Listing all assets in estate planning

Below I have posted a sample of the information we like to have when we do estate planning. Though we do not require the information it’s helpful to us. It’s helpful in different ways. Let’s discuss.

First, the dollar amounts are certainly not required but knowing the approximate estate size helps determine what plan is right for YOU.  Often clients do not think about the true size of their estate until they put it on paper. Often it adds up to more than they thought. That is, by the time you add your IRA, 401k, life insurance, and other things to your home equity and savings accounts the value can jump up!

Second, we can’t fully fund a trust if we don’t know about all your accounts.  Having the name, account number and address helps us to help you fund the trust!

Third, it’s a great help to your family, friends, loved ones and trustees later. That is, at your incapacity or death how do they know what assets exist? The only way they know is if they have a list. Where do they get a list? From YOU.

Here’s a sample of the questions we go over with you during the estate planning process.

 

 

1)      CASH AND SAVINGS (Please supply bank name, address and account number)

Checking Account                   $ ___________

Certificates of Deposit (CDs)  $ ___________

Credit Union                            $ ___________

Savings Account                      $ ___________

Money Market                         $ ___________

TOTAL CASH AND SAVINGS                                $ ______________

 

2)     MARKETABLE SECURITIES (Please include bank name, address and account number)

Stocks                                      $ ___________

Bonds                                      $ ___________

Mutual Funds                          $ ___________

Annuities                                 $ ___________

Gold and Silver                       $ ___________

TOTAL OF MARKET SECURITIES                       $ ______________

 

3)     REAL ESTATE  (Please list address, city and state)

TYPE OF PROPERTY   COUNTY            MARKET VALUE -  MORTGAGE = EQUITY

 

i.   _______________________________           ______________________________________

ii.  _______________________________           ______________________________________

iii. _______________________________           ______________________________________

TOTAL EQUITY IN REAL ESTATE                      $ _______________

 

 

 

 

 

 

4)     FIXED AND OTHER ASSETS (Please supply additional information if available)

 

Business Interests                    $ ___________

Limited Partnerships               $ ___________

Notes Due                               $ ___________

TOTAL OF FIXED AND OTHER                           $ ________________

 

5)     RETIREMENT PLANS (Please bring bank name, address and account number)

 

IRA (Standard Deductible)      $ ___________

IRA (Roth IRA)                       $ ___________

Keogh                                      $ ___________

SEP                                         $ ___________

401k                                        $ ___________

403B                                        $ ___________

Profit Sharing Plan                  $ ___________

TSA                                         $ ___________

ESOP                                      $ ___________

PASOP                                    $ ___________

Deferred Compensation          $ ___________

Pension Plan                            $ ___________

TOTAL OF RETIREMENT PLANS                        $ ________________

 

6)     LIFE INSURANCE (Please list life insurance company and agent, if you know)

 

Face Value of Policy #1          $ ___________  (Term  or   Whole Life?)

Face Value of Policy #2          $ ___________  (Term  or   Whole Life?)

Face Value of Policy #3          $ ___________  (Term  or   Whole Life?)

 

TOTAL FACE AMOUNT OF LIFE INSURANCE  $ ________________

 

7)      OTHER ASSETS (Cars, boats, collectibles, etc.)

$ ___________

$ ___________

TOTAL OF OTHER ASSETS                      $ ________________

 

 

 

GRAND TOTAL OF ALL ASSETS                        $ ________________

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Where to file a trust petition in California

In many cases it’s easy to determine where to file your trust petition. See California probate code sections 17000-17006 pasted below for ease of reference. In a probate case you file where the decedent lived at death. That is the county, in California, where they were last a resident. This can, in some cases, be unclear. For example, we often have cases where the decedent lived in Roseville (Placer county) for 50 years but 3 months before death moved to a nursing home in Carmichael (Sacramento county). Did they move their residence or were they just staying in Carmichael temporarily? You look at things like intent to move back home, was the home rented out, did they re-register to vote, etc…. In a trust it’s totally different.

In a trust it does not matter where the decedent resided. The correct county is where the principal place of trust business takes place. Well, if the trustee lives in Alaska how can you get into a California Court? That is, what if mom dies in Sacramento and son, the named successor trustee, lives in Alaska. I have looked at this a couple ways. I have used the theory of mom’s former home as being the place where mail is received and thus Sacramento county is still proper. I believe that’s a stretch though but it has worked. The probate code does allow for “…trustee or its representative who is primarily responsible
for the administration of the trust
.” Emphasis added. Who falls into that category? Am I as the attorney “primarily responsible for the administration of the trust?” I believe that argument will work in most counties in California but I would rather have a different theory if possible.

In any event, just remember that the rules for venue in a trust are completely different than for a standard probate case.

-John

PROBATE CODE SECTION 17000-17006

17000. (a) The superior court having jurisdiction over the trust
pursuant to this part has exclusive jurisdiction of proceedings
concerning the internal affairs of trusts.
(b) The superior court having jurisdiction over the trust pursuant
to this part has concurrent jurisdiction of the following:
(1) Actions and proceedings to determine the existence of trusts.
(2) Actions and proceedings by or against creditors or debtors of
trusts.
(3) Other actions and proceedings involving trustees and third
persons.

