California Tax Attorney Blog

In California, an attorney handling your probate case gets paid a statutory fee as well as a possible extraordinary fee. California statutory probate fees have been discussed elsewhere in this blog. In this particular blog post, I will discuss extraordinary fees.

The Los Angeles Superior Court has issued guidelines on attorney compensation. Here is what it says about extraordinary fees:

CALIFORNIA PROBATE CODE sections 10801, 10811 - Allowance of additional compensation for "extraordinary services . . . in an amount the court determines is just and reasonable."

8.1.1 Sales or mortgages of real or personal property

8.1.2 Contested or litigated claims against the estate

8.1.3 The defense of a will contested after its admission to probate. In a post-probate contest, the estate may be required to pay the cost of defense even if the defense is NOT successful, i.e., Section 10801 expenses and Section 10811 expenses can be awarded against and made payable from the estate so long as the representative's defense was in GOOD FAITH.

8.1.4 The successful defense of a will contested before its admission to probate Although expenses in preprobate contests require a "successful defense", the term is construed broadly. It matters not whether the "success" was by judgment after trial OR BY PRETRIAL SETTLEMENT, or whether the representative fails to "win" on all issues. So long as the defense BENEFITTED the estate -- in the sense of preserving decedent's desires and intentions as expressed in the will -- it is "successful". Compensation payable by estate where contest settled by dismissal with prejudice; immaterial that estate did not prevail on challenge to contestant's standing.

8.1.5 Preparation of estate, inheritance, income, sales or other tax returns or the adjustment, litigation, or payment of any of said taxes

8.1.6 Litigation involving estate property

8.1.7 Carrying on of the decedent's business pursuant to COURT ORDER. If not pursuant to Court order, there is no "guarantee" that extraordinary compensation will be approved; the result will likely turn on the circumstances involved and whether continuing the business was profitable to the estate.

8.1.8 "Other litigation or special services that are necessary for the executor or administrator to prosecute, defend or perform."

8.2 Probate Code section 8547 - Allowance of compensation to an attorney out of estate funds for extraordinary services to a special administrator

8.3 Probate Code section 10953 - Allowance of compensation for the extraordinary service of filing an accounting for the administration of a deceased, incompetent or absconding representative by his attorney, or the attorney of record for the estate, when such an accounting is required

8.4 Probate Code section 11003 - Recovery of compensation and expenses for "bad faith" contest or opposition to contest

8.4.1 If the court determines that a contest to the representative's account was brought "WITHOUT REASONABLE CAUSE AND IN BAD FAITH", the court may award against the contestant the compensation, and costs of the personal representative, as well as other expenses and costs of litigation, including attorney compensation, incurred to defend the account. The amount so awarded is a charge against the contestant's interest in the estate, and the contestant is personally liable for any amount remaining unsatisfied. (Emphasis added)

8.4.2 Conversely, upon determining that the REPRESENTATIVE'S OPPOSITION to a contest was "WITHOUT REASONABLE CAUSE AND IN BAD FAITH", the court may award the CONTESTANT the costs and other expenses, including attorney compensation, incurred to contest the account. The award is a charge against the compensation or other interest of the personal representative in the estate, and the representative is personally liable and on the bond (if any) for any amount that remains unsatisfied.

8.5 Probate Code section 11624 - Costs of preliminary distribution paid by distributee or estate in proportions determined by Court.

8.6 Paralegal Services. The above sections (except sections 11003 and 11624) provide that extraordinary compensation for probate counsel may also include compensation for extraordinary services performed by the attorney's PARALEGAL under the direction and supervision of the attorney. The application for such compensation must set forth the "hours spent and services performed by the paralegal.”

8.6.1 It is doubtful that the Legislature intended to equate "legal secretary" work with work performed by a "paralegal" (the Legislature expressly chose the term "paralegal" rather than "legal secretary.") Thus, to justify payment for paralegal services, counsel should set forth IN DETAIL, the paralegal's EXPERIENCE AND CREDENTIALS.

8.6.2 The amount requested for the extraordinary services of the attorney and paralegal COMBINED must not exceed the amount that would be appropriate if the attorney had provided the services WITHOUT paralegal assistance.

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The Los Angeles County Superior Court web site will provide help with California probate matters in general, but focuses on areas where parties tend to be self-represented (without an attorney to help them). The information and links contained on that web site are intended to help you help yourself through the California court system and probate matters.

You may find it difficult to proceed without an attorney familiar with California Probate law. Only a licensed attorney can give legal advice. If you do not understand any information or if you have trouble filling out any of the forms located here, see an attorney for help.

Self help topics include the following:

Probate Guardianship/Conservatorship Information Sheet

Conservatorship

Guardianship

Transfer Of Small Estates Without Probate

Glossary of Probate Terms

Probate Forms Packets

Creditor's Claims

Estate Planning

Links To Other Probate Self-Help Web Sites

Call a qualified probate attorney for help. Call Mitchell A. Port at 310.559.5259.

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Los Angeles County Court Rule 10.28(c) for probate provides that in connection with a request to waive the requirement of a bond, the following must be satisfied:

In all cases where bond is not waived in the will, or the proposed personal representative resides out-of-state, and a waiver of bond is being requested, the petitioner must submit a declaration which states:

(1) the number of unsecured creditors of the estate and the estimated estate liability to such creditors;

(2) whether the estate is solvent;

(3) all estimated tax liabilities, if any;

(4) the amount of any known contingent liabilities; and,

(5) the due diligence performed to ascertain the above information.

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Masters in Accounting was created as a nonprofit resource to serve students considering enrolling in a masters in accounting program. Actively maintained, Masters in Accounting is a nonprofit website which lists and links to every accredited masters in accounting program as well as answers some basic questions about the degree so that students have a single unbiased resource from which they can begin their research.

This blog was listed in the "101 Top Tax Policy Blogs" featured in Masters in Accounting.

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By dying in 2010, George Steinbrenner, the billionaire and long-time New York Yankees owner’s wealth avoids the federal estate tax altogether.

Steinbrenner’s death Tuesday came during a year-long gap in the estate tax, the first in its history. As a result, the government does not collect billions of dollars in annual estate tax revenue. For those who inherit wealth, getting it tax-free is fantastic. A probate may still be required if any of the property was in California.

“If you’re wealthy, it’s a good year to die.” Forbes magazine has estimated Steinbrenner’s estate at $1.1 billion. The federal estate tax in 2009 was 45 percent, with the $3.5 million per-person exemption. If he had died last year, his estate could have faced federal estate taxes of almost $500 million, depending on how the estate was structured.

Remember, in California, just because you don’t owe the IRS any estate tax, your estate may still go through probate before your heirs can receive their inheritance. Moreover, the estate tax will likely come back. Call a qualified estate planning attorney to discuss avoiding probate and minimizing estate tax with a living trust. Call Mitchell A. Port at (310) 559-5259.

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When someone in California dies, a family member should get a credit report to find out what accounts are still open and need to be closed, what debts are outstanding and to verify there has been no identity theft. Those who die are often targeted for identity theft. It can take a very ling before a family becomes aware of the fraud.

You can obtain a credit report on someone who has died by writing to the three big credit bureaus: Experian, Equifax and Trans Union. Give those bureaus information about the death with the decedent's full name, address, social security number and date of death. Include a copy of the death certificate and give your name and explain your relationship to the decedent. Ask for the decedent's most current copy of the credit report and that a notice such as "Deceased - Do not Issue Credit" be included in the public record. Be sure to request that any suspicious activity be reported to you. Send the letter certified mail.

If I can help with the death of someone in California, call me. I handle probate and trust administration and can assist with the legal process of administering a will or a trust or the probate of an individual without a will.

For more help, call probate attorney Mitchell A. Port at 310.559.5259.

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I just received an email from Walt in Los Angeles, CA after reading this blog and this is what he wrote:

"Both parents are deceased. I know they had a living trust. I am not on good terms with my siblings. How can I find out about the trust and what is in it?"

Here is my reply:

"Walt, You can ask for a copy because if you are a beneficiary you are entitled to it by law. If they refuse, you can file a petition to remove them as successor trustee for breach of their fiduciary duty to give you a copy.

"California Probate Code Section 16061.5(a) provides that:

"'When a revocable trust or any portion of a revocable trust becomes irrevocable because of the death of one or more of the settlors of the trust, or because, by the express terms of the trust, the trust becomes irrevocable within one year of the death of a settlor because of a contingency related to the death of one or more of the settlors of the trust, the trustee shall provide a true and complete copy of the terms of the irrevocable trust, or irrevocable portion of the trust, to any beneficiary of the trust who requests it and to any heir of a deceased settlor who requests it.'

"If you would like me to help you file a petition to get the copy, please let me know."

If you have a similar issue, please call California probate attorney Mitchell A. Port at (310) 559-5259.

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California, all the other 49 states and the District of Columbia have enacted laws governing probate and estate planning – the probate process, the validity of wills, creation of trusts, and more. These laws can fall under various names, often as collections of laws called "codes." The different estate and probate codes that can be found from state to state include "Estate Administration," "Decedents' Estates," "Trust and Fiduciaries, and the "Uniform Probate Code."

In the table provided here, you will find links and citations to estate and probate laws for all 50 states and the District of Columbia.

Speak to a probate attorney in California about your questions. Call Mitchell A. Port at (310)559-5259.

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The "self service" center of the California probate court has a handy diagram illustrating the probate process.

The California probate process diagram is not intended to cover all situations. For your particular probate questions, consult Mitchell A. Port by calling (310) 559-5259.

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How to Probate a Decedent's Estate

California Probate Code (probate law)

How to Probate an Estate in California

California Probate Procedure

California Probate Referees Association

State Laws: Estates and Probate

Any other California probate questions? Call an experienced probate lawyer, call Mitchell A. Port.

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Funding your California living trust with your property is an important step to avoiding probate. Listing all of your assets on a schedule attached to your living trust – and updating that list whenever you acquire another asset – is also important especially if the listed assets have not been transferred into and owned by your living trust. Your property in counties of Los Angeles, Orange, Santa Barbara and Ventura (to name a few) which is not owned by your California living trust may be subject to the probate proceedings which are costly and long.

For property that is not owned by your living trust but which you listed on a schedule attached to your living trust, you may be able to avoid probate. It may be possible to get a court order which determines that property held in the decedent's individual name is actually trust property. Filing with the court a Heggstad Petition (named after a 1993 California case Estate of Heggstad, 16 CA4th 943, 20 CR2d 433), a successor trustee may claim that property was intended to be owned by the trust simply because it was listed on the schedule of assets intended to be a part of the trust. If the California probate court grants the petition, the Court issues an order declaring that the property is in fact trust property.

The Heggstad Petition avoids a full probate of the assets that were not transferred to the trust and is therefore more cost-efficient. However the best way to avoid probate is to clearly transfer the property to the trust and to list it in the property schedule.

Speak with a California probate attorney about this. Call Mitchell A. Port at (310) 559-5259.

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When someone in California dies, the California Health and Safety Code imposes on certain people the obligation to dispose of the remains of a deceased person, to determine the location and conditions of interment and to make arrangements for funeral goods and services to be provided. Those same people also have the obligation to pay for the reasonable cost to dispose of the remains. Here’s a list in descending order of priority of those who have the responsibility to attend to the dead:

1. An agent under a power of attorney for health care.

2. The competent surviving spouse.

3. The sole surviving competent adult child of the decedent, or if there is more than one competent adult child of the decedent, the majority of the surviving competent adult children.

4. The surviving competent parent or parents of the decedent. If one of the surviving competent parents is absent, the remaining competent parent shall be vested with the rights and duties.

5. The sole surviving competent adult sibling of the decedent, or if there is more than one surviving competent adult sibling of the decedent, the majority of the surviving competent adult siblings.

6. The surviving competent adult person or persons respectively in the next degrees of kinship, or if there is more than one surviving competent adult person of the same degree of kinship, the majority of those persons.

7. The public administrator when the deceased has sufficient assets.

In a related blog post, read "What To Do When Someone Dies".

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If you become ill or disabled unexpectedly, or when you die, the important details of your online (internet) life can be made available to those who really need it. It is important to consider having a safe, secure repository for your vital digital property that lets you grant access to online assets for friends and loved ones. It is important to have the ability to update your information in a timely manner rather than keeping everything in a safe deposit box or hidden away in a desk drawer. Keep your usernames, passwords, final messages and so on in a virtual safe-deposit box.

After you’re gone, there are companies that carry out last wishes, alert friends, give account access to various designated beneficiaries, and generally parse out and pass on your online assets. Digital remains should be properly bequeathed to an inheritor.

Three such companies include: AssetLock, Legacy Locker and Deathswitch.

I do not endorse any one of these companies and I provide links to them as examples of what is available to you. There are other such services available elsewhere too.

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The Los Angeles Times ran an article on March 7, 2010 by Kathy M. Kristof in the personal finance section discussing the need to either amend your existing living trust or have one prepared along with a will, durable power of attorney for property management and an advance health care directive. Here is what the Times said:

If you're rich, the best estate planning advice would be to die quickly. If you're not, the best advice is to either review or rewrite your estate planning documents to make sure your heirs aren't left high and dry if you die.

That's because estate taxes that could allow Uncle Sam to nab up to 45% of your bequeathed assets are currently -- and very temporarily -- kaput.

A decadelong phase-out of the estate tax eliminated the tax completely as of January. The catch: If nothing's done, estate taxes will boomerang back to historic levels in 2011. That means any bequest of more than $1 million would be hit with a heavy levy on any amount above that limit after December.

But estate planning isn't just about taxes, and it's not just for the rich.

The legal vacuum that was created by the temporary elimination of the estate tax has created potential pitfalls even for people with modest estates.

For example, if you were to die this year and had an old "by-pass" trust, the elimination of the estate tax could cause you to accidentally disinherit your spouse, said Clay Stevens, director of strategic planning for Aspiriant, a wealth management firm in Los Angeles.

These trusts, aimed at reducing estate taxes, often have boilerplate provisions for bequeathing children an amount equivalent to the estate tax "exclusion." This year, that exclusion is unlimited, so everything goes to your kids and unintentionally there would be nothing left for a spouse, he said.

Then, too, as long as the estate tax is phased out, so is something called the "step-up" that reduced capital gains taxes on your appreciated assets after you died.

You can still get that break if you make a few strategic fixes to your estate plan this year, Stevens said. But, if you do nothing, your heirs could face capital gains taxes on all but a pittance of your appreciated property.

"This is the one year when you can't procrastinate," said Herbert E. Nass, a New York lawyer and author of "101 Biggest Estate Planning Mistakes." "Absolutely everyone should review their documents."

What if you have no documents? Then get cracking.

Studies indicate that the vast majority of Americans don't have wills, trusts or powers of attorney. That can leave heirs in a rough spot, said Danielle Mayoras, coauthor with her husband, Andy, of "Trial & Errors: Famous Fortune Fights."

Act now, avoid trouble later

Ignoring your estate plan can land your children with ill-suited guardians or give them a pile of cash that they're too young to handle, she said.

If you become incapacitated before you die, it can mean that your care could be dictated by a stranger -- or even an enemy. And, doing nothing can cause your heirs to bicker and battle in court -- sometimes for decades.

"People never think their family is going to end up fighting," Andy Mayoras said. "But, especially in this economy, families are fighting over money more and more."

Nass contends that neglect of an estate plan may have cost one wealthy New Yorker his life. Wall Street titan Ted Ammon, in the throes of an acrimonious 2001 divorce, was killed by his estranged wife's boyfriend, Nass said. The boyfriend went to prison, but the estranged wife got the estate because Ammon hadn't yet changed his will.

"That was big news out here for a long time," he said.

What do you need? First and foremost you need a will, which distributes your assets at death. Wills can be simple -- a matter of a few paragraphs -- or very complex. It depends on your wishes and whether you expect to draw up additional documents, such as a trust.

If you don't want a trust, your will should name personal guardians for any minor children, economic guardians who can distribute assets to your children and other heirs, and an executor who will make sure the terms of the will are carried out. Finally, it should include a simple statement about what you own and who should get it.

If you're leaving assets through a will, it's wise to also execute powers of attorney for both financial and healthcare matters, Stevens adds. That will give somebody you trust the ability to pay your bills and make medical decisions for you if you become incapacitated before you die.

But if you want your heirs to be able to avoid probate -- a time-consuming and costly legal process that involves a court reviewing the distribution of assets bequeathed through a will -- you'd be better off to also create a trust. If you have a trust, your will essentially can be a one-liner: "I want all my nonretirement assets to go into my trust."

(Retirement accounts such as IRAs should be left directly to people, not trusts. That gives your heirs the ability to withdraw those assets, and pay taxes on them, over a longer period of time.)

A trust would then distribute the assets based on the formula you'd drawn up. Trusts can accommodate difficult issues, such as whether you want to attach a few strings to your bequests as you might if you're leaving assets to heirs who are not financially or personally responsible.

Divide and conquer . . . the IRS

Trusts also typically contain clauses that dictate who would handle your financial affairs should you become unable to handle them yourself. And many include a "by-pass" or a "two-step" provision that essentially splits the trust in two.

Splitting the trust is aimed at saving estate taxes. That's because husbands and wives can leave each other all their assets without tax consequences, but if they want to leave money to anyone else, any amount over a set threshold is subject to tax.

The amount that's "excluded" from estate taxes has been a moving target for the last 10 years, but is unlimited today and likely to amount to $1 million in 2011.

As a result, savvy couples with estates in excess of $1 million (in any year but 2010) would each execute a by-pass trust, leaving the amount of the estate tax exclusion to their kids or other heirs and the rest to their spouse.

That would preserve the estate tax exemption for the spouse who is the first to die. In the case of someone with $2 million in assets, that could save heirs a tidy $550,000 -- or 55% of the second $1 million.

But the most important thing may be to simply make your wishes known so your heirs know that you've thought about them and how you'd like to provide for them when you're gone. That alone could eliminate a lot of family bickering.

Both Nass and the Mayorases wrote books about what celebrities have done wrong with estate planning. They say they did so to give parents and their children a way of bringing up the topic to explore how they could do it better.

"It's a way to get the dialogue started," Andy Mayoras said.

Danielle Mayoras adds that entertainer Ray Charles' estate plan provides a blueprint of how to do it right. He got his 12 children and their nine respective mothers in a room to talk about what he was planning, which was to give most of his money to charity. But everyone was provided for in some way, she said.

"The beauty of doing that is that everything is out in the open," she said. "It gives the family some comfort and the ability to talk about it."

Call Mitchell A. Port, an experienced estate planning attorney, for a consultation now. Call (310) 559-5259.

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LIABILITIES AND DUTIES OF PERSONAL REPRESENTATIVE

When the California probate court appoints you as personal representative of an estate, you become an officer of the court and assume certain duties and obligations. An attorney is best qualified to advise you about these matters. You should understand the following:

1. INVENTORY OF ESTATE PROPERTY
Locate the estate's property

Determine the value of the property

You must arrange to have a court-appointed referee determine the value of the property unless the appointment is waived by the court. You, rather than the referee, must determine the value of certain "cash items." An attorney can advise you about how to do this.

File an inventory and appraisal
Within four months after Letters are first issued to you as personal representative, you must file with the court an inventory and appraisal of all the assets in the estate.

File a change of ownership
At the time you file the inventory and appraisal, you must also file a change of ownership statement with the county recorder or assessor in each county where the decedent owned real property at the time of death, as provided in section 480 of the California Revenue and Taxation Code.

2. MANAGING THE ESTATE'S ASSETS

Prudent investments
You must manage the estate assets with the care of a prudent person dealing with someone else's property. This means that you must be cautious and may not make any speculative investments.

Keep estate assets separate
You must keep the money and property in this estate separate from anyone else's, including your own. When you open a bank account for the estate, the account name must indicate that it is an estate account and not your personal account. Never deposit estate funds in your personal account or otherwise mix them with your or anyone else's property. Securities in the estate must also be held in a name that shows they are estate property and not your personal property.

Interest-bearing accounts and other investments
Except for checking accounts intended for ordinary administration expenses, estate accounts must earn interest. You may deposit estate funds in insured accounts in financial institutions, but you should consult with an attorney before making other kinds of investments.

Other restrictions
There are many other restrictions on your authority to deal with estate property. You should not spend any of the estate's money unless you have received permission from the court or have been advised to do so by an attorney. You may reimburse yourself for official court costs paid by you to the county clerk and for the premium on your bond. Without prior order of the court, you may not pay fees to yourself or to your attorney, if you have one. If you do not obtain the court's permission when it is required, you may be removed as personal representative or you may be required to reimburse the estate from your own personal funds, or both. You should consult with an attorney concerning the legal requirements affecting sales, leases, mortgages, and investments of estate property.

3. Record Keeping
Keep accounts
You must keep complete and accurate records of each financial transaction affecting the estate. You will have to prepare an account of all money and property you have received, what you have spent, and the date of each transaction. You must describe in detail what you have left after the payment of expenses.

Court review
Your account will be reviewed by the court. Save your receipts because the court may ask to review them. If you do not file your accounts as required, the court will order you to do so. You may be removed as personal representative if you fail to comply.

4. INSURANCE
You should determine that there is appropriate and adequate insurance covering the assets and risks of the estate. Maintain the insurance in force during the entire period of the administration.

5. NOTICE TO CREDITORS
You must mail a notice of administration to each known creditor of the decedent within four months after your appointment as personal representative. If the decedent received Medi-Cal assistance, you must notify the State Director of Health Services within 90 days after appointment.

6. CONSULTING AN ATTORNEY
If you have an attorney, you should cooperate with the attorney at all times. You and your attorney are responsible for completing the estate administration as promptly as possible.

When in doubt, contact your attorney. Call lawyer Mitchell A. Port at (310) 559-5259. This statement of duties and liabilities is a summary and is not a complete statement of the law. Your conduct as a personal representative is governed by the law itself and not by this summary.

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As a solo tax and probate lawyer in Los Angeles, I read an interesting article in the February 15, 2010 issue of the Los Angeles Times that clients believe they get better service and value from solo attorneys and small firms than they get from the large firms. Here are some of the article's highlights:

Solo and small boutique law practitioners across the country have been better able to adapt to a shifting legal landscape than big law firms that had to shed more than 4,600 lawyers nationwide last year….

In an inverse demonstration that size matters, small firms able to quickly reinvent themselves have benefited despite shrinking spending on legal services and a more demanding clientele….

Boutiques flourish because they deal on a more personal level with the legal consumer and they tailor services to individual needs. Smaller firms also have less overhead and can be more flexible and affordable….

Clients perceive that they will get more efficient legal services and more bang for their buck in the context of a small, more agile firm….

Some of the big firms went overboard, charging upward of $700 an hour, and when the economy changed, their clients were no longer in a position to pay that. The rainmakers left and started their own firms. One told me he tells his clients, “I'm not any dumber but now I'm $400 an hour less….”

There is a preference among some lawyers to create a better work-life balance than that experienced by attorneys struggling to stay on a partnership track at the huge corporate entities of the American Lawyer 100, firms with as many as 4,000 attorneys….

A solo practice satisfies an attorney’s quest for meaningful practice, community involvement and quality time for home and family….

