When I conduct the initial consultation with my clients, there is an issue that often pops up that I think we should address in this blog entry.
Clients often want to grant someone (sometimes a child or significant other) the right to remain in the primary residence after the clients die. In a recent case, my married clients (who have 3 children) told me they wanted their daughter (who currently resides with them) to be able to remain in their primary residence until she passes away or decides to move out. At that time, the house will be sold and the money divided among all their surviving children. Apparently their daughter had fallen on hard times, separated from her husband, and needed to stay with them.
This raises many interesting questions that should be addressed in the estate plan. If the named beneficiary gets to stay there until they die (should they so choose), we generally call that a "life estate" in the property. Here are several things I discuss with my clients when this issue arises:
1) First, I tell them it's important to outline all the provisions clearly in their living trust so we can avoid arguments that may occur after they die. Perhaps all their children might not be that crazy about giving the daughter the right to live in the property till she passes. After all, doing so would delay their inheritance with respect to the property.
2) I ask if they've discussed this idea with the other beneficiaries. How do they all feel about it?
3) Do they have any sons-in-law or daughters-in-law that may create a problem if they find out about this? After all, it's not only the children of the couple that can be a problem.
4) If their daughter gets to stay in the property, will it be for "life" or perhaps for a period of time (like 5 or 10 years).
5) If their daughter remains in the property, who is going to pay for all the property taxes, upkeep, utilities, and other maintenance of the property? What if they don't pay for those things? What happens then?
Those issues should be outlined clearly and addressed in the living trust. The more specific, the better, as doing so may help prevent arguments later on. Whether you plan on granting a "life estate" or some other similar solution to a specific beneficiary, you should discuss the pros and cons with an estate planning lawyer who can help you think through the various options.
Hello everyone. This is Robert Mansour, and I wanted to present a very quick explanation today of the standard estate plan that most of my clients implement. You'll notice that in the background of this graphic, I have a tool box (a graphic of a tool box), and that is the analogy that I like to use - An estate plan is a legal toolbox and it's full of all different kinds of "legal tools" that can help you and your family.
If something should happen to you, either death or incapacity or car accident (something that happens when people need to assist you). Also this assists in the distribution of property after you pass away. So the four major tools of the estate plan are on the screen. There's the living trust at the top, wills, power of attorney and health care documents.
Now there are other tools, but for our purposes today, we're going to hit on the big four. So a living trust is a legal document up here at the top left that an individual can create, or two people can create like a husband and a wife and three or four people etc. The people who create the living trust are called the "Settlors." You'll see at the very top left the word Settlors. If it's an individual, obviously Settlor, Settlors for plural (when you have more than one individual). The term that you might be familiar with is "Grantor" or "Trustor". They all mean the same thing. The Settlors are the people who create the living trust from the very beginning. So an individual would be that person, a husband and wife, etc.
Now, what I want you to understand also is that a living trust is basically a contract. It's a legally enforceable document. So the contents of the document can be enforced in court. So it's not anything terribly mysterious. For example, my wife and I have a living trust, and it is nothing more than a contract between me and my wife about what happens with our stuff. If we should get sick, something happens to us...who is in charge after we pass away, where does our estate go? Who sees to it that those assets get to the right people? In our case, it's our two children. And we want to make sure that those assets get to our kids in a certain fashion. And all of those rules and regulations are contained in our living trust. Now, the next people involved in a living trust are called the Trustees.
These are the people who are in charge of everything that is in the living trust. So let's say for example, let's say the Smith family creates the Smith Family Trust. Assets that are in the name of the Smith Family Trust are managed by the trustees. In the very beginning, the Trustees are the people who created the trust, whether it's an individual or a married couple. And so you are the initial trustee of your own trust. At some point, you will not be able to be the trustee and the people who will take over are folks called your "Successor Trustees." I use the analogy of the airplane. As you can see at the very top of the graphic - here in the very front of the airplane in the cockpit are the initial Trustees (i.e., the husband and the wife or the individual who created the living trust). The Settlor(s) are typically also the initial Trustees.
And then the first class are the Successor Trustees. They are sitting there having champagne, maybe some shrimp cocktail. As soon as the people in the cockpit can no longer fly that plane, those Successor Trustees step into the cockpit and take control over the living trust. Now they have to follow the "flight plan" (which are the rules of the living trust). So they can't just do anything. Do you see these stars here in the middle of the graphic? The stars represent the "assets" of the living trust (the cargo on the plane, if you will). So a lot of people create a living trust, but they don't put anything in it. It's basically like building a house and not furnishing it.