17001. In proceedings commenced pursuant to this division, the
court is a court of general jurisdiction and has all the powers of
the superior court.

17002. (a) The principal place of administration of the trust is
the usual place where the day-to-day activity of the trust is carried
on by the trustee or its representative who is primarily responsible
for the administration of the trust.
(b) If the principal place of administration of the trust cannot
be determined under subdivision (a), it shall be determined as
follows:
(1) If the trust has a single trustee, the principal place of
administration of the trust is the trustee’s residence or usual place
of business.
(2) If the trust has more than one trustee, the principal place of
administration of the trust is the residence or usual place of
business of any of the cotrustees as agreed upon by them or, if not,
the residence or usual place of business of any of the cotrustees.

17003. Subject to Section 17004:
(a) By accepting the trusteeship of a trust having its principal
place of administration in this state the trustee submits personally
to the jurisdiction of the court under this division.
(b) To the extent of their interests in the trust, all
beneficiaries of a trust having its principal place of administration
in this state are subject to the jurisdiction of the court under
this division.

17004. The court may exercise jurisdiction in proceedings under
this division on any basis permitted by Section 410.10 of the Code of
Civil Procedure.

17005. (a) The proper county for commencement of a proceeding
pursuant to this division is either of the following:
(1) In the case of a living trust, the county where the principal
place of administration of the trust is located.
(2) In the case of a testamentary trust, either the county where
the decedent’s estate is administered or where the principal place of
administration of the trust is located.
(b) If a living trust has no trustee, the proper county for
commencement of a proceeding for appointing a trustee is the county
where the trust property, or some portion of the trust property, is
located.
(c) Except as otherwise provided in subdivisions (a) and (b), the
proper county for commencement of a proceeding pursuant to this
division is determined by the rules applicable to civil actions
generally.

17006. There is no right to a jury trial in proceedings under this
division concerning the internal affairs of trusts.

10 Steps in the California Trust Administration Process

Trust administration is often ignored after death. The thought is that a trust avoids probate and therefore no work is needed.  This is simply not true in most cases. Here are ten crucial steps in the California trust administration process. While not mandatory in every case they should be discussed with your attorney in every case.

1) Lodge the will (typically a “pour over” will) with the Court in the county the decedent resided in.

2) Send California Probate Code 16061.7 NOTICE to all heirs at law and everybody named in the trust.

3) Gather asset information and prepare an inventory.

4) Gather creditor information and prepare a list for notice.

5) Open probate Court file to accept creditor claims.

6) Publish in local newspaper to notify potential creditors.

7) Send notice to potential creditors including Medi-Cal (the Department of Health Services).

8) Open a trust bank account.

9) Hire an accountant.

10) Sell assets (after giving proper notice) if they should be sold.

More steps coming soon….

 

Legal Fees for Trust Funding After Death in California

Generally speaking one of the main reasons people get trusts is to REDUCE ATTORNEY FEES AFTER DEATH.  Yes, there are other benefits to a trust but this is one of the main reasons.  People want to avoid probate.  Sure probate takes 7 months minimum but beyond that it is costly… and most of that cost is attorney fees.  Thus, a living trust should reduce fees and costs after death. However, not all attorneys agree with that.  Sadly some attorneys use death as a money making opportunity. They use the confusion of a child who has lost a parent or the complete bewilderment of a widow who has never even written a check in their life to charge outrageous attorney fees.  As sad as this statement is it is the truth.

Successful attorneys make a fine living.  Successful attorneys make a fine living without gouging their clients. They make a fine living without preying on people who have just lost a loved one. However, for some that’s not enough.

Yesterday I was told of a situation I hear about a lot. It’s attorney who charge exorbitant fees after death for simple trust administration. Yes, some trust administration cases are difficult and cost thousands of dollars to clear up. Those cases would be ones where assets are not in the trust, where complex accountings are required or where there is fighting in general.  However, that’s the minority of cases.  Most trust cases are simple after death and attorney fees should be low to reflect that simplicity.

Yesterday I was told of an attorney that has preyed on a widow after her husband had a sudden death. Charges of $10,000 to administer an A/B trust at the first death. Sadly had they gone to an ethical attorney they might spend $1,000 to $2,000. From my understanding this attorney is not done yet! Hopefully the battered widow will listen to her advisors and find another attorney.

This case reminds me that you have to be careful when you choose an attorney. I am just a guy typing words here but I can tell you, from the bottom of my heart, that I was sickened when I heard this story yesterday. Absolutely sickened! I charge for my time, yes, but I never take advantage of my clients.  To me this behavior, that this other attorney has done, is criminal!

