When it comes to most estate plans, there are four major components. Think of the estate plan like a tool box that has several tools inside it. For example, most tool boxes would have a hammer, a flathead screwdriver, a Phillips screwdriver, a wrench, etc. The legal toolbox (the estate plan) also contains several legal several tools.
The "hammer" of this legal toolbox is the living trust. The living trust is created by someone called the "Settlor" or "Settlors" if there is more than one person You might be more familiar with older terms like "trustor" and "grantor." All these terms refer to the same thing - the person who created the trust. You can die 100 times, but you will always be the creator (Settlor) of your own living trust.
The second major player in the living trust is someone called the "trustee." This is the person who handles all of the assets that are in the name of the living trust. When I say "in the name of the living trust," I mean that title to the asset has been changed to reflect the name of the living trust. Your personal property is no longer owned by "John Smith," but by "John Smith's Living Trust" instead. Bank accounts that used to be in the name of John Smith are now in the name of his living trust. I changing title, you are "funding" the living trust with assets. Failure to "fund" a living trust is one of the biggest reasons most living trusts fail. Think of the trust like a bucket. The problem is some people have this bucket, but they don't put anything IN the bucket. An empty trust might be a useless trust. Generally, you will be the initial "Trustee" of your own trust.
The final cast member of this living trust is the "beneficiaries." In the very beginning, you will be the initial beneficiary of your living trust. After you pass away, other people will serve as "successor Trustees" of your trust and ultimate beneficiaries of your trust. Those persons might be your children or other people that you might designate.
The next component in most estate plans is the the "Will." Unlike traditional wills which simply distribute assets to certain people, this type of will serves as a backup to your living trust. It works in concert with your living trust. In the event some assets are not properly titled or don't have the proper beneficiary, such assets are "caught" by the will and ultimately directed to your living trust. Think of it like a big "safety net" that sits under your living trust and catches stray assets that are not properly titled. If all of your assets are properly titled or have the proper beneficiary (depending on the nature of the asset), the will might be unnecessary upon your death. However, if you need it, it's good to have one in your toolbox.
The next legal tool in the toolbox is something called a durable power of attorney. The durable power of attorney allows those named as your agents to act on your behalf in the event you cannot handle your own affairs. Generally speaking, there are many things in our lives that need to be handled which don't directly involve our living trust. For example, let's say John Smith needs to speak with his wife's credit card company. He needs to demonstrate he has the legal authority to act on his wife's behalf. That's where a durable power of attorney comes into play. Make sure you name people that you trust to handle this very powerful legal tool. You can imagine that in the wrong hands, this power can be abused.
The final set of documents in the legal toolbox are the health care documents. Generally speaking that includes of the Advance Health Care Directive here in California. In the past, this was known as a durable power of attorney for health care. The more modern term since 2001 has been Advance Health Care Directive. You also want to make sure that your health care documents have all the requisite language regarding the release of medical records to your designated agents. In many cases, it is also helpful to have a separate authorization for the release of your medical records. Some facilities and institutions are insisting on a stand-alone authorization for the release of medical records.
While there are many other tools that go into your estate plan, these are the major tools that most people should consider. In some cases, one or more of these tools may be unnecessary. One size doesn't fit all. Please feel free to contact my office if you have any questions or if you'd like to schedule an initial consultation.
The first step towards creating an estate plan to protect you and your family is to actually make that initial appointment. The idea of meeting with a lawyer and discussing heavy estate planning matters can be daunting and overwhelming. We walk our clients through the process. While it isn't a walk in the park, we do our best to make it easy and methodical. As noted earlier, the first step is calling our office and setting up the initial appointment. If you are married, it is important for both spouses to be at the initial appointment. Spouses are a team, and having both spouses involved is important and necessary. There are many occasions when one spouse is more interested in estate planning than the other spouse. That being said, it's still important for both spouses to be involved in the process. Furthermore, in most cases we are dealing with "community property" and one spouse cannot unilaterally dispose of such property.
Once an appointment is set, we ask our clients to fill out an estate planning questionnaire. We have two versions of this questionnaire - one for couples and one for single people. There is an online version and a PDF version of each. Both are available from the "Get Started" page of our website. The information provided on the questionnaire helps provide us with more information so we can offer you guidance and advice particular to your situation. The more information we have in advance, the more productive your initial consultation will be. Otherwise, the first meeting will only provide you with "general" advice, and that might not be the best use of your time.
During the initial meeting, we will discuss general principals and answer questions. We will also review your particular situation and offer guidance and advice. If you choose to proceed, we will ask that you sign a "retainer agreement" with our office. A retainer agreement is basically the contract between the attorney and the client. Half the total fee is then due. The other half is technically due when we deliver your drafts to you, but as a practical matter, we collect the balance at the second meeting when we sign and finalize your estate planning documents.
