California Probate, Estate and Trust Administration
Serving Clients in Westlake Village, Thousand Oaks, Agoura Hills and all of Southern California.
Probate and trust administration are the processes through which a deceased person’s estate assets are managed and transferred after death. When probate avoidance techniques have not been implemented prior to death, the state will require a probate court proceeding if the deceased was a resident of or owned assets in the state. The probate process in California has many technical requirements that must be complied with before a court will appoint a personal representative (an “executor” or “administrator” depending on whether there is a will) to take charge of the estate, and once appointed, the personal representative must make sure he or she complies with the legal requirements imposed on them in administering an estate, and knows when court approval is required to take an action that the personal representative wants to take. The firm has considerable experience in representing the personal representatives of deceased persons who died with a will, with no will, or with a botched estate plan, but the firm much prefers to assist clients in avoiding the probate process.
Because probate can be a lengthy, costly and public process, many people choose to avoid it. There are a number of legal strategies that will allow you to pass property to another person after death, without going through probate.
- Joint Tenancy Adding another person to your assets as a joint owner or “joint tenant with rights of survivorship” will allow your property to pass to them upon your death without going through probate. There are many, many pitfalls to this strategy, however, including subjecting such assets to any claims (such as lawsuits) against the co-owner, and making the jointly owned asset available to the co-owner’s creditors and/or bankruptcy trustee. All of this can happen while you are still alive and expected to use the assets yourself without interference by strangers who now can force the sale of the asset, or force you to buy from them a portion of the asset you owned before you placed the other person on title.
- Beneficiary Designations. California allows Transfer on Death (TOD) or Pay on Death (POD) beneficiary designations to be added to bank and brokerage accounts. Beneficiary designations like these are preferable to joint tenancy in that they allow you to transfer property only upon your death without giving away current ownership. One of the drawbacks, however, is that it can be difficult to obtain an equitable distribution of property among your heirs by utilizing beneficiary designations. Additionally, understand that if you have beneficiaries listed on your assets, those assets will be distributed upon your death to the listed beneficiaries, even if your trust or will provide otherwise. Recently, California also began allowing beneficiary designations on real property, but given the problems with the law, at this point in time, title companies will not insure the sale of real property passed by a beneficiary deed until three years after the death of the deceased owner.
- Revocable Living Trust. A Revocable Living Trust is a legal document that allows you to establish a separate entity (the trust) to “hold” legal title to your assets while you are alive, to name trustees to manage those assets on your incapacity or death, and to name beneficiaries to receive those assets after your death, on whatever terms you provide in the trust . Typically, you serve as the trustee while you are alive, managing your assets for your own benefit. Upon your disability or death, the trust terms appoint your successor trustee, who then continues to manage — or distribute — the assets held in trust. A properly drafted trust can accomplish many goals, including conservatorship and probate avoidance for your estate and bloodline, and marital and creditor protection for your trust beneficiaries.
California Estate and Trust Administration
A properly drafted and “funded” trust (meaning ownership of your assets are transferred to your trust prior to your death) will generally avoid probate. The trust need not be filed with the probate court. Nonetheless, there are still steps necessary to administer a trust: beneficiaries must receive certain notifications; assets must be gathered, valued and managed; potential creditors must be notified; debts, taxes and final expenses must be paid; and, ultimately, any remaining income and assets must be distributed in compliance with the trust terms. Successor trustees often lack the time, resources or knowledge to personally administer the trust, and get into trouble as a result. Thus, it is best for non-professional trustees to engage legal, accounting and investment professionals for assistance. Oftentimes, a corporate fiduciary (e.g., a trust company) or a private fiduciary (individuals who make their living by acting as fiduciaries) are alternatives to relying solely on busy family members or friends to serve as trustee. We can help your successor trustee(s) deal with the complexities of administering your trust. Please call our office and we will be happy to schedule a consultation, whether or not our office drafted the original trust.