So once you create your living trust, you have to put things in your living trust - and you do that by changing title to your assets. So for example, your real estate will no longer be held in your name alone. It would say "Smith Family Trust" on it, or "Johnson Family Trust". Your bank accounts, your investment accounts - not all of them - but many of them are going to say Smith Family Trust on them. You have to actually physically go to the bank or call your investment company and change the name on your assets. Once you create your living trust, we call that "funding" the living trust.
The final people involved in the living trust are the "beneficiaries." These are the people who benefit from the living trust. Once again, in the very beginning, it's the Settlors - the people who created the living trust are the beneficiaries of their trust. Eventually, other people will be the beneficiaries such as the children or whoever else you have as the beneficiary of your living trust. Now you'll notice out here, there is a star that is floating out here. This is an asset that's not in the living trust. I'll get to that in just a minute. Now, the living trust is a common document among two people or a single document for one person. Then you have the wills. If you're dealing with a married couple, each person is going to have their own will. The person in charge of the will is called the "Executor." People tend to confuse the terms "Executor" and "Trustee" a lot. They tend to use them interchangeably. In fact, they are not interchangeable terms. They are separate jobs. Now you can choose the same people to do those jobs, but they are nevertheless separate jobs. So the executor is the person in charge of the will and the trustees are the people in charge of the trust.
Now you will notice that I drew a trampoline down here. Here's why I deliberately put the will under the living trust. I want you to get a visual. The will is like a big "safety net" that sits under the trust. If an asset is sitting outside the trust like this one over here, and after you die, we find this asset not in the trust. It falls, bounces off the trampoline, and goes into the trust. So consider the will like a big safety net that sits under your living trust.
Now you're also going to have powers of attorney. The power of attorney is also a very important document. The power of attorney is a managed by somebody known as your "Agent." Your agent is the person who's in charge. Now the agents can be the same people as the trustees, the executor, it can be the same people. It's just a different job. In most cases, with a married couple, the husband is first in line for the wife and the wife is first in line for the husband.
So the agent is the person who gets to act on your behalf. That's what the power of attorney is. You're giving someone the legal authority to act on your behalf in matters that do not directly involve your trust, your will, or healthcare decisions. So for example, let's say I need to call my wife's credit card company or my wife's former employer, because I need information about something. Sometimes you'll run into resistance when you do that - because they'll tell you, "No, we can't give you that information because it's private information." However, if I have power of attorney given to me by my wife to me and I'm her agent, therefore I can act on her behalf. There may be times in life when I need to do that.
Now, keep in mind, this is a power that you have to give somebody. They can't take it from you. I get calls from clients all the time and they say, "Hey, I'm at the hospital. My dad is sick. My mom is sick. I need power of attorney over them." I say, "Well, you can't just take it from them. They have to give you that authority." In many cases, clients are calling me too late. Their father or their mother, or their loved one is in a coma or they are not doing well. They're at the hospital - whatever the case may be. So you want to make sure you get this legal toolbox set up BEFORE something happens. So that's power of attorney, and then you have the health care documents down here. Once again, we use the term agent to be the person in charge of health care decisions.
There are two important documents in California that go under the healthcare discussion. The first one is something called an Advance Health Care Directive. Sometimes people confuse this with something called "power of attorney for health care." In California, we call this thing an advance health care directive - where you give someone the authority to make health care decisions on your behalf. It's very similar to power of attorney but this one is specific to health care. This is where you let people know what your wishes are - what kind of measures do you want. If you're very sick - and this is not just about pulling the plug - that's what people usually think about. It's a lot more than that. This individual is your advocate. They are the ones who can demand answers from doctors and nurses and other professionals. They can move you from one facility to another. They can do a lot of things.
It's not just about end of life decisions. In California, it's becoming increasingly important to have a separate authorization for the release of medical records. So even though you are the agent, some facilities might give you a hard time if you're trying to obtain the medical records of a loved one. There may be times when you need those records for a variety of reasons, including perhaps getting a second opinion about a recommended surgery or something like that. So those are the documents that go into health care decisions.
So this is just a very cursory and quick glance of the four major tools that go into most estate plans. I hope you found that helpful. If you want to learn more about my practice, you can always visit www.MansourLaw.com. You can also call our office at (661) 414-7100. Thanks so much.