If you lose a loved one and need fair priced legal services, for a trust administration, please contact me to discuss your case.  -John

Requests for Trust Accountings

Requests for trust accounting should be done by a beneficiary as soon as possible. Pursuant to California probate code 1060 (the accounting section) and 16060 et seq (the duty to inform section).  This starts a time clock and the trustee’s failure to comply with a reasonable request can put the trustee in a place of being in breach of their fiduciary duty. This breach is important if you want to eventually remove them as trustee. It’s all about setting the stage!

Flat Fee Probate Court Attorneys

Ethics are important to us and thus our hourly fee time is carefully noted in our time keeper program. However, some clients just do not like hourly fee arrangements. They want to know exactly how much they are going to spend.  We have heard the request many times and now we can offer FLAT FEE PAYMENT OPTIONS in most California probate Court matters.

Flat fee payment options are available for most all probate court work including:

- Under $150,000 probates

- Spousal property petitions

- Trust petitions

- Heggstad petitions

- and the list goes on.

If you have the need to file in a California probate court and want a FLAT FEE that you know about BEFORE the work starts let us know!

 

California Probate Code 850 Petition

I have personally filed, and successfully completed, more Heggstad petitions than any attorney I know of.  I know the nuances.  I know what Judges like to see. I know what the Heggstad case says. I also know to use California probate code 850 and not California probate code 17200 for a Heggstad petition. Ask your probate attorney which probate code section they would use for their Heggstad petition.  PC 17200 does a lot but it’s not the foundation, or the law, for a Heggstad petition.  In a Heggstad petition you need to establish intent to hold assets in the trust that is in line with the Heggstad case. Once that intent is established California Probate Code 850 is what “moves” the asset into the trust, retroactively, to the date of death. Know the code!  Let’s talk about YOUR Heggstad case!  -John

P.S. Yes, I am happy to associate in with other attorneys to help them complete their Heggstad petition successfully.

 

PROBATE CODE SECTION 850-859

850. (a) The following persons may file a petition requesting that
the court make an order under this part:
(1) A guardian, conservator, or any claimant, in the following
cases:
(A) Where the conservatee is bound by a contract in writing to
convey real property or to transfer personal property, executed by
the conservatee while competent or executed by the conservatee’s
predecessor in interest, and the contract is one that can be
specifically enforced.
(B) Where the minor has succeeded to the interest of a person
bound by a contract in writing to convey real property or to transfer
personal property, and the contract is one that can be specifically
enforced.
(C) Where the guardian or conservator or the minor or conservatee
is in possession of, or holds title to, real or personal property,
and the property or some interest therein is claimed to belong to
another.
(D) Where the minor or conservatee has a claim to real or personal
property title to or possession of which is held by another.
(2) The personal representative or any interested person in any of
the following cases:
(A) Where the decedent while living is bound by a contract in
writing to convey real property or to transfer personal property and
dies before making the conveyance or transfer and the decedent, if
living, could have been compelled to make the conveyance or transfer.
(B) Where the decedent while living binds himself or herself or
his or her personal representative by a contract in writing to convey
real property or to transfer personal property upon or after his or
her death and the contract is one which can be specifically enforced.
(C) Where the decedent died in possession of, or holding title
to, real or personal property, and the property or some interest
therein is claimed to belong to another.
(D) Where the decedent died having a claim to real or personal
property, title to or possession of which is held by another.
(3) The trustee or any interested person in any of the following
cases:
(A) Where the trustee is in possession of, or holds title to, real
or personal property, and the property, or some interest, is claimed
to belong to another.
(B) Where the trustee has a claim to real or personal property,
title to or possession of which is held by another.
(C) Where the property of the trust is claimed to be subject to a
creditor of the settlor of the trust.
(b) The petition shall set forth facts upon which the claim is
based.

 

851. (a) At least 30 days prior to the day of the hearing, the
petitioner shall cause notice of the hearing and a copy of the
petition to be served in the manner provided in Chapter 4 (commencing
with Section 413.10) of Title 5 of Part 2 of the Code of Civil
Procedure on all of the following persons where applicable:
(1) The personal representative, conservator, guardian, or trustee
as appropriate.
(2) Each person claiming an interest in, or having title to or
possession of, the property.
(b) Except for those persons given notice pursuant to subdivision
(a), notice of the hearing, together with a copy of the petition,
shall be given as provided in Section 1220 if the matter concerns a
decedent estate, as provided in Section 1460 if the matter concerns a
conservatorship or guardianship, or as provided in Section 17203 if
the matter concerns a trust to all of the following persons:
(1) Each person listed in Section 1220 along with any heir or
devisee whose interest in the property may be affected by the
petition if the matter concerns a decedent estate.
(2) Each person listed in Section 1460 if the matter concerns a
conservatorship or guardianship.
(3) Each person listed in Section 17203 if the matter concerns a
trust.
(c) The court may not shorten the time for giving the notice of
hearing under this section.
852. An interested person may request time for filing a response to
the petition for discovery proceedings, or for other preparation for
the hearing, and the court shall grant a continuance for a
reasonable time for any of these purposes.