After you decide to retain our firm to assist you with your estate plan, we will get to work on your plan. About 30 days later, we send you drafts of your documents for your review. The drafts are usually accompanied by a summary to assist you with your review. In most cases, we also highlight certain sections of the documents where you should pay particular attention. When we send the drafts to you for your review, we usually contact you to set up a signing meeting for your estate plan. During that signing meeting, we will review your entire estate plan with you. Not only will we review the documents prepared, but we will also teach you HOW to use your estate plan. It's one thing to "have" a plan, but it's another thing to actually know how to use it. Once all documents have been signed, notarized, witnessed, and otherwise finalized, we will scan your entire estate plan to our computer system so we have a complete digital copy in our office. You will also be provided with the same scanned copy and all the original documents.
As the days, weeks, and months pass, you are always welcome to contact our office with any quick follow up questions. We are here for you and want to make sure you not only HAVE an estate plan, but that you actually understand how to use it.
Usually, it's not what's in your estate planning documents that is a problem. On the contrary, it's what's NOT in your documents. If you want something to occur, whether it's a health care matter or how your estate will distribute upon your death, you should make sure you spell things out clearly in your documents.
Life is unpredictable. As a general rule, how you think things will unfold is not necessarily how things will unfold. If you've lived long enough, you know that's true. Therefore, if you something specific to occur with your estate or with anything involving your estate plan, the best course of action is to spell things out clearly. For example, if you don't want your children inheriting everything from you right away, then spell it out. How exactly do you want them inheriting from you? What can they use the money for? When don't they inherit from you? What if they are in the middle of a divorce? What if they are in the middle of a bankruptcy? What if they have a substance abuse problem?
With respect to health care decisions, who will be in charge of those decisions? Do you want extraordinary measure to keep you alive and breathing or do you prefer quality of life over quantity of life? When it comes to estate planning, the more you leave to the imagination the more likely there are going to be problems. If your kids are fighting over what to do with your real estate upon your death, wouldn't it be nice if there were some instructions about that issue in your living trust? If you anticipate certain issues are going to occur, the best thing to do is "spell out" your wishes clearly and without ambiguity. If you are choosing trustees, executors, agents, and others that you truly trust, then perhaps you should give them the discretion to act according to your wishes.
Again, being clear in your estate planning documents is much better than being unclear. Don't leave these things to chance. You've spent your whole life building up your estate. Why should you squander it all away by improper or inadequate planning? Remember, it's not just about who inherits from you. It's about what will happen if you can no longer act on your own behalf. A good estate plan not only addresses you gets your "stuff" when you die. It's more about who has the legal authority to act on your behalf and if you've given them the proper road map to do so.
Hello everyone. This is Robert Mansour, and I wanted to make a brief video today about blended families. More and more clients are coming to me where the husband and the wife have children but sometimes the husband has his own children from a previous relationship, and the wife has her own children from a previous relationship. So this gets a little bit complicated, but let's talk about some of the possible solutions for a family like this.
One solution is to create a living trust that has all of the assets in it. We can call it the "Smith Family Trust." So the Smith Family Trust. There's the husband and there's the wife. Let's say the husband has three kids from a previous relationship and let's say the wife has two kids from a previous relationship. Well, this, as you can imagine, could be a problem. So let's say the husband passes away first. All right? Let's say the husband passes away first and everything is with the wife. Now these children down here are waiting to see what happens. Aren't they? Well what if the wife decides to change the Smith Family Trust? What if she says, "You know what? I don't really like these kids," or somebody enters her life like a new husband, maybe, or a boyfriend or whatever, and they come and they get her ear. Frankly, it could be these children who get her ear, and she decides, "You know what? I want to change the Smith Family Trust. I don't want these children to get anything anymore."
Well that's entirely possible. So what can we do? Well, I sit down with a husband and a wife and I talk about this and I tell them, "Look. Either you're okay with that," and in some cases they are. A lot of times the husband and wife say, "You know what? If my spouse wants to change everything, then so be it. That's okay with me," but then I have some clients who say, "Oh, no. That doesn't sound okay with me." So what are some other options? Well, what we can do is we can say when the first spouse dies, the surviving spouse, the wife in this particular scenario, cannot make any changes to the trust. No changes at that point. So even if somebody tried to pressure her or tell her to do something, she cannot legally make any changes to this trust. It's going to split the way she and her husband originally designed.
Another idea that we can do is the trust can split into two parts. So let's see how that one works. So here's the original Smith family trust. There's the husband and there's the wife. Let's say in this particular scenario the wife dies. What happens is we split the trust into two parts. We put 50 percent on this side and 50 percent on this side. Now it could be different percentages, but this is essentially how it works. This side is called the "A" side and this side is called the "B" side. Now sometimes we call this the survivor's trust because of the surviving spouse and sometimes we call this the decedent's trust. Either way, it's an A, B split. So we take, let's say there's $100 in the trust. We take $50 and put them here and $50 and put them here. So somebody might say, "Well, how does this help?" Here's how it helps. This trust over here, the "B" trust, you can't change. You can't make any modifications to it. It's going to distribute the way the husband and the wife originally designed it. The survivor's trust on the "A" side, the surviving spouse can do whatever he or she wants with that. So this is one solution to that problem.