In 1789, statesman Benjamin Franklin wrote to a friend and penned the famous words, “Nothing is certain except death and taxes.” Some 200 years later, those words are just as true as when Mr. Franklin cited them. Of those two things, unfortunately one is the finality of life. In thinking about our own mortality, we often wonder, not about ourselves, but those we leave behind.
You are probably considering estate planning and, like many people, you might have a number of questions. One is likely "Should I even do this?" The simple answer to that question is a resounding, YES. Let's expore the reasons why you should arrange to speak to an attorney about an estate plan and why you should do so as soon as possible.
What an Estate Plan can give you now?
Peace of Mind
No one likes to talk about it, but our mortality sometimes keeps us up at night. According to the Center for Disease Control and Prevention (CDC), more than 2.8 million people died in the United States from a variety of causes in 2018. That number is very sobering when we consider that some of these deaths were sudden and without warning.
Creating a comprehensive estate plan will be one of the best ways to ensure that your family will be taken care of and your legacy will be able to carry on. It's not as scary as it seems if you work with an attorney who can explain it all to you in plain English.
Think of it this way; a captain of a ship is responsible for everyone on board, from the crew to the passengers. While the captain has that responsibility, he doesn’t stand and steer the ship constantly, he allows others to take his direction and keep to the course until the ship is safely at its destination. Like that captain, your estate plan will allow you to have others follow your directions to make sure those in your life are safe.
Who Gets My Stuff?
Imagine this. After months, you decided to clean out your garage. You set a day, and after hours of working on it, you are done. Then you look around and see all this “stuff." Maybe you are asking yourself how you ever accumulated all the "stuff." But in looking around further, you recognize what is important, less important, and quite frankly, what is just junk you should have gotten rid of a long time ago.
After your pass away, your family will need to sort out all the "stuff" you left behind. This includes real estate, bank accounts, investments, life insurance, retirement accounts, and other assets. This is already a difficult time for them. However, by creating your estate plan, you will be helping your family as you've already sorted everything for them. They have to follow your instructions, and if your plan is set up correctly, they will be able to settle your estate without too much trouble.
By creating a Trust and transferring your assets to the Trust during your life takes the guess work out of what do to with your assets. You will also designate who will be handling the management of your affairs instead of just leaving it to chance. Think of your estate plan like a flight plan that you hand your family. All they have to do is follow that flight plan and hopefully they will have a smooth landing.
Perhaps you've heard of probate court. That is a special branch of the court that often gets involved when distributing family assets. The probate process is expensive and lengthy. Do you really want your family held hostage for 1 to 2 years after you are gone? In our next article we will examine how to avoid the time and costs of probate as well as some other items that you may not have even thought of in planning out what to do next.
Hello, everybody. It's time for a whiteboard lesson. My name is Robert Mansour, and I'm a lawyer in the Santa Clarita area. And one of my areas of practice is estate planning. So estate planning involves things like wills, living trusts, powers of attorney, healthcare documents, guardianship nominations, a lot of that stuff.
But today I want to talk about a very common question that I get, which is "Rob, what is the difference between a will and a living trust?" And what's the main differences. So let's talk about that briefly. So let's talk about a will. So what is a will? I tell clients that a will is basically a letter to the judge? It says, "Dear Judge, I'm dead. My name is so and so and I am dead. The following people are to get my stuff. My cousin Louis gets this. My cousin Sally gets that. My brother Tommy gets this and my baseball card collection goes to so-and-so." And that's what a will does now, who is in charge of administering the will, who is in charge of that? Somebody called the executor.
Now you can pick who your executors are. Generally speaking, you want to pick one person. And if that person can't do it, then you pick a successor executor, etc. One of the main differences is that a will only goes into effect (as a general rule) only goes into effect after you die. So while you are alive, this thing is not doing you much good. It springs into action after you die. So after you die, your executor says, "Oh, John died. We need to do something. Let's read the will." So they read the will and it says, "Give this to cousin Louie...give this to so-and-so and Sally, etc." So that's what the will is now. What else can you do in your will? You can also give away certain assets. Like we talked about, this goes to this person, this goes to that person, but you can also name guardians for your children - guardianship nominations.
So if you have any minor children, your will is often the place where you might say, hey, if I can't take care of my kids or if I die or whatever the case may be, and I have minor children, meaning children, at least in California, under the age of 18, you can name the people that you want to take care of those kids. And that's where you would put all of that information. Or you can also do a separate guardianship nomination if you want. But a will only goes into effect after you die as a general rule. It doesn't do you much good while you are still alive. Now what's the difference between that and the living trust. Let's take a look at a living trust here - living trust.