 
853. A person having or claiming title to or an interest in the
property which is the subject of the petition may, at or prior to the
hearing, object to the hearing of the petition if the petition is
filed in a court which is not the proper court under any other
provision of law for the trial of a civil action seeking the same
relief and, if the objection is established, the court shall not
grant the petition.

 

854. If a civil action is pending with respect to the subject
matter of a petition filed pursuant to this chapter and jurisdiction
has been obtained in the court where the civil action is pending
prior to the filing of the petition, upon request of any party to the
civil action, the court shall abate the petition until the
conclusion of the civil action. This section shall not apply if the
court finds that the civil action was filed for the purpose of delay.

 

855. An action brought under this part may include claims, causes
of action, or matters that are normally raised in a civil action to
the extent that the matters are related factually to the subject
matter of a petition filed under this part.

 
856. Except as provided in Sections 853 and 854, if the court is
satisfied that a conveyance, transfer, or other order should be made,
the court shall make an order authorizing and directing the personal
representative or other fiduciary, or the person having title to or
possession of the property, to execute a conveyance or transfer to
the person entitled thereto, or granting other appropriate relief.

 
856.5. The court may not grant a petition under this chapter if the
court determines that the matter should be determined by a civil
action.
857. (a) The order is prima facie evidence of the correctness of
the proceedings and of the authority of the personal representative
or other fiduciary or other person to make the conveyance or
transfer.
(b) After entry of an order that the personal representative,
other fiduciary, or other person execute a conveyance or transfer,
the person entitled thereunder has the right to the possession of the
property, and the right to hold the property, according to the terms
of the order as if the property had been conveyed or transferred in
accordance with the terms of the order.

 

858. If a proceeding has been brought under this part by a
conservator on behalf of a conservatee, or by a guardian on behalf of
a minor, and the conservatee or minor dies during the pendency of
the proceeding, the personal representative of the conservatee or
minor’s estate or other successor in interest may proceed with the
matter and the existing proceeding shall not be dismissed on account
of the death of the conservatee or minor.

 

859. If a court finds that a person has in bad faith wrongfully
taken, concealed, or disposed of property belonging to the estate of
a decedent, conservatee, minor, or trust, or has taken, concealed, or
disposed of the property by the use of undue influence in bad faith
or through the commission of elder or dependent adult financial
abuse, as defined in Section 15610.30 of the Welfare and Institutions
Code, the person shall be liable for twice the value of the property
recovered by an action under this part. The remedy provided in this
section shall be in addition to any other remedies available in law
to a trustee, guardian or conservator, or personal representative or
other successor in interest of a decedent.

 

 

PROBATE CODE  SECTION 17200-17211

17200. (a) Except as provided in Section 15800, a trustee or
beneficiary of a trust may petition the court under this chapter
concerning the internal affairs of the trust or to determine the
existence of the trust.
(b) Proceedings concerning the internal affairs of a trust
include, but are not limited to, proceedings for any of the following
purposes:
(1) Determining questions of construction of a trust instrument.
(2) Determining the existence or nonexistence of any immunity,
power, privilege, duty, or right.
(3) Determining the validity of a trust provision.
(4) Ascertaining beneficiaries and determining to whom property
shall pass or be delivered upon final or partial termination of the
trust, to the extent the determination is not made by the trust
instrument.
(5) Settling the accounts and passing upon the acts of the
trustee, including the exercise of discretionary powers.
(6) Instructing the trustee.
(7) Compelling the trustee to do any of the following:
(A) Provide a copy of the terms of the trust.
(B) Provide information about the trust under Section 16061 if the
trustee has failed to provide the requested information within 60
days after the beneficiary’s reasonable written request, and the
beneficiary has not received the requested information from the
trustee within the six months preceding the request.
(C) Account to the beneficiary, subject to the provisions of
Section 16064, if the trustee has failed to submit a requested
account within 60 days after written request of the beneficiary and
no account has been made within six months preceding the request.
(8) Granting powers to the trustee.
(9) Fixing or allowing payment of the trustee’s compensation or
reviewing the reasonableness of the trustee’s compensation.
(10) Appointing or removing a trustee.
(11) Accepting the resignation of a trustee.
(12) Compelling redress of a breach of the trust by any available
remedy.
(13) Approving or directing the modification or termination of the
trust.
(14) Approving or directing the combination or division of trusts.
(15) Amending or conforming the trust instrument in the manner
required to qualify a decedent’s estate for the charitable estate tax
deduction under federal law, including the addition of mandatory
governing instrument requirements for a charitable remainder trust as
required by final regulations and rulings of the United States
Internal Revenue Service.
(16) Authorizing or directing transfer of a trust or trust
property to or from another jurisdiction.
(17) Directing transfer of a testamentary trust subject to
continuing court jurisdiction from one county to another.
(18) Approving removal of a testamentary trust from continuing
court jurisdiction.
(19) Reforming or excusing compliance with the governing
instrument of an organization pursuant to Section 16105.
(20) Determining the liability of the trust for any debts of a
deceased settlor. However, nothing in this paragraph shall provide
standing to bring an action concerning the internal affairs of the
trust to a person whose only claim to the assets of the decedent is
as a creditor.
(21) Determining petitions filed pursuant to Section 15687 and
reviewing the reasonableness of compensation for legal services
authorized under that section. In determining the reasonableness of
compensation under this paragraph, the court may consider, together
with all other relevant circumstances, whether prior approval was
obtained pursuant to Section 15687.
(22) If a member of the State Bar of California has transferred
the economic interest of his or her practice to a trustee and if the
member is a deceased member under Section 9764, a petition may be
brought to appoint a practice administrator. The procedures,
including, but not limited to, notice requirements, that apply to the
appointment of a practice administrator for a deceased member shall
apply to the petition brought under this section.
(23) If a member of the State Bar of California has transferred
the economic interest of his or her practice to a trustee and if the
member is a disabled member under Section 2468, a petition may be
brought to appoint a practice administrator. The procedures,
including, but not limited to, notice requirements, that apply to the
appointment of a practice administrator for a disabled member shall
apply to the petition brought under this section.
(c) The court may, on its own motion, set and give notice of an
order to show cause why a trustee who is a professional fiduciary,
and who is required to be licensed under Chapter 6 (commencing with
Section 6500) of Division 3 of the Business and Professions Code,
should not be removed for failing to hold a valid, unexpired,
unsuspended license.
17200.1. All proceedings concerning the transfer of property of the
trust shall be conducted pursuant to the provisions of Part 19
(commencing with Section 850) of Division 2.

