We fix $499 Trusts

I was reading the paper the other day and I saw an ad for a $499 trust. This blog post is not specifically saying that trust company is bad because I have no idea. That $499 trust may be the best trust of all time. However, seeing the ad reminded me that you really shouldn’t price shop for your estate planning documents. That can be VERY costly to your family in the long run.

Let me start by saying that our firm has been providing reasonable cost legal services since 1979. We pride ourselves on this. However, we aren’t the cheapest. We are far from the most expensive but also not the cheapest.

When you are searching for your attorney don’t shop solely on price. Yes, consider it but please don’t use that as your only factor. I have seen way too many trust mill trusts that are completely inadequate in one of different ways.

Some common problems:

1) Unfunded trusts;

2) Incorrect type of trust used;

3) Complete errors;

4) Failure to provide a pour over will;

and on the list goes.

Get your estate plan right by an experienced attorney!



Ten characteristics of a good trustee

When I go through the estate planning questionnaire with a client I suggest they think long and hard before selecting their trustee. In fact, if they hesitate for a split second when naming someone I ask about it. For example, they might say, “well our son is probably our first choice… well… ahhh….”  The second I heard the word “probably” I was wondering what that was about. I know it does not mean their son is dishonest but maybe he has an overbearing wife? Or maybe he and his brother don’t get along. Or who knows!? The point is there is a reason they said “probably.” I thus bring you 10 characteristics to look for in your chosen trustees in no particular order:

- Trustworthy

- General competence

- Financial experience

- Life experience

- Ability to see things from the beneficiaries point of view

- Geographic location

- Above reproach

- Wants to do it

- Understand’s your desires

- Understands your future beneficiaries needs

I could go on but this is a good starting point. Let’s talk about your trustees!


Starting probate as a creditor

I have a new case where the decedent’s son contacted me about starting a probate. He wasn’t quite ready as he had other things going on in life. Well, last week he called, in a panic, because one of his mom’s creditors had started probate! That’s right. A creditor, in a California probate, can start the probate process for you whether you like it or not.

In most probate cases it’s better to be in control. There are a variety of reasons for that which is beyond the scope of this post. However, trust me, control is good in probate!

With a creditor’s claim you lose your leverage to negotiate. Think about it. If a creditor is in the driver’s seat it’s a lot harder to suggest they take a haircut on their claim. Plus there are likely going to be added costs.

We can salvage the situation by paying the creditor and then filing our probate case. The creditor has been pretty easy to work with to clean it up but still… why get to this position?

Don’t let this happen to you. Start your probate before someone does it for you.

Oh ya, guess how much the creditor’s claim was for? Only $6,000. That’s right they started probate over a $6,000 creditors claim. Don’t let this happen to your probate case!

Michael Jackson’s estate valuation tax fight with IRS

I read about the Michael Jackson tax dispute with the IRS on a legit website but figured I would get better dirt on TMV so here’s the link to that article.  Most of my readers understand that when a wealthy person dies their estate may have to pay an “estate tax” which is basically a death tax. It’s certainly due to the IRS for estates over $5mil and sometimes also due to the estate depending on what state the decedent lived in. Mr. Jackson lived in California so there is no state estate tax. Just the feds!

This dispute with the IRS is going to get good. Look, I am certainly not an asset valuation expert but for the estate’s advisors to suggest Mr. Jackson’s likeness has a value of $2,105 is sort of silly. I mean really I’ll give you $2,500 without even understanding what’s included in his “likeness.”  The IRS values at $434 million. I imagine the realize is somewhere between those two extremes.

The estate could face significant penalties if they don’t solve this quick!  Stay tuned….

The above is just one example. Read more on tmz. If you think you might have estate valuation issues let’s talk about it now to PLAN AHEAD and avoid the fights later!

Getting on with life and avoiding the family fights

I recently talked to a prospective client. His story made me think of one thing, though I didn’t tell him in these words, IT’S TIME TO SOLVE THIS AND GET ON WITH YOUR LIFE!

His story was one I have heard countless times.  Siblings fighting.  It’s not always clear what exactly they are fighting about and an outside mediator can probably solve everything in 5 minutes. I often say, not to the clients, that issues stem from when they were five years old or at some point when the older sibling was mean to the younger sibling, or the time mom babied the younger sibling and the older sibling felt bad, or whatever. It doesn’t matter the background. The fact is it’s 50-60 years later so let’s help you move on with life.

I am not a therapist or a counselor but my legal services do the same thing sometimes.

My advice is probably what some family law attorneys tell their clients going through a divorce. Put aside your petty differences and focus on GETTING ON WITH LIFE.

I am not saying to just give in. However, I am saying really focus on the BIG PICTURE items. Focus on the big dollar items. Focus on the house worth $300,000 rather than the photo album. Yes, the photo album is important but you can easily duplicate those.  Does it REALLY matter if you have the original photos or a copy? It’s the picture, the memory, that matter… isn’t it?