Also, another way we can do it is we can say that another person will serve as a co-trustee with the surviving spouse. Like one of the kids from the decedent's side of the family maybe can be a co-trustee and make sure that the wife or the husband honor the original agreement. As you can see, things can get a little bit dicey when you have a blended marriage.
That's why it's a good idea to visit with an estate planning attorney, sit down, and map out a plan. Remember, it's called estate planning. There's a reason for that. Having a plan is better than having no plan at all. All the children from both sides of the marriage will certainly appreciate the time that you took to protect everybody involved. Please feel free to give me a call and set up an appointment if you'd like to talk about your estate plan. Thank you very much.
Rebecca Robins: Hello. I am Rebecca Robins, and I am the host of the Santa Clarita Valley Local Leaders Show. I am a local leader here in Santa Clarita, and the business owner of Robins Financial. I provide tax and financial services. To learn more about me, my business, and my services, please visit Robinsfinancial.com. That's Robins, R-O-B-I-N-S, financial.com.
But without any further delay, I would like to introduce my guest today. I am so excited to have with me Robert Mansour, who is an attorney of the Law Offices of Robert Mansour. He specializes in estate planning, probate, tax administration, and personal injury law. How are you today, Rob?
Robert Mansour: Good, Rebecca. Thank you very much. Thank you for having me.
Rebecca Robins: Thank you for being my guest today. Can you tell us a little bit more about yourself and what you do in Santa Clarita Valley?
Robert Mansour: Sure, I'd be happy to. Thank you. Let's see here. The best way to start is with a little bit of history. I've been a lawyer since 1993. For a good portion of my career, I was a defense lawyer, a litigation attorney, working for the insurance companies, defending personal injury cases. As such, I was a trial lawyer. I was in front of juries a lot, taking depositions, arbitrations. Basically fighting with people all the time in adversarial kind of settings.
After, oh gosh, maybe 10 years of that, I got really tired of the fighting, and decided to look to a different area of law that was a little bit more constructive. One area that had always appealed to me was the area of estate planning. Sitting down with a family and working on legal documents such as wills, living trusts, powers of attorney, healthcare directives, things like that, and helping the family come up with a plan that suited them. It was so nice to sit across the table from actual clients, a husband wife, or whomever I'm sitting across the table with, and working with them to create a plan that they felt comfortable with, and that they felt reflected their values. I got away from the adversarial trial lawyer work that I had done.
For the last several years I've had my own practice, after leaving the big firm that I was with. It has been a very interesting transition. Most of my practice now is devoted to estate planning. I have about 25% of my practice deals with personal injury cases, such as car accidents, slip and fall accidents, things of that nature. That just kind of happened because of my background, having worked for the insurance companies as a defense lawyer, I found it kind of natural to put on the other hat, if you will, and represent victims of those accidents, since I have a very good understanding of how the other side approaches those kinds of cases.
Those are really the two areas of law that I do specialize in. I shouldn't say specialize. That's something that the bar doesn't like us to use unless, it's kind of a term. All right, I should say those are the areas of practice that I work on. I will say also that I help people with post-death matters such as probate. Or for example, somebody's the trustee of their family's trust, and they don't know what to do, and they need some guidance. I help people with also those post-death matters as well.
Rebecca Robins: Well, that's wonderful. Thank you for sharing with us, Rob. Now I'd like to actually focus on probably what you were referring to earlier, was that estate planning. Can you explain to us what is meant by estate planning?
Robert Mansour: Of course. I think the first thing that we should do is talk about this word estate. That, I think, turns a lot of people off, and they figure, "Estate planning is not for me." Because the first thing they think of when they think of the word estate, is they think of somebody living in a big mansion, somebody who is very, very wealthy, who plays polo on the weekends, and speaks with a fake British accent. That is not, the word estate, I think, tends to mislead a lot of people.
The way I tell people is to think of the word estate as simply being equivalent to the term stuff. Everybody has stuff. You might have $50 to your name. You might have $50 million to your name. That is your stuff. It could include real estate. It could include checking accounts, savings accounts, any kinds of bank accounts, investment accounts of any sort, jewelry, clothing, all of the things that you own. Stocks, bonds, all of those things, are part of your "stuff."
That's all estate planning is. It is planning what to do with your stuff, and there's two components, essentially. Number one, planning who is going to be in charge of your stuff, if you will, if something happens to you. Never mind the issue of death. Most people think of estate planning, and they think about dying. It's really about a lot more than that. It's about empowering people to act on your behalf in case something ever happens to you, whether it is a car accident, dementia, Alzheimer's disease, a coma, something happens where you're no longer able to handle your affairs, you want to make sure that you give people the legal tools that they need to be able to assist you.