 

17201. A proceeding under this chapter is commenced by filing a
petition stating facts showing that the petition is authorized under
this chapter. The petition shall also state the grounds of the
petition and the names and addresses of each person entitled to
notice of the petition.

 

17202. The court may dismiss a petition if it appears that the
proceeding is not reasonably necessary for the protection of the
interests of the trustee or beneficiary.

 

17203. (a) At least 30 days before the time set for the hearing on
the petition, the petitioner shall cause notice of hearing to be
mailed to all of the following persons:
(1) All trustees.
(2) All beneficiaries, subject to Chapter 2 (commencing with
Section 15800) of Part 3.
(3) The Attorney General, if the petition relates to a charitable
trust subject to the jurisdiction of the Attorney General.
(b) At least 30 days before the time set for hearing on the
petition, the petitioner shall cause notice of the hearing and a copy
of the petition to be served in the manner provided in Chapter 4
(commencing with Section 413.10) of Title 5 of Part 2 of the Code of
Civil Procedure on any person, other than a trustee or beneficiary,
whose right, title, or interest would be affected by the petition and
who does not receive notice pursuant to subdivision (a). The court
may not shorten the time for giving notice under this subdivision.
(c) If a person to whom notice otherwise would be given has been
deceased for at least 40 days, and no personal representative has
been appointed for the estate of that person, and the deceased person’
s right, title, or interest has not passed to any other person
pursuant to Division 8 (commencing with Section 13000) or otherwise,
notice may instead be given to the following persons:
(1) Each heir and devisee of the decedent, and all persons named
as executors of the will of the decedent, so far as known to the
petitioner.
(2) Each person serving as guardian or conservator of the decedent
at the time of the decedent’s death, so far as known to the
petitioner.

 

17204. (a) If proceedings involving a trust are pending, a
beneficiary of the trust may, in person or by attorney, file with the
court clerk where the proceedings are pending a written request
stating that the beneficiary desires special notice of the filing of
petitions in the proceeding relating to any or all of the purposes
described in Section 17200 and giving an address for receiving notice
by mail. A copy of the request shall be personally delivered or
mailed to the trustee or the trustee’s attorney. If personally
delivered, the request is effective when it is delivered. If mailed,
the request is effective when it is received. When the original of
the request is filed with the court clerk, it shall be accompanied by
a written admission or proof of service. A request for special
notice may be modified or withdrawn in the same manner as provided
for the making of the initial request.
(b) (1) An interested person may request special notice in the
same manner as a beneficiary under subdivision (a), for the purpose
set forth in paragraph (9) of subdivision (b) of Section 17200. The
request for special notice shall be accompanied by a verified
statement of the person’s interest.
(2) For purposes set forth in paragraphs (2), (4) to (6),
inclusive, (8), (12), (16), (20), and (21) of subdivision (b) of
Section 17200, an interested person may petition the court for an
order for special notice of proceedings involving a trust. The
petition shall include a verified statement of the creditor’s
interest and may be served on the trustee or the trustee’s attorney
by personal delivery or in the manner required by Section 1215. The
petition may be made by ex parte application.
(3) For purposes of this subdivision, an “interested person” means
only a creditor of a trust or, if the trust has become irrevocable
upon the death of a trustor, a creditor of the trustor.
(4) This section does not confer standing on an interested person
if standing does not otherwise exist.
(c) Except as provided in subdivision (d), after serving and
filing a request and proof of service pursuant to subdivision (a) or
paragraph (1) of subdivision (b), the beneficiary or the interested
person is entitled to notice pursuant to Section 17203. If the
petition of an interested person filed pursuant to paragraph (2) of
subdivision (b) is granted by the court, the interested person is
entitled to notice pursuant to Section 17203.
(d) A request for special notice made by a beneficiary whose right
to notice is restricted by Section 15802 is not effective.