The defections from big law firms to boutiques to attorneys' recognizing “the path to riches is through niches.”…

“The age of the generalist is dead. Clients are requiring attorneys to know more and more about less and less. Everyone wants to be treated by a specialist.”…

Call me to discuss your probate issues, IRS and California Franchise Tax Board tax problems, wills and living trusts as well as business transactions in which you are involved. Call (310) 559-5259.

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A recent article published in the Los Angeles Times addresses “Selling What the Dead Leave Behind”.

If you die in Los Angeles County without a will or heirs, your belongings will probably end up in a warehouse in the City of Industry. There, the walls are stacked with hundreds of wooden crates. County employees and private auctioneers divide the contents into lots and sell them at daylong auctions held on the second Saturday of the month, typically 10 times a year. Proceeds go back into the estate and often are used to cover burial expenses and other costs. Whatever is left goes to the state of California.

To avoid this from happening to you and your property, prepare a Will. Better yet, consult with an estate planning attorney about your options. Call Mitchell A. Port at (310) 559-5259.

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Will challenges are not so unusual. If a will doesn't satisfy certain legal requirements, or the one who wrote the will was not of age or sound mind, a possible beneficiary or heir can challenge it in probate court once the maker of the will dies. There are several grounds on which someone who stands to benefit from getting the will dismissed can base a legal challenge.

Fraud or Undue Influence

Mental State

The maker of the will must have been of "sound mind" when the will was made. This is fairly easy to satisfy. The court resolves a question of mental capacity by requiring that the person who made the will:

• knew what a will does and that he or she was making one
• knew who he or she would normally be expected to provide for, such as a spouse or children
• understood what he or she owned, and
• was able to decide how to distribute his or her property.

The Will’s Contents

What makes a document a valid will? The document should:
• appoint an executor
• state that it's the will of the person who wrote it, and
• include at least one substantive provision, such as a provision leaving some property to someone or appointing a personal guardian for a minor child

Witnesses

A typed or computer-printed will must have been dated and signed in the presence of at least two adult witnesses. The witnesses should not be people who are named in the will to inherit property.

Handwritten, unwitnessed wills are valid in California. "Holographic" wills must be completely written, signed and dated in the handwriting of the person making the will.

Age

The person who wrote the will must have been an adult or otherwise considered "emancipated."

Hire an attorney since challenging a will must be done properly if you are to win. Call Mitchell A. Port at (310) 559-5259. Want to learn more about how to probate a will in California or find out about death and taxes? Call now.

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You can make a will three different ways in California:

A will which is prepared by an attorney.
California law provides a will form which you can "fill-in-the-blanks".
A holographic or handwritten will.

Wills have their limits on what they can do. Here are some things you shouldn't expect to do in your will:

• Avoid Probate.

• Property left through a will can take months or a year to work through the probate court before it can be distributed to the people who inherit it.

• Reduce Estate Taxes.

• If your estate is large enough to owe federal estate taxes, take steps now to reduce the tax liability. A will does not help you avoid taxes. Various kinds of trusts can reduce or postpone the tax bill.

• Leave Certain Kinds of Property

You can't use your will to leave:

• Proceeds of a life insurance policy for which you've named a beneficiary.

• Money in a pension plan, individual retirement account (IRA), 401(k) plan, or other retirement plan where you’ve named the beneficiary on forms provided by the account administrator.

• Property you hold in joint tenancy with others.

• Property you've transferred to a living trust.

• Money in a payable-on-death bank account.

• Stocks or bonds held in beneficiary (transfer-on-death or TOD) form.

Put Certain Conditions on Gifts

There are legal limitations on what you can do in a will. You can try to influence certain matters. For example, you could leave money "to Lisa, if and when she goes to college." But you cannot leave a gift that is contingent on the marriage, divorce, or change of religion of a recipient.

Leave Money to Pets

Don't leave your pets any property in your will since they cannot own it. Instead, leave the animal to someone who has agreed to take care of it - and leave that person some money to assist with pet-related expenses. California allows you to set up trusts for animals.

Arrange to Care for a Beneficiary With Special Needs

If you want to provide long-term care for someone, something other than your will can accomplish that. It is better to set up a trust that's tailored to the beneficiary's needs.

Leave Money for an Illegal Purpose

You can't set aside money for something illegal, such as encouraging minors to own a car to drive before he or she is licensed.

Leave Funeral Instructions

Write your instructions in your will as an expression of your intent rather than as a direction/demand. Or, write instructions in a note which deals only with your funeral.

Speak with an experienced estate planning attorney. Call Mitchell A. Port at (310) 559-5259. Want to learn how to probate a will in California or find out more about death and taxes? Call now.

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Find the original will or living trust signed by the person who died (known as the "Testator" or "Settlor"). The will or trust may name you as the Executor (or Trustee).

In your capacity as the named Executor, file a "Petition for Letters" in the Probate Court where the Testator died or owned property. Generally, as the person filing the Petition, you would be required to notify all of the Testator's immediate next of kin. You may also be required to post a bond to protect the beneficiaries’ and creditors’ interests.

Attend the hearing scheduled for your Petition to be set by the Probate Court upon giving notice to all of the Testator's immediate next of kin. At the hearing, you may be asked to prove to the Court's satisfaction that the document filed is actually the Testator's Last Will and Testament. Proof is often provided by witnesses to the Testator's signature on the Will. A "self-proving" affidavit incorporated within the body of some wills is sometimes sufficient proof of the Testator's signature. You may also be asked to satisfy the Court that the Testator did not execute another, subsequent Will, which would result in the document filed not being the Testator's most recent Will.

Get Letters Testamentary or Letters of Administration from the Probate Court, which is the Court Order formally appointing you as the Executor or Administrator of the Estate.

Do what is lawful and necessary to diligently carry out the provisions of the Will.

Begin immediately. Some decisions must be made quickly. For example, within nine months the estate may have to file an Estate Tax Return. Furthermore, as the Executor, you have a duty to collect and maintain the Estate assets and any delay may make it harder to locate and preserve assets.

Consult with an attorney experienced in Probate Law.

You should also consult with an accountant because as the Executor you assume the responsibility to ensure the payment of the Testator's personal income taxes as well as taxes on income earned by the Estate following the Testator's death but before distribution among the beneficiaries. Estate taxes may be owed to the Internal Revenue Service.

You may wish to go directly to a probate attorney. Call Mitchell A. Port at (310) 559-5259. Want to discuss how to probate a will in California or find out more about death and taxes? Call now.

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Here is FREE California probate information from an authoritative source - the Superior Court of California:

PROBATE COURT

Property Transfers at Death

Simplified Probate Procedures
How to Probate a Decedent's Estate
Probate Process Diagram
Preparing the Petition
Administering the Probate Estate after Appointment
Closing and Distributing the Probate Estate
Trusts

Adoption & Other Help for Minors

Guardianship

Is Guardianship Necessary?
Guardian Duties
Establishing Guardianship
Ending Guardianship
Guardianship vs Adoption
Are You Ready to be a Guardian?
Guardianship Checklist
Guardianship Forms

Emancipation

Name Change for Minors

Adoption

Agency
Independent
Stepparent
Adoption Hearing
Rights of Birth Parents
Birth Records
Adoption Terms
More Help with Adoption

Minors Compromise

How to Protect a Child's Assets
Community Resources

Help for Adults/Elders

Conservatorship
LPS [Mental Health] Conservatorship
Conservatorships for Developmentally Disabled Adults (Limited Conservatorships)
Medi-Cal
Name Change for Adults
How to Adopt an Adult
Dependent Adult/Elder Abuse

Financial & Medical Decision Making

Power of Attorney
Making Health Care Decisions
Living Trusts

How to Establish a Fact of Birth, Death or Marriage

Resources & Referrals

Frequently Asked Questions (FAQ)
Probate Court Rules & Forms
Probate Forms
Probate Fees (main site)
Finding a Probate Lawyer
Probate Terms

For professional probate help from an experienced attorney, call Mitchell A. Port at (310) 559-5259. Want to discuss how to probate a will in California or where you can find out more about death and taxes? Call now.

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Funding your California living trust with your property while you are alive results in the direct transfer to heirs and beneficiaries when you die without the time and expense of a probate proceeding.

There are times when people don’t include all of their property in their living trust before they die. When this happens, a simpler type of probate referred to as a Heggstad petition may be available for the California property left outside of the trust that should have been in the trust but for some reason wasn’t.

While a full probate proceeding in Los Angeles can take up to nine months and cost up to 6 percent of the full value of the property in the probate estate, a Heggstad petition can be completed in just a few short months and costs much less. Some probate attorneys erroneously refer to a Heggstad petition as a Hegsted, Hegstead or Heggstead petition.

California probate law says that if you die leaving property worth $100,000 or less, then the proper person may claim the property without using the and no probate lawyer is necessary.

For probate help or to file a Heggstad petition, call a probate attorney - call Mitchell A. Port at (310) 559-5259. Want to discuss how to probate a will in California or find out more about death and taxes? Call now.

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Los Angeles County Court Locations

LOCATIONS BY NAME

Airport Courthouse
11701 S. La Cienega, Los Angeles, CA 90045

Alfred J. McCourtney Juvenile Justice Center
1040 W. Avenue J, Lancaster, CA 93534

Alhambra Courthouse
150 West Commonwealth, Alhambra, CA 91801

Bellflower Courthouse
10025 East Flower Street, Bellflower, CA 90706

Beverly Hills Courthouse
9355 Burton Way, Beverly Hills, CA 90210

Burbank Courthouse
300 East Olive, Burbank, CA 91502

Catalina Courthouse
215 Summer Avenue, Avalon, CA 90704

Central Arraignment Courts
429 Bauchet St., Los Angeles, CA 90012

Central Civil West Courthouse
600 South Commonwealth Ave., Los Angeles, CA 90005

Chatsworth Courthouse
9425 Penfield Ave., Chatsworth, CA 91311

Clara Shortridge Foltz Criminal Justice Center
210 West Temple Street, Los Angeles, CA 90012

Compton Courthouse
200 West Compton Blvd., Compton, CA 90220

David V. Kenyon Juvenile Justice Center (Delinquency)
7625 South Central Avenue, Los Angeles, CA 90001

Downey Courthouse
7500 East Imperial Highway, Downey, CA 90242

East Los Angeles Courthouse
4848 E. Civic Center Way , Los Angeles, CA 90022

Eastlake Juvenile Court (Delinquency)
1601 Eastlake Avenue, Los Angeles, CA 90033

Edmund D. Edelman Children's Court (Dependency)
201 Centre Plaza Drive, Monterey Park, CA 91754

El Monte Courthouse
11234 East Valley Blvd., El Monte, CA 91731

Glendale Courthouse
600 East Broadway, Glendale, CA 91206

Hollywood Courthouse
5925 Hollywood Blvd., Los Angeles, CA 90028

Huntington Park Courthouse
6548 Miles Ave., Huntington Park, CA 90255

Inglewood Courthouse
One Regent Street, Inglewood, CA 90301

Inglewood Juvenile Courthouse (Delinquency)
110 Regent Street, Inglewood, CA 90301

Long Beach Courthouse
415 West Ocean Blvd., Long Beach, CA 90802

Los Padrinos Juvenile Courthouse (Delinquency)
7281 East Quill Drive, Downey, CA 90242

Malibu Courthouse
23525 Civic Center Way, Malibu, CA 90265

Mental Health Courthouse
1150 North San Fernando Rd, Los Angeles, CA 90065

Metropolitan Courthouse
1945 South Hill Street, Los Angeles, CA 90007

Michael Antonovich Antelope Valley Courthouse
42011 4th Street West, Lancaster, CA 93534

Norwalk Courthouse
12720 Norwalk Blvd., Norwalk, CA 90650

Pasadena Courthouse
300 East Walnut Ave., Pasadena, CA 91101

Pomona Courthouse North
350 West Mission Blvd., Pomona, CA 91766

Pomona Courthouse South
400 Civic Center Plaza, Pomona, CA 91766

Redondo Beach Courthouse
117 West Torrance Blvd., Redondo Beach, CA 90277

San Fernando Courthouse
900 Third Street, San Fernando, CA 91340

San Pedro Courthouse
505 South Centre Street, San Pedro, CA 90731

San Pedro Courthouse Annex
638 South Beacon Street, San Pedro, CA 90731

Santa Clarita Courthouse
23747 West Valencia Blvd., Santa Clarita, CA 91355

Santa Monica Courthouse
1725 Main Street, Santa Monica, CA 90401

Stanley Mosk Courthouse
111 North Hill Street, Los Angeles, CA 90012

Stanley Mosk Courthouse
110 North Grand Ave., Los Angeles, CA 90012

Sylmar Juvenile Courthouse (Delinquency)
16350 Filbert Street, Sylmar, CA 91342

Torrance Courthouse
825 Maple Ave., Torrance, CA 90503

Van Nuys Courthouse East
6230 Sylmar Ave., Van Nuys, CA 91401

Van Nuys Courthouse West
14400 Erwin Street Mall, Van Nuys, CA 91401

West Covina Courthouse
1427 West Covina Parkway, West Covina, CA 91790

West Los Angeles Courthouse
1633 Purdue Ave., Los Angeles, CA 90025

Whittier Courthouse
7339 South Painter Ave., Whittier, CA 90602

Want to discuss how to probate a will in California? Call Mitchell A. Port at (310) 559-5259 where you can find out more about death and taxes.

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California's probate fees paid to both the probate lawyer and to the estate's executor are set by law. In an earlier blog, I laid out the 4-3-2-1 statutory fee system.

Your California probate attorney probably won't decline being paid the statutory probate fee. But as the executor, you may want to consider waiving the fee. As is the case with any income you earn, the probate fee is subject to income tax. If you are the only beneficiary, then you will inherit the entire estate income tax free; in that case, why pay yourself the taxable fee when you can get all the property tax free?

You may also wish to consider waiving the probate fee if peace among the family is enhanced as a result. Some family members may not appreciate that you get more of the estate than they get even though you will legally earn it.

Have questions about California probate? Want to discuss how to probate a will in California? Call Mitchell A. Port at (310) 559-5259 where you can discuss death and taxes.

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About a week ago, USA Today ran an article entitled "5 Myths About Wills, and What You Should Do". These myths apply in California and ought to result in contacting a knowledgeable estate planning attorney about what can be done.

Those myths are:

After I create my will or living trust, I'm all set.

If I die without a will, everything will go to my spouse.

I could be held responsible for a deceased parent's debts.

Estate planning is for rich people.

If I have a will, my estate won't go through probate.

Call attorney Mitchell A. Port with questions about California probate, estate planning, living trusts and any number of other tax planning tools to help you minimize your tax exposure.

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A long illness and nursing home or hospital expenses for our parents can quickly add up to a lot of debt in California. You are not liable and cannot be sued personally for their debt so long as you didn't agree to pay it.

You may get letters or phone calls from creditors asserting that as heirs of your parents’ estate, you are liable for their debts.

In California, children are not responsible for paying their parent's debts unless they agree to be. The estate of the person who died is liable but if there is no money or assets in the estate, the creditors lose.

When a person dies, his or her estate is responsible for paying off the debts. If there is a probate because your parent passed away with a will or intestate without a will, creditors have four months to file a creditor's claim. If there is no money in the probate estate or the trust estate, then the creditor won't be paid. Creditors just write off the debt.

Similarly if your parent dies with credit card debt, you are not liable except if you co-signed with your parent on the credit card application.

For questions about your rights and obligations when someone dies, call Mitchel A. Port at (310) 559-5259.

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Who should get a copy of your California living trust? In a previous blog, the California Probate Code was quoted as follows:

"When a revocable trust or any portion of a revocable trust becomes irrevocable because of the death of one or more of the settlors of the trust, or because, by the express terms of the trust, the trust becomes irrevocable within one year of the death of a settlor because of a contingency related to the death of one or more of the settlors of the trust, the trustee shall provide a true and complete copy of the terms of the irrevocable trust, or irrevocable portion of the trust, to any beneficiary of the trust who requests it and to any heir of a deceased settlor who requests it."

Other than those mentioned in the Probate Code, no one else has the right to a copy of your trust upon your death. The terms of your trust remain private.

For your own peace of mind, you may want to give a copy of your trust to your successor trustee. You are not obligated to do that. Some people choose to give copies to their children who are the successor trustees and the only beneficiaries. Other clients of mine keep their trust private.

One of the advantages of having a revocable living trust is that it is private and not a public record. No one has the right to see the provisions of your trust unless you want them to.

When you transfer your investment and other accounts into the name of your trust, often you will take your trust into the financial institution and show them that you have one. Simply give the bank officer the first page and last page of your trust. You can also give the institution a copy of your Certification of Trust; the Certification is a document showing the name of your trust, listing the trust’s powers, and the current trustees. You do not have to provide any financial institution with a copy of your trust.

Contact Mitchell A. Port if you have any questions about your revocable living trust or any other estate planning issues. Keep the problems of death and taxes to a minimum.

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The State Bar of California has free pamphlets on its website covering various topics. My favorite three are "Wills", "Estate Planning" and "Living Trust".

Pamphlet topics also include:

Hiring a Lawyer

Arrested

Auto Accident

Small Claims Court

Debts

Divorce & Custody

Domestic Violence

Rent

Client Security Fund

CSF Request

Crime Victim

Problem with Lawyer

Wills

Estate Planning

Living Trust

Employee

Resolve a Dispute

Lawyer Referral Services

Jury Duty

Become a Lawyer

Elder Abuse

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Dying without a Will in California means that the probate court will address the estate by applying the rules of intestate succession. Sometimes, in the case of lost California Wills, the same rules apply. Here are some of the rules as found in the California Probate Code:

Section

6400: Property subject to intestacy provision.

6401: Surviving spouse or surviving domestic partner; intestate share; community or quasi-community property; separate property.

6402: Intestate estate not passing to surviving spouse of surviving domestic partner.

6402.5: Predeceased spouse; portion of decedent’s estate attributable to decedent’s predeceased spouse.

6403: Failure to survive decedent by 120 hours; deemed predeceased; application of section.

6404: Application of escheat provisions.

6406: Relatives of halfblood.

6407: Unborn relatives of decedent.

6409: Property given to heirs during decedent’s lifetime; advancement against share.

6410: Debt owed to decedent; predeceased debtor.

6411: Aliens

6412: Dower and curtesy, nonrecognition.

6413: Relation through two lines of relationships; single share.

6414: Application of part.

Ask a California probate attorney about questions you have concerning death and taxes. Call Mitchell A. Port at (310) 559-5259.

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This is so interesting to me:

California Probate Code Section 6112 provides that:

(a) Any person generally competent to be a witness may act as a witness to a will.

(b) A will or any provision thereof is not invalid because the will is signed by an interested witness.

(c) Unless there are at least two other subscribing witnesses to the will who are disinterested witnesses, the fact that the will makes a devise to a subscribing witness creates a presumption that the witness procured the devise by duress, menace, fraud, or undue influence. This presumption is a presumption affecting the burden of proof. This presumption does not apply where the witness is a person to whom the devise is made solely in a fiduciary capacity.

(d) If a devise made by the will to an interested witness fails because the presumption established by subdivision (c) applies to the devise and the witness fails to rebut the presumption, the interested witness shall take such proportion of the devise made to the witness in the will as does not exceed the share of the estate which would be distributed to the witness if the will were not established. Nothing in this subdivision affects the law that applies where it is established that the witness procured a devise by duress, menace, fraud, or undue influence.

To draft and execute your Will properly, call an estate planning or probate attorney. Call Mitchell A. Port at (310) 559-5259. Deal fairly with questions about death and taxes.

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In California, probate bonds are an “insurance policy” which guarantees a fund for satisfaction of damages incurred by a breach of trust committed by the estate’s representative. The Los Angeles Superiour Court has some of the rules pertaining to bonds on its website which you can read here. Probate bonds may be required as security for the estate representative’s obligation to faithfully carry out his or her fiduciary duties.

When examining the issue of a probate bond, consider these topics:

When is bond required
Does the Will waive bond
Will the beneficiaries or heirs sign a written waiver of bond
Is there alternative security in lieu of bond
What is the statutory maximum/minimum amount of the bond
How do you determine the estate’s value for purposes of bond
Are separate bonds needed for multiple representatives
Can you use a “blocked account” deposit to reduce the initial bond
Does the initial bond need to be increased

Consult with a California probate attorney about these and other probate questions. Call attorney Mitchell A. Port at (310) 559-5259.

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Read Michael Jackson's Will he prepared and signed in Los Angeles, California.

With the coverage of Michael Jackson's death, estate and guardianship questions involving his children, Michael Jackson's Will was made available through the internet shortly within it being filed with a Los Angeles Probate Court.

Don't be shocked that such an important and personal document is available to the public. That's the nature of wills -- they are public documents (once you die) when a probate proceeding is started. Any will admitted to probate court is a public record that anyone can read.

So what do you do if you don't want your estate planning wishes to be read by everyone? Do what Michael Jackson did and create a revocable living trust. He created his estate plan.

Estate planning is a term that may confuse people. Many people really don't know what documents make up an estate plan. The term estate planning somehow confers a meaning that someone must have an estate. And people think of estates as those lovely homes in Beverly Hills and the surrounding area. You don't have to be Michael Jackson or own an expensive home to benefit by having an estate plan.

Generally whenever someone dies, whatever they leave behind is called their estate whether it is assets or debts. So, estate planning is really planning for handling your affairs after you die.
In some instances, estate planning is also planning for incapacity.

The basic estate plan for most people generally consists of the following documents:
1. Will
2. Living Trust
3. Durable Power of Attorney
4. Advance Health Care Directive

Talk to a California estate planning attorney. Reduce the impact of death and taxes. Call Mitchell A. Port at (310) 559-5259.

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The Los Angeles Court’s website has a list of frequently asked questions. Los Angeles Court employees and others throughout the entire California Court system can help you but they are not allowed by law to give you legal advice. You are encouraged to discuss any further questions (including those about death and taxes) with an attorney.

Those FAQs are listed here and posted on the Court's website here:

How do I get legal advice?

How do I get an attorney?

Where can I check if a probate action has been filed?

Does the Court provide a list of probated property?

Where is the list for probate properties that are for sale?

My case was denied without prejudice, what do I have to do to put it back before the court?

My case was taken off-calendar, do I have to file a new petition?

How can I get guardianship of my grandchildren?

How can I terminate a guardianship or conservatorship?

How can I get money from a blocked account for a minor?

What if the Court lost an original of a filed document?

Is the Court closed at lunchtime?

More questions: Call a probate attorney: call Mitchell A. Port at (310) 559-5259.

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Questions and answers about California’s Statutory Will are presented in California Probate Code Section 6240. The free form for the Statutory Will is here.

A will does not avoid probate in California. Speak to an estate planning attorney about how to avoid probate and make use of a living trust. Call Mitchell A. Port at (310) 559-5259.