Then, of course, the other component is after you pass away, you get to control where your stuff goes, and to whom it goes, and in what manner. By preparing these legal documents in advance, by creating this estate plan with your stuff, you get to control a lot more of what happens, rather than just leaving things to chance.
Let me just also address one more thing here, Rebecca. People always say, "Isn't this what wealthy people do? Don't wealthy people do estate planning? Why should I?" I say, look, yes, wealthy people do estate planning. Wealthy people know how to stay wealthy. That's one of the things that they do very well. We, as average folks, if there are any average folks listening to this, I consider myself average folks, we need to learn from the wealthy people. We need to do what they do. They are using the very same legal tools that are available to everyone. But most people don't think it's for them.
Then what happens in this country, I read an interesting article, most of the wealth in this country, especially in the middle class, is lost between one and two generations. It's gone. That is because the average people don't know how to transfer wealth from one generation to another. They don't know how to preserve it. They don't know how to ensure against problems and things of that nature. Wealthy people know how to do that, and we need to learn from them and do what they do, and preserve the wealth in our family and make sure that it gets to the right people.
Rebecca Robins: So Rob, what you're telling us is, no matter if our stuff is worth, in our mind $50 or $50 million, we should consider sitting down with someone and doing an estate plan. Is that correct?
Robert Mansour: That's exactly correct. One of the things that people tell me is they say, "Look, I don't have enough money to do estate planning. I don't have enough to protect." I tell them, the truth of the matter is, wealthy people like, let's say, the example that I often use is about Bill Gates. If Bill Gates lost a million dollars from his estate, he'd probably be okay. But if an average person loses a good portion of their estate to legal fees, or attorneys, or the court system, or hospital bills, or whatever the case may be, that will hurt that person, much more than it would hurt a very wealthy person. So you're absolutely right.
Rebecca Robins: One of the things, too, that's important in estate planning is, if you have children. Will you address that for us? Why is estate planning important if you have minor children?
Robert Mansour: Well, minor children can't really own anything. I mean, they can, for example, if my wife and I were to pass away without any planning whatsoever, our home would eventually go to our children, yes. I have two kids. It would eventually go to them. But children cannot own real estate. They are minors. They have to be 18 years of age or older in California. One of the problems is that they can't own real estate.
They can't own, for example, here's another problem I'll tell you. This is a very common problem, life insurance policies. Let's say somebody has a life insurance policy and they put their children as a beneficiary of that life insurance policy. The insurance company's not going to write a check to a 10-year-old kid. They're not going to write a check to an 11-year-old kid. They're not going to do that. What are they going to do? They're going to tell the kid to wait until they're 18 years of age, and then the child will get everything at that time.
So for example, I have a million dollar life insurance on my life. If I were to pass away, and my wife were to pass away in a common accident with me, my children, at the age of 18, would each get $500,000, a check made out to them free and clear. That's not exactly the best way to transfer wealth. Because I know, given my own history, and my youth, I don't think they will handle the money very well at that age.
There's just so many other reasons. For example, a child will have to go to court and have a guardian appointed to them. That can be a very lengthy and expensive process as well. I'm not a big fan of, I mean I am a big fan of estate planning, especially when it comes to protecting kids, and making sure that they are taken care of.
Also, this has nothing to do with money. You get to name the guardians for your children. In an estate plan, in any good estate plan, people with minor children should take the time to name guardians for their kids. That way, you get to choose who takes care of your kids, and not the state of California or some judge. Because the truth of the matter is, anybody can get in line to be the guardian of your kids, and sometimes that can lead to family problems, in-fighting. It is much better for you to choose who's going to take care of your children in advance, and you can be as specific as you want in your documents as to where you want your children to grow up, if you want them to live together, if you want your children to be raised in a particular faith, any kind of information regarding education of your children. All of that can be included in your legal documents. So absolutely, taking care of kids is one of the biggest reasons for doing an estate plan.
Rebecca Robins: Rob, with that, we're going to have to take a break. But we'll be right back with Robert Mansour, Attorney, and we'll be talking more about estate planning. Stay tuned.
Hello, this is Rebecca Robins, and I am your host of the Santa Clarita Valley Local Leaders Show. I am back with Robert Mansour, Attorney, of the Law Offices of Robert Mansour. Robert, we are talking about the importance of estate planning today. I wanted to ask you, what happens if someone does absolutely nothing?
Robert Mansour: Well, if somebody does absolutely nothing, first of all, I should say that that is probably the most popular estate plan, basically doing nothing and just kind of hoping things work out, crossing your fingers and hoping things work out for the better. Also, it is a free plan, so you don't have to pay any money to do nothing, which is another reason why people like it. But I'm being facetious because it is something that really we should spend a couple of minutes talking about.