 
17205. If a trustee or beneficiary has served and filed either a
notice of appearance, in person or by counsel, directed to the
petitioner or the petitioner’s counsel in connection with a
particular petition and proceeding or a written request for a copy of
the petition, and has given an address to which notice or a copy of
the petition may be mailed or delivered, the petitioner shall cause a
copy of the petition to be mailed to that person within five days
after service of the notice of appearance or receipt of the request.

 

17206. The court in its discretion may make any orders and take any
other action necessary or proper to dispose of the matters presented
by the petition, including appointment of a temporary trustee to
administer the trust in whole or in part.

 

17209. The administration of trusts is intended to proceed
expeditiously and free of judicial intervention, subject to the
jurisdiction of the court.
17210. In a case involving a charitable trust subject to the
jurisdiction of the Attorney General, the Attorney General may
petition under this chapter.
17211. (a) If a beneficiary contests the trustee’s account and the
court determines that the contest was without reasonable cause and in
bad faith, the court may award against the contestant the
compensation and costs of the trustee and other expenses and costs of
litigation, including attorney’s fees, incurred to defend the
account. The amount awarded shall be a charge against any interest of
the beneficiary in the trust. The contestant shall be personally
liable for any amount that remains unsatisfied.
(b) If a beneficiary contests the trustee’s account and the court
determines that the trustee’s opposition to the contest was without
reasonable cause and in bad faith, the court may award the contestant
the costs of the contestant and other expenses and costs of
litigation, including attorney’s fees, incurred to contest the
account. The amount awarded shall be a charge against the
compensation or other interest of the trustee in the trust. The
trustee shall be personally liable and on the bond, if any, for any
amount that remains unsatisfied.

Parent to Child Exemption Form

Upon death or any other transfer of real estate in California you need to evaluate if a PT-58 form is required. It is the document which tells the county assessor that a transfer has been made, of real property, between a parent and a child.  This will preserve the parent’s property tax assessment or basis.  This is also known as the “prop 13 basis.”  Likewise if a transfer is between a grandparent and a grandchild a similar exclusion is available in some cases.  This should be done within 3 years of the transfer and always done BEFORE any sale or transfer to an outsider. This is imperative!  Failure to file this with the county assessor in the appropriate county will create unnecessary property taxes now and into the future.

The rules allow the transfer of the personal residence AND $1,000,000 of other property at it’s assessed value.

There can certainly be value in hiring a professional to assist with this as it is easy to mess up!

Contact me to discus your parent-child and grandparent-grandchild transfers!

-John

Finding Lost Assets

In California probate and trust administration cases we often have to go find the money. There are a number of things we do.  These are often employed when I am hired as to represent a beneficiary. That is, they want to make sure the Executor or Trustee is doing things right and accounting for all the money. Some common things we do:

- Get old tax returns and check all the 1099s;

- Get the decedent’s credit report which can show loans on hidden assets;

- Title search anywhere in the country and, with some information can even look up old title history to find property taken someone else;

- Get copies of bank records and check for money coming in or going out in large amount or unusual patterns.

Beyond all that we can hire forensic accountants to dig even deeper and get into old records, cell phone bills, employment records, etc….

Hire an attorney and protect your interests!

California Trustee Powers

A lot of times when I go through a trust client’s ask “why is that there?”  Of course these documents are based on forms and some of the form is “boilerplate” and the same for most clients.  Our forms have been tweaked over 30 years of development to have what we think our the crucial elements. Of course we select the right trust form for YOU, we customize the document to fit your wishes precisely, and help get the trust properly funded. However, there is still a “form” or “boilerplate” element to it. That’s reality. Much of the “why is that there” questions come from the trustee’s power section. We want to give the trustee as much power as possible so they can effectively administer the trust. Certainly there are instances where the powers are tweaked and some are eliminated but for most people the basic form works.  Though much of it may not apply today it may apply in the future so we generally leave in all the powers.  Please remember you shouldn’t be scared by a power because if you don’t trust your trustee implicitly then you should pick a different trustee!  Here are a list of powers from one of our trust forms to give you an example along with an excerpt from the California probate code on trustee powers.  Let me know of any questions you have.  -John

 

TRUSTEE POWERS OVER THE TRUST ESTATE

In extension, and not in limitation of the powers given by law or other provisions of this instrument, the Trustee under the trust and trust estate created hereunder shall have the following powers with respect to the trust and trust estate and the property thereof, in each case to be exercised from time to time in the discretion of the Trustee and without order or license of court:

A.        To retain indefinitely any investments and real property and to invest and reinvest in stocks, shares and obligations of corporations, of unincorporated associations or trusts and of investment companies, or in a common trust fund without giving notice to any beneficiary, or in any other kind of personal or real property, notwithstanding the fact that any or all of the investments made or retained are of a character or size which, but for this express authority, would not be considered proper for the Trustee.