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You can make a will three different ways in California:

A will which is prepared by an attorney. An estate planning lawyer can make sure that your will satisfies California law. The lawyer can make suggestions and help you understand the many ways that assets can be transferred to or for the benefit of your beneficiaries. A lawyer can also help you develop a complete estate plan and offer alternative plans that may save taxes. This kind of planning can be extremely helpful and economical in the long run. Your lawyer will either personally supervise the signing of your will or will give you detailed instructions on the rules for its execution by you and two witnesses (who are not beneficiaries of your estate).

California law provides a will form which you can "fill-in-the-blanks". This is for small estates. If you do not understand the form or if you are making any provisions that are complicated or unusual, you should ask an attorney for advice.

A holographic or handwritten will. A handwritten will does not have to be notarized or witnessed. This will must be completely in your own handwriting. Your handwriting has to be legible, and the will must clearly state what you are leaving and to whom. However, any typed material in a handwritten will may invalidate the will. (A typed will must be signed by two witnesses.) You must date and sign the will. It is a good idea to consult with an attorney to make sure your will satisfies California law and does not provide for things you do not intend.

Whichever one of the three different kinds of wills you use, the will should be yours alone and not a joint will with your spouse, registered domestic partner or anyone else.

Also, it is important to distinguish between your will and a “living will”. The term “living will” used to be used in California to describe a legal document that states you do not want life-sustaining treatment if you become terminally ill or permanently unconscious. Now in California, advance health care directives and durable powers of attorney for health care decisions are used for that same purpose.

This does not avoid death and taxes, probate, and should not be used as a substitute for a complete estate plan. Consultation with an estate planning attorney like Mitchell A. Port at 310.559.5259 is strongly advised.

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In California, if you die without a will or if all you have is a will and you don’t have a living trust, your estate will probably have to go through probate. The Courts in Los Angeles County, Santa Barbara County, Ventura County and Orange County (as well as all the other counties in California) will oversee the probate of all the property that you owned at the time of death such as real property, personal property, bank accounts, investment accounts, etc. But there are some exceptions. You may have in your estate some assets that do not go through probate in California. These are some of them:

Payable on Death Accounts (POD accounts). This is a type of bank account where you choose a beneficiary who will receive the account without probate when you die.

Life Insurance Policies and Retirement Accounts – like an IRA. The death benefit from the life insurance and IRA benefits payable to named beneficiaries automatically pass to them and avoid probate.

Property held in joint tenancy. Many Californians who happen to be married own their home in joint tenancy with their spouse. When a joint tenant dies, the other joint tenant inherits the property without going through the probate process.

Another way you can avoid probate is to transfer your assets into a revocable living trust. Assets which have been transferred into the name of the trust are non-probate assets. Contact an experienced estate planning lawyer if you would like more information about a living trust. Call Mitchell A. Port at (310) 559-5259.

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As a California probate lawyer in Los Angeles, I have seen time and again that do-it-yourself wills – cheap wills – “simple” wills - are a probate attorney’s dream. Over and over again I have seen the damage that self-written wills have done to well-intended people that bought stationary and tried to do it themselves. Instead of giving their money to their beneficiaries - the beneficiaries end up fighting over the vague terms of the document leading to an unnecessary loss to the estate. If you don’t believe me, read this article to find out more about the disputes that arise over off-the-shelf wills.

Avoid these mistakes by working with a qualified tax attorney to discuss your estate plan, that is, your living trust, pour-over will, durable power of attorney and advance health care directive. Call Los Angeles attorney Mitchell A. Port at 310.559.5259.

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Want to contest a California Will? Do you believe the terms of the Will should not be enforced? A Will can be contested and invalidated for a variety of reasons, not all of which are included here.

Undue Influence. Although there are several tests for undue influence, it boils down to a confidential relationship between the testator (will drafter) and the influencer and suspicious circumstances. Suspicious circumstances can be shown by procurement of a will, secrecy, no independent advice by the testator (person who executes the will), an unnatural or unjust gift, susceptibility to influence, haste in the signing of the will, or a change in attitude.

Menace. Menace is essentially blackmail. Menace can be shown by threat of unlawful and violent injury to the person, property or character of any person and will invalidate a will if it was used to coerce a transfer or prevent someone from changing a testamentary document.

The testator may lack capacity. In California, the person must be 18 years of age and of sound mind. The fact situations are often varied, but often the person does not understand the nature of the testamentary act sometimes because of dementia, or lacks the ability to recall the nature of the individual’s property.

Fraud. Fraud may be actual or constructive. Actual fraud generally can be intentional if a person tells a lie, suppresses a fact, or makes a promise without intent to perform. Constructive fraud is a breach of a duty with fraudulent intent to gain advantage to another’s prejudice.

Duress. Although the rule is stated differently in California, duress may invalidate a will if a transfer is obtained after the wrongdoer threatened to perform or did perform a wrongful act that coerced the donor into making a donative transfer that the donor would not otherwise have made.

Mistake. It is hard to show that a mistake will invalidate a will or part of a will, but under certain circumstances it may be possible to prove.

Have other questions, call a probate lawyer; call Mitchell A. Port at (310) 559-5259.

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It may be difficult for some to proceed in court without an attorney familiar with California Probate law when someone dies in Los Angeles or elsewhere in California and leaves property subject to probate.

In California, only a licensed attorney can give legal advice. If you don't understand any information in this blog or if you have trouble filling out any of the forms located here, see an attorney for help.

The Los Angeles Superior Court has a self-help website. The web site provides help with Probate matters in general and pays special attention to areas where people represent themselves without an attorney to help them. The self-help site is not supposed to be a do-it-yourself guide and is instead intended to help you help yourself through the court system and probate matters.

The Los Angeles Superiour Court site has information on the following:

Probate Guardianship/Conservatorship Information Sheet

Glossary of Probate Terms

Conservatorship

Guardianship

Creditor's Claims

Transfer Of Small Estates Without Probate

Estate Planning

Probate Forms Packets

Links To Other Probate Self-Help Web Sites

Still need help? Call a qualified probate attorney. In Los Angeles call Mitchell A. Port at (310) 559-5259.

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When opening a California probate (in Los Angeles Superiour Court, for example) believing that the will is lost, there's a rebuttable presumption that it was destroyed. What this means is that the court will presume that the the person who died destroyed the will.

But, to probate a lost will you may introduce evidence that the will was not destroyed. The sort of evidence that is allowed must satisfy the probate court that the will wasn't destroyed. If the evidence suggests that the will wasn't destroyed, then it will be admitted to probate. For example, you look for a copy of the will and any reason as to why that copy should not be valid.

California Probate Code 6124 says that: “If the testator's will was last in the testator's possession, the testator was competent until death, and neither the will nor a duplicate original of the will can be found after the testator's death, it is presumed that the testator destroyed the will with intent to revoke it. This presumption is a presumption affecting the burden of producing evidence.”

Let's assume there's no copy, and that the California will is just lost. Most likely what's going to happen is the property will probably pass intestate, meaning it will go equally to whomever the natural objects of the bounty are, the natural heirs or lineal descendants.

For probate help, call Mitchell A. Port at (310) 559-5259.

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Domestic partners in California whose property was reassessed between January 1, 2000 and January 1, 2006 because of a change in ownership or the death of the owner can apply for an exclusion. Go to the Los Angeles county tax assessor's website and apply for help before June 30, 2009.

The Los Angeles Times ran a good article discussing this in more detail.

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How much does a probate in California cost when more than one attorney is involved with the same client?

The fee is calculated based on a percentage as follows:

4% of the first $100,000 of probate property pays a fee of $4,000
3% of the next $100,000 of probate property pays a fee of $3,000
2% of the next $800,000 of probate property pays a fee of $16,000
1% of the next $9,000,000 of probate property pays a fee of $90,000
0.5% of the next $15,000,000 pays a fee of $75,000

If the estate exceeds $25,000,000 in value, the court will determine the amount of the fee for the excess.

Using this fee structure, an estate worth $1 million pays a fee of $23,000 ($4,000 plus $3,000 plus $16,000).

When more than one attorney is involved for the same estate, the fee is split between the lawyers. For example, if three attorneys handled the same $1 million estate, the maximum statutory fee is $23,000 which is divided among the lawyers in any way that they agree.

When an executor fires the first attorney during the probate proceeding, the next attorney has to negotiate his share of the statutory fee with the first lawyer. The stage of the probate proceeding at which this occurs will impact the discussion between the attorneys. If the new attorney is hired by the executor late in the proceeding, his or her fees negotiated with the prior attorneys probably will be relatively small; it may be difficult to hire a new attorney at this stage since the fee may be too small.

Speak with a competent California probate lawyer about this. Call Mitchell A. Port at (310) 559-5259.

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California, like many states, abides by the contractual beneficiary designation made on your IRA and life insurance. When you designate a specific beneficiary, then the property will go to that person without probate.

Sometimes, however, the beneficiary you designate may not be the actual person you wish to receive the IRA or life insurance. In one particular situation, a woman designated her sister as the beneficiary before the woman was married and never changed the beneficiary designation to name her husband after she was married. As a result, when the husband tried to claim the money, neither the IRA administrator nor the insurance company would pay him since he was not the designated beneficiary despite more than two decades of marriage. Here’s the story.

Similarly, if an IRA or insurance beneficiary is named and dies before the IRA owner or the insured, and if there is no secondary beneficiary named, then those assets must go through a probate in California before the money is distributed. So, when certain items of property ordinarily avoid probate because the law of contracts usually applies, California probate is required when the beneficiary designation no longer works.

Avoid probate in California. Consult with an estate planning attorney – call Mitchell A. Port at (310) 559-5259.

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Who does the California probate's executor pay first: the probate attorneys' fees or the IRS tax liability when there is not enough property in the estate to fully pay both debts?

California Probate Code Section 11420 contains a priority list of which creditors are paid and in what order they are paid. The short answer is that the IRS is paid before the probate attorney is paid. The long answer can't be more clear:

California Probate Code Section 11420 states:

11420. (a) Debts shall be paid in the following order of priority among classes of debts, except that debts owed to the United States or to this state that have preference under the laws of the United States or of this state shall be given the preference required by such laws:

(1) Expenses of administration. With respect to obligations secured by mortgage, deed of trust, or other lien, including, but not limited to, a judgment lien, only those expenses of administration incurred that are reasonably related to the administration of that property by which obligations are secured shall be given priority over these obligations.

(2) Obligations secured by a mortgage, deed of trust, or other lien, including, but not limited to, a judgment lien, in the order of their priority, so far as they may be paid out of the proceeds of the property subject to the lien. If the proceeds are insufficient, the part of the obligation remaining unsatisfied shall be classed with general debts.

(3) Funeral expenses.

(4) Expenses of last illness.

(5) Family allowance.

(6) Wage claims.

(7) General debts, including judgments not secured by a lien and all other debts not included in a prior class.

(b) Except as otherwise provided by statute, the debts of each class are without preference or priority one over another. No debt of any class may be paid until all those of prior classes are paid in full. If property in the estate is insufficient to pay all debts of any class in full, each debt in that class shall be paid a proportionate share.

Need help with probate? Call Mitchell A. Port, an attorney in Los Angeles, for help. Call (310) 559-5259.

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In August, 2008, California's governor approved a bill providing that on and after January 1, 2010, any instrument, whenever executed, that became irrevocable on or after January 1, 2001 the law regarding no contest clauses will change.

California Probate Code Section 21310 - 21315 addresses the question of what is a "no contest" clause in California's wills and living trusts.

There is more about this topic in an earlier blog post.

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For probate, that is California decedent's estates, free forms are available by clicking on this link.

More free forms are available by clicking on this link.

Here is a list of some useful probate forms:

Probate Case Cover Sheet-Certificate of Grounds for Assignment to District

Bid in Open Court on Sale of Real Property

Conservatorship Care Plan

Ex Parte Order For Release Of The Remains Of A Decedent

Ex Parte Petition For Court Order To Release The Remains Of A Decedent

Financial Documents Cover Sheet

Application and Order Appointing Probate Referee

Notice of Deposit of Estate Planning Documents

Notification to Court of Address on Conservatorship/Guardianship (print on yellow paper)

Order Terminating Proceedings

Request for Refund of Graduated Filing Fees

Discuss your Will and probate with a probate lawyer or attorney. Call Mitchell A. Port at 310.559.5259.

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California revised the fees and costs charged by the probate Courts for probate cases. The new schedule of probate fees can be read in full detail below. Or, you may see them by clicking on this link.

For probate help, call Mitchell A. Port at (310) 559-5259.

Continue reading "New California Probate Fees" »

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California's executors and administrators are usually obligated to provide an inventory of the estate to the court. The inventory is supposed to include all property to be administered in the decedent's estate.

California law says that an inventory must specify the following property:

Money owed to the decedent, including debts, bonds, and notes, with the name of each debtor, the date, the sum originally payable, and the endorsements, if any, with their dates. The inventory shall also specify security for the payment of money to the decedent, including mortgages and deeds of trust. If security for the payment of money is real property, the inventory shall include the recording reference or, if not recorded, a legal description of the real property.

The California executor in the middle of probate must also show in the inventory, to the extent ascertainable by the personal representative, the portions of the property that are community, quasi-community, and separate property of the decedent.

For probate help in this area, call Mitchell A. Port. Call (310) 559-5259.

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As part of the California probate process, notice of a person’s death and the probate of that person’s estate must be published 3 times before the court hearing and the first publication must be at least 15 days before the hearing date. California Probate Code Sections 19040 and 19041 have very specific publication requirements.

The notice must be published in a newspaper of general circulation in the city where the decedent resided at the time of death (or where the decedent left property if the decedent did not live in California). If no such newspaper exists or if the property is not in the city or if the decedent didn’t reside in a city, publication may be made in a newspaper of general circulation that is circulated in the area of the county in which the decedent lived.

Three publications must occur in a newspaper published once a week or more often, with 5 days between the first and last publication dates, not counting those dates.

An affidavit from the newspaper as proof of publication must be filed with the court before the petition for probate is scheduled for a hearing date.

The notice shall state substantially as follows:

NOTICE TO CREDITORS OF _____________

LOS ANGELES SUPERIOR COURT OF CALIFORNIA
COUNTY OF LOS ANGELES

Notice is hereby given to the creditors and contingent creditors of the above-named decedent, that all persons having claims against the decedent are required to file them with the Superior Court, at _______, and mail a copy to _____, as trustee of the trust dated ____ wherein the decedent was the settlor, at _____, within the later of four months after ____ (the date of the first publication of notice to creditors) or, if notice is mailed or personally delivered to you, 60 days after the date this notice is mailed or personally delivered to you. A claim form may be obtained from the court clerk. For your protection, you are encouraged to file your claim by certified mail, with return receipt requested.

_____________________________________________
(name and address of trustee or attorney)

Probate your California estate with a qualified probate attorney. Contact attorney Mitchell A. Port at (310) 559-5259 for probate help.

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Many California residents write a will which leaves their entire estate to their surviving spouse – even after they’ve divorced! But what is a “surviving spouse”?

California Probate Code Section 78 defines a “surviving spouse” by what who that person is not. Section 78 says the term “surviving spouse” does not include any of the following:

(a) A person whose marriage to the decedent has been dissolved or
annulled, unless, by virtue of a subsequent marriage, the person is
married to the decedent at the time of death.

(b) A person who obtains or consents to a final decree or judgment
of dissolution of marriage from the decedent or a final decree or
judgment of annulment of their marriage, which decree or judgment is
not recognized as valid in this state, unless they (1) subsequently
participate in a marriage ceremony purporting to marry each to the
other or (2) subsequently live together as husband and wife.

(c) A person who, following a decree or judgment of dissolution or
annulment of marriage obtained by the decedent, participates in a
marriage ceremony with a third person.

(d) A person who was a party to a valid proceeding concluded by an
order purporting to terminate all marital property rights.

If your will leaves your estate to your "surviving spouse" who may no longer hold that title because of the application of Section 78, then your estate may pass through California's laws of intestacy - the laws which apply to situations where no will exists or where no heirs have been designated.

Have your will prepared properly by a qualified estate planning attorney so you can leave your estate to those you really want to have it. Call Mitchell A. Port at (310) 559-5259.

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A probate bond is designed to protect the estate in California in case the personal representative mismanages the estate or steals any of the estate's assets.

A Will that waives the bond requirement is often effective at avoiding having to obtain a bond. Another way to avoid buying a bond is for all the heirs agree to waive the bond. However, the court may still require that the personal representative be bonded if that person resides outside California even when all of the heirs agree to waive it.

This means that to probate an estate without a Will or Trust waiving the bond requirement, the personal representative will have to apply for a probate bond to be sure the value of the estate is protected. For example, if the estate is worth a million dollars - which could include a personal residence in California along with cash assets - bond premiums could run approximately $2,000 for every year the estate is opened. The first year's premium is not refundable if the estate closes within a year.

The executor or personal representative for the estate must qualify for a bond. Qualification depends on the executor’s personal net worth and credit worthiness. Some personal representatives won't qualify and the bond company will require that their attorney maintain control over the estate account in some agreeable fashion with the bond company.

To avoid probate in California and avoid the expense of buying a bond, consult with a qualified probate attorney. Call Mitchell A. Port at (310) 559-5259.

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Major changes in California regarding your domestic partnership, such as its termination, do impact your Will. California enacted a law which addresses this very issue.

Probate Code Section 6122.1 provides the following:

(a) Unless the will expressly provides otherwise, if after executing a will the testator's domestic partnership is terminated, the termination revokes all of the following:

(1) Any disposition or appointment of property made by the will to the former domestic partner.

(2) Any provision of the will conferring a general or special power of appointment on the former domestic partner.

(3) Any provision of the will nominating the former domestic partner as executor, trustee, conservator, or guardian.

(b) If any disposition or other provision of a will is revoked solely by this section, it is revived by the testator establishing another domestic partnership with the former domestic partner.

(c) In case of revocation by termination of a domestic partnership:

(1) Property prevented from passing to a former domestic partner because of the revocation passes as if the former domestic partner failed to survive the testator.

(2) Other provisions of the will conferring some power or office on the former domestic partner shall be interpreted as if the former domestic partner failed to survive the testator.

(d) This section shall apply only to wills executed on or after January 1, 2002.

Your California will and living trust should be remade after the domestic partnership ends. Call Mitchell A. Port at (310) 559-5259 for help writing the new estate planning documents.

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A divorce or annulment of your marriage in California directly effects your will. Only devises to the former spouse are revoked by divorce. The rest of the will remains valid. The property that does not go to your ex-spouse passes as if the spouse had predeceased you. Remarriage to your former spouse revives that part of your will that was for the spouse's benefit; cohabitation following dissolution is not enough to revive the will for your ex's benefit.

Probate Code Section 6122 provides that:

(a) Unless the will expressly provides otherwise, if after executing a will the testator's marriage is dissolved or annulled, the dissolution or annulment revokes all of the following:

(1) Any disposition or appointment of property made by the will to the former spouse.

(2) Any provision of the will conferring a general or special power of appointment on the former spouse.

(3) Any provision of the will nominating the former spouse as executor, trustee, conservator, or guardian.

(b) If any disposition or other provision of a will is revoked solely by this section, it is revived by the testator's remarriage to the former spouse.

(c) In case of revocation by dissolution or annulment:

(1) Property prevented from passing to a former spouse because of the revocation passes as if the former spouse failed to survive the testator.

(2) Other provisions of the will conferring some power or office on the former spouse shall be interpreted as if the former spouse failed to survive the testator.

(d) For purposes of this section, dissolution or annulment means any dissolution or annulment which would exclude the spouse as a surviving spouse within the meaning of Section 78. A decree of legal separation which does not terminate the status of husband and wife is not a dissolution for purposes of this section.

(e) Except as provided in Section 6122.1, no change of circumstances other than as described in this section revokes a will.

Revise your California will and trust after your divorce is complete. Call an estate planning attorney for help. Call Mitchell A. Port at 310.559.5259.

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When a Californian who owns a business dies and creates a probate estate, the business owner’s affairs must be sorted out and when appropriate, the business must continue to operate. The business is an asset of the probate estate. Payroll must be met, contracts must be fulfilled, bills must be paid and the business property must be addressed in an orderly fashion.

Immediate business needs may be addressed by creating a “special administration” rather than waiting for the appointment by the California probate court of an executor.

Sole Proprietorship. California Probate Code sections 9760-9763 deal with the California representative’s role in handling those business affairs of a sole proprietorship.

Partnerships. Partnership businesses are governed by California Probate Code sections 9761-9763.

Corporations. California corporations in which the decedent was a shareholder are not governed by section 9769-9763 since the remaining members of a board of directors, officer or managing employees can operate the business. When a shareholder dies, the issue is one of what to do with the deceased shareholder’s stock which is governed by whether there is a Will or a buy sell agreement between the shareholders.

The executor usually does not become personally involved in the day-to-day operation of the California-based business unless he or she has experience in the kind of business owned by the decedent. The executor ordinarily obtains court approval to employ independent management who are qualified to run the business.

For probate help, call a California probate attorney. Call Mitchell A. Port at (310) 559-5259.

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Your California Will ought to nominate someone to serve as executor of your estate when you die. But when the person you nominate declines or cannot serve as executor, when no one else is named in the Will as a successor executor, who can serve?

The same question arises when someone in California dies without a Will and obviously hasn't left behind a document that names anyone to probate the estate. Whoever is appointed when a Will does not exist is called an administrator.

The priority of those persons entitle to administer an estate is set by California law under Probate Code Section 8461. Here's the order of priority:

(a) Surviving spouse or domestic partner.

(b) Children.

(c) Grandchildren.

(d) Other issue.

(e) Parents.

(f) Brothers and sisters.

(g) Issue of brothers and sisters.

(h) Grandparents.

(i) Issue of grandparents.

(j) Children of a predeceased spouse or domestic partner.

(k) Other issue of a predeceased spouse or domestic partner.

(l) Other next of kin.

(m) Parents of a predeceased spouse or domestic partner.

(n) Issue of parents of a predeceased spouse or domestic partner.

(o) Conservator or guardian of the estate acting in that capacity
at the time of death who has filed a first account and is not acting
as conservator or guardian for any other person.

(p) Public administrator.

(q) Creditors.

(r) Any other person.

Do you think you should serve as executor or administrator in California? Speak with a qualified probate attorney by calling Mitchell A. Port at (310) 559-5259.

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Living in Los Angeles where I practice probate law as an attorney, I am often asked about a person’s competency to make a will. The answer is straight forward as described in California Probate Code Section 6100.5. It says:

(a) An individual is not mentally competent to make a will if at the time of making the will either of the following is true:

(1) The individual does not have sufficient mental capacity to be able to (A) understand the nature of the testamentary act, (B) understand and recollect the nature and situation of the individual's property, or (C) remember and understand the individual's relations to living descendants, spouse, and parents, and those whose interests are affected by the will.

(2) The individual suffers from a mental disorder with symptoms including delusions or hallucinations, which delusions or hallucinations result in the individual's devising property in a way which, except for the existence of the delusions or hallucinations, the individual would not have done.

(b) Nothing in this section supersedes existing law relating to the admissibility of evidence to prove the existence of mental incompetence or mental disorders.

(c) Notwithstanding subdivision (a), a conservator may make a will on behalf of a conservatee if the conservator has been so authorized by a court order pursuant to Section 2580.