First thing, let me give you a couple of examples of how doing nothing may not work out. I had a client who came to me, and he had just gotten a divorce. One of the reasons that he got a divorce was because his wife was spending far too much money. He would make a dollar. She would spend two dollars. He comes to me and he says, "Look, Rob. We had financial problems. We got a divorce. What if I do nothing?" That's what he tells me.
I said, "If you do nothing, the state of California already has dictated what's going to happen with your spouse." If he remains unmarried, everything is going to go to his daughter. He said, "Well, that's terrific. That's exactly what I want." He said, "I have real estate, and I have a life insurance policy for $500,000." I said, "Great. All of that is going to go to your daughter." Then he goes, "Super. I guess I'll do nothing." I said, "Hold on a minute. How old is your daughter?" He says, "Well, she's eight years old."
I said, "Eight years old?" I said, "Tim, no insurance company is going to write a check to an eight year old." I said, "Your house will not go to an eight year old." I said, "It's going to go to your child's guardian." I said, "Who's your child's guardian?" Guess what? It's his ex-wife. So if he did nothing, all of his work and money and estate is going to go, basically, to the control of his ex-wife.
Another example that I have that I often use to illustrate doing nothing. A very wealthy client called me and she says, "Look, what if my husband and I do nothing?" I said, "If you do nothing, then once again the state of California will tell where your assets go. It'll go to your kids."
She says, "Well, we don't have any kids."
I said, "Well, then it'll go to your parents."
She says, "Oh, our parents have passed away."
I said, "Well, the next in line would be your siblings."
She kind of pauses and she says, "Well, I have this one brother."
I said, "Well, then everything would go to him."
She said, "We're coming to see you right away, Mr. Mansour." Because she did not want everything to be going to her brother. Because they don't have a good relationship. She didn't want everything that she and her husband had worked for to end up going to her brother.
Sometimes by doing nothing, everything could end up in the wrong hands. I think that that's probably the best thing to say about that, that state law will dictate where your assets go. Also, if you do nothing, you could end up in court, going through the probate process. The probate process is simply the court supervising the transfer of your assets. That's very costly. It costs about 5% of the gross assets. So just on a $700,000 home, you could be looking at about $35,000 in fees just for the court to help and assist in transferring an asset from you to whomever it needs to go to, when if you plan ahead, you can avoid the court system entirely, especially if you use something like a living trust, or another kind of vehicle.
Rebecca Robins: Rob, would you recommend, if someone's thinking about doing nothing, at least invest an hour of their time with an attorney who can specifically tell them, if they do nothing, this is your situation. It's going to go to your child. It's going to go to your brother. It's going to go to your ex. Would you recommend someone at least sit down with an attorney for an hour and find out their individual situation?
Robert Mansour: One of the things that I provide for my clients, Rebecca, is a free consultation. If they have no documents, we sit down and we map out, "What's going to happen if you guys do nothing?" We basically take a look at that scenario. We ask ourselves if we're comfortable with that. Nine times out of 10, or even more so, they are not comfortable with that, and we end up creating a plan. If you don't create a plan, it's just going to happen the way California law dictates. So yes, it's a good idea to sit down with a professional and walk through it and see how the plan might help avoid the disaster of doing nothing.
Rebecca Robins: Okay, and with that note, we're going to take a break, and we will be right back with Robert Mansour, Attorney of the Law Offices of robert Mansour. Stay tuned.
Hello, this is Rebecca Robins, your host of the Santa Clarita Valley Local Leaders Show. I am back with Robert Mansour, Attorney, of the Law Offices of Robert Mansour. We are talking about estate planning. Rob, I wanted to ask you, what are your thoughts about joint ownership of assets?
Robert Mansour: Joint ownership of assets is a very popular approach that a lot of people use, especially married couples use joint ownership by default. They basically own their bank accounts together. They own their real estate together. They own investment accounts together. It's basically, husband's name on the account and wife's name on the account, or the real estate. However, I really caution people, because joint ownership, in my opinion, is one of the leading causes of people losing their wealth in this country, money going to the wrong people. It ends up with people that you never imagined would have your wealth. Here is basically some of the common dangers of joint ownership.
Number one, it is dangerous because the last person alive gets to control the entire asset. I call it Last Man Standing, although it's Last Woman Standing as well. So last man standing gets full control over the asset. If my wife and I own real estate together, if I pass away, my wife has full control over what happens with that real estate. If I own real estate with my brother, for example, if I pass away, he has full control over where that asset goes. I lose control. Once I pass away, I have no say where that asset goes.
For example, sometimes I get clients and they inherit a house from their mom and dad. So there's two siblings that end up owning this house. Then one of those siblings dies, and the remaining sibling gets the whole house. The sibling who passed away, their family gets nothing. That is one of the biggest reasons for what we call unintentional disinheritance, the money ending up with the wrong people.