B.         To hold, retain, and continue to operate, solely at the risk of the trust estate, any business enterprise the Settlors may transfer to the Trustee, whether organized as a sole proprietorship, partnership or corporation; to become or remain a partner in any such business; to incorporate such business and to hold the stock as an investment of the estate and the trust estate; to employ such officers, managers, employees or agents as the Trustee may deem advisable in the management of such business; to cause the Trustee to take part in the management of such business as director, officer or otherwise; to do and perform all other acts which the Trustee in the Trustee’s discretion may deem necessary or advisable in the operation of such business, without liability of the Trustee for loss from the continuance of such business, such losses, if any, to be chargeable to the trust estate as a whole; and to dissolve, liquidate or sell such business at such time and upon such terms as the Trustee in the Trustee’s discretion deems to be in the best interests of the trust estate.  The Trustee shall be entitled to extra compensation for these services commensurate with the time devoted to and the responsibility involved in the continuance and operation or sale of such business;

C.        To manage, control, sell, convey, exchange, partition, divide, subdivide, improve, or repair any real property; to grant options and to sell upon deferred payments; to lease for terms within or extending beyond the duration of this trust for any purpose, including exploration for and removal of gas, oil and minerals; to create restrictions, easements and other servitudes relating to any real property; to compromise, arbitrate or otherwise adjust claims in favor of or against the Estate or the trust estate; to institute, compromise and defend actions and proceedings; and to carry such insurance as the Trustee may deem advisable;

D.        To invest and reinvest the principal, and income if the Trustee is required to accumulate it, and to purchase or acquire by exchange or otherwise therewith every kind of property, real, personal or mixed, and every kind of investment, specifically including, but not by way of limitation, term demand deposits with any bank or savings and loan association, corporate obligations of every kind, and stock, preferred or common, which men of prudence, discretion and intelligence acquire for their own account; to invest in any common trust fund now or hereafter established by a corporate Trustee or corporate executor;

E.         To loan funds or assets belonging to the trust on such terms and conditions as the Trustee deems advisable;

F.         To borrow money for any trust purpose upon such terms and conditions as the Trustee may deem proper, and to obligate the trust estate for repayment; to hypothecate the trust estate or any part thereof and to replace, renew and extend any encumbrance thereon, upon such terms, conditions and security as may be determined by the Trustee; to encumber the trust estate or any of its property by mortgage, deed of trust, pledge or otherwise, using such procedure to consummate the transaction as the Trustee may deem advisable;

G.        To have, respecting securities, all the rights, powers and privileges of an owner, including the power to pay assessments and other sums deemed by the Trustee to be necessary for the protection of the trust estate; to participate in voting trusts, pooling agreements, foreclosures, reorganizations, consolidations, mergers, and liquidations, and in connection therewith, to deposit securities with and transfer title to any protective or other committee under such terms as the Trustee may deem advisable; to exercise or sell stock subscription or conversion right; to accept and retain as an investment any securities or other property received through the exercise of any of the foregoing powers, regardless of any limitations elsewhere in this instrument relative to investments by the Trustee;

H.        To improve or develop, assign, partition, divide or subdivide any properties, real or personal; to construct, alter or repair buildings or structures on real estate; to settle boundary lines and easements and other rights with respect to real estate; to partition and to join with co-owners and others in dealing with real estate in any way;

I.          To receive additions to any trust under this instrument by gift or will or otherwise, and to hold and administer the same under the provisions hereof;

J.          When dividing or distributing any trust fund, to make such payments division or distribution wholly or partly in kind by allotting and transferring specific securities or other personal or real property or undivided interest therein as a part or the whole of any one or more payments or shares at current values;

K.        To open any account or accounts and execute signature cards and other documents on behalf of the trust pursuant to this paragraph; should any savings or other banking accounts be established by the Trustee hereunder, all checks, drafts, withdrawals, and all documents relating thereto, shall be signed by one Co-Trustee and shall not be required to be signed by all acting Co-Trustees; either Co-Trustee shall have the power and authority to place additional persons as signatories on any such bank accounts;

L.         To buy, sell and trade in securities of any nature on margin, or otherwise, including options, commodities and short sales and for such purpose may maintain and operate brokerage accounts with brokers;

M.        If at any time the costs of administration of this trust (or any share thereof) are of such an amount in relation to the then principal and undistributed income of this trust (or any share thereof) that the Trustee deems it advisable to distribute the then principal and undistributed income of this trust (or any share thereof) to the then living income beneficiary or beneficiaries, the Trustee may do so.  Such a distribution on behalf of a beneficiary under a disability, in the Trustee’s sole discretion may be made to the guardian of the person of such beneficiary, or to the parent of such beneficiary, if such beneficiary is a minor, or may be applied by the Trustee for such beneficiary’s benefit;