I have worked with other clients who develop serious medical conditions due to the stress their sibling causes them. Family fights aren’t always avoidable but I would say they often are.  Focus in and move on!

I think I am really good at working with my client to focus in on the important things. I pride myself at helping my clients GET ON WITH THEIR LIFE.  Talk to me if you and your sibling are fighting about mom and dad’s stuff. Maybe we can solve it together!?

A/B Trust Options

The “A/B” trust is a very common set-up for married couples in the estate planning world.  I should say there are different names for these trusts. I call it an A/B Trust. Others may be call it a Bypass trust, a credit trust or even a 1/2 trust. Whatever you call it a split trust is a common estate planning vehicle. How does it work?

There are 4 main options for a standard husband and wife to consider in trust planning. That is, at the first death what happens to the trust.

1) Totally revocable: This is the simplest trust. I call it a “probate avoidance” trust. It’s the simplest and most straight forward trust. The downside though is that the surviving spouse can completely change the trust and disinherit the kids. However, assuming no estate tax issues this is a good option for many people with more modest estate sizes.

2) A/B Disclaimer Trust: This is a very common trust set up for married couples. It allows the surviving spouse to “disclaim” assets within 9 months of death of the first spouse’s death. This is typically if they are concerned about estate taxes or if they are very concerned about making a bad decision in the future as it limits their ability to change the trust to the A trust as the B trust is irrevocable after the first death.

3) Mandatory A/B Trust: This is common for second marriages or for people with inherited or other separate property assets. It mandates a split into two trusts at the first death. For a long time it was the predominant trust utilized by estate planning attorneys. However, with the great changes in estate tax exemptions the mandatory A/B is used less often now.

4) Totally irrevocable: This is only for elderly people in my opinion. That is, your basic husband/wife trust should not be totally irrevocable at the first death unless you are really confident you won’t get remarried or want to make any changes.  I say 85 years old and up for this. In fact, this trust is the least used of the four.

Whatever trust works for you works for me. There are many A/B trust options so pick what works for you!  Let me know if you questions about your trust set up!  -John

Pay for your trust or probate work with Bitcoins

As an attorney in Northern California, near Silicon Valley, I realize there are many people who may want to pay with Bitcoins as it’s a very tech savvy type of currency. Maybe that’s estate planning or probate work!?  Additionally, I have represented clients from around the world who have probate legal issues in California; Bitcoins are sort of the world’s currency!  I thus will gladly accept payment in Bitcoins!

Additionally, I was reading on espn.com that my local basketball team, the Sacramento Kings, now take Bitcoins. If I want to go to a game I can pay with this great new currency!

If you have Bitcoins burning a whole in your wallet let me know!




How to properly witness a legalzoom will

I met with a client this week who proudly showed me her old will. It was a fine legal document. It left her assets to her husband and then her kids. It set up a guardian for the kids. It named an executor. It was a fine will. As she pointed out there was a major typo in that one of her kids wasn’t included in part of the disposition paragraph but she believed that may have been her fault in setting it up. She acknowledged that she set it up on legalzoom.com

She also proudly showed me the notary page.  What? The notary page? For a will? In California wills are not notarized. The other documents, like powers of attorney, are to be notarized but not the wills.  The notary should have known better but they didn’t.  I am a California notary and it seems to be that every time I have studied for the notary exam I have been reminded that we can not notarize a will.

The law is set forth in California Probate Code 6110(c) which reads:

(c) (1) Except as provided in paragraph (2), the will shall be
witnessed by being signed, during the testator’s lifetime, by at
least two persons each of whom (A) being present at the same time,
witnessed either the signing of the will or the testator’s
acknowledgment of the signature or of the will and (B) understand
that the instrument they sign is the testator’s will.”

Notice it says the will shall be witnessed by two persons.  In fact, a notary can be one witness but they wouldn’t notarize the will. Instead they would sign the witness block.

Again, as stated before, Legal Zoom may create perfectly fine legal documents. However, if you don’t execute it properly all you have is a pile of paper! I am confident that Legal Zoom probably sends detailed instructions for signing the will. However, if it’s done right it’s as if it’s not done!

Get your will done right! Hire an estate planning attorney and make sure the will is signed and witnessed properly!


TSA Precheck Helps you avoid airport lines

For the last few years there have been different options to try and avoid the line at airport security checkpoints. The latest, run by the federal government, seems to have the best chance of success. It’s the TSA Precheck. You can sign up online at this link.

No it’s not directly related to estate planning but I have a lot of readers who travel frequently. Some for work and some for pleasure. Either way avoiding the long TSA lines is something all of my readers can appreciate.

The cost to sign up is $85. It appears that is a one time fee. You have to go get finger printed. Make sure you take your ID and your passport (or other second ID source).  You can make an appointment to avoid a long wait at the signup center.

Get your life in order! Get your Precheck and get your estate planning done as well!

Safe travels. -John Palley