Also, some people see joint ownership as a way of avoiding probate. They figure they'll just put somebody on title with them, and when they die the person will get the property. That's true. But at some point, there's going to be one person left. You're simply postponing probate. That's all you're doing. You're just putting it off for a while. Because if I pass away, and my wife remains on the house, at some point, she's going to pass away. Then that house will, indeed, be going through the court process.
The other thing that people should really know is that whenever you put somebody on title with you, you are adding a bulls eye to your asset. A common thing that I see is an elderly person who's perhaps in their 70's or 80's. They entertain the idea of putting one of their children on title with them. They'll say, "I know, I'm going to put my son Bobby on title with me."
I say, "Hold on a minute. Are you sure that's a good idea?" Because if Bobby gets into any trouble whatsoever, let's say Bobby is driving down the street and he hits a little boy with his car. That little boy's family gets a lawyer. Anything with Bobby's name on it is fair game, including Mom's home, or Mom's accounts, or anything with Bobby's name on it. By putting people on title with you, you are adding bulls eyes to it.
The other thing that is very, very important is the issue of remarriage in this country. People are getting married two, three, four times in some cases. This is a very dangerous thing, because here's how it works. My wife and I have two kids. I've got my son and my daughter. Let's say my wife and I are on title together, and then my wife passes away. If my wife passes away, maybe a few years later it's possible I might meet somebody new and get remarried. If I put my new wife on title with me, on all of my assets, just like most people do, one day what if I die? Guess who owns everything that my original wife and I worked so hard for? My new wife owns everything. She could conceivably take all the assets and do whatever she wants with them. My children, my son and my daughter, get zero. Again, another example of unintentional disinheritance through joint ownership.
There's a whole other bunch of reasons that joint ownership is not a great idea. There are tax reasons that are too complicated to get involved in with here. I would recommend people talk with you about those things. But I think that covers some of the main dangers of joint ownership, Rebecca.
Rebecca Robins: Okay. Lots of times, when people do have joint ownership of assets, they are looking to a document that's called a living trust. Can you explain to us more what a living trust is?
Robert Mansour: Well, a living trust is nothing more than a contract. It's nothing mysterious. People get kind of mystified by this term living trust. It is a legal document that you can create, either by yourself or with your spouse, or with anybody else, really. The legal contract says the following.
Number one, it tells everybody who you are. It tells everybody what you own. It tells everybody, if anything happens to me, I've chosen the following people to take care of my stuff in case anything happens to me. Finally, after I pass away, this is where I want my stuff to go, and to the following people, and in the following manner.
By reducing that to an example, my wife and I don't own anything. Robert and Laurie Mansour don't own anything. What owns everything? The Mansour Family Trust, this document, this agreement that my wife and I made together. Our house is owned by our trust. All of our bank accounts are owned by our trust. Our investment accounts are owned by the Mansour Family Trust. Not by me or by my wife. The reason that's significant is that if I pass away, the Mansour Family Trust continues to own the assets, continues to govern those assets. If my wife passes away, same difference. The Mansour Family Trust continues to own and govern the assets, and the distribution of those assets.
There are three major benefits to having a trust, Rebecca. The first one, anything in the name of your trust, whether it's real estate, bank accounts, or investments, whatever you put in, is avoiding the court system. That's number one. Number two benefit, anything in the name of the trust can be controlled by your trustees, people that you've chosen in advance to control your assets. The number three benefit is that anything in the name of your trust will be governed by it. So whatever rules you have in your trust will govern the distribution of your assets.
For example, my children are not going to receive their inheritance right away. They're going to receive their inheritance over the years. They're going to receive one-third at 25, one-third at the age of 30, and the balance at the age of 35. Because I don't want them to squander their inheritance by receiving it at such a young age. A living trust is a very important tool under this larger umbrella of estate planning. Does that help?
Rebecca Robins: It does, absolutely. You know, Rob, in segment one we were talking about the possibility of having incapacity. Who's going to help me take care of my stuff even while I'm still alive. Because we all know the probability of incapacity is sometimes greater than the probability of death.
Robert Mansour: Yes.
Rebecca Robins: It sounds like this living trust helps take care of that while you're still alive and for some reason you're not able to take care of your stuff. This living trust then will kick in. Is that correct?
Robert Mansour: Absolutely. One of the serious issues that we need to understand is that one of the things a good trust should outline is the mechanism of succession. How do I know when the next trustee gets to come in? How are we going to define that? There are so many nuances in a good living trust. There are many different kinds of trusts, by the way, not just one kind. A lot of people think it's some kind of a drug that you take an everything is fine. Just like there are many different kinds of automobiles, there are many different kinds of living trusts. You're absolutely right. Anything in the trust can be governed by the successor trustees, people that you've chosen in advance to manage your assets for you.