N.        Upon any division of the trust estate into separate shares or trusts and upon any distribution, the Trustee may apportion and allocate the assets of the trust estate in cash or in kind, or partly in cash and partly in kind, or in undivided interests, in such manner as the Trustee in the Trustee’s discretion deems advisable.  The Trustee may sell such property as the Trustee deems necessary to make such division or distribution.  After any division of the trust estate, the Trustee may make joint investments with funds from some or all of the several shares or trusts; provided, however, that nothing herein contained shall give the Trustee any authority to change or alter as between beneficiaries the total value of such beneficiary’s trust estate;

O.        Upon the death of any beneficiary, any estate, inheritance, succession or other death taxes, duties, charges or assessments, together with interest, penalties, costs, Trustee’s compensation and attorney’s fees, which shall become due by reason of the inclusion of the trust estate or any interest therein in the estate of such deceased beneficiary for such tax purposes, may be paid by the Trustee from the trust estate, unless other adequate provision shall have been made therefore.  Any such payments shall be charged to the principal of the share of the trust estate or the separate trust so included.  The Trustee may make any such payments directly to a personal representative or other fiduciary, and the Trustee may rely upon a written statement from such fiduciary as to the amount and propriety of such taxes, interest, penalties and other costs, and shall be under no duty to see to the application of any funds so paid;

P.         The interest of any beneficiary in the principal or income of a trust estate shall not be pledged, assigned, hypothecated or in any way alienated by any beneficiary prior to its actual receipt by the beneficiary, and such interest shall be immune from seizure or control of creditors of such beneficiary or of creditors of any spouse of any married beneficiary or of creditors of others, and neither the income nor the principal of a trust estate shall be subject to attachment, garnishment, or claims, through bankruptcy or otherwise, nor be subject to judgment of any court or proceedings in aid of execution thereon.  Should the Trustee so desire, the Trustee may as a condition precedent, withhold payments of principal or interest under this trust until personal order for payment is given or personal receipt furnished by each such beneficiary as to his or her share.  The Trustee may, however, deposit in any bank designated in writing by a beneficiary, to his or her credit, income or principal payable to such beneficiary.  Nothing contained in this paragraph shall be construed as restricting in any way the exercise of any power of appointment granted hereunder;

Q.        The Trustee may apply payments for the benefit of any beneficiary or may make payments to any beneficiary under disability to the guardian or conservator of the beneficiary, or to the natural parent of any beneficiary who is a minor.  Sums necessary for support and education may be paid directly to minor beneficiaries who, in the judgment of the Trustee, have attained sufficient age and discretion to render it probable that the money will be properly expended;

R.         Until a corporate Trustee shall receive in its trust department where this trust is being administered written notice, or until an individual Trustee shall personally receive written notice, of any birth, marriage, death, or other event upon which the right to payments from this trust may depend, the Trustee shall incur no liability to persons whose interest may have been affected by that event for disbursements made in good faith;

S.         Income accrued or in the hands of the Trustee for payment to an income beneficiary at the termination of his or her interest or estate under this trust shall go to the beneficiaries entitled to the next succeeding interest in the proportions in which they take such interest.  The Trustee shall not be required to prorate taxes and other current expenses to the date of termination; and

T.         Unless otherwise specifically provided herein, the Trustee in the Trustee’s discretion may determine what is principal or income and what shall be charged or credited to either, and the Trustee may rely upon the statement of the paying corporation as to whether dividends are paid from profits or earnings or are a return of capital or a distribution of assets, and as to any other fact relevant hereunder concerning the source or character of dividends or distributions of corporate assets.  Except insofar as the Trustee shall exercise the discretion herein conferred, and except as otherwise provided in this instrument, matters relating to principal and income shall be governed by the provisions of the trust law of the State of California, Division 9 of the California Probate Code, from time to time existing; provided, however, that the powers herein conferred upon the Trustee shall not in any event be construed as allowing an individual noncorporate Trustee to exercise the Trustee’s discretion except in a fiduciary capacity.

 

 

CALIFORNIA CODES PROBATE CODE SECTION 16200-16203
16200.  A trustee has the following powers without the need to
obtain court authorization:
(a) The powers conferred by the trust instrument.
(b) Except as limited in the trust instrument, the powers
conferred by statute.
(c) Except as limited in the trust instrument, the power to
perform any act that a trustee would perform for the purposes of the
trust under the standard of care provided in Section 16040 or 16047.
16201.  This chapter does not affect the power of a court to relieve
a trustee from restrictions on the exercise of powers under the
trust instrument.
16202.  The grant of a power to a trustee, whether by the trust
instrument, by statute, or by the court, does not in itself require
or permit the exercise of the power. The exercise of a power by a
trustee is subject to the trustee’s fiduciary duties.
16203.  An instrument that incorporates the powers provided in
former Section 1120.2 (repealed by Chapter 820 of the Statutes of
1986) shall be deemed to refer to the powers provided in Article 2
(commencing with Section 16220). For this purpose, the trustee’s
powers under former Section 1120.2 are not diminished and the trustee
is not required to obtain court approval for exercise of a power for
which court approval was not required by former law.