Something an individual makes just one person. My name is John. This is my will. A living trust can also be made by one person, but sometimes it's made by two people like a married couple. And essentially it's very similar in nature to the will. Basically it says, you know who you are, what you own and where you want your stuff to go when you die. And the person in charge of your living trust is called your trustee. Now, initially, you're going to be your own trustee. My wife and I are the trustees of The Mansour Family Trust. After I die, my wife will be the trustee of The Mansour Family Trust. And then we will have these people called "successor trustees." These are the people waiting in the wings who are going to mind the store. If my wife and I can no longer do it, or if it's one person, if that one person can no longer be the trustee.
One of the main differences is that this legal tool is effective the day you sign it. Whereas this legal tool, the will, only goes into effect after you die. So it doesn't do you much good while you're still alive. This is a "living" trust living. It's "living" the day you sign it. And so it's kind of like you create your own little corporation that exists that very day and continues even after your death. So a living trust distributes your assets to certain people, etc. The nice thing is that you don't have to go to court to handle this. Oftentimes you have to go to court to handle a will. A judge has to get involved. Now, if you have a very small estate, you may not need to worry about going to court and you can still handle it outside of the court process.
But much of the time you're going to end up in court. A judge is going to be handling the administration of your will, which can take a lot of time and cost a lot of money. Plus this is a public affair. Now the fact that this is in the court system - everybody can know your business and it's a lot easier to contest a will than it is to contest a living trust. Everything in the name of your trust stays outside the court system - all of the assets that are inside the living trust. When I say "inside" the living trust, I mean that the asset's title is changed. So your bank accounts no longer say "John and Mary Smith," - they say the "Smith Family Trust". As for your real estate, it doesn't say "John and Mary Smith." It says the "Smith Family Trust" on the deed. So everything inside the circle avoids the court system.
Why? Because you want to keep your affairs private. You don't want a court getting involved or a judge. Your trustees will handle the distribution of your assets and the handling of your assets per the rules of your living trust. So those are some of the major differences between a will and a living trust. So hopefully that was helpful to you. There are also many kinds of other things that work with living trust. They work in connection with each other, but that's beyond today's lesson. Hopefully this will help you understand the difference between a will and a living trust. My name is Robert Mansour and thank you for watching this whiteboard lesson.
Hello everyone, this is Rob Mansour. And I wanted to make a very brief video today about a phone call that I took today that I think is a very illustrative of a mistake that a lot of people make. So here's the scenario. This lady calls me, her name is Linda and she calls me about her father Paul, who passed away three years ago and she is now concerned about the estate and why she didn't receive the inheritance. First mistake - you shouldn't wait three years. You may forfeit any claims that you have if you wait that long. So that's the first issue. The second issue is she told me that her father had a life insurance policy and she thought all four of the kids were supposed to get a portion of the life insurance policy.
And she said that the reason she thinks that is because her father's will said that all four kids should inherit equally. I explained to her that a life insurance policy doesn't work with the will. The beneficiaries are whoever is listed on the beneficiary form and it turns out her father only wrote her sister Michelle. So Michelle got the life insurance policy and Michelle used that money for whatever she used that money for. I told her that Michelle has no legal obligation to share the insurance proceeds if she was the only beneficiary on the policy, no matter what the will said. The only other thing that her father had when he passed away was a fully paid for house with about $500,000 in equity. Before he died (several years before) he put his daughter Michelle on title with him. Now what that means is that his daughter and Michelle is a joint owner on the property.
So Linda says to me, I thought I was going to get part of the house because the will says that we are all to share equally. And I had to explain again, the joint ownership trumps whatever the will says. I told her the will doesn't matter if Michelle was on the property with her father Paul, and then Paul passes away. Michelle owns the entire property. And that's what happened in this case.
So the mistake that some people make is waiting too long, first of all. And the other mistake that some people make is they think that the will controls everything. The will does not control anything when it comes to beneficiary designations on a life insurance policy and joint ownership. The last person standing and gets the entire asset, a will only controls assets that are in your name alone that do not pass by any other means. And in this particular case, the life insurance policy passed by way of beneficiary and the house passed by way of joint ownership.
So I hope this brief lesson is helpful once again, a will does not trump beneficiary designations and does not trump joint ownership. Thank you very much for watching. I hope you found this video helpful.