California Probate Code Section 810 deals with findings and declarations; capabilities of persons with mental or physical disorders; judicial determination; evidence.

California Probate Code Section 811 deals with deficits in mental functions.

California Probate Code Section 812 deals with the capacity to make decisions.

California Probate Code Section 813 deals with the capacity to give informed consent to proposed medical treatment; judicial determination.

Do you have questions on capacity and other estate planning and probate issues? Call Mitchell A. Port, Esq.

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I am honored by being selected as a Southern California Super Lawyer for 2009 in areas of law including Estate Planning & Probate, Tax Controversy and Closely Held Business. There is a very nice badge on the right side of this blog posting.

Super Lawyers is a listing of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement.

Super Lawyers is published as a special supplement in leading newspapers and city and regional magazines across the country. Super Lawyers magazine, featuring articles about attorneys named to the Super Lawyers list, is distributed to all attorneys in the state or region, the lead corporate counsel of Russell 3000 companies and the ABA-approved law school libraries.

The objective of the Super Lawyers selection process is to create a credible, comprehensive and diverse listing of outstanding attorneys that can be used as a resource to assist attorneys and consumers in the search for legal counsel.

No other legal publisher goes through the unique multi-step process that Super Lawyers employs to find evidence of peer recognition and professional achievement.

Super Lawyers Selection Process

Step One: Creation of the Candidate Pool - Statewide survey of lawyers

Step Two: Evaluation of Lawyers in Candidate Pool

Step Three: Peer Evaluation by Practice Area

Step Four: Final Selection

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Two of the benefits of a California revocable living trust are continuity of management and avoidance of probate. These benefits are generally available only as to assets that are held in the name of the California living trust. Often, when property is left out of your living trust, it may have to be probated before heirs can obtain legal title and ownership. This blog post deals with title transfers.

Generally, you should transfer title to your assets from your individual name to:

"[Your name], Trustee, [your surname] Family Living Trust dated [the date the Trust is signed]"

So, title may look like this example: “Mitchell A. Port, Trustee, Port Family Living Trust dated February 2, 2009”

Title to your assets should be transferred to your California living trust – in most cases – for the types of property listed below. Various issues related to the type of property transferred into your California living trust are mentioned as well. You ought to address transferring the following assets:

1. Automobiles

2. Bank, Savings and Other Cash Accounts

3. Bonds, T-Bills, Commodities

4. Life Insurance; Pension, Profit Sharing, Retirement Plans

a. Life Insurance

b. Retirement [IRA] Accounts

c. Keogh, Pension, Profit Sharing Benefits

d. Current Retirement Benefits

5. Notes

a. Secured by Real Property

b. Secured by Personal Property

c. Unsecured

6. Partnerships and LLCs

a. Limited Partnerships and LLCs

b. General

7. Real Property

a. Reassessment

b. Loan Acceleration

c. Title Insurance

d. Homeowner's Exemption

e. Homeowner's Insurance

f. Purchases of Real Property

g. Sales of Real Property

8. Stock

a. Marketable Securities

b. Mutual Funds; Margin and Ready Asset Accounts

c. Closely Held Corporations

9. Prepare this list of information addressing the items below that would be useful in case of death or a health emergency and add it to your California estate planning book or some place easily locatable:

a. Bank Accounts and Safe-Deposit Boxes

All bank names - account numbers - personal contact, if available - location of safe-deposit box - contents of box - location of box key;

b. Credit Cards

Issuers - account numbers - expiration dates - special information (airline mileage points, balances owed);

c. Insurance

Home, car, life, health, long-term care: issuers - account numbers - agents - premium due dates;

d. Health Care

Contact information for physicians - current medications and dosages - Medicare claim number - Medigap policy number;

e. Taxes

Accountant information - location of past filings;

f. Investment And Retirement Accounts

Names of brokerage or plan administrators - account numbers - PIN numbers - Names of bankers or brokers;

g. House

Amount of mortgage payment or rent - due date - location of deeds and property titles - contact information for service people;

h. Miscellaneous

(i) Driver’s license number and expiration date; (ii) vehicle registration information; (iii) any items in storage and storage company phone number; (iv) contact information for neighbors and friends; (v) e-mail accounts, websites, and passwords; (vi) the combination to any safe in your home; and (vii) a list of the automatic payments from and deposits to bank accounts.

Consult with a California estate planning attorney. Call Mitchell A. Port at (310) 559-5259.

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Most Californians who have life insurance or a retirement plan like a 401(k) or IRA will name their spouse as the primary beneficiary if they are married. Single folks who also live in California counties such as Los Angeles, Orange, Santa Barbara or Ventura will name someone else who is deserving of the death benefit. But when a designated beneficiary dies before you do, most people do not remember to change the beneficiary to someone else who is still living. As a result, when you die after your beneficiary dies, who gets the money?

While my estate planning clients may put all of their other assets into the living trust I prepared for them to avoid probate upon their death, the 401(k), IRA or life insurance policy likely will have to be probated if the primary beneficiary dies before you.

If this or something similar has happened to you recently, let's talk about what is involved with probate. Call me at (310) 559-5259 and let's get those issues resolved.

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After working with your attorney in Los Angeles to avoid probate in California by preparing your will, living trust, durable power of attorney for property management and the advance health care directive, you now decide you want to revoke the directive. How?

California law provides that a patient having capacity may revoke the designation of an agent only by a signed writing or by personally informing the supervising health care provider. California law goes on to say that a patient having capacity may revoke all or part of an advance health care directive, other than the designation of an agent, at any time and in any manner that communicates an intent to revoke.

In other words, you may revoke the designation or authority only if, at the time of revocation, you have sufficient capacity to make a power of attorney for health care. The burden of proof is on the person who seeks to establish that you did not have capacity to revoke the designation or authority.

Discuss your estate plan with an experienced attorney. Call Mitchell A. Port in Los Angeles at 310.559.5259.

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New California Probate Code Section 710 describes your attorney's duty of care to preserve the estate planning documents you decide to leave with him or her and which he or she agrees to keep for you. Here is what the California law provides:

If a document is deposited with an attorney, the attorney, and a successor attorney that accepts transfer of the document, shall use ordinary care for preservation of the document on and after July 1, 1994, whether or not consideration is given, and shall hold the document in a safe, vault, safe deposit box, or other secure place where it will be reasonably protected against loss or destruction.

Your California lawyer's duty to hold the living trust or will in a safe, vault, safe deposit box, or other secure place is a reasonable one, and allows reasonable periods for the document to be out of safekeeping for the purpose of examination or delivery in appropriate circumstances. At all times the document should be reasonably protected against loss or destruction, although what is reasonable may vary with the circumstances.

Discuss safekeeping your California will and living trust with Mitchell A. Port, a Los Angeles estate planning attorney who drafts those documents for his clients.

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Questions and answers about California’s Statutory Will are presented here and in California Probate Code Section 6240.

The following information, in question and answer form, is not a part of the California Statutory Will. It is designed to help you understand about Wills and to decide if this Will meets your needs. This Will is in a simple form.

1. Does a Will avoid probate? No. With or without a Will, assets in your name alone usually go through the court probate process. The court's first job is to determine if your Will is valid.

2. Are there different kinds of Wills? Yes. There are handwritten Wills, typewritten Wills, attorney-prepared Wills, and statutory Wills. All are valid if done precisely as the law requires. You should see a lawyer if you do not want to use this Statutory Will or if you do not understand this form.

3. What can a Will do for me? In a Will you may designate who will receive your assets at your death. You may designate someone (called an "executor") to appear before the court, collect your assets, pay your debts and taxes, and distribute your assets as you specify. You may nominate someone (called a "guardian") to raise your children who are under age 18. You may designate someone (called a "custodian") to manage assets for your children until they reach any age from 18 to 25.

4. Does my Will give away all of my assets? Do all assets go through probate? No. Money in a joint tenancy bank account automatically belongs to the other named owner without probate. If your spouse, domestic partner, or child is on the deed to your house as a joint tenant, the house automatically passes to him or her. Life insurance and retirement plan benefits may pass directly to the named beneficiary. A Will does not necessarily control how these types of "nonprobate" assets pass at your death.

5. What happens if I die without a Will? If you die without a Will, what you own (your "assets") in your name alone will be divided among your spouse, domestic partner, children, or other relatives according to state law. The court will appoint a relative to collect and distribute your assets.

6. May I change my Will? Yes. A Will is not effective until you die. You may make and sign a new Will. You may change your Will at any time, but only by an amendment (called a codicil). You can give away or sell your assets before your death. Your Will only acts on what you own at death.

7. When should I change my Will? You should make and sign a new Will if you marry, divorce, or terminate your domestic partnership after you sign this Will. Divorce, annulment, or termination of a domestic partnership automatically cancels all property stated to pass to a former husband, wife, or domestic partner under this Will, and revokes the designation of a former spouse or domestic partner as executor, custodian, or guardian. You should sign a new Will when you have more children, or if your spouse or a child dies, or a domestic partner dies or marries. You may want to change your Will if there is a large change in the value of your assets. You may also want to change your Will if you enter a domestic partnership or your domestic partnership has been terminated after you sign this Will.

8. May I add or cross out any words on this Will? No. If you do, the Will may be invalid or the court may ignore the crossed out or added words. You may only fill in the blanks. You may amend this Will by a separate document (called a codicil). Talk to a lawyer if you want to do something with your assets which is not allowed in this form.

9. Who may use this Will? This Will is based on California law. It is designed only for California residents. You may use this form if you are single, married, a member of a domestic partnership, or divorced. You must be age 18 or older and of sound mind.

10. Are there any reasons why I should NOT use this Statutory Will? Yes. This is a simple Will. It is not designed to reduce death taxes or other taxes. Talk to a lawyer to do tax planning, especially if (i) your assets will be worth more than $600,000 or the current amount excluded from estate tax under federal law at your death, (ii) you own business-related assets, (iii) you want to create a trust fund for your children's education or other purposes, (iv) you own assets in some other state, (v) you want to disinherit your spouse, domestic partner, or descendants, or (vi) you have valuable interests in pension or profit-sharing plans. You should talk to a lawyer who knows about estate planning if this Will does not meet your needs. This Will treats most adopted children like natural children. You should talk to a lawyer if you have stepchildren or foster children whom you have not adopted.

11. What can I do if I do not understand something in this Will? If there is anything in this Will you do not understand, ask a lawyer to explain it to you.

12. Where should I keep my Will? After you and the witnesses sign the Will, keep your Will in your safe deposit box or other safe place. You should tell trusted family members where your Will is kept.

13. What is an executor? An "executor" is the person you name to collect your assets, pay your debts and taxes, and distribute your assets as the court directs. It may be a person or it may be a qualified bank or trust company.

14. What is a custodian? Do I need to designate one? A "custodian" is a person you may designate to manage assets for someone (including a child) who is under the age of 25 and who receives assets under your Will. The custodian manages the assets and pays as much as the custodian determines is proper for health, support, maintenance, and education. The custodian delivers what is left to the person when the person reaches the age you choose (from 18 to 25). No bond is required of a custodian.

15. What is a guardian? Do I need to designate one? If you have children under age 18, you should designate a guardian of their "persons" to raise them.

16. Should I ask people if they are willing to serve before I designate them as executor, guardian, or custodian? Probably yes. Some people and banks and trust companies may not consent to serve or may not be qualified to act.

17. Should I require a bond? You may require that an executor post a "bond." A bond is a form of insurance to replace assets that may be mismanaged or stolen by the executor. The cost of the bond is paid from the estate's assets.

18. What happens if I make a gift in this Will to someone and that person dies before I do? A person must survive you by 120 hours to take a gift under this Will. If that person does not, then the gift fails and goes with the rest of your assets. If the person who does not survive you is a relative of yours or your spouse, then certain assets may go to the relative's descendants.

19. What is a trust? There are many kinds of trusts, including trusts created by Wills (called "testamentary trusts") and trusts created during your lifetime (called "revocable living trusts"). Both kinds of trusts are long-term arrangements in which a manager (called a "trustee") invests and manages assets for someone (called a "beneficiary") on the terms you specify. Trusts are too complicated to be used in this Statutory Will. You should see a lawyer if you want to create a trust.

20. What is a domestic partner? You have a domestic partner if you have met certain legal requirements and filed a form entitled "Declaration of Domestic Partnership" with the Secretary of State. Notwithstanding Section 299.6 of the Family Code, if you have not filed a Declaration of Domestic Partnership with the Secretary of State, you do not meet the required definition and should not use the section of the Statutory Will form that refers to domestic partners even if you have registered your domestic partnership with another governmental entity. If you are unsure if you have a domestic partner or if your domestic partnership meets the required definition, please contact the Secretary of State's office.

21. What is community property? Can I give away my share in my Will? If you are married and you or your spouse earned money during your marriage from work and wages, that money (and the assets bought with it) is community property. Your Will can only give away your one-half of community property. Your Will cannot give away your spouse's one-half of community property.

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One of the most common questions I am asked as a Los Angeles probate lawyer involves property going to the State of California after a person dies who owned property in California. The term applicable when that happens is “escheat”. California Probate Code Section 6404 is the applicable statute.

The term is applied to the transfer of title of a California resident’s property to California when the person dies intestate (without a will) without any other person able to take the property as an heir. For example, California intestacy law provides that when someone dies without a will and is not survived by a spouse, descendants, parents, grandparents, descendants of parents, children or grandchildren of grandparents, or great-grandchildren of grandparents, then the person's estate will escheat to the state of California.

In California, escheat can also occur when an entity (such as a bank) holds money or property (such as an account in that bank) and the property goes unclaimed. In California, if the owner cannot be located, such property can be revocably escheated to the government.

Avoid this from happening to your property. Speak with an attorney in Los Angeles, call Mitchell A. Port.

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Creditor claims in Los Angeles County, Santa Barbara County, Ventura County and Orange County against the property of a decedent in California must file a timely claim with the county court where the probate proceeding is pending if the claim is to be addressed.

California Probate Code Section 19100 provides this rule about the time for filing claims:

(a) A creditor shall file a claim before expiration of the later of the following times:
(1) Four months after the first publication of notice to creditors under Section 19040.
(2) Sixty days after the date actual notice is mailed or personally delivered to the creditor. This paragraph does not extend the time provided in Section 366.2 of the Code of Civil Procedure.
(b) A reference in another statute to the time for filing a claim means the time provided in paragraph (1) of subdivision (a).
(c) This section shall not be interpreted to extend or toll any other statute of limitations, including that provided by Section 366.2 of the Code of Civil Procedure.

Are you a creditor with a substantial claim? Call Mitchell A. Port to discuss this or other probate matters in California.

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As a probate lawyer in Los Angeles, from time to time I am hired to handle the estate of a Los Angeles resident who dies without a will. To pass property to heirs and beneficiaries in California after dying without a California will is called intestate succession.

California Probate Code Section 240 provides a system of property distribution when there is no California will. Probate Code Section 240 says:

If a statute calls for property to be distributed or taken in the manner provided in this section, the property shall be divided into as many equal shares as there are living members of the nearest generation of issue then living and deceased members of that generation who leave issue then living, each living member of the nearest generation of issue then living receiving one share and the share of each deceased member of that generation who leaves issue then living being divided in the same manner among his or her then living issue.

Assume, for example, that my Los Angeles client had two children, A and B, both of whom predeceased my client. A leaves three children who survive my client, and B leaves one child who survives my client. Neither A nor B had any children who predeceased my client. Under this fact context, Probate Code Section 240 will have the following result:

The estate is divided at the nearest generation having living members. Each of my client’s four grandchildren receives one-fourth of the class gift. (The share of a deceased grandchild who left issue surviving would be divided among the children of the deceased grandchild.)

If this or other California probate questions arise, discuss your situation with Los Angeles attorney Mitchell A. Port. Call 310.559.5259.

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Where should you keep estate planning documents prepared by your attorney licensed in California? Where should people expect to find your living trust, will, durable power of attorney and advance health care directive? You want to be sure that those documents stay safe and can be easily found when your family needs to find them.

Do not keep them in a safe deposit box at the bank.

The best place is in your home where they can easily be found when they are needed. Don’t lock them into a box for safekeeping inside your home since that would be as difficult to penetrate as a safe deposit box. Simply leave them in the open inside a desk, on a shelf or somewhere else that is obvious to anyone looking for them.

Your safe deposit box won’t be easy for your friends or family to open it if you’re not there. This is true even if they are co-owners of the box. Having the key isn’t enough to get the bank to open it up for them — the bank wants you to prove that you have the legal authority to require them to open it up. So here’s the conundrum: the document granting your friends or family the right to act on your behalf as an executor or as the power of attorney/agent is inside the box, and until the box is opened, they can’t prove that they have the authority to get the bank to open it…etc.

Safe deposit boxes are often inside a bank which may be closed over the weekend. If a durable power of attorney or advance health care directive is needed over the weekend, no one will be able to get to it until Monday. In a medical emergency, the advance health care directive should be easily accessible.

To speak with a tax attorney about your estate plan, call Mitchell A. Port at (310) 559-5259.

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New legislation doesn't change probate in California. It does change, however, the requirement for doctors to provide terminally ill patients with counseling and disclosure about their options for end-of-life care.

California’s health care providers are now required to let their patients know about their options when they've been diagnosed with a terminal condition, including:

their right to give individual health care instructions in their California Advance Health Care Directive

their prognosis with and without disease-targeted treatment

their right to continue such treatment with or without palliative care, and

hospice care

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California probate courts use PVP attorneys. What is a PVP attorney? Do you need one? How do you get one? What exactly does a PVP attorney do?

The abbreviation “PVP” is short for “Probate Volunteer Panel”, which is a panel of attorneys who register with the Los Angeles Superior Court to assist with the resolution of various California probate issues. The PVP panel consists of California attorneys who the court appoints in probate and family law matters, including conservatorships, guardianships and related proceedings. In a typical proceeding, a PVP attorney is appointed to represent the interests of the potential conservatee or ward.

Here’s what the California Superior Court, County of Los Angeles, says in the probate section of its Court Rules, Chapter 10:

Continue reading "California Conservatorships And Guardianships " »

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Why are California probate attorneys and probate lawyers so busy? Over half (55%) of all adult Americans do not have a will, a new survey shows, a figure that has remained pretty much unchanged over the past three years.

The survey on estate planning was conducted by Harris Interactive for Martindale-Hubbell, lawyers.com, one of the most comprehensive online resource for finding lawyers.

The survey asked 1,018 adults and found that more than half of them did not have a will. Only one in four Hispanic Americans (26%) had a will. Only one in three African American adults (32%) had a will.

At a minimum, get a California will if that's where you live. Better yet, avoid probate in California and get a living trust too.

Call Mitchell A. Port about your California living trust, will and other estate planning documents. Call 310.559.5259.

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The California Department of Motor Vehicles has a clear explanation about a transfer of a car and other vehicles without probate at its website. The decedent's heir may transfer title or interest of the vehicle if the estate is not going through probate or awaiting probate of a will.

The California form entitled "Affidavit for Transfer Without Probate" may be completed without Testamentary Letters or Letters of Administration. Transfers without probate may be done only for vehicles registered in California.

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A recently decided court case, Baccei v. United States, highlights the adverse consequences when an estate fails to follow instructions in obtaining an extension of time to pay.

The decedent died in September, 2005. Her estate consisted mainly of real estate. Her nephew was the executor of her estate and the trustee of her revocable trust.

The executor, through his attorney, retained an accountant to prepare the Federal estate tax return.

In June, 2006, the accountant filed Form 4768, requesting an automatic 6-month extension of time to file the estate tax return.

Form 4768 consists of four parts:

Part I, "Identification," requests information identifying the estate. The accountant completed Part I.

Part II, "Extension of Time to File Form 706, 706-A, 706-NA, or 706-QDT (Section 6081)" contains boxes to check to show for which return the estate is claiming an extension of time to file. The accountant completed Part II.

Part III is captioned "Extension of Time to Pay (Section 6161)," and requests a written statement explaining why the estate cannot pay the tax in full, and the extension date requested (not more than 12 months). The accountant did not complete Part III.

Part IV, "Payment to Accompany Extension Request," contains three lines. Line 1 is for the estimated amount of tax due. Line 2 is for the cash shortage (with an instruction to complete Part III.) Line 3 is for the balance due (with an instruction to subtract line 2 from line 1). The accountant completed Part IV.

The accountant filed the extension with a cover letter. The estate timely filed the estate tax return on extension. The return showed estate tax of over one and a half million dollars, which the estate paid with the return. The IRS asserted a sizeable late payment penalty which the estate paid and then sought a refund claiming that it had timely applied for an extension of time to pay the estate tax, and had established reasonable cause.

The court held for the government, saying that the estate did not request an extension of time to pay because Part III was not completed, and that neither the Form 4768 nor the cover letter specified the date to which an extension of time to pay the tax was requested.

The court noted that the statutes and regulations make a clear distinction between extensions of time to file and extensions of time to pay.

A 6-month extension of time to file is automatic - provided the Form 4768 is timely filed.

An extension of time to pay is discretionary, and can be requested for up to 12 months at a time. While the same Form 4768 can be used to request both extensions, they are nevertheless separate extensions.

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The California Executor, Administrator or Trustee works on behalf of the estate (sometimes in probate) to minimize taxes, resolve administrative problems and provide prompt, proper distribution of assets. If you are naming an individual as Executor or Trustee, or if someone has asked you to serve as one, keep in mind that the responsibilities can include some or all of the following:

1. Make sure that desired funeral arrangements have been carried out.

2. Locate the will and file with the California Probate Court.

3. Petition Court for appointment as Executor/Personal Representative of estate.

4. For estates, publish legal Notice of Hearing in a newspaper acceptable to the Court.

5. Obtain death certificate or doctor's statement for insurance claims (sometimes birth and marriage certificates also are necessary).

6. Notify all heirs, legatees, devisees and next of kin of their interest in the estate.

7. Arrange for inventory of safe deposit box contents.

8. Obtain life insurance claim forms, fill out and submit with policy (or policies). Obtain proceeds for beneficiary and Form 712 for estate tax return.

9. File claims for final medical bills with Medicare and other medical insurance carriers.

10. Assemble necessary documents for each parcel of real estate or mineral interest, including deeds, leases, tax receipts, abstracts and insurance policies.

11. If necessary, oppose in Court all incorrect or invalid claims against the estate.

12. Check on Veteran's Administration benefits.

13. Check On possible pension, or other employee benefits.

14. Check on Social Security benefits for survivors.

15. Check on Social Security lump-sum death benefit.

16. Locate bank accounts and transfer funds to estate account.

17. Obtain from Court permission for allowance for support of family.

18. Collect and take possession of all assets (stocks and bonds, etc.)

19. Invest surplus cash.

20. Execute appropriate purchases and sales. Value marketable securities and closely held assets.

21. Collect dividends and interest on estate's assets.

22. Arrange for appraisals of real estate, jewelry, stamp and coin collections, etc., to determine fair market value for tax and accounting purposes.

23. Prepare an inventory of all estate assets including bank accounts, real estate, automobiles, furniture, jewelry and other possessions; file original with estate account. Court (as required) and send copies to beneficiaries.

