how a person wishes his assets to be distributed after his death.  Estate assets go to the individuals or organizations designated by that person in his will, provided they are not otherwise transferred by the terms of a trust or by operation of law (such as through joint tenancy or under a contract).  Money in a joint tenancy bank account or real property held in joint tenancy automatically passes to the other named joint tenant without probate.  Likewise, life insurance and retirement plan benefits may also pass directly to the named beneficiary.

A will is valid only if done precisely as the law requires.  Any person executing a will must be eighteen years of age and of sound mind for it to be valid in California.  California Probate Section 6100.  Four different types of wills are authorized by California law: (1) the formal typewritten, witnessed will; (2) the handwritten ("holographic"), un-witnessed will; (3) the statutory form will; and (4) the international will (a very specialized type of will that has very limited use).

 A formal, typewritten will must be in writing, signed by the person (the "testator") or in his name by someone in the testator's presence and at his direction, and witnessed by at least two persons who are present at the same time, witnessing either the signing of the will or the testator's acknowledgement of signature and understand that the document is the testator's will.  California Probate Code Section 6110.  This type of will is normally prepared by an attorney and provides the greatest flexibility and protection.

The handwritten ("holographic") will must be signed by the testator with the material provisions in the testator's handwriting. It should be dated and contain an expression that the testator intends the document to be his will. California Probate Code Section 6111.

The statutory form will requires a person to fill in the blanks, date and sign the form, and have two witnesses sign it.  Instructions and a question and answer section are provided with the statutory will.  California Probate Code Section 6240. The statutory form will is a simple, limited purpose will designed only for California residents and should be used with care.

Trusts

A trust is a legal arrangement where one person (called the "trustor" or "grantor") transfers the ownership of property to another person or organization (called the "trustee") who controls that property for the immediate or eventual benefit of a third person (called the "beneficiary"). A trust can be created as part of a will (called a "testamentary trust") which is designed to be effective upon the death of the trustor or it can be created as a separate document to be effective during the lifetime of the trustor (called a "living trust").

Under most living trust arrangements, trustors, while still competent, are also the trustees and may revoke the trust or change its terms. After the trustor's death, probate is avoided since the property is legally held in the name of the trust and its assets are distributed or continue to be held in the trust in accordance with the terms of the trust document. Living trusts typically include provisions designed to reduce estate taxes and are set up to assure that property is passed to heirs in a specific way. This is an area where an experienced attorney is essential.

Probate

Probate is the legal process that usually involves filing a deceased person's will with the local probate court, taking inventory of the person's property, paying all legal debts, and eventually distributing the remaining assets and property.  Not all estates, however, need to be probated.  A streamlined court procedure is available for property left to a surviving spouse or property in small estates (less than $100,000). California Probate Code Sections 13100 - 13101.

If a person dies without a will (called "intestacy"), the estate may still need to be probated and the property owned by the person will be distributed according to the California law of "intestate succession". Community property will go to a spouse, if any. Separate property will be divided among a spouse, children or other relatives. If there are no relatives, as defined by California law, the estate will go to the state. California Probate Code Sections 6400 - 6414.