Hello everyone. This is Robert Mansour and today we are going to do an estate planning pop quiz. All my contact information is on the screen right there for you. First, an estate plan is not a living trust or a will. A lot of clients think that their living trust is their estate plan. An estate plan includes several legal tools, including wills, powers of attorney, healthcare documents, living trusts, beneficiaries, and a lot more. All of these things are tools in your legal tool box. So what you should know is that an estate plan is the toolbox and a living trust or a will is just one component of that. So let's have our pop quiz:
In California, what do we call the document people use to designate a person to make healthcare decisions for them? The answer an "advance health care directive." A lot of people think it's a living will - many states still use that term. In California, we call it an advance health care directive. And there is no "D" at the end of the word advance.
Number 2 - Jimmy and Sue own a home. They have no estate plan. They passed away in a car accident. Their home has to go through the probate court. The lawyer says the process could take a year or more. Does the mortgage payment on their home need to be paid during the probate process? The answer is "Yes, it does." Just because you died doesn't mean the mortgage company doesn't want their monthly payment. If your family is stuck in court for two years, that's not going to be a lot of fun for them. So the mortgage payment is still due after you pass away on a monthly basis.
Number 3 - Charlie has five siblings. Charlie's mom has $500,000 and put him as a joint owner on all of her accounts so he can help her pay the bills. She also wrote a will that states, "All my children shall share my estate equally." She even videotaped herself saying the same thing. When Charlie's mom dies, how much does each child get? Well, let's see...there are five siblings, so let's do the math. The answer is "Charlie gets all the money." Why? Because Charlie is a joint owner on all of the accounts. So Charlie gets the money. It doesn't matter what the will says or the videotape.
Number 4 - A will is generally effective upon your death. True or false? The answer is "True." A lot of clients have a will and they think they're all set. What a lot of people don't know is that a will generally goes into effect after you die. It doesn't do you much good while you are still alive. Keep in mind a will is simply a "letter" to the judge telling the judge where you want all of your assets to go.
Number 5 - Mary is in a troubled marriage and is contemplating divorce from her husband Todd. Mary's parents died and left her $750,000. Mary decides to file for divorce five years later. Will Todd get any of the $750,000? Well it depends what Mary does with the money when she inherits it. When you inherit stuff from your family, that's your "separate property," unless you choose to treat it as community property. So if Mary takes the money and deposits it into a joint account or a trust account with her and Todd on it, that's going to be a problem for Mary when she gets a divorce five years later because Todd is probably going to want a piece of that.
Bob and Sally have two kids. They own their home as "joint tenants." Mary dies and Bob remarries years later, Bob puts his new wife Susan on title with him as a joint tenant to the house. Bob dies a few years later. Who gets the house? Well, you would hope that Bob's kids get the house, but the answer is "Susan" - the new wife is going to get that house because Bob put her on as a joint owner with him on the property. The kids get zero. Now, Susan might choose to give the kids the property, but that's a whole other discussion.
Number 7 - John and Mary owned their home as "tenants in common." Mary has an old will that gives everything she owns to her former boyfriend, Jimmy. When Mary dies, who owns the home? Well, when Mary dies, John is going to be owning the property with Jimmy. Why? Because Mary's will gives her share of the property to Jimmy. Notice that it's "tenants in common" - not joint tenants. So that's the trick. The verbiage on the deed is critical.
Laurie has two minor children. One is 10 years old, and one is 16. She also has a life insurance policy for $500,000. She listed her living trust as the beneficiary of her life insurance policy. Why would she do that? The reason it is is because Laurie smart - she doesn't want that money going to a 10 year old and a 16 year old because once they turn 18, they're going to have full access to that money and they're probably going to blow it. So she has it payable to her living trust, and her trustee that she's chosen will be in charge of that money and distribute it to the children in a responsible manner.
Number 9 - Kenneth added his son Mark to his home to make sure Mark inherited the home after Kenneth passed away. Neither Kenneth or Mark have any estate planning documents. Mark got into a car accident and became incapacitated. Kenneth now needs to sell the house in order to pay health care bills. Can he do so? The answer is "It's gotta be tough." Why? Because his son Mark is now incapacitated and is on that deed. Mark can't sign anything. So if he can't sign anything, Kenneth cannot sell the house because the title company is going to be looking for two signatures. That's going to be a problem.