24. Examine all real estate and mineral interests. Determine insurance, status of taxes, bills, leases and assessments. If necessary, screen for environmental contamination.

25. Determine what debts exist. Mortgages? Life insurance loans? Bank loans? Auto loans? Settle these debts.

26. Investigate status of any business interest owned, including closely held stock and partnership interests.

27. Supervise operation of family-owned business until either sold or distributed.

28. For income-producing real estate, collect rents, make repairs, pay real estate taxes, maintain insurance, arrange for utility services and handle all tenant-related issues.

29. For estates, pay claims after claim period has expired. Obtain receipts and/or vouchers for all bills and claims paid.

30. Communicate regularly with co-fiduciaries and interested parties.

31. Maintain complete records for all transactions in the account and provide statements for all receipts and disbursements.

32. Ascertain cash requirements for debts, taxes and expenses, and review all assets to see how necessary funds can best be raised.

33. Prepare court accountings as required.

34. Select valuation date for federal estate tax return. (This selection can often provide substantial savings.)

35. Prepare final federal (1040) and state income tax returns for the deceased.

36. Prepare federal and state estate tax returns as required. Determine charitable, marital or other deductions and elections.

37. Compute estimate of any state and federal death taxes. Prepare preliminary tax notices required by law. Analyze tax planning options.

38. Determine whether administrative expenses should be used as fiduciary income tax or estate tax deductions.

39. Prepare gift tax or generation-skipping tax returns as required.

40. Prepare federal and state income tax returns for the estate and related trusts.

41. Pay final administration expenses.

42. Obtain Estate Tax Closing Letter from Internal Revenue Service.

43. Prepare final federal and state income tax returns for the estate and/or trust and give Internal Revenue Service notice of termination of fiduciary relationship.

44. If the estate is audited by a government agency and a tax deficiency is levied, determine whether to negotiate, appeal or accept the ruling.

45. Prepare detailed final accounting that is acceptable to the Court and send copies to beneficiaries as required.

46. Prepare Report of Final Distribution and send original to Court with copies to beneficiaries as required.

47. Arrange for transfer and registration of securities with transfer agent. Execute and file deeds.

48. Prepare a Plan of Division and Cash Accounting to divide the residue of the estate.

49. Distribute estate assets to beneficiaries in accordance with the Plan of Division and Cash Accounting.

50. Petition Court for discharge of Executor/Personal Representative.

California probates can sometimes be very complex. Speak with a probate attorney about your concerns. Call Mitchell A. Port at (310) 559-5259.

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Complaints Against Enrolled Professionals

California's taxpayers who have a complaint against their attorney, accountant, enrolled agent or other practitioners who are specifically permitted to practice before the IRS can submit their complaints in writing in a letter format. The letter should include the tax practitioner's name, address, telephone number, designation (i.e., attorney, certified public accountant, enrolled agent, enrolled actuary, etc.), a detailed description of the allegations, and any documents that support those allegations.

Direct all referrals to:

Internal Revenue Service
Office of Professional Responsibility
SE:OPR, Room 7238/IR
1111 Constitution Avenue NW
Washington, DC 20224

You can send it by facsimile at 202-622-2207

Complaints Against Unenrolled Tax Return Preparers

Complaints against unenrolled tax return preparers can be reported by completing Form 3949-A and mailing it or a letter with similar information to Internal Revenue Service, Fresno, CA 93888.

For additional information, you may refer to Complaints Against Tax Professionals Frequently Asked Questions.

If you have questions concerning an allegation, you may email the IRS at OPR@irs.gov.

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I am often asked about restraining orders that become effective when a divorce action is filed in California and how those orders impact estate planning by my clients who live in Los Angeles County, Santa Barbara County, Ventura County or Orange County. I am also asked about the ability of my clients to do estate planning when they terminate their marital status before the final disposition of property.

When a dissolution action is filed, pursuant to California Family Code section 2040(4)(b), parties are prevented from creating a nonprobate transfer or modifying a nonprobate transfer that could affect the disposition of the property being transferred without having first obtained the written consent of the other party or a court order. Nonprobate transfers include revocable trusts, joint tenancies and beneficiary designations such as payable on death accounts, IRAs, profit sharing pension plans and life insurance.

As a result, a trust can be created but cannot be funded. While this will allow my client to immediately fund the trust at the conclusion of the dissolution action, this does not solve the problem of dieing during the dissolution action without an estate plan in place.

Therefore, if my client has the luxury of time, creating or modifying a revocable trust should be done before a dissolution action is pending. If this is not possible, then revoking any and all family trusts should be considered and an interim Will should be created. This will insure a disposition of my client’s separate property and one-half of the community property to persons whom my client would want to receive the property should their death occur during the pending dissolution action.

Because people often choose to terminate their marriage before the final disposition of property, what about estate planning of such property once the parties divorced? The issue was that while restraining orders became effective upon the filing of the dissolution action, Probate Code section 5600 provides that spousal beneficiary designations are automatically revoked at the termination of marital status if an asset is a “non probate transfer asset,” as defined in Probate Code section 5000 unless there is either (1) clear and convincing evidence that the transferor intended to preserve the nonprobate transfer in favor of his or her former spouse, or (2) an order from the Court. Effective January 1, 2008, the California legislature resolved this question in California Family Code section 2337(c)(7A).

California Family Code section 2337 addresses the situation where a party seeks to terminate their marital status before the disposition of property and protections that may be put in place to protect the spouse that did not seek the early termination of their marital status. Section (c)(7A) now provides that the Court may specifically order a party, as a condition of their seeking to be divorced, to maintain the other party as a beneficiary of a nonprobate transfer of one-half, or upon good cause, all of a nonprobate transfer asset until a judgment is entered with regards to the property and the property is in fact distributed.

As a result of this new development, it is important that when my clients tell me they are divorced, I must inquire further. I need to know if they were divorced after January 1, 2008; and if so, if they have a final judgment on their property issues. If not, I need to see their Status Only Judgment of Dissolution to know if the Court imposed a California Family Code section 2337(c)(7A) condition on the termination of their marital status so I know how to proceed with their estate planning.

If you are contemplating a divorce and you are concerned about your spouse getting your estate upon your death because that is what your Will or living trust provides, then speak with me about resolving this issue. I am an estate planning attorney and can help.

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For the purpose of determining inheritance when there is no Will or other instrument disposing of property (called “intestate succession”) by, through, or from a person, California Probate Code Section 6450 provides that a relationship of parent and child exists in the following circumstances:

(a) The relationship of parent and child exists between a person and the person's natural parents, regardless of the marital status of the natural parents.

(b) The relationship of parent and child exists between an adopted person and the person's adopting parent or parents.

California Probate Code Section 6452 says that if a child is born out of wedlock, neither a natural parent nor a relative of that parent inherits from or through the child on the basis of the parent and child relationship between that parent and the child unless both of the following requirements are satisfied:

(a) The parent or a relative of the parent acknowledged the child.

(b) The parent or a relative of the parent contributed to the support or the care of the child.

For answers to this and other probate questions, please call Mitchell A. Port at (310) 559-5259.

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When you have a California living trust, generally the trust is revocable while you are alive. That means no one has the right to ask to see it and it's contents remain private. However, when either you or your spouse dies, a part or all of your California living trust becomes irrevocable. Once your trust becomes irrevocable, it's contents are no longer private and any beneficiary can request a copy of it. California Probate Code Section 16061.5(a) provides that:

"When a revocable trust or any portion of a revocable trust becomes irrevocable because of the death of one or more of the settlors of the trust, or because, by the express terms of the trust, the trust becomes irrevocable within one year of the death of a settlor because of a contingency related to the death of one or more of the settlors of the trust, the trustee shall provide a true and complete copy of the terms of the irrevocable trust, or irrevocable portion of the trust, to any beneficiary of the trust who requests it and to any heir of a deceased settlor who requests it."

A California probate attorney may be helpful in this and other estate matters. For a consultation, call Mitchell A. Port at (310) 559-5259.

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Last week, California's governor approved a bill providing that on and after January 1, 2010, any instrument, whenever executed, that became irrevocable on or after January 1, 2001 the law regarding no contest clauses will change.

Existing law, in relation to wills, trusts, and other instruments, defines and regulates no contest clauses, which are provisions in otherwise valid instruments that, if enforced, penalize beneficiaries if the beneficiaries file a contest with the court. Existing law provides that a no contest clause in a will or a trust is generally enforceable and defines a "contest" and "direct contest" in this regard. Existing law provides that certain actions do not constitute a contest unless expressly identified in the no contest clause as a violation. Existing law exempts certain contests from the enforcement of the no contest clause under specified circumstances, including if there is reasonable cause to believe that instrument has been revoked. Existing law permits a beneficiary to apply to a court for a determination of whether a particular motion, petition, or other act by the beneficiary would be a contest within the terms of a no contest clause.

This bill, beginning January 1, 2010, would revise, recast, and clarify these provisions. The bill would limit the application of a no contest clause to specific contests. The bill would redefine "direct contest," and would provide that a no contest clause may be enforced against a direct contest only when it is brought without probable cause, which the bill would define for these purposes. The bill would delete the provisions regarding the authority of a beneficiary to apply to a court for a determination regarding a no contest clause, as described above.

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California probate law says that if the person who died left property worth $100,000 or less, then the proper person may claim the property without using the probate court in Los Angeles County, Ventura County, Santa Barbara County, Orange County or any other county throughtout California.

Here is what the California Probate Code provides to avoid probate:

If the gross value of the decedent's real and personal property in this state does not exceed one hundred thousand dollars ($100,000) and if 40 days have elapsed since the death of the decedent, the successor of the decedent may, without procuring letters of administration or awaiting probate of the will, do any of the following with respect to one or more particular items of property:

(a) Collect any particular item of property that is money due the decedent.

(b) Receive any particular item of property that is tangible personal property of the decedent.

(c) Have any particular item of property that is evidence of a debt, obligation, interest, right, security, or chose in action belonging to the decedent transferred, whether or not secured by a
lien on real property.

Continue reading "Avoid Probate In California" »

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Of the many probates I work on as a probate lawyer in Los Angeles County, Ventura County, Santa Barbara County and Orange County, California, I often am asked before starting work what can my client look forward to spend for the entire matter.

California probate costs are fairly standard since the procedures are uniform throughout the State. Other articles on this subject include:

"Los Angeles Times Discusses Estate Planning And Probate"

"California Probate Court - Court Rules"

"California Probate Costs"

Here's a breakdown:

The cost to file for probate is $320 no matter what is the value of the estate. Before the law changed in March, 2008 when the California Court of Appeal issued its ruling in the Estate of Pierre P. Claeyssens, eight different incremental amounts were charged as filing fees and the schedule can be found here.

Next, a publication fee is charged by the local newspaper where the decedent died which announces the person’s death and how interested persons can contact the attorney, executor or administrator. The cost to run legal notice depends on the area, but fees can generally be between $350 to $500.

An appraisal by a court-appointed independent third party (a probate referee) is necessary if there are real property or other non-cash assets in the estate. The probate referee ordinarily charges 1/10 of 1% of the appraised value in each case plus miscellaneous charges (e.g., mileage, photos).

Often a bond must be posted by the executor or administrator to insure that if the value of the probate property declines as a result of the executor’s or administrator’s misconduct, a bond will make the estate whole again. Obtaining such a probate bond can be costly and depends on the value of the property subject to the bond. If there is a Will and if it waives the bond requirement, then the California Probate Court will often - but not always - waive the bond.

The costs of paying the mortgage, property taxes and homeowner's insurance for the real property need to be paid as well so as to avoid foreclosure by the lender or the imposition of a lien by the local tax authority.

Attorney's fees are also based on the value of the gross estate. The fee is calculated based on a statutory formula. The fees are 4% of the first $100,000 of the estate, 3% of the next $100,000, 2% of the next $800,000, 1% of the next $9,000,000, and 1/2% of the next $15,000,000. For estates larger than $25,000,000, the court will determine the fee.

The fee for the executor or administrator is the same fee based on the same rate as attorney's fees are calculated. Fee discounts are subject to the probate attorney's, executor's or administrator's discretion.

To discuss this and other probate questions, call Mitchell A. Port at 310.559.5259.

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I read an ad and it went something like this:

"There's really no difference between law firms."

Many people believe that Los Angeles law firms are pretty much the same. I don't. I believe that what separates me from the pack is not what I do, but how I do it - aggressive not conservative, team player and not a one-man-band, problem solver not just a legal practitioner. My clients clearly understand and value this difference. How can I help you? Contact Mitchell A. Port at (310) 559-5259.

I liked this because it describes me and my practice. If you need help with probate, Wills, living trusts, powers of attorney, tax problems or business transactions, please call me for your consultation.

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The American Bar Association published an interesting article in its "Probate & Property" online magazine written by attorney Karen S. Gerstner of Houston, Texas entitled "A Message to Clients . . . Avoiding Probate Court Litigation". The material Ms. Gerstner discusses applies to probates in California as well.

Here is an excerpt of her article:

"How to Avoid Probate Litigation

"Don’t do things that could cause serious legal consequences without first discussing them with legal or other advisors. Come in for a “check up” on a regular basis and be prepared to discuss every issue and concern. Follow through on necessary “homework” such as account titling and beneficiary designation matters (see above). Plan ahead for possible mental incapacity by having the appropriate documents in place. Make sure the persons appointed to fiduciary positions are completely trustworthy and responsible.

"If a nonstandard estate plan is being implemented, use stronger techniques (such as a funded living trust) and additional provisions (such as a “no contest” clause). Consider creating a “will wall”: a series of wills executed over a lengthy period of time, designed to make it undesirable for a relative who the client wishes to “cut out” (or treat less favorably) to contest the will, so that if the last will is successfully contested, the contestant will still have to contest the prior will, which, through advance planning, would have been prepared to provide even less generous gifts to the contestant than the last will (and so on).

"In discussions with family members, the client should explain the reasons for the plan being implemented, although the client will need to be careful to state the reasons in a way that is calm and rational (“incendiary” statements will only add fuel to the fire and could be detrimental in a will contest).

"Not all probate litigation can be prevented, of course, but a large portion of probate litigation can be prevented by good planning. Good planning is what estate planning is all about."

If you have probate litigation questions, please call attorney Mitchell A. Port for probate help.

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The question I sometimes hear as part of my California probate law practice from clients after the death of a loved one is: “What do I need to do now?” Not all of the points below will apply to all Decedents, but many of them will. What follows should be considered when a close friend or relative dies who owns property in Los Angeles County, Santa Barbara County, Ventura County or Orange County, California:

1. If the death occurs at home, you may need to contact a local police officer or coroner.

2. Notify family and friends. You may want to consider having family members contact others to save yourself some time on the phone during a stressful period.

3. If the Decedent wished, a donation of body parts and tissues should be considered.

4. If a doctor is not present, notify a doctor or coroner in order to obtain a death certificate.

5. Contact a funeral home concerning burial or cremation arrangements.

6. Look for instructions which the Decedent may have left regarding preferences for funeral and burial arrangements.

7. Complete funeral and burial arrangements.

8. Determine if the Decedent belonged to a burial or memorial society that may make special arrangements for the funeral, such as military honor guards.

9. Contact the Social Security Administration and any other government agencies or benefit program that may be making payments to the Decedent. (Note that the payment for the month of death will not be made by the Social Security Administration and others.)

10. Review the Decedent’s financial affairs and look for any estate planning documents, such as Wills and Trusts, along with any other relevant documents, including:

Continue reading "What To Do When Someone Dies" »

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The Federal estate tax is a tax on the right to transfer property at death. The tax, reported on Form 706, United States Estate (and Generation Skipping Transfer) Tax Return, is applied to estates for which at-death gross assets, the "gross estate," exceed the filing threshold. Included in gross estate are real estate, cash, stocks, bonds, businesses, and decedent-owned life insurance policies. Deductions are allowed for administrative expenses, indebtedness, taxes, casualty loss, and charitable and marital transfers. The taxable estate is calculated as gross estate less allowable deductions.

The IRS Estate Tax page provides further information concerning the estate tax. Covered are topics including:

Frequently Asked Questions on Estate Taxes Gift Tax

Frequently Asked Questions on Gift Taxes

Filing Estate and Gift Tax Returns

Forms and Publications - Estate and Gift Tax

Publication 950, Introduction to Estate and Gift Taxes

What's New - Estate and Gift Tax

Once you have accounted for the Gross Estate, certain deductions (and in special circumstances, reductions to value) are allowed in arriving at your "Taxable Estate." These deductions may include mortgages and other debts, estate administration expenses, property that passes to surviving spouses and qualified charities. The value of some operating business interests or farms may be reduced for estates that qualify.

After the net amount is computed, the value of lifetime taxable gifts (beginning with gifts made in 1977) is added to this number and the tax is computed. The tax is then reduced by the available unified credit. Presently, the amount of this credit reduces the computed tax so that only total taxable estates and lifetime gifts that exceed $1,000,000 will actually have to pay tax. In its current form, the estate tax only affects the wealthiest 2% of all Americans.

Most relatively simple estates (cash, publicly-traded securities, small amounts of other easily-valued assets, and no special deductions or elections, or jointly-held property) with a total value under $1,000,000 do not require the filing of an estate tax return. The amount was $1,500,000 in 2004 and 2005. For 2006 through 2008, the amount is raised to $2,000,000.

To maximize your estate tax planning opportunities, call Mitchell A. Port at 310.559.5259.

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The 2006 version of Form 706 asks if decedent ever transferred an interest in a closely held entity to certain trusts that are in existence at the decedent’s death. (Part 4, Question 12e). Be careful in looking for technical ways to avoid this question. One way around the question would be to terminate the trusts before the client’s death. But that is not practical in many situations. If the planner is “too clever,” the IRS may say the planner is being misleading and allege a Circular 230 violation. Even if the planner could avoid the current question, the IRS can change the form in the future in reaction to clever plans to avoid the question.

This new question applies retroactively to all transfers made by decedents filing the new Form 706. This question highlights the desirability of reporting sales of discounted interests in closely-held entities on a gift tax return. Eventually the IRS will learn about this transaction.

Recognize that the question only applies to transfers to trusts and not to transfers to individuals.

For decedents dying between 12/31/06 and 1/1/08, the new Form 706 (dated September 2007) makes several additional changes including the following: (a) The instructions on the reverse side of Schedule F lists detailed information that must be supplied to support any valuation discounts of assets listed on Schedule F; (b) any foreign account for which the decedent has an interest or signature authority must be disclosed (Part 4, new question 14); and (c) any private annuity being received by the decedent must be disclosed (Part 4, question 15).

Completing this form can be highly complex. If you need a referral to a qualified tax return preparer experienced with preparing Form 706, Mitchell A. Port can provide tax help.

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This information is not intended to be a substitute for proper estate planning. Writing your own will may result in unintended consequences, misinterpretation and perhaps litigation. Probate will not be avoided. I have listed many of the steps necessary to write your own will even though I advise against it.

To write a holographic will as a California resident, the following steps should be taken:

1. Use a completely blank sheet of paper (no letterhead, no logo, nothing on it)

2. Write the entire will in your own handwriting

3. State your name and that you are of sound mind and not under any duress to write a will

4. State the county in which you reside

5. State that it is your last will and that it supersedes all prior wills

6. State who you are married to, if you are married, and if not, so state

7. State the names of your children, if any, and if none, so state. If you have children and they are minors, list those people in an order of priority who will be guardians

8. List those people in an order of priority who will be executors

9. State that bond is waived for any executor (and guardian – if you have children) who serves

10. State who is going to inherit what property, for example, “I leave my spouse all of my interest in any property whether real or personal, including but not limited to our home on _________, Drive, my nut company on __________, Drive, my real estate on ____________ Drive, all of my cash and investments, and all the rest of my property wherever located. If my spouse does not survive me, I leave all of my interest in said property in equal shares to my children.”

11. State who else gets something by mentioning their name(s) and what they get. Add that if either the person named is not living at the time of your death or if the property is no longer a part of your estate, then the gift to that person lapses.

12. If applicable, state your intent to disinherit anyone who contests the will. For instance: “Except as otherwise provided in this Will, I have with full knowledge omitted to provide for my children and heirs, or any others who might feel entitled to some portion of my estate. I have carefully considered the needs and abilities of my family and after such consideration have disposed of my estate in the manner provided in this Will. Should any beneficiary named in this Will, or the parent of any beneficiary named in this Will, or any person claiming through a beneficiary named in this Will, or any person claiming to be an heir, directly, indirectly, singly or in conjunction with other persons, attack this Will, or contest any of its provisions, or contest any trust established by me, or seek to impair or invalidate any part or provision of my estate plan, or conspire or cooperate with anyone attempting to do any of the aforesaid, such person's interest (or if such person has no interest, but his or her child has an interest in my estate or any trust established by me, then such child's interest) in my estate is revoked and shall be forfeit and distributed as if such person (or the child of such person) had predeceased me and any generation-skipping transfer taxes caused by reason of such forfeiture shall be charged to and paid from such property without the benefit of the use of any of generation-skipping transfer tax exemption.”

13. Sign and date the document without any witnesses or a notary. Do not let anyone else sign as a witness and do not have the will notarized

This does not avoid probate and should not be used as a substitute for a complete estate plan. Consultation with an estate planning attorney like Mitchell A. Port at 310.559.5259 is strongly advised.

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The California probate court, in particular the Los Angeles Superiour Court sitting in probate, publishes online its Probate Court Rules . The probate court rules begin in Chapter 10. These court rules provide the court and those who use the probate court with guidance on how the system works. What follows is a table of contents for those California probate court rules which you can use to decide whether to pursue obtaining more information from the court website itself.