Rebecca Robins: Very, very good. In segment one, you also mentioned something called a healthcare directive. I was wondering, could you go over other documents that would be part of a typical estate plan?
Robert Mansour: Oh, absolutely. A living trust is part of a larger estate plan. That's something people should know, because they often think it's just a trust. Other important documents are wills for the clients. A will that serves as a back up to the trust. In case something has to go through the court system, the will will direct all of the assets back to the trust in order for them to be governed by the trust.
Another very important document you just mentioned is something in California we called the Advanced Healthcare Directive, where you select people to care for you and to make healthcare decisions for you in case you cannot. You can be as specific as you want to be in that document. There's a lot of nuances that go into that. But again, there's too many to get into on this call.
Another important document, I would say, the big four are the living trust, the healthcare directive, the will that I just talked about, and finally, in my opinion perhaps the most important, is the durable power of attorney, where you select someone in advance to act on your behalf in virtually every other circumstance. This person can talk to the credit card companies, can talk to your former employer, can talk to your lawyer, can talk to your CPA, can talk to the IRS. It goes on and on and on. A very good, durable power of attorney is part of a solid estate plan.
There are many other documents, for example, nominating guardians for your kids, business agreements, community property agreements, especially among married couples, whether there are any separate property issues that we need to address. All of those go into the larger umbrella, if you will, known as estate planning.
Rebecca Robins: Rob, I wanted to ask you the question. Lots of times people come to an attorney, and they set up a living trust. But you were talking earlier about titling your home in the name of the trust, titling your bank account in the name of the trust. What happens if somebody just comes to you and sets up a living trust and their assets aren't put in the trust?
Robert Mansour: What you're hinting at here, and not even hinting at it, you're telling us, essentially, this is probably the biggest reason that living trusts fail, Rebecca, is that people fail to take the time, once they create their trust, to change title to their assets. They come to me and they say, "But the trust says this, and the trust says that."
I say, "It doesn't matter." Because title trumps at the end of the day. If you own everything jointly with somebody, it doesn't matter what your living trust or your will says. It's irrelevant. Because the title to the asset trumps. If I own everything jointly with my brother, for example, if I pass away, my brother gets everything. I don't care how many living trusts I have. I don't care how many wills. You must take the time to transfer your assets into the trust, and assets that you acquire in the future should be put into the name of the trust as well, in order for them to be governed by it. Very good point.
Rebecca Robins: Then the other thing. Let's say somebody comes to an estate attorney like you, Rob, and they sit down and they do the living trust, and they do the advanced healthcare directive, and they do the will, and they do the durable power of attorney. What happens if nobody is aware of it? Nobody knows where the documents are.
Robert Mansour: This does sometimes happen, too, which is why it's critical that people tell the people on their team that they're on the team. If you're going to pick trustees and agents and people to be guardians of your kids, you've got to let them know. What I tell my clients is, tell the people on your team where your binder is, where all your documents are. Let them know where they are. It doesn't help you just to keep it all a secret, or to put it under your bed somewhere and nobody can find it. I also keep copies of my clients' documents as well.
But, by the same token, I don't always know when my clients pass away or if they get sick. They really need to let their family members know where their documents are. They don't have to give them the documents to read. They can keep that private. But at the very least, tell everybody who needs to know, where the documents can be found.
Rebecca Robins: Rob, would you think it would be a good idea to put all these documents in a safe deposit box?
Robert Mansour: I'm against that, Rebecca. I think that usually leads to inability to access the documents. Some people do that, and then all of a sudden the family's trying to get into the box, but they can't, and you're stuck. I have my estate plan sitting in a binder on my bookcase in my home. Everybody who needs to know knows where it is. I also keep a copy of it on a disk in my desk at the office. The people who need to know are aware of that as well. That's really, I think, the best thing to do. I don't want to make it hard for people to find my documents if they need to find them.
Rebecca Robins: Absolutely. Because lots of times, these particular documents we're talking about are going to need to kick in on a moment's notice.
Robert Mansour: Right.
Rebecca Robins: They really need to be accessible.
Robert Mansour: One thing, a trick that I tell some folks with their healthcare directive, I say, "You might want to make a copy of your healthcare directive. Give it to the person that you've chosen, who's known as your agent, by the way. Give it to that person and have them keep it in their glove compartment in their car." Because if they need to drive to the hospital or to act on your behalf, it would be really nice if they had a copy of your healthcare directive readily accessible to them in their glove compartment. That's one way to do it.
Another way to do it is to put your healthcare directive on your refrigerator. Because a lot of healthcare professionals, paramedics, etc., are trained to look on the fridge, because a lot of people do keep their documents there.
Rebecca Robins: Okay.
Robert Mansour: I know it sounds silly.
Rebecca Robins: Yeah, but like I'm saying, you never know. Oftentimes things happen on the spur of a moment, and you want to be able to grab these important documents, so that your wishes can be carried out.