Number 10 - Bob's sister Ann got into a car accident and was unable to handle her affairs. Bob went to Ann's bank with Ann's durable power of attorney so he can withdraw some money for her medical expenses. They said they could not honor the power of attorney because it was "springing." What does this mean? That means that the power of attorney that Ann has probably requires her to be declared incompetent first before Bob can do anything. Sometimes I see documents requiring two or even three physicians to declare the principal individual incompetent before the persons named can do anything. So Bob now has to cart Ann all around town, trying to find doctors to declare her incompetent.
Number 11 - Mary was the named beneficiary on her boyfriend John's life insurance policy. John and Mary broke up a year ago. Last month, John wrote a will giving all his assets to his siblings in equal shares. When John passes away, who gets his life insurance money? The answer is "Mary does." Why? Because he listed her as the beneficiary of his life insurance policy. It doesn't matter what the will says.
Number 12 - John and Mary die leaving minor children and no estate plan. The children will inherit $500,000. Mary's estranged brother has taken any sudden interest in the kids, and he petitions the guard for "guardianship" of the children and control over their inheritance. Can her brother do that? The answer is "Yes he can." Anybody can petition the court for a guardianship of the children. What matters is if John and Mary took the time to nominate guardians for their children. If they didn't do that, then generally speaking, the first person to the courthouse who impresses the judge might end up with those kids and also might end up controlling the money.
Number 13 - Sharon is 65 years old. She decided to add her son Brian to her house as a joint owner so he can get her home when she dies. Brian later got sued for causing a bad car accident. Can they get to Sharon's home? The answer is "Yes they can." Why? It's because Brian's name is on the house. Anytime you put somebody on property with you or on a bank account or anytime you add a name, you've added a massive "bulls-eye" to that asset. So any trouble that Brian gets into is now Sharon's problem. That's another reason to think two or three times about adding your kids or anybody to your property or to your assets.
One more question: James and Cheryl got a divorce because James was verbally abusive and financially irresponsible. They have minor children, and Cheryl took out a $1 million life insurance policy to make sure her children would have enough money when she died. If she dies, who will likely end up with the kids and have control over their money? The answer is James. The reason for that is because James is the natural father. Now, he probably would petition the court for guardianship over the children or get automatic guardianship depending on the divorce. However, Cheryl may not want James to control anything, in which case Cheryl should have created a living trust - perhaps naming somebody else to be responsible for that $1 million of life insurance. So just be very careful when it comes to a divorce and things of that nature.
So once again, this was an estate planning pop quiz and less than 10 minutes. Thank you very much for watching. I really appreciate your patience. My name is Robert Mansour. My website and my phone number are on the screen. Take care. I hope you enjoyed the pop quiz.
Hello everyone. This is Robert Mansour and today I'm going to make a brief video about how to fill out the estate planning questionnaire and how to go about doing that. So if you go to my website, which is mansourlaw.com, and you click on the button that says "Get Started" at the very top, you will see that it takes you to our "Get Started" page where there is a brief video there. Then you're going to find three steps. Number one - you make an appointment with my office to make sure that we can help you. Step number two is to choose the applicable questionnaire below and that's what we're going to focus on today. You will notice you have three options here - single client, couples and post death. So basically what we're focusing on here today is the questionnaires for single people as well as couples with special focus on couples.
Now you'll notice under each one you have the ability to fill out our secure online form or a printable form. The printable form is obviously just a PDF that you can print out, fill out by hand and send to our office. You can fax it, email it, or just mail it to us. We only ask that you do so and get us all the information a few days before our meeting so I have time to review it. And with the couples is the same thing. You get the secure online form as well as the printable form. Now if you click on the secure online form, it will take you to the questionnaire, which is right here. So I'd like to spend some time reviewing this questionnaire so you can kind of see what it's like to fill out the questionnaire before you have your estate planning meeting.
So at the very beginning you'll see some general instructions. Don't worry if you don't have all the answers to everything. Also, at the very bottom of the form, you will find a place where you can save your work and it will give you a link that you can pick up where you left off. It mails you a link to your email here. It's going to ask you for the date of your consultation, how you learned about my office, spouse number one (usually the person filling out the form), how you want your name to appear in the documents, spouse number two, how you want your name to appear in the documents as well. Basic contact information, mailing address, etc. Let's go to the next page. Now here it asks if either of you have been divorced. If the answer is yes, you click here.