GENERAL PROVISIONS

10.0 APPLICABILITY OF RULES
(a) Applicability of Rules
(b) Rules of Construction
(c) Jurisdiction

10.1 EXCUSE FROM COMPLIANCE

10.2 PROBATE COURT INFORMATION
(a) District Courts Hearing Probate Matters
(b) Addresses and Telephone Numbers and Calendaring Information

10.3 PROBATE ATTORNEY'S NOTES
(a) Probate Notes Available on the Web
(b) Clearing Probate Notes
(c) Updated Probate Notes
(d) Failure to Clear Probate Notes

10.4 PROBATE NOTE ABBREVIATIONS

HEARINGS, EX PARTE PROCEDURES AND TRIALS

10.5 SETTING OF PROBATE MATTERS

10.6 RESETTING PETITIONS

10.7 CENTRAL DISTRICT - PROBATE LAW AND MOTION MATTERS
(a) Setting for Probate Law and Motion Matters
(b) Filing Oppositions, Joinders and Replies to Opposition in Law and Motion Matters

10.8 EX PARTE PROCEDURES
(a) Time for Ex Parte Matters in Central District
(b) Time for Ex Parte Matters in District Courts
(c) Preliminary Considerations
(d) Ex Parte Procedures

10.9 PROBATE HEARINGS CANNOT BE ADVANCED

10.10 CONTINUANCES OF NON-TRIAL MATTERS
(a) Continuances of Matters Not Ready for Hearing
(b) Continuances Pursuant to Stipulation
(c) Continuance To Permit Filing of Objections/Responses
(d) Notice of Continued Matters

10.11 CONTINUING PROBATE LAW AND MOTION MATTERS

10.12 TRIALS ON CONTESTED MATTERS IN CENTRAL DISTRICT
(a) Trial Setting
(b) Joint Trial Statements for All Contested Matters
(c) Continuances
(d) Motions in Limine

TRANSFERRING, CONSOLIDATING, AND RELATING CASES

10.13 TRANSFERS FROM ONE DISTRICT TO ANOTHER

10.14 CONSOLIDATION AND/OR TRANSFER OF CASES

10.15 RELATED CASES
(a) Related Probate Cases
(b) Relating Probate Cases To Non-Probate Cases

PLEADINGS

10.16 DOCUMENT FILINGS REQUIRE DEPARTMENT NUMBER AND HEARING DATE

10.17 DOCUMENT FILING REQUIREMENTS
(a) Reproducing Judicial Council Forms
(b) Filing Requirements to Facilitate Document Scanning

10.18 SUPPLEMENTAL AND AMENDED PLEADINGS
(a) Supplemental Pleadings
(b) Amended Pleading

10.19 OPPOSITION AND REPLY PLEADINGS

10.20 ORDERS
(a) Orders in Contested Proceedings
(b) Use of Judicial Council Form Orders
(c) Probate Volunteer Panel (PVP) Attorney's Approval of Orders
(d) Material To Be Included In Probate Orders
(e) Riders and Exhibits
(f) Nunc Pro Tunc Orders

10.21 ISSUANCE OF LETTERS TO PERSONAL REPRESENTATIVES OF DECEDENTS'ESTATES
(a) Issuance of Letters
(b) Multiple Representatives
(c) Confidential Supplement To Duties and Liabilities of Personal Representative

PROVISIONS COMMON TO VARIOUS CASE TYPESAND MISCELLANEOUS PROCEEDINGS

10.22 MOTIONS TO WITHDRAW AS ATTORNEY OF RECORD - CITATION REQUIRED FOR FIDUCIARY

10.23 PARTY TO GIVE NOTICE
(a) Party To Give Notice
(b) Undelivered Notice

10.24 PETITION TO DETERMINE TITLE TO REAL OR PERSONAL PROPERTY
(a)10.0 Caption and Setting
(b)10.0 Notice of Hearing

10.25 APPRAISAL OF PERSONAL PROPERTY BEFORE SALE

10.26 SALES OF REAL PROPERTY
(a) Published Notice for Private Sales of Real Estate
(b) Sale of Specifically Devised Real Property
(c) Increased Bid Forms
(d) Real Estate Commissions

10.27 BORROWING AND REFINANCING
(a) Petition
(b) Inventory and Appraisal

10.28 REDUCTION AND WAIVER OF BOND
(a) Court Order Required to Increase or Decrease Bond or Substitute Surety
(b) Description of Bonds in Accounts
(c) Request for Bond Waiver In Decedents' Estates Proceedings
(d) Appearance Required In Decedents' Estate Proceedings

10.29 BANK STATEMENTS AND BLOCKED ACCOUNTS
(a) Decedents' Estates and Trusts
(b) Reconciliation
(c) Confidential Financial Statements
(d) Blocked Accounts

10.30 ACCOUNTS AND REPORTS SUFFICIENCY OF BOND TO BE STATED

10.31 PAYMENT AND REIMBURSEMENT OF COSTS
(a) Non-reimbursable Costs
(b) Discretionary Reimbursement

10.32 FINDINGS AS TO CHARACTER OF PROPERTY
(a) Facts Establishing Community or Quasi-community Property Character of Assets
(b) Documents Supporting Community or Quasi-community Property Character of Assets
(c) Copies of Deeds To Be Attached
(d) Will as Basis for Passing Decedent's Property
(e) Petitioner Is Not the Spouse or Domestic Partner
(f) Spousal or Domestic Property Petitions, Findings Regarding Character of Property

10.33 AFFIDAVITS FOR REAL PROPERTY OF SMALL VALUE PROBATE CODE SECTION 13200 ET SEQ12
(a) Decedent Died Testate
(b) Decedent Died Intestate

DECEDENTS' ESTATES PROCEEDINGS

10.34 APPOINTMENT OF SPECIAL ADMINISTRATORS
(a) Notice
(b) Preference
(c) Bond

10.35 DECLINATIONS AND CONSENTS TO ACT
(a) Declination of Named Executor
(b) Consent to Act

10.36 APPOINTMENT OF PUBLIC ADMINISTRATOR
(a) Appointment
(b) Notice

10.37 PROOF OF WILLS AND CODICILS
(a) Self Proving Wills and Codicils
(b) Non-Self Proving Wills

10.38 FOREIGN LANGUAGE WILL

10.39 SUBSEQUENT PETITIONS FOR PROBATE

10.40 INCORPORATED CITIES IN LOS ANGELES COUNTY

10.41 NOTICE TO CREDITORS
(a) Notice To Known and Reasonably Ascertainable Creditors
(b) Claims by Public Entities

10.42 CREDITOR'S CLAIMS
(a) Creditor's Claims of Personal Representatives or Their Attorneys
(b) Funeral and Interment Claims

10.43 NOTICE OF PROPOSED ACTION
(a) A Notice of Proposed Action
(b) Notice Filed with the Court
(c) Petitions for Distribution

10.44 PETITION FOR FAMILY ALLOWANCE
(a) Ex Parte Petitions
(b) Limitation on Period of Family Allowance
(c) Reasonableness and Eligibility

10.45 HEIRSHIP DETERMINATIONS
(a) Notice of Hearing
(b) Notice to Attorney General
(c) Contents of Petition
(d) Genealogical Chart
(e) Escheat

10.46 PETITIONS FOR INSTRUCTIONS
(a) Limitations
(b) Specifying Instruction

10.47 COLLECTION OF DAMAGES FOR WRONGFUL DEATH/PHYSICAL INJURY OR PROPERTY DAMAGE
(a) Wrongful Death Damages
(b) Physical Injury or Property Damages
(c) Court Approval Required

10.48 PETITIONS FOR PRELIMINARY AND FINAL DISTRIBUTION
(a) Schedule of Creditors' Claims
(b) Medi-Cal Recipient
(c) Heir Confined In a Correctional Facility

10.49 PAYMENT OF COSTS OF ADMINISTRATION

10.50 ALLEGATIONS REGARDING CREDITORS

10.51 MEDI-CAL NOTIFICATION

10.52 INHERITANCE TAXES FOR DECEDENTS DYING BEFORE JUNE 8, 1982

10.53 GUIDELINES FOR ATTORNEY COMPENSATION

10.54 ALLEGATION RE CHARACTER OF PROPERTY

10.55 PROVISIONS RE SURVIVORSHIP

10.56 DESCRIPTION OF DISTRIBUTEES
(a) Names and Addresses
(b) Age of Minors and Others

10.57 ORDERS ESTABLISHING TESTAMENTARY TRUSTS
(a) Appointment of Testamentary Trustee Prior To Distribution
(b) Orders Establishing Testamentary Trusts

10.58 DOCUMENTS TO BE ON FILE BEFORE ORDER FOR DISTRIBUTION OF DEVISE TO MINOR OR FIDUCIARY
(a) Distributions To Minors
(b) Distribution To Court Appointed Fiduciary

10.59 POST DECEASED DISTRIBUTEES, DISTRIBUTION PURSUANT TO PROBATE CODE SECTION 13100 ET SEQ18
(a) Post Deceased Distributee Died Testate
(b) Post Deceased Distributee Died Intestate

10.60 ASSIGNMENT OR TRANSFER OF INTEREST IN ESTATE
(a) Notification To Court
(b) Written Assignment or Transfer of Interest
(c) Distribution Care-of Attorney

10.61 RECEIPTS OF DISTRIBUTION
(a) Distributee Receipts
(b) Recorded Deed or Order In Lieu of Distributee's Receipt

GUARDIANSHIP PROCEEDINGS

10.62 APPOINTMENT OF GUARDIANS
(a) Single Petition for Multiple Minors
(b) PRO 003 Must Be Filed with Petition
(c) Appointment of Non-Relative Guardians

10.63 GUARDIANSHIP ACCOUNTS OR WAIVERS OF ACCOUNTS
(a) Separate Accounting for Each Minor
(b) Waiver of Accounting When a Ward Reaches Majority

CONSERVATORSHIP PROCEEDINGS

10.64 APPOINTMENT OF CONSERVATORS
(a) PRO 003 Must Be Filed with Petition
(b) Appointment of Private Professional Conservators

10.65 LANTERMAN-PETRIS-SHORT (LPS) CONSERVATORSHIP
(a) LPS Conservatorship Proceedings
(b) Notice to LPS Conservator

10.66 NOTICE OF ESTABLISHMENT OF CONSERVATORSHIP

10.67 CONSERVATORSHIP CARE PLAN
(a) LASC Form Care Plan
(b) Mailing Copy of Conservatorship Care Plan to Court Investigator

10.68 COURT INVESTIGATOR'S ASSESSMENTS

10.69 RESIGNATION OF CONSERVATOR
(a) Effective Date of Resignation
(b) Final Account of Resigning Conservator

10.70 NOTICES RE FINAL ACCOUNT UPON DEATH OF CONSERVATEE

RULES COMMON TO CONSERVATORSHIP PROCEEDINGS,GUARDIANSHIPS PROCEEDINGS AND/ORTRUSTS CREATED OR FUNDED BY COURT ORDER

10.71 CONSERVATOR'S OR GUARDIAN'S INDEPENDENT POWERS

10.72 INVENTORY AND APPRAISAL OF BENEFITS

10.73 ACCOUNTS, REPORTS AND CONSERVATOR/GUARDIAN COMPENSATION
(a) Reconciliation of Financial Statements
(b) Allegation Regarding Sufficiency of Bond
(c) Allegation Regarding Blocked Accounts
(d) Insured Accounts
(e) Vesting of Accounts
(f) Court Investigator's Assessments
(g) Conservator Compensation
(h) Hearings for Approval of Conservatorship/Guardianship Accounts To Be Coordinated With Hearings For Approval of Trust Accounts

10.74 ACCOUNTS AND INVENTORIES AND APPRAISALS - CONSERVATORS AND TRUSTEES OF TRUSTS SUBJECT TO THE COURT'S CONTINUING JURISDICTION
(a) Mailing Copies to the Court Investigator's Office
(b) Lodging Original Financial Statements with the Court

TRUST PROCEEDINGS

10.75 MULTIPLE PROBATE CODE SECTION 17200 ET SEQ. PETITIONS CONCERNING ONE TRUST

10.76 PETITIONS TO CONFIRM SALE OF TRUST REAL PROPERTY

10.77 SETTLEMENTS INVOLVING CHARITABLE TRUSTS

10.78 TESTAMENTARY TRUSTEES' ACCOUNTS

SETTLEMENTS OR JUDGMENTS INVOLVING MINORS ORPERSONS WITH DISABILITIES, TRUSTS FUNDED OR ESTABLISHED PURSUANT TO COURT ORDER

10.79 SETTLEMENTS OR JUDGMENTS RELATING TO CLAIMS OF MINORS OR PERSONS WITH DISABILITIES (INCLUDING ESTABLISHMENT AND FUNDING OF TRUSTS)
(a) Proper Court To Approve Settlement
(b) Disposition of Proceeds
(c) Petition to Compromise Claim
(d) Orders
(e) Post Judgment Procedures

10.80 TRUSTS CREATED OR FUNDED PURSUANT TO COURT ORDER INCLUDING CIVIL JUDGMENT
(a) Trusts Created or Funded By Court Order
(b) Additional Trust Requirements
(c) Rule Does Not Apply to Trusts Under $20,000

10.81 SPECIAL NEEDS TRUST CREATED BY COURT ORDER/JUDGMENT

10.82 NEW COURT PROCEEDINGS REQUIRED FOR TRUSTS ESTABLISHED UNDER PROBATE CODE SECTION 2580 OR 3100

PROBATE VOLUNTEER PANEL ATTORNEYS

10.83 PROBATE VOLUNTEER PANEL GENERAL ELIGIBILITY REQUIREMENTS AND PROCEDURES FOR APPOINTMENT TO THE PANEL
(a) Active Status with the State Bar
(b) Submit Application and Compliance Statement
(c) Educational and MCLE Requirements
(d) Professional Liability Insurance

10.84 PROBATE VOLUNTEER PANEL - REQUIREMENTS FOR SPECIFIC AREAS OF INTEREST
(a) General Requirements for Specific Areas of Interest
(b) MCLE Requirements for Specific Areas of Interest

10.85 ETHICAL GUIDELINES

10.86 PVP ATTORNEY APPOINTMENTS ARE PERSONAL

10.87 WRITTEN REPORTS AND COMPENSATION FOR COURT-APPOINTED ATTORNEYS
(a) Written Reports
(b) Compensation for PVP Attorneys

APPENDIX A COMMONLY USED ABBREVIATIONS
APPENDIX B TABLE OF INCORPORATED CITIES
APPENDIX C LOS ANGELES SUPERIOR COURT GUIDELINES ONATTORNEY COMPENSATION AND COSTS IN DECEDENTS' ESTATES
APPENDIX D REQUESTING COMPENSATION FOR THE PROFESSIONAL CONSERVATOR

Continue reading "California Probate Court - Court Rules" »

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California probate law says that if the person who died left property worth $100,000 or less, then the proper person may claim the property without using the probate court in Los Angeles County, Ventura County, Santa Barbara County, Orange County or any other county throughout California. No probate lawyer is necessary.

Here is what California Probate Code says to avoid probate:

If the gross value of the decedent's real and personal property in this state does not exceed one hundred thousand dollars ($100,000) and if 40 days have elapsed since the death of the decedent, the successor of the decedent may, without procuring letters of administration or awaiting probate of the will, do any of the following with respect to one or more particular items of property:

(a) Collect any particular item of property that is money due the decedent.

(b) Receive any particular item of property that is tangible personal property of the decedent.

(c) Have any particular item of property that is evidence of a debt, obligation, interest, right, security, or chose in action belonging to the decedent transferred, whether or not secured by a
lien on real property.

Continue reading "Avoid Probate In California" »

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The Internal Revenue Service has many forms and free publications on a wide variety of topics to help you understand and meet tax obligations, reporting and filing requirements. If you need IRS materials try one of these ways:

Walk-in: During the tax-filing season, many libraries and post offices offer free tax forms. Some libraries also have copies of commonly-requested publications. Braille materials may also be available. Many large grocery stores, copy centers, and office supply stores have forms you can photocopy or print from a CD.

Internet: You can access forms and publications on the IRS website 24 hours a day, 7 days a week, at IRS.gov.

Mail: Send your order for tax forms and publications to National Distribution Center, P.O. Box 8903, Bloomington, IL 61702-8903. You should receive your products within 10 days after we receive your order.

Phone: Call 800-TAX-FORM (800-829-3676) to order current year forms, instructions and publications and prior year forms and instructions. You should receive your order within 10 days.

Try these links:

Publication 2053A, Quick and Easy Access to IRS Tax Help and Forms (PDF 40K)

Publication 910, Guide to Free Tax Services (PDF 636K)

Need other tax help? Have other tax problems you wish to discuss with a California tax attorney? Call Mitchell A. Port at 310.559.5259.

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To begin a probate in California, someone files a petition for probate so as to be appointed either as the executor or as the administrator. In California the word “Executor” is used when there is a Will and the word “Administrator” is used when the someone dies without a Will.

Who gets to serve as the Administrator in a California probate proceeding? Depending on a person’s relation to the decedent, the California Probate Code provides that those in the following order of priority are the first ones to be appointed by the probate court:

(a) Surviving spouse or domestic partner.
(b) Children.
(c) Grandchildren.
(d) Other issue.
(e) Parents.
(f) Brothers and sisters.
(g) Issue of brothers and sisters.
(h) Grandparents.
(i) Issue of grandparents.
(j) Children of a predeceased spouse or domestic partner.
(k) Other issue of a predeceased spouse or domestic partner.
(l) Other next of kin.
(m) Parents of a predeceased spouse or domestic partner.
(n) Issue of parents of a predeceased spouse or domestic partner.
(o) Conservator or guardian of the estate acting in that capacity
at the time of death who has filed a first account and is not acting
as conservator or guardian for any other person.
(p) Public administrator.
(q) Creditors.
(r) Any other person.

Want to discuss being appointed as the California executor or California administrator in a probate? Call Mitchell A. Port at 310.559.5259 for a consultation.

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The Sacramento (California) public law library has an organized and easy-to-use list of probate law resources that is extraordinary. In the index is a listing of information about probate law topics which include wills, trusts, estate planning, estate administration, conservatorships, and guardianships.

Specifically, the resources and references include:

Self-Help Books

Legal Encyclopedias & Law Summaries

Practice Guides

Forms

Statutes & Court Rules

Probate Assistance

Within each of these listed topics are numerous and very helpful sub-categories worth looking at.

If you need help with probate in California and want to speak with an experienced probate lawyer, call Mitchell A. Port at 310.559.5259.

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Avoiding probate when the value of the personal property is $100,000 or less is easy. The Los Angeles County Superior Court has a step-by-step explanation in addition to providing the appropriate form. Click here for the information.

If your circumstances do not fit this format, then you may require help from a Los Angeles probate attorney. Call Mitchell A. Port for probate help at 310.559.5259.

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The filing fee paid to the California Superior Court to open a probate and file a petition for probate has been changed for 2008. The initial filing fee is now $320.00 for California probate matters.

Until very recently, the Los Angeles Superior Court website and no other website provided any notice of the change. I’ve learned that some California probate lawyers were surprised.

The filing fee is based on the inventory value of the estate. The filing fee used to be calculated on the estimated value of the inventory and was paid at the time the petition for probate was filed. The filing fee schedule is set by Section 70650 of the California Government Code.

The fee structure that was replaced used to provide that when a probate case was opened:

The fee was $320.00 for estates or trusts under $250,000;

the fee was $385.00 for estates or trusts of at least $250,000 and less $500,000;

the fee was $485.00 for estates or trusts of at least $500,000 and less than $750,000;

the fee was $635.00 for estates or trusts of at least $750,000 and less $1,000,000;

Etc….

Now, the fee to file a petition for probate is $320.00 and when the estate closes the estate then pays the applicable filing fee amount based on the actual final inventory prepared during the probate.

So if the estate’s inventoried value is $751,000, the total filing fee is $635.00 and since $320.00 has been paid when the petition was initially filed with the court, the estate will pay directly to the probate court an additional $315.00 before the court will order the estate closed.

Those who file the petition for probate no longer have to advance large sums of money as used to be the case. Now, only $320 is required and later when money is available because the estate is to be closed, any unpaid filing fee will be due from the estate.

Want to start a California probate proceeding? Call a probate lawyer with experience. Call Mitchell A. Port at 310.559.5259.

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California probate law says that if the person who died left property worth $100,000 or less, then the proper person may claim the property without using the probate court in Los Angeles County, Ventura County, Santa Barbara County, Orange County or any other county throughtout California.

Here is what the California Probate Code Sections say to avoid probate:

If the gross value of the decedent's real and personal property in this state does not exceed one hundred thousand dollars ($100,000) and if 40 days have elapsed since the death of the decedent, the successor of the decedent may, without procuring letters of administration or awaiting probate of the will, do any of the following with respect to one or more particular items of property:

(a) Collect any particular item of property that is money due the decedent.

(b) Receive any particular item of property that is tangible personal property of the decedent.

(c) Have any particular item of property that is evidence of a debt, obligation, interest, right, security, or chose in action belonging to the decedent transferred, whether or not secured by a
lien on real property.

Continue reading "Avoid Probate In California" »

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A. Estate Income Tax Clearance Certificates.

For certain estates, California Revenue and Taxation Code Section 19513 prohibits the probate court from allowing the final account of the fiduciary unless the Franchise Tax Board certifies that all taxes have been paid or secured as required by law. The Estate Income Tax Clearance Certificate is only required if an estate meets BOTH of the following TWO requirements:

(1) Had assets with a fair market value exceeding $1,000,000 on the date of death, AND

(2) Is to distribute assets exceeding $250,000 to one or more nonresident beneficiaries.

In determining if the assets exceed $1,000,000, include the fair market value of all assets on date of death, wherever situated, for decedents who were California residents. Nonresident decedents should only include the value of those assets located in California.

In determining if assets exceeding $250,000 are distributable to nonresident beneficiaries, the residency of a trust which is a beneficiary of the decedent’s estate is determined by the residency of the trust’s fiduciaries and beneficiaries.

Before issuing the Estate Income Tax Clearance Certificate, the FTB requires payment of all accrued taxes of the decedent and the estate. The FTB may also require a deposit by check, or bond to secure the payment of any taxes which may later become payable.

The Estate Income Tax Clearance Certificate is valid only to the end of the current taxable year. The FTB will only issue a new Estate Income Tax Clearance Certificate extending the expiration date when a return is filed for each subsequent year and the tax for that year, if any, is paid.

The Estate Income Tax Clearance Certificate is issued to the fiduciary or representative designated on the application. THE ACTUAL FILING OF THE ESTATE INCOME TAX CLEARANCE CERTIFICATE WITH THE COURT IS THE RESPONSIBILITY OF THE FIDUCIARY OR REPRESENTATIVE.

B. Effect of the Estate Income Tax Clearance Certificate and Continuing Liability of the Fiduciary.

The Estate Income Tax Clearance Certificate issued under California Revenue and Taxation Code Section 19513 does not relieve the estate of liability for any taxes due or which may become due from the decedent or the estate. Neither does the certificate relieve the fiduciary of the personal liability for taxes and other expenses as imposed by California Revenue and Taxation Code Section 19516.

C. Other Information.

You do not need to submit a copy of the Final Account of the fiduciary unless the FTB requests it.

The FTB may require fiduciaries to withhold tax on California source income distributed to nonresident beneficiaries. Income from intangible personal property such as interest and dividend income or gain from the sale of stocks or bonds is generally not taxable to a nonresident beneficiary and therefore not subject to withholding. Failure to withhold when required may make the fiduciary personally liable for the amount due.

For information on determining requirements for withholding, telephone (888) 792‑4900 (toll free) or write to: Withholding Services and Compliance Section, Franchise Tax Board, PO Box 942867, Sacramento, CA 94267-0651.

Income earned by the estate in the final year in which its assets are distributed pursuant to a decree of final distribution is taxable to the beneficiaries. The estate must file a final return and properly report the income distribution. You should compute the return for the fractional part of the year prior to death on the basis of the method of accounting followed by the decedent. You can not include income and deductions for expenses, interest, taxes, and depletion accrued solely by reason of death in the return of a decedent for the period in which death occurred. Include those items in the return of the estate or beneficiary, as the case may be, upon receipt or payment.

