Estate Planning Blog

Estate Planning: Wills, Trusts, Probate

Written on: January 31st, 2018

Estate planning is not just for the aged. If you have assets and property, you should give serious consideration to estate planning. Life is uncertain. If you die without an estate planning tool such as a will or a trust in place, your assets will be distributed according to the intestacy laws. Talk to a Modesto estate planning attorney from the Thomas Hogan Law Office to know how you can determine how your property must be distributed or used after your death. The intestacy laws are rather rigid, generally speaking. This was true in the early nineteenth century, and it is still true today. The statutes lay down rules about the devolution of property; and these rules are concrete, specific, and in the normal case inflexible.

Wills

Most Americans who are middle-aged and older and most people with a substantial amount of property have a will, so devise of property according to the terms of a will is the most common means of transmission of property at death. The basic form of the will must express the intent to dispose of property in writing, signed by the testator, and attested by witnesses, and the courts are pretty strict about only honoring wills that comply with the requirements. The requirement of a written will establishes a permanent record for the court to consider and brings home the seriousness of the endeavor. So far videotapes and audiotapes have not been accepted as substitutes for writing. A lawyer sometimes will videotape the execution of a will to show that the testator appeared to know what he or she was doing, but the writing, not the videotape, is the actual will. The signature requirement demonstrates seriousness, and it also shows completeness.  The law assumes that if someone is merely making notes about the disposition of property, or doing a draft of a will, the document will not be signed; only a final, complete version of a document is usually signed, so the signature shows that the testator has fully and finally expressed his or her wishes. The requirement of witnesses serves similar functions. If you want to prepare a valid will, contact our office to speak with an estate planning attorney in the Modesto area.

Trusts

The need to distribute your property while at the same time avoiding court costs is taking form as one of the major financial problems that you must resolve before your death. Upon your death you want your estate to go to chosen survivors that you desire. As for court costs, avoid the need for a probate court to distribute your estate. Proceedings of a probate court can be expensive. Probate courts distribute legacies, devises of real property, and residuary property to the spouse, descendants, and charities through an attested will made by the deceased in testamentary capacity. The trust, a type of will substitute, holds great promise as the solution to these problems. Trusts avoid probate court to transfer title of ownership. Trusts avoid court costs and delays. Trusts enable you to control your property without legally owning it. In establishing a trust the trustor divides the property into legal and beneficial ownerships. The property transferred into a trust is called by a special term; it is called the corpus of the trust. Legal ownership is held by the trustee and beneficial ownership is held by the beneficiary. The trustee holds the legal title and the beneficiary uses the property. The trust merely divides the legal ownership from the beneficial ownership. The trustor can change the trust with provisions of a revocable living trust. Property is distributed according to the wishes of the trustor. The trustee, such as the trustor’s bank, can transfer a deceased trustor’s farm, part of the trust’s property, to new beneficiaries. The trustor as the former beneficiary would have had the rights to all benefits of the property, such as income, and the right to use the property, such as live on the farm. The trustee transfers the beneficiary rights to the farm to the new beneficiaries, such as the deceased trustor’s spouse and the deceased trustor’s children.

Probate

The formation of a trust is a perfectly legal method of avoiding probate and the related expenses. You can create a separate trust for the benefit of each of your heirs. You can transfer the asset you want that legal heir to have after your death to the trust you created for the benefit of that legal heir. An asset transferred to a trust is no longer the asset of the transferee and will not be subject to probate on the death of the transferee. You can also avoid probate by having multiple wills. In your primary will, you should include assets that require probate while your secondary wills should include assets that need not go through probate. In such cases, only the primary will is subject to probate. Contact the Thomas Hogan Law Office for advice on how to legally avoid probate.

Consult with Us:

Life is full of uncertainties that is why it is important to always plan ahead. We are here to help you plan out your will, your trusts and estate to make sure that the future of the ones you leave behind are secure. To speak with an estate planning expert from the Thomas Hogan Law Office, call our Modesto office at (209) 492-9335.

New Form: Revocable Transfer on Death Deed

Written on: February 7th, 2017

Wrongful Death| Personal Injury| Thomas Hogan Law OfficeA new form of statutory deed entitled Revocable Transfer on Death Deed (TOD) has been established by the legislature. A TOD deed is a non-probate deed whereby the homeowner may deed his or her home to a name beneficiary and the transfer becomes operative on the homeowner’s death, but will remain revocable until he or she dies.

Why is this of importance to seniors? The TOD was created to allow single seniors or widows to escape probate without the need to draft a trust. Some parents add their children on the deed to the home as joint tenants for the sole purpose of avoiding probate. The problem with doing this is that the children immediately own part of the house, which may subject the house to the children’s creditors.

The beneficiary of a TOD effectuates the transfer when the homeowner dies by recording an affidavit of the transferor’s death certificate and also notifies Medi-Cal of the death.

This new law tries to combat elderly financial abuse by adding a 120 day rule and revocability of the deed. So that if you find out that Mother has transferred her home to her new boyfriend using a TOD deed and Mother is alive, you can simply have mom revoke it. But is mom is dead, you have 120 days to file a lawsuit against the boyfriend and record a lis pendens on the property so that new boyfriend is not able to sell the home.

One catch, If the beneficiary listed on the TOD deed dies before the granter, then the TOD deed is worthless and the property would be probated.

Also, one of the major disadvantages of the TOD deed is that the home will be subject to Medi-Cal recovery. While the legislature intended this new law to help low income seniors who can not afford to pay the legal fees required to draft estate planning documents, it is the low income seniors who are most likely to use Medi-Cal and perhaps lose their homes to a Medi-Cal lien.

As to married people, the best way to avoid probate on a home is to hold title as joint tenants or community property with right of survivor.

So while the TOD deed provides a possible solution for estate planning purposes for low income seniors, it leaves them open to folks who can and will commit fraud and abuse against the elderly. So please use this tool wisely.

The Law Office of Thomas Hogan is an Estate Planning specialist who is prepared to help in your time of need. Feel free to contact us if you are in need of help with Wills, TOD, or Estate Planning in Modesto CA. Call (209) 492-9335 to speak with our Modesto California Attorneys.

A common situation that comes up during a dissolution matter is dividing the equity in a house that was owned by one spouse prior to marriage. In most cases the non-owning spouse is entitled to receive a portion of the equity in the house. The general rule in California dissolutions is that all community property (property from the marriage) is to be divided equally. The complication in this situation is that at part of the loan was paid outside of the marriage and part was paid during the marriage. To make matters even more complicated, the value of homes generally fluctuate constantly throughout the parties marriage and the divorce process.

 

Two California cases (In Re Marriage of Moore and In Re Marriage of Marsden) have established a method for dealing with these issues. Simply put, the portion of the equity of the house which came from the marriage will be split equally and the portion of equity from before or after marriage belongs to the spouse who owns the property. To determine the correct apportionment of these two, the courts look to the value and loan balance at four different dates: (1) Date of Purchase, (2) Date of Marriage, (3) Date of Separation, and (4) Date of Trial. With this information correct percentage and values owed to each spouse can be determined.

 

Generally, the assistance of a real estate appraiser is required to determine these values. Further, close examination of the loan documentation is also required. If the house has been re-financed at any point in time, additional information and documentation has to be reviewed. In many cases, the parties can hire an agreed appraiser to determine these values and can agree to a fair buyout amount. In other cases the value may be contested and it may be necessary to have the court decide this value. Either way, it is important when dealing with this issue to contact a skilled attorney to assist you in navigating this complicated claim. You may contact our office to discuss this issue further with one of our attorneys.

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