If there's anything in particular that affects your plan, you would indicate so otherwise you can put "No." If you have any prior documents, we'd like to know about those and please send them to our office well before the meeting so I have time to review them. Let's go to the next page. The next section talks about the beneficiaries of your living trust. Who is going to be the beneficiaries of your estate? Here is where you indicate all of that. Now here you can indicate if you have any children from previous relationships. If you click "Yes," it will ask you about that. Otherwise, you just leave it as "No." Do you have any common children? Once again, if you click "yes," you can list the names of the children and the birth date and you can add as many children as you need to add.
Also you would indicate here if you don't want your estate to distribute equally among your children. You can indicate here where you want your estate to go. Also if there will be any distributions upon the first death, how you want your beneficiaries to inherit from you? Anything specific that we need to know? Also important - how much control should the surviving spouse have? So after one person dies, does the other person have full discretion to make changes to the living trust? That is an important issue. Let's go to the next page. On this page, you're going to list who your successor trustees are. These are the people who are going to manage your living trust if you can no longer do so yourself and you can indicate the individual's name and add successor trustees by clicking on this button.
Usually we like people to have about two or three people in line just in case. The executors are the people in charge of your will. The will is a backup to your living trust. If you have a living trust, your will is going to serve as a backup. And then if you have any minor children, you would indicate right here. That is because you may want to indicate who the guardians are of those minor children. If you and your spouse can no longer be parents to those kids, who do you nominate to be the guardians of those kids? Otherwise you leave that as "No." Let's go to the next page. Here is your chance to indicate who the health care agents are going to be.
So part of your estate plan is to indicate who your agents for health care are going to be. And these are not just people who "pull the plug." These people are your advocates - the people who healthcare professionals need to talk to - the people who have access to medical records and each spouse can name however many agents they want, in the order that they want. Usually the spouse is first in line followed by those that you indicate here. And of course, here you can indicate whether you would prefer that your life be prolonged as much as possible or whether you don't want your life to be prolonged on machinery, etc. If you have any preference - cremation, burial, or if you're unsure, you would indicate that.
And any other special health care instructions you might have. Another part of the estate plan is something called "power of attorney" - where you list someone to make decisions for you if you cannot make them yourself. Now these are non-healthcare matters, and there's a lot of things in the world that people might need to help you with that don't have anything to do with health care. And here, spouse number one can indicate who his or her agents are going to be. And spouse number two - again - backups beyond your own spouse. Usually your spouse is number one in line.
Let's go to the next page here. Now this last page is going to deal primarily with assets that you have, which helps me give you tips about how to title your assets. So the first part here is if you have any real estate. If you say "Yes," then you will have the opportunity to list your real estate right there and add property if you need to do so.
Assets include bank accounts, credit unions, investment accounts, stocks, mutual funds, things like that - life insurance policies, retirement accounts. If you have any business interests of any sort, any other additional assets like annuities, savings accounts, savings bonds, things like that. Time shares. And if you click "Yes," you will have the opportunity to list those here. I'd like to know a little bit about your primary reasons or goals for creating your estate plan. That way, I can tailor our meeting to those goals and any additional information you would like to add. You can add that here and you actually can upload documents to attach to your questionnaire as well. Once everything looks good, you will be able to submit your questionnaire by clicking on the bottom here. Now, a copy of all your responses will be sent to the email that you provided at the very beginning of the questionnaire. Thank you so much. I hope you found this overview of the estate planning questionnaire to be very helpful. Again, my name is Robert Mansour, and I thank you very much for taking the time to watch this video.
Many of my clients often ask me how often they should check on their estate plan. I used to recommend every 5 years. Then I realized that, for most people, not much changes every 5 years. Then I used to recommend every 10 years. However, that seemed to be too long. Now I tend to recommend at least every 7 years.
Just like anything in life, circumstances change. Therefore, I tell clients to take a look at their estate plan every 7 years or sooner if there are any major life changes. Also, I definitely recommend revisiting the plan if they wish to make any significant changes such as choosing different trustees, changing their executives, choosing different agents for power of attorney, etc.
Most people go to their doctor regularly for a physical exam. Some people go every year and some people go every other year. Of course, some people never go. I tell clients that reviewing their legal documents is very similar to reviewing their physical health. If you have a physical examination and everything checks out, that doesn't mean you should never go for another medical physical examination. Every couple of years or so, you should go to your doctor to check on your overall health. The same goes for your "legal health" - you want to make sure your legal house is in order every few years.