D. Returns Required.

You must file a final fiduciary return (Form 541) for the year in which the estate closes if the filing requirements are met. You should also file a return to establish any excess deductions allowed to beneficiaries in the final year. The decedents final personal income tax return (Form 540, 540A, 540 2EZ, or Long or Short Form 540NR) must be marked “FINAL” at the top of the return in block letters. In addition, please furnish copies of any other returns filed for the decedent or the estate within the last 12 months. Write “COPY – DO NOT PROCESS” in bold letters on the face of each copy. If you submit original returns with this application, include an additional copy of each return with the words, “COPY – DO NOT PROCESS” in bold letters on the face of each copy. Mail the completed Estate Income Tax Request for Clearance Certificate and required returns to:

Estate Income Tax Clearance Unit, MS F150
Franchise Tax Board
PO Box 1468
Sacramento CA 95812-1468

For more information about this and other California probate matters, contact Mitchell A. Port at 310.559.5259.

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The California State Bar has a very interesting pamphlet offering advice on finding the right lawyer for you in California.

The pamphlet asks about 16 different questions to help you find and hire the right attorney.

The California State Bar has other useful pamphlets on topics such as California Wills, whether you need estate planning and whether you need a living trust in California.

To speak with an attorney in Los Angeles, please call Mitchell A. Port at 310.559.5259.

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The following information, in question and answer form, is not a part of the California Statutory Will. It is designed to help you understand about Wills and to decide if this type of Will meets your needs. Wills do not avoid probate in California. This Will is in a simple form and you can have the form by clicking here. The complete text of each paragraph of this Will is printed at the end of the Will. You may find the answers to all of the questions below in Probate Code section 6240.

1. What happens if I die without a Will?

2. What can a Will do for me?

3. Does a Will avoid probate?

4. What is community property?

5. Does my Will give away all of my assets? Do all assets go through probate?

6. Are there different kinds of Wills?

7. Who may use this Will?

8. Are there any reasons why I should NOT use this Statutory Will?

9. May I add or cross out any words on this Will?

10. May I change my Will?

11. Where should I keep my Will?

12. When should I change my Will?

13. What can I do if I do not understand something in this Will?

14. What is an executor?

15. Should I require a bond?

16. What is a guardian? Do I need to designate one?

17. What is a custodian? Do I need to designate one?

18. Should I ask people if they are willing to serve before I designate them as executor, guardian, or custodian?

19. What happens if I make a gift in this Will to someone and that person dies before I do?

20. What is a trust?

21. What is a domestic partner?

To discuss estate planning or probate with a lawyer, please call Mitchell A. Port at 310.559.5259.

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The California State Bar maintains a very interesting website which provides information about the following California estate planning topics:

DO I NEED ESTATE PLANNING?

1. What Is Estate Planning?
2. What Is Involved in Estate Planning?
3. Who Needs Estate Planning ?
4. What Is Included in my Estate?
5. What Is a Will?
6. What Is a Revocable Living Trust?
7. What Is Probate?
8. To Whom Should I Leave My Assets?
9. Whom Should I Name as My Executor or Trustee?
10. How Should I Provide for My Minor Children?
11. When Does Estate Planning Involve Tax Planning?
12. How Does the Way in Which I Hold Title Make a Difference?
13. What Are Other Methods of Leaving Property?
14. What If I Become Unable to Care for Myself ?
15. Who Should Help Me With My Estate Planning Documents?
16. How Do I Find a Qualified Lawyer?
17. Should I Beware of Someone Who Is a "Promoter" of Financial and Estate Planning Services?
18. What Are the Costs Involved In Estate Planning?

You may also want to look at my website: www.AskMyAttorney.net for more information.

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Under Internal Revenue Code section 6166, an estate that meets all of the requirements of the statute may elect to pay the estate tax attributable to the decedent’s interest in a closely held business in up to 10 equal, annual installments. The first of those annual payments must be made by the 5th anniversary of the due date of the estate tax liability that is not deferred under section 6166.

An estate qualifies for a section 6166 election if the value of the decedent’s interest in the closely held business exceeds 35 percent of the adjusted gross estate, the decedent was a United States citizen or resident at the time of his or her death, and the estate made the election by attaching a full and complete notice of election with a timely filed federal estate tax return.

If the estate qualifies for the election, the estate pays a reduced rate of interest on the portion of estate tax deferred under section 6166; that interest is payable annually during the entire deferral period, and in most instances, interest only is paid during the first four years of the deferral period. The deferred tax is payable in no more than ten equal annual installments, beginning on a date that is not more than five years after the due date of the Federal estate tax return, which is generally nine months from the date of death.

Continue reading "Estate Tax Installment Payments" »

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In California, you can make a will in one of three ways:

A will prepared by a California lawyer. A qualified estate planning lawyer can make sure that your will conforms with California law. The California attorney can also offer suggestions and help you understand the many ways that property can be transferred to or for the benefit of your beneficiaries. I, as a California lawyer, can also help you develop a complete estate plan and offer alternative plans which may save taxes. This kind of planning can be extremely helpful and economical in the long run for you and your beneficiaries. No matter what kind of will you use, the will should be solely your will and not a joint will with your spouse or any other person.

Also, keep in mind that your will is not a living will. The term living will is used in many states to describe a legal document stating that you do not want life-sustaining treatment if you become terminally ill or permanently unconscious.

A statutory will. California law provides for a “fill-in-the-blanks” will form. The will form is designed for people with relatively small estates. If there is anything you do not understand or if you are making any provisions which are complicated or unusual, you should ask a qualified lawyer to advise you.

A handwritten or holographic will. This will must be completely in your own handwriting. You must date and sign the will. Your handwriting has to be legible, and the will must clearly state what you are leaving and to whom. A handwritten will does not have to be notarized or witnessed. However, any typed material in a handwritten will may invalidate the will. A typed will must be signed by two witnesses. It is a good idea to consult with a qualified lawyer to make sure your will conforms with California law and does not have any unintended consequences.

Continue reading "The Case Against A Holographic Will" »

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Last weekend, the Los Angeles Times Business section ran a front page article on estate planning entitled "Estate Planning Can Help You Rest Easier; Protect Your Heirs and Property By Making Sure Your Wishes Are Clear". It is reprinted here so you can easily read why in California an estate plan can avoid probate problems, family fighting and save taxes. Here's the article:

Continue reading "Los Angeles Times Discusses Estate Planning And Probate" »

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Evolving from its Spanish provincial past over 200 years ago, the Los Angeles Judicial System has developed and grown into an organization that provides services to the largest metropolitan area in California. The Superior Court provides services to over 11 million residents who live and work throughout Los Angeles County. In over 150 years of existence, the courts have grown along with the geographic expansion of the Southern California region.

Useful links to ALL Los Angeles County Courts are here.

Continue reading "SPOTLIGHT #1: About The Los Angeles Court" »

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A durable power of attorney (DPA) for property management is the best protection against the financial consequences of becoming disabled. A DPA is a document often drafted by an estate attorney in which one person (the principal) gives legal authority to another person (the attorney-in-fact) to act on the principal's behalf. In California, probate law allows for the DPA to provide that it is "durable"; that is, that it will continue in effect after you become incapacitated. It terminates at your death or cancellation (you can cancel it at any time), or at a time you specify.

A DPA's flexibility is one of its main advantages. You can limit the authority of the attorney-in-fact in the document, giving him or her as many or as few powers over your property as you wish, attaching conditions and so on. You should check with an attorney before executing a DPA.

The DPA lets you appoint an attorney-in-fact (usually your spouse or child) to manage all or part of your business or personal affairs. The law imposes the responsibility on the attorney-in-fact to act as your fiduciary, but it might be difficult for you or you family to take him or her to court. Since this person can in effect do anything with your money, you should be sure to appoint someone you trust and in whose judgment and ability you have confidence.

Continue reading "California's Durable Power Of Attorney" »

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The State Bar of California has a very informative website containing information specifically addressing the question of whether you should have a California estate attorney prepare a revocable trust, that is, a family trust to stay out of probate court.

The State Bar of California article asks these probate law related questions:

What Is a Living Trust?

What Can a Living Trust Do for Me?

Should Everyone Have a Living Trust?

How Does a Living Trust Help if I Am Incapacitated?

How Does a Living Trust Help at my Death?

Who Should Be the Trustee of My Living Trust?

What Are the Disadvantages of a Living Trust?

If I Have a Living Trust, Do I Still Need a Will?

Does a Living Trust Save Estate Taxes?

Does a Living Trust Pay Income Taxes?

What Other Estate Planning Documents Should I Have?

What Other Kinds of Trusts Are There?

How Do I Transfer Assets to My Living Trust?

Who Should Draft a Living Trust for Me?

How Do I Find a Qualified Lawyer?

Should I Beware of Someone Who Is a "Promoter" of Financial and Estate Planning Services?

How Much Does a Living Trust Cost?

To discuss how answers to some of these questions may effect you and your family, please call Mitchell A. Port at (310) 559-5259.

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The website for the State Bar of California has a terrific series of articles addressing various topics. One of those topics of interest to California residents discusses Wills. Below are the topic headings the article discusses - some of which deal with probate law. The California State Bar also has a link to a free California statutory will.

What does a will do?

Your beneficiaries.

A guardian for your minor children.

An executor.

Does a will cover everything I own?

Life insurance.

Retirement plans.

Assets owned as a joint tenant.

“Transfer on death” or “pay on death.”

“Community property with right of survivorship.”

Living trusts.

Your spouse’s or domestic partner’s half of community property.

Are there various kinds of wills?

A handwritten or holographic will.

A statutory will.

A will prepared by a lawyer.

What if my assets pass to a trust after my death?

Can I change my will?

How are the provisions of my will carried out?

Who should know about my will?

What other planning should I do?

List of assets and debts.

Durable power of attorney for property management. In this document, you appoint another individual (the attorney-in-fact) to make property management decisions on your behalf if you are incapacitated.

Advance health care directive / durable power of attorney for health care.

How can I find a lawyer to write a will for me?

If you would like to discuss these and other California probate questions, please call Mitchell A. Port at (310) 559-5259.

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The Office of the Attorney General, State of California, has a free medical power of attorney, also known as the advance health care directive, available just by clicking here.

No need for a California estate attorney to prepare the power of attorney - if that is all you want done - since the one for free is simple to use.

The California Attorney General's website recommends that you:

Designate Person To Carry Out Wishes. Select who should handle your health care choices and discuss the matter with them. You could name a spouse, relative or other agent.

Inform Key People Of Your Preferences. Notify your doctor, family and close friends about your end-of-life preferences. Keep a copy of your signed and completed advance health care directive safe and accessible. This will help ensure that your wishes will be known at the critical time and carried out.

Give a copy of your form to:

The person you appoint as your agent and any alternate designated agents

Your physician

Your health care providers

The health care institution that is providing your care

Family members

Other responsible person who is likely to be called if there is a medical emergency

For answers to questions about the California advance health care directive and other estate planning matters, call a Los Angeles tax attorney: call Mitchell A. Port at (310) 559-5259.

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In California, a durable power of attorney for property management, also called a financial power of attorney, is a way for you to arrange for someone to manage your personal financial affairs if you become unable to do that on your own. Depending on the extent of the powers provided, a durable power of attorney may also be used to avoid a California probate, probate court and help minimize estate tax. An estate attorney should be consulted to be sure the document provides the terms you desire.

If you become incapacitated and unable to make decisions for yourself, the durable power of attorney avoids the messy alternative of a court proceeding. Your spouse, closest relatives, or someone else who cares for you will have to ask a court for authority over some or all of your financial affairs. Without the durable power of attorney, a California probate attorney may be required to obtain a conservatorship.

A durable power of attorney can be written so that it goes into effect immediately as soon as you sign it. Many of my estate planning clients have a durable power of attorney for each other in case something happens to one of them or for when one spouse is away. As an estate attorney, I often draft a “durable” power of attorney because if I don't, it will automatically end if you later become incapacitated; my document "endures" my client's incapacity.

My clients, some of whom live in Los Angeles County, Santa Barbara County, Orange County or Ventura County, specify that they do not want the power of attorney to go into effect unless a doctor certifies that they have become incapacitated. This is called a "springing" durable power of attorney. Its purpose is to enable you to keep control over your affairs unless and until you become incapacitated, when it springs into effect. I don’t like them as much as those which become immediately effective because it may be difficult to obtain a written medical opinion concerning your incapacity.

When you create and sign a durable power of attorney, you give another person legal authority to act on your behalf. In California, this person is called your attorney-in-fact.

Commonly, people want their attorney-in-fact to “step into their shoes” and give their attorney-in-fact broad power to handle all of their finances and property. But you can give your attorney-in-fact as much or as little power as you wish. You may want to give your attorney-in-fact authority to do some or all of the following:

Continue reading "Power Of Attorney: An Estate Planning Tool To Avoid California Probate" »

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The IRS published a Q&A about basic trust law and trust taxation which is quite good. Any qualified California tax attorney worth his salt knows this material. Here are the "Qs" and for the "As" click here.

Basic Trust Law

Q: What is a trust?

Q: Who is a grantor of a trust?

Q: What is a trustee/fiduciary?

Q: What is a beneficiary?

Q: What is a simple trust?

Q: What is a complex trust?

Q: What is a grantor trust?

Q: What are irrevocable/revocable trusts?

Q: What are testamentary and Inter Vivos trusts?

Trust Taxation Questions

Q: IRS instructions for Form 1041 and Schedules A, B, D, G, I, J and K-1 provide general tax information and guidance for completing Form 1041. What law controls trust taxation?

Q: Do trusts have a requirement to file federal income tax returns?

Q: How does a trust compute its income tax liability?

Q: I have been told that I can assign income to a trust and I will not be taxed on that income. Is this true?

Q: May a trust deduct contributions to a charity?

Q: Will I owe Federal Gift Taxes on property contributed to a trust?

Q. The information presented by the promoter sounded legitimate. Now I have concerns regarding this promotion. Who do I contact to report information on the promotion and promoter?

Q. Can I get more information on the Internet?

Speak with a California tax lawyer about these and other questions you may have. Call Mitchell A. Port at (310) 559-5259.

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The California State Bar has a lengthy article concerning estate tax and California probate. A few of the topics covered in that site are described here.

What Is Estate Planning?

What Is Involved in Estate Planning?

Who Needs Estate Planning?

What Is Included in my Estate?

What Is a Revocable Living Trust?

What Is a Will?

What Is Probate?

How Should I Provide for My Minor Children?

To Whom Should I Leave My Assets?

Whom Should I Name as My Executor or Trustee?

How Does the Way in Which I Hold Title Make a Difference?

What Are Other Methods of Leaving Property?

When Does Estate Planning Involve Tax Planning?

What If I Become Unable to Care for Myself?

Who Should Help Me With My Estate Planning Documents?

Should I Beware of Someone Who Is a "Promoter" of Financial and Estate Planning Services?

What Are the Costs Involved In Estate Planning?

How Do I Find a Qualified Lawyer?

The Californian State Bar urges you to seek advice only from professionals who are qualified to give estate planning advice. Many professionals must be licensed by the State of California. Mitchell A. Port is a licensed attorney with a master's degree in taxation who has been practicing law since 1982. You may reach him to discuss your estate tax and estate planning concerns at (310) 559-5259.

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PUT IT IN WRITING

As a probate attorney in Los Angeles, all of my California clients have me prepare a California Health Care Directive. As the Terri Schiavo case illustrated, in any given case, people may have divergent views on what measures should be taken to keep someone alive. The choice of which person speaks for you is your choice alone. My clients avoid or lessen the kind of strife that has torn the Schiavo family by identifying in advance who will speak for them.

TALK ABOUT IT

Each of us in Los Angeles County, Ventura County, Santa Barbara County and Orange County where most of my clients live chooses a person to whom we express our wishes who shouldn't be left guessing. If anything good has come of the Schiavo tragedy, it is that families are now talking about end of life decisions, and are taking steps to make sure that their wishes are known and are carried out.

BE SPECIFIC

I still believe that the designation of a health care agent is far more effective than trying to provide instructions for every conceivable scenario. But your grant of authority to your agent – and your discussions with him or her – should cover a key issue raised in the Schiavo case by specifying whether or not the agent's power extends to the withholding or withdrawal of fluids and nutrition.

YOU CAN'T COVER ALL THE BASES:

Any attempt to make medical decisions far in advance, I began to realize, will almost always be futile. As one widely-read booklet on advance health care directive (Shape Your Health Care Future with Health Care Advance Directives, co-produced by the American Association of Retired Persons, the American Bar Association Commission on Legal Problems of the Elderly, and the American Medical Association, 1995) states:

Continue reading "California Advance Health Care Directive" »

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For California probate matters, picking the right person to serve as personal representative or executor can make a significant difference. The wrong person (including someone outside of California when the estate’s property is primarily in California) can blunder and convert what should be an uncontested estate into a quagmire of never-ending litigation. The right person can take a difficult situation and smoothly work through the issues with minimum fuss and expense to the benefit of all concerned.

In an article entitled Choose The Right Executor, Forbes thoroughly discussed each task the executor must assume when probating an estate. The importance of picking the right personal representative or executor is highlighted in the article. It begins by stating:

Most people know that they should have a will, but few individuals understand how important it is to select the right executor to help manage their affairs and distribute their assets to heirs upon their death. Picking the right executor will mean that loved ones will receive their inheritance on a timely basis. Picking the wrong one could lead to lengthy delays, tax problems and possibly even a “will contest.”

I recommend reading the entire piece.

If you have any questions about California probate, please call Mitchell A. Port at (310) 559-5259.

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Existing California law (California Probate Code Section 5600) invalidates nonprobate transfers of assets made to a former spouse by a decedent before termination of the marriage, unless

There is clear and convincing evidence that the decedent intended for the benefits to pass even after termination of the marriage,

The nonprobate transfer is not subject to revocation, or

A court orders otherwise.

A bill pending before the California State Legislature (AB 873) would permit a court instead to impose any or all of the following conditions upon a party to a bifurcated, status-only dissolution:

A new condition authorizing the court to make an order, if appropriate and except as specified, requiring that a party maintain a beneficiary designation for a nonprobate transfer asset until judgment has been entered with respect to the community ownership of that asset and until the other party's interest therein has been distributed to him or her.

A new condition authorizing the court to require that the community interest in an Individual Retirement Account (IRA) by or for the benefit of the party be assigned or transferred, as specified, to the other party to preserve the ability of the party to defer the distribution of the IRA upon the death of the other party. In addition, the bill would include a new condition authorizing the court to order a specific security interest under specified circumstances that may arise upon the death of one party.

Except as specified, the bill would require a party to maintain a beneficiary designation for a spouse for up to half, or upon a showing of good cause all, of a nonprobate transfer asset until a final judgment on the community interest has been entered.

Consult with an estate planning attorney about your alternatives. Call Mitchell A. Port at (310) 559-5259.

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Each county in California is permitted to supplement the California Rules of Court to govern the handling of its probate cases without being bound by the rules which govern another California county courthouse. Listed below are links to some of the counties where I handle most of my California probate matters:

Los Angeles Superior Court

Ventura County Superiour Court

Santa Barbara County Court

Orange County Superior Court

Riverside County Court

San Bernardino County Court

Fresno County Court

Santa Clara County Court

San Francisco County Court

San Diego County Court

Monterey County Court

For a complete listing of local rules for the entire California court system, including criminal rules, civil rules and all other rules, click on Local Court Rules.

For personalized help from a California probate lawyer, call Mitchell A. Port at (310) 559-5259.

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The California Probate Referees' Association published its latest edition of the Probate Referees' Procedures Guide. The Guide is designed to assist those with California probate experience as well as those without experience.

The Guide covers all basic procedures with a focus on the preparation of the Inventory and Appraisal. The Guide provides practical suggestions for preparing attachments, describing assets, obtaining appraisals and presenting necessary supporting data.

The Los Angeles Daily Journal published the California Probate Guide under the title: Using Probate Referees in Trusts, Probate, Conservatorships and Guardianships, Small Estates, and Non-probate Matters

The Guide's Table of Contents are here:

WHY USE A PROBATE REFEREE?

THE ROLE OF THE PROBATE REFEREE

BENEFITS OF USING REFEREIS IN TRUST AND NON-PROBATE MATTERS

TRANSFER OF SMALL ESTATES AND SPOUSAL PROPERTY PETITIONS

NEW REQUIREMENT OF VALUATIONS WHENEVER ACCOUNTS ARE REQUIRED TO BE FILED

WHAT IS THE INVENTORY AND APPRAISAL
-Checklist for preparing the Inventory and Appraisal
-What does not go in the Inventory and Appraisal
-What goes on Attachment 1
-What goes on Attachment 2

LISTING PARTICULAR ASSETS
-The importance of complete information

REAL PROPERTY
-Vacant, agricultural, condominium, and single family residential
-Stock cooperatives
-Residential income producing
-Commercial/industrial property
-Life estates
-Remainder and reversionary interests

BUSINESS INTERESTS
-Closely held corporations
-Limited partnerships
-General partnerships
-Sole proprietorships

TANGIBLE PERSONAL PROPERTY
-Miscellaneous/furniture and furnishings
-Jewelry/coins/art
-Motor vehicles/mobile homes/boats
-Livestock and breeding animals

PROMISSORY NOTES

SECURITIES
-Portfolio accounts at brokerage firms
-Common and preferred stocks
-Mutual funds
-Stock options
-Corporate, state and municipal bonds
-US treasury notes and bonds
-GNMA, FNMA, and FHLMC securities
-United States savings bonds

OTHER INTERESTS
-Inheritances and distributions from trusts
-Insurance policies
-Patents, copyrights, and royalty interests
-Judgments and ongoing litigation
-Personal injury actions
-Gas and mineral rights

ADMINISTRATIVE ISSUES AND QUESTIONS COMMONLY ASKED
-How long does the appraisal take?
-How do I correct a mistake?
-When do I need a reappraisal for sale?
-What about inheritance taxes?
-Minority discounts

Speak with an experienced California probate lawyer who can represent you in any court in California, most readily in Los Angeles County, Santa Barbara County, Ventura County and Orange County. Call Mitchell A. Port at (310) 559-5259 to discuss your probate matter.

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My estate planning and probate clients who come from Los Angeles County, Santa Barbara County, Ventura County and Orange County, (and occasionally from Northern California) will often speak with me about what they have heard regarding estate planning and avoiding probate. Retained by clients as their California estate planning attorney and California probate lawyer, they freely share their concerns about estate tax, gift tax planning and the other items listed here:

1. Failure to Make Gifts to Reduce Estate Taxes. Easy gifting options include the $12,000 annual exclusion, $1,000,000 lifetime gift exemption, and unlimited tuition/medical gifts. In a 45% estate tax bracket, each $12,000 gift saves $5,400 in estate tax.

2. Failing to Protect a Child's Inheritance. A child's inheritance that passes outright to the child is not protected from creditors, divorce, or estate tax at the child's death. To protect the inheritance, it may be better to leave assets in trust for such child's benefit. If desired, the child can be named as the co-trustee of the trust along with a third party.

3. Failure to Pursue Sophisticated Estate Planning Tools. Explore techniques to reduce estate taxes and/or protect assets. Consider the family limited partnership, charitable trusts, qualified personal residence trust, and sale of assets to children.