One thing I have found is that certain legal documents sometimes get "stale." That is not to say they are not legal. So while a living trust and/or a will can last for many many years without any problem, I have found, as a practical matter, that some places will start to give my clients a hard time if they present a power of attorney or any health care documents that are more than 10 years old. They will often be asked, "Do you have anything newer than this?" As such, at the very least, I think you should renew your durable power of attorney and health care documents every 7 years or so. Those are some general guidelines that I provide to my clients. I hope you found this helpful.
A few years ago, I created the above graphic to help illustrate to clients how their assets will pass once they create a living trust. Basically, I explain that every asset they have will pass through one of the two funnels. Like animals at the zoo, we don't put all of the animals in the same cage.
Some clients make the mistake of believing that all of their assets are controlled by their living trust (simply because they created a living trust). A living trust has no magical properties that control your assets. A living trust only controls assets that are actually titled in the name of the living trust. That being said, not every asset you have will be in the name of the living trust...only certain assets.
If you take a look at the above graphic, you will notice that real estate, bank accounts, regular investment accounts, certificates of deposit, credit union accounts, and savings bonds need to be titled in the name of the living trust. There may be other assets as well but these are the big ones. What does it mean to "title" the asset in the name of your trust. That means your asset will no longer simply have your name on it. For example, your bank account or real estate won't simply say "John Smith" on it. It will say "John Smith Living Trust" instead.
You will also notice the graphic indicates you must change title to the assets for them to be considered "in your trust." However, the graphic also indicates that certain assets will pass through the "beneficiary" funnel. These are basically retirement type accounts and life insurance policies. This would include individual retirement accounts (IRAs), 401k, 403b, other retirement accounts, pension benefits, annuities, health savings accounts, and life insurance.
These type of assets are driven by a contractual relationship with the financial institution. When you open these accounts, you will fill out something called a "beneficiary form" which dictates who gets the account upon your passing. Notice they don't care what your living trust says or whether you even have one! All they care about is who is indicated on the beneficiary form.
For these assets, you have to make sure you fill out the proper forms and indicate both primary and secondary beneficiaries. In some cases, you can name your trust as a beneficiary but you should not do so automatically. You should consider the pros and cons. Like any estate plan, there is often no perfect answer - only the best answer given all the circumstances.
As a general rule, assets owned "jointly" do not pass through either funnel. Assets owned jointly pass to the surviving owner. Therefore, If Bob and Sally own a bank account together and are listed as joint owners, Sally gets the entire account when Bob passes away. It doesn't matter what the living trust says. This can be especially problematic when people have second marriages. If they put the new spouse on an account or a parcel of real estate, that new spouse gets the entire asset. For example, let's say Bob and Sally are married. When Sally passes away, Bob gets remarried a few years later to Mary. Bob puts Mary as a joint owner on his assets. When Bob dies, Mary gets everything - end of story! It doesn't matter what Bob's living trust says. Joint ownership trumps.
There are three general benefits to having your assets titled in the name of your living trust. First, anything in the name of your trust avoids the court system. Second, anything in the name of your trust is managed by your named successor trustees in the order you list them. Finally, any assets in the name of your trust are governed by the rules of your trust. Again you have to change title to the asset. You can't just think about it or list of the asset somewhere in the trust or on a schedule somewhere. That's not the same thing.
Again, once you create your living trust, you should understand that your assets will pass through two separate funnels depending on the nature of the asset. It's one thing to have a living trust - it's another thing to understand how it works. Hopefully this will assist you in understanding proper trust funding and proper beneficiary designations. If you need help with your estate plan, please call (661) 414-7100 to see if we can assist you.
Hello, everyone, this is Robert Mansour, and today I wanted to make a brief video about The Parent/Child Exclusion. When you inherit real estate from your parents, or even your grandparents, frankly, if you inherit real estate from them and they're paying a certain amount of property taxes every year, you can actually keep the property taxes exactly where they are because you are inheriting from a parent or from a grandparent. That is know as The Parent/Child Exclusion. Pursuant to Proposition 58, which was passed many years ago here in Los Angeles County area and California.
What you need to know is that when you inherit, your property taxes don't have to go up, but you have to file the appropriate exclusion forms with the property tax assessor. Now, they might want to see the living trust or other legal instrument that gives you that property, and they want to make sure that this person is indeed a parent and a child relationship. If you don't file that exclusion, your property taxes might go way up. If your parents bought the property in say 1980 and now in present day that property is worth a lot more, your property taxes might skyrocket if you don't file the proper exclusion forms.
Be mindful of The Parent/Child Exclusion in cases where you might inherit real estate from your parents. Thank you very much for watching.