4. Wasting $2,000,000 Exemption When First Spouse Dies. The $2,000,000 exemption is wasted when assets are left outright to the surviving spouse. Instead, the Will should create a bypass trust to be funded with $2,000,000 of the decedent's assets, saving up to $900,000 of estate taxes (assuming a 45% estate tax rate). WARNING: Naming the spouse as beneficiary of life insurance/retirement plans prevents such assets from going into the bypass trust. Also, if the house goes outright to the survivor, the decedent's portion cannot be used if needed to fully fund the bypass trust. The impact on the overall plan should be considered before making such a bequest.

5. Wasting $2,000,000 GST Exemption. This results in needless estate taxes at the deaths of children. Instead, consider segregating $2,000,000 ($4,000,000 for husband and wife) of assets in trust for the benefit of children for life and then to grandchildren, free of estate tax at each child's death.

6. Life Insurance Policies Owned by the Insured. The proceeds of life insurance are subject to estate tax when the insured owns the policy. For example, $1 million of coverage taxed at 45% leaves only $550,000 coverage after tax. Transferring ownership of life insurance to an irrevocable life insurance trust (or having the trust buy new coverage) removes the proceeds from the estate, provided the insured lives for three years after the transfer.

7. Poor Timing of Retirement Plan/IRA Distributions. Penalty taxes arise if retirement plan/IRA distributions are too small, too early, or too late. Devise a distribution strategy and beneficiary designations to maximize income tax deferral, but with due consideration of these penalty taxes. Consider designating a charity as beneficiary to avoid estate tax and income tax.

8. Failure to Plan for Lifetime Contingencies/Disability. This may result in a court-supervised guardianship. Plan ahead by executing a power of attorney for management of property and personal affairs, advance health care directive and living trust. Be wary of "standard form" documents.

9. Lack of Liquidity to Pay Estate Taxes. Illiquidity can result in forced "fire sale" of real estate or a family business within nine months of death in order to pay taxes. In this situation, it is advisable to explore life insurance and plan for the orderly sale of assets.

10. JTWROS ("Joint Tenants with Right of Survivorship") Ownership Designation on Brokerage or Bank Accounts. This designation prevents such accounts from being funded into the bypass trust when the first spouse dies, potentially wasting the decedent's $2,000,000 exemption (and costing up to $900.000 in extra estate taxes). This also applies to "P.O.D." (pay on death) accounts and "Trust" accounts payable to a named beneficiary (example: "A, Trustee for B"). While these designations avoid probate, other problems arise instead. Multiple party accounts should be set up as tenants in common.

If you would like to speak with a licensed California attorney about these matters or estate planning in particular, call Mitchell A. Port at (310) 559-5259.

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The California legislature recently held a hearing on the question of whether the attorney-client privilege should continue indefinitely after a client's death. The hearing further asked whether a means for waiving the privilege should be created when subsequent administration of the estate is necessary.

In judicial and other proceedings when an attorney is called as a witness or otherwise required to produce evidence related to a client, the attorney-client privilege applies to shield the attorney from providing the evidence.

The privilege enables a client to prevent a witness from disclosing confidential communications between the client and his or her attorney. It encourages the client to fully disclose information to assist the attorney in the lawyer’s representation of the client. Under current law, the privilege remains effective until the end of the probate of the deceased client's estate and the personal representative was discharged by the court.

The bill provides that the attorney-client privilege continues indefinitely after the client's death and creates a mechanism for waiving the privilege when a lawyer is instructed by the holder of the privilege to do so.

This bill also authorizes the court to appoint a personal representative for purposes of holding the attorney-client privilege where the court has discharged a personal representative and disclosure is sought as to a privileged communication. Under this bill a lawyer will be obligated to claim the attorney-client privilege, even if the client is dead, whenever the lawyer is present when the communication is sought to be disclosed.

This bill will also allow waiver of the privilege if the attorney is instructed to do that by the holder of the privilege.

Litigation in the Bing Crosby estate has weakened the assumption that the privilege could be abandoned after a deceased client's personal representative has been discharged without harming the societal goals embodied by the attorney-client privilege.

Upon Bing Crosby's death, there was a probate of his assets, including his recording contracts. During the probate case, HLC Properties, Ltd. was created which received Crosby's assets, including the recording contracts, on his estate's distribution. His widow was the personal representative and the court then discharged her. HLC later sued MCA, a record company, for unpaid royalties. MCA requested and the trial court ordered HLC to turn over documents containing Crosby's past communications with his attorneys.

In HLC Properties, Ltd. v. Superior Court, the California Supreme Court upheld the trial court. Since the attorney-client privilege is governed exclusively by statute, the court did not consider whether the assumptions behind the statutory rule ending the attorney-client privilege on the discharge of a client's personal representative remain valid. (HLC Properties Ltd. v. Superior Court, 105 P.3d 560 (Cal. 2005).)

If Bing Crosby had created a revocable trust to avoid probate and to pass his royalties at his death, his successor trustee would have been able to claim the privilege. If he incorporated his business during life, his corporation would have been able to claim the privilege.

The bill before the California legislature concludes that the continuance of the attorney-client privilege after a client's death should not be decided on minute and picky distinctions that are unrelated to the purposes from which the privilege originates, such as whether the decedent passed property at death by either a revocable trust or a will.

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California Probate News Flash: The California Assembly Committee on Judiciary, in order to help facilitate the filing of tax claims and the collection of California state income tax, recently held a hearing asking whether a decedent's estate should provide notice of the probate to the Franchise Tax Board.

This bill, sponsored by the California Franchise Tax Board (FTB), requires that the personal representative of an estate notify the FTB of the probate proceedings within 90 days of when letters are first issued for the estate. The bill also requires California estates, for which a petition for final distribution has not been issued by January 1, 2008, to provide FTB with notice within 90 days of January 1, 2008. This should allow FTB to make any outstanding claims against the estate, and, according to the author, help reduce the amount of uncollected taxes.

Current law provides that:

(i) a claim by a public entity against an estate must be filed within the time provided or is barred. (Probate Code Section 9200);

(ii) requires the FTB to mail notice assessing taxes and commence any proceeding in court within 18 months after written request is filed (after the tax return is made) by the fiduciary of the estate or trust. (Revenue & Taxation Code Section 19517); and

(iii) requires, within 90 days of the date probate letters are first issued, the general personal representative or estate attorney of a decedent's estate to provide notice to specified public entities, including Health Services and the California Victim Compensation Board, of the administration of the decedent's estate. These public entities then have four months after notice is received to file a claim or pursue a collection. (Probate Code Section 9202)

According to the bill’s author, an estate representative often does not know a decedent's financial affairs and, as a result, is unable to resolve tax obligations. This bill will codify a process that would assure that an estate representative discovers and resolves a decedent's income tax obligation, thus helping to close the tax gap. The author believes this information allows FTB to make any outstanding claims against the estate and help reduce the amount of uncollected taxes.

Currently, if it is known that a claim is likely, a personal representative of an estate being probated is required to notify the directors of Health Services and the California Victim Compensation and Government Claims Board of the decedent's death within 90 days of when letters for probate administration are first issued. The directors then have four months after receiving notice to make their claims or pursue collection of outstanding fines. This bill seeks to expand that notice requirement to FTB, but does not limit the time period by which FTB has to make a claim against the estate.

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California uses a 4-3-2-1 system to calculate statutory probate fees. Four percent of the first $100,000 of property in probate, 3% of the next $100,000, 2% of the next $800,000, and 1% over $1 million.

For example: your home in Los Angeles County, Ventura County, Orange County or Santa Barbara County has a fair market value of $750,000. Under the 4-3-2-1 system, probate fees will be:

4% of the first $100,000 = $4,000
3% of the next $100,000 = $3,000
2% of the next $550,000 = $11,000

TOTAL STATUTORY PROBATE FEES: $18,000

Those fees are calculated on the property’s fair market value and NOT on the equity. Even if your $750,000 home has a mortgage of $500,000, the fees will still be $18,000.

Moreover, the fees are sometimes paid twice: once to the probate attorney and once to the executor or administrator of the estate. The attorney and executor do not split the fee; each one of them earns the entire amount.

If you have a probate matter or questions about a California probate, please call Mitchell A. Port at 310.559.5259.

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Probate in California requires these assets to be probated:

The deceased person's share of an asset when the asset is registered as tenants in common with other people.

One-half of each asset registered as community property in the decedent's name with his or her spouse.

Assets in the deceased person's name alone.

California law provides that a probate is not necessary if the total value at the time of death of the assets does not exceed the sum of $100,000. If the deceased person has 3 accounts at 3 different banks each having $35,000 on deposit, then the sum of the 3 accounts exceeds the $100,000 limit and each account must be probated even though each account is less than $100,000. There is a simplified procedure for the transfer of assets with a value under $100,000. The $100,000 figure does not include vehicles and certain other assets.

The following assets are NOT subject to the California probate process:

Assets in a bank or savings and loan account in the deceased person's name as "trustee" for someone else.

Assets which can be registered in a person's name and which are "payable on death" (P.O.D.) or "transfer on death" (T.O.D.) to someone.

Assets held in joint tenancy with another person or persons.

Assets held in a living trust.

Assets such as life insurance and IRA benefits, where a beneficiary is named and is alive at the time he or she is to receive the property from the deceased person.

Assets registered by husband and wife as "community property with right of survivorship."

Assets passing to the surviving spouse. If the deceased person owned assets in his or her name alone but these assets are left by will or pass by intestate succession to the surviving spouse, no probate is necessary.

In some cases, part of an estate in California can avoid probate while another part of the same California estate may have to go through probate.

If you would like to know whether a probate is necessary, Mitchell A. Port welcomes calls for a consultation at (310) 559-5259.

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Probate is the court-supervised process developed under California law to transfer your assets at your death to the beneficiaries named in your will and in the manner prescribed by your will. It also provides for the disposition of creditors’ claims who have claims against your estate at your death.

The probate rules are the same whether the jurisdiction of the court is in Los Angeles County, Ventura County, Orange County or Santa Barbara County; local rules may differ from county to county, however.

At the beginning of a probate, a petition is filed with the court and is usually filed by the person or institution named in your will as executor. After the publication of notice, and after a hearing is held, your will is admitted to probate and an executor is appointed. If you die without a will, described as “intestate”, your estate is still subject to probate and the person appointed by the court to handle the probate is known as the "administrator."

If the assets owned at death do not include an interest in real estate and have a total value of less than $100,000, then a statutory procedure to transfer those assets pursuant to your will can be used without a formal court-supervised probate administration; debts and expenses must still be paid.

A probate has advantages and disadvantages. You are assured that the actions and accountings of your executor will be reviewed and approved by the probate court. Second, the probate court is used to resolving disputes about the distribution of your assets in relatively short order and according to defined rules.

Disadvantages of a probate include the fact that a minimum of nine months is required from beginning to end; distributions can be made pursuant to a living trust more quickly than in a probate proceeding. During that period of time, if the real property has a mortgage, the payment of the mortgage is required if foreclosure on the property is to be avoided. Another disadvantage is probate’s public nature; your estate plan and the value of your assets become a public record. Also, because lawyer's fees and executor's commissions are based upon a statutory fee schedule, the expenses may be high.

The advantages and disadvantages of a probate proceeding should be discussed thoroughly with your estate planning lawyer. You may call Mitchell A. Port to discuss this and other estate planning concerns; his number is 310. 559.5259.

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It is appropriate for California estate planners and probate attorneys to think beyond offering mere tax advice and probate advice to the family of a deceased client.

There have always been a number of planning tools and techniques to aid in pre-and post mortem planning, I suggest probate lawyers in Los Angeles County, Ventura County, Santa Barbara County, Orange County and through-out California think about a step that should now be taken in estate administration which may never have been previously considered.

The client's family should:

Cancel all credit cards and charge accounts as soon as possible after a death.

Once death certificates have been obtained, copies should be sent to Equifax, Experian and TransUnion; the three credit-reporting bureaus with a notice stating that activity under the decedent’s social security number should immediately be reported.

Hire an off-duty policeman to watch the decedent's house while the family is at the funeral, if the obituary contains the decedent's address.

Take precautions against a new form of identity theft if the decedent's month and date of birth are in the obituary.

The California DMV should be asked to cancel the decedent's driver's license and refuse any requests for duplicates.

All this can usually be done before appointment of an executor or administrator.

Identity thieves can obtain the name, address and birth date of decedents from an obituary. Then, on the internet for just $15, they can purchase the decedent's Social Security number and even credit history.

This information can then be sold, with a fake driver's license or ID, to those with bad credit risks or people with other dishonest motives. The thieves can then make large consumer purchases (such as an automobile) and open credit accounts in the decedent's name.

Once letters testamentary have been obtained, free credit reports can be obtained from each credit bureau at www.annualcreditreport.com to be sure that there has been no post-death activity.

Consider using a California probate attorney or estate planning attorney to help. Call Mitchell A. Port at (310) 559-5259.

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For those of you who have read my earlier blog postings on California estate planning and want to know about some of the topics that may come up during an estate planning meeting with a Los Angeles tax attorney like me, I’ve attached a long questionnaire and a short questionnaire.

I almost never ask anyone to complete the long form before we meet. Many find it too cumbersome and I want to avoid providing people with a reason not to see me as their tax attorney. Instead, I provide the long form as a guideline for the kind of assets that may need to be put into your California living trust.

It is also a good way to inventory what you have so that your executor or trustee will have an easier time administering your estate.

Finally, it helps me to know roughly how large an estate and what types of property I am working with so I can bring all the tax planning resources I have to address effectively the federal estate tax issues raised by your estate.

Click on this link for the estate planning long form sample questionnaire: Download file

I have also provided a short form estate planning questionnaire which simply asks some of the questions most important to my clients. Those questions include who will serve as guardians of minor children and who will be the executors. Click on this link for the estate planning short form questionnaire: Download file

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Here are ten commonly held beliefs about living trusts and California Wills that can easily be addressed with the assistance of an California estate planning attorney.

Belief 1: "I Don't Have an Estate Big Enough to Require Planning"

This is the most frequently heard objection to having an estate plan. What is important is not the value of your estate but the mix of the assets of your estate. For example, a $125,000 condominium, or any other real property located in Los Angeles County, Santa Barbara County, Orange County, Ventura County or anywhere else throughout California, is the right kind of asset that would necessitate an estate plan since the avoidance of probate fees is important when the estate consists in part of real property. Probate fees on this condominium would be about $4,750. A living trust would eliminate this needless fee.

Belief 2: Leaving Everything to Your Spouse

Leaving everything to your spouse "wastes" the $2,000,000 unified credit exemption of the first spouse to die which could cause a considerable increase in the estate taxes of the surviving spouse. Further, some spouses have neither the interest nor ability to manage estate assets after the death of their spouse. Utilizing appropriate estate planning techniques and trusts, the estates of both you and your spouse gain the benefit of the largest possible tax savings, and also get proper estate management.

Belief 3: Believing That Living Trusts Avoid All Estate Taxes

Living trusts do not avoid all estate taxes. Instead, you are able to take advantage of the law permitting each person to pass this year or next $2,000,000 of their estate to heirs without paying any estate tax. This is a tax savings of between $900,000 and $1,100,000. During this year and next, an estate over $2,000,000 for a single person, or $4,000,000 for a married couple, would be hit by an estate tax even if all of the property is in a living trust.

Continue reading "10 Most Frequently Held Misconceptions About Estate Planning" »

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It's a good idea to update your California estate plan every few years or after the occurrence of significant life events such as marriage, divorce, the birth of a child and grandchild, or adoption.

Meet with your tax attorney while you’re still thinking about the changes you want to make to your plan.

Even if you haven't experienced any of these events since you last updated your estate plan, there have been changes in California state and federal tax laws or changes in your financial situation that necessitate a reevaluation of your estate plan.

Your desires as far as how your property will be distributed are likely to change over the years, especially as certain events occur in your life. For example, if you get a divorce, you probably don't want to make the same bequest to your former spouse as you did when you were married. In Los Angeles County, Ventura County, Santa Barbara County and Orange County, California, provisions regarding an ex-spouse in your will are not disregarded.

The birth or adoption of a child is another life event that will require you to update your estate plan. Even if your will or trust already provides for children, it is a good idea to update it each and every time you have a child.

Other significant events that will require you to update your estate plan are marriage, re-marriage, the death of a beneficiary, and the death of an executor or trustee.

California provides that a statutory share of the estate will go to a surviving spouse. If this statutory requirement is not in keeping with your estate planning desires, you will need to revise your estate plan or have a valid pre-nuptial or post-nuptial agreement to avoid it.

This becomes particularly important for individuals in a second marriage who have grown children from a first marriage. In this situation, you may want to provide for the support of your current spouse during his or her lifetime, but you will want to make sure that your children ultimately inherit your assets.

Without proper planning, your current spouse's children could end up inheriting your assets, instead of your own children.

Another thing that tends to change over the years is your financial situation. If your current estate plan was made even a few years ago, your net worth may have changed enough that you will need to incorporate more estate tax planning into your estate plan.

Finally, you should reevaluate your desires from time to time. You may find that you've changed your mind about a variety of issues addressed by your estate plan. Do you want a different person to be the trustee of your estate, rather than the one who is currently named in your will or trust? Did you grant a health care power of attorney to one of your children and now that child has moved to a different state? Is there something about the way one of your beneficiaries is leading his or her life that would make you want to put their bequest into a trust rather than granting an outright distribution?

You may have become aware that one of your children has trouble managing money and you fear their creditors might end up with the inheritance.

If you already have an estate plan in place, you deserve congratulations for planning ahead and being prepared. But you also need to remember to update it from time to time as your situation or needs change.

To discuss this in more detail, please call Mitchell A. Port at (310) 559-5259.

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During a recent evening event with other professionals in Los Angeles, California, I was asked whether a probate of a living trust created and signed in Los Angeles is necessary. My knee-jerk reaction was to say “of course not”. But after hearing more about the situation, I had to reconsider.

The circumstances were that the California based trustee in charge of the estate after the settlors of the trust died wanted to transfer the trust’s investments from one investment firm to another firm. Both securities firms were located in Ventura County with offices in Santa Barbara County and Orange County, California. The firm currently holding the investments asked the trustee whether he knew with certainty that the trust he had in his possession was the most recent version and that it had not been amended.

Until the trustee could somehow prove that he had the most recently drafted trust which had not been amended, the investment firm would not release the property. To make matters worse, the investment firm would not accept a mere written statement (not even a notarized one) from the trustee that he had the latest trust and that there were no amendments to it.

I suppose that the California investment firm had the experience of releasing funds to a trustee without asking whether the living trust the trustee presented was the latest version and whether it had been amended. My guess is that after releasing the investments to the trustee, another person connected to the estate approached the investment firm with a later version of the trust which may have named that person as the trustee in place of the trustee who previously obtained access to the investments. The investment firm probably had no choice but to require proof that the living trust presented by the second trustee was the most recent version and once it received that proof it handed-over the property upon demand. As a result, the firm was out-of-pocket the value of the investment account one time too many.

How does a trustee prove that the living trust he or she possesses is the latest version and has not been amended? The trustee will have to petition a California probate court having jurisdiction over trust administration seeking an order confirming the status of the living trust as the last living trust or amendment signed by the settlors. The trustee can then present that order to the investment firm so as to obtain control over the investments and transfer them to the other firm as he or she originally tried to do once becoming the trustee.

If you would like help by consulting with an attorney experienced in trust administration, you are welcome to call Mitchell A. Port at (310) 559-5259.

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One of the decisions that you will be asked to make as you are completing the purchase of real property in California, is how you are going to hold title to the property (the vesting). The vesting will appear on the Deed of Trust and the Grant Deed, which are recorded documents in the county where the property is located such as Los Angeles County, Ventura County, Orange County or Santa Barbara County. Usually, your escrow officer or lender, or possibly both, will ask you how you want to hold title. The manner in which you hold title may have significant legal and tax consequences. Some of the issues that you should consider will be explored in this blog.

SOLE OWNERSHIP

Real property in California can be owned in either Sole Ownership or in Co-Ownership. There are three options for holding property as a Sole Owner:

A Single Man or Woman, defined as a man or woman who has never been married.

An Unmarried Man or Woman, defined as a man or woman who has been married in the past, but is now legally divorced or is widowed.

A Married Man/Woman, as His/Her Sole and Separate Property, defined as a married man or woman who wishes to acquire title in his or her name alone.

In California, any assets that are acquired during marriage become community property, (i.e., belonging to both spouses), unless they are specifically acquired as separate property. Real property that is conveyed to a married man or woman is considered community property, unless it is stated otherwise. In order for a married individual to acquire title in his or her name only, the spouse must relinquish all right, title and interest to the property. Usually, this is done by executing a Quitclaim Deed to the property, which is recorded concurrently with the deed to the property.

CO-OWNERSHIP

For residential property, the primary methods for holding title are Community Property, Joint Tenancy, and Tenancy in Common. Tenancy in Partnership will not be addressed in this article.

Continue reading "How Do I Take Title to Property In California?" »

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My estate in California isn’t big enough to justify the expense, effort and time to have an estate plan prepared.

As an estate planning and tax attorney working with clients in Los Angeles County, Ventura County, Orange County, and Santa Barbara County, I hear this refrain a lot. The simplest way to decide whether you would benefit by having an estate plan prepared is to ask whether you have any property that would pass to your heirs through the court supervised process called probate. If you own such property in California, then you would benefit by having an estate plan prepared.

An easy rule of thumb to keep in mind is that your California real estate vested in your own name must go through probate after death unless a living trust is established beforehand and the property was held in the name of the trust. Another easy rule of thumb is that cash, investments and savings accounts held in your own name must also go through probate if the total value is over $100,000 unless the accounts were held in the name of a living trust.

Probate is usually a process worth avoiding when possible. It is slow, expensive, and a hassle. In comparison, a living trust which holds your property at the time of death allows your property to be distributed quickly to your proper heirs usually without any expense or trouble.

Your living trust comes into play at the time of death. But while you are alive and incapacitated or incompetent, there are other important parts of an estate plan that may come into play. Those other parts are a durable power of attorney for property management and a California advance health care directive. Both of those documents allow someone you trust to manage your personal affairs (pay your mortgage, your bills, etc.) and to make important health care decisions on your behalf if you can’t do that for yourself.

Call an estate planning and tax attorney now to discuss these and other benefits related to your estate plan.

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Posted In: Probate , Estate Planning

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What a probate mess in California!

With Anna Nicole Smith’s death last week, it is a field day for California probate, California estate and California tax attorneys. Since there is as much as $1.6 billion at stake, no one should be surprised. If only Smith had hired a qualified California estate planning attorney, the outcome might be very different.

This is no ordinary probate dispute in California or Texas.

Smith’s billionaire husband had a son who was in a pitched battle against Smith. That son recently died. So the California and Texas probate battle is now between Smith’s infant daughter and the surviving wife of Smith’s husband’s dead son. Smith’s daughter is also in the middle of an unrelated and separate paternity suit since who her father is remains unclear. That young girl’s father – whoever he is – stands to control millions and millions for her benefit.

What happens next is anyone’s guess. Disputes concerning how much Smith’s estate is entitled to – whether $89 million or some other amount – remain unresolved.

A qualified California lawyer should have been hired to plan for a better outcome insofar as the property located in California is concerned.

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Posted In: Probate

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