Robert Mansour: Exactly.
Rebecca Robins: On that note, we're going to take a break, but we'll be right back with Mansour, Attorney.
Hello, this is Rebecca Robins, and I am your host of the Santa Clarita Valley Local Leaders Show. I am back with Rob Mansour, Attorney, of the Law Offices of Robert Mansour. Rob, we've been talking about the importance of estate planning. Now, if there's someone listening out there that is interested in getting an estate plan, what is the steps that they need to take?
Robert Mansour: That's a great question. If they're working with me or any competent attorney, they should expect the following steps. Number one, they should call the lawyer. The hardest point is making that phone call. It really is. Because once you've made the phone call and the appointment, in my estimation, everything is downhill from there, because you've taken the most difficult step. So place a call. Make an appointment with the attorney's office. It usually is going to be about three or four weeks down the line. Because the lawyer is probably either going to send you, or connect you with some kind of a questionnaire.
I have all my clients fill out a questionnaire that's available on my website, or we can mail it to them, or both. This questionnaire is going to walk you through all of the things that we talked about. Who do you want as your trustee? Who do you want to make healthcare decisions for you? Who do you want your guardians or your children to be, etc., etc.? Once you fill out that questionnaire, you really should send it back to the lawyer's office, along with copies of any assets that you have. Because the lawyer's going to want to analyze not only your questionnaire, but also estate tax issues, and any other important issues with respect to title. Then the lawyer will be well equipped to provide you with a productive initial meeting.
During that initial meeting, mine usually last about an hour and a half, where we sit down together. We come up with a plan. We address the client's concerns, and everybody feels good at the end of the meeting, because we have a good direction of where we're going to go. After that, about three weeks later, the clients will receive drafts of their documents in the mail. I also include a summary of those documents for the clients, and I highlight particular passages in the documents that I want them to pay attention to, especially specific attention to.
Then if everything is working fine, the clients come in to sign the documents at the very end. At that point, at least in my office, we scan all the documents to the computer. We give the clients a disk of all of their documents, as well as the original hard copies for them in a nice binder that's organized for them. It's also full of instructions for not only them to read, but also their successor trustees to read as well. That's kind of an overview of the process.
Rebecca Robins: Then Rob, how may people reach you?
Robert Mansour: Well, they can always call the office. The phone number is local here in the Santa Clarita area. It's (661) 414-7100. Or there's also an 800 number, which is 800-799-7449. Of course they can also find me on the internet. I have two websites. The reason I do that is because I have two areas of practice, so I kind of divide them up into the two sites. The first website is my last name, mansourlaw.com, so Mansour spelled M-A-N-S-O-U-R, then the word law, L-A-W, .com. That website is dedicated to the estate planning part of the practice. Then I also have a different website for my personal injury practice, and that one is www.valencialawyer.com. Those are the two easiest ways to reach me.
Rebecca Robins: Rob, you are located in Santa Clarita Valley. What is your address?
Robert Mansour: Oh, yes. I'm off of Copper Hill. Copper Hill is near Newhall Ranch Road, in that area. My address is 28212 Kelly Johnson Parkway, Suite 110. That's in Valencia, California, 91355. There are also directions on my website, as well as the address as well.
Rebecca Robins: Very good. Rob, we have about one minute. Would you like to do any type of additional wrap up for our listeners, as to why estate planning is so important?
Robert Mansour: I really just want people to just take five minutes or 10 minutes, and take a look at their situation, and ask themselves, am I okay with this? Should I really? I think the best thing to say is that they really should talk to a lawyer. Ask the lawyer. I mean, sometimes clients come to me and I say, "Look, you don't need to do this. You don't need to do X, Y, or Z. You only need to do part of it." But even a good healthcare directive is better than nothing. There are some free resources that I can tell clients about if they call my office, that I can direct them to as well. They're not great, but it's better than nothing. Just be proactive. I guess that's the best thing I can tell folks.
Rebecca Robins: That is great advice. If you'd like to get in contact with Rob, all you have to do is go to www.mansourlaw.com, M-A-N-S-O-U-R Law L-A-W .com. Also, is phone number is (661) 414-7100. He will help you plan for your stuff, and for your family, and for your children. Rob, I want to thank you so much for being my guest today.
Robert Mansour: It's been a privilege, Rebecca. Thank you very much.
Rebecca Robins: Thank you. May you all have a great day.
Hello everyone, this is Robert Mansour, and I wanted to make a brief video today about what it means to "have" an estate plan versus what it means to "understand" your estate plan. Sometimes I get in conversations with clients and they say, "Oh yeah, we have an estate plan," or, "We have a living trust," or, "We have powers of attorney. We have healthcare documents." Then I ask them some questions about those documents and they have no idea what I'm talking about.
I'll say, "Well what does your estate plan say?" They say, "I don't know." We'll say, "What kind of living trust do you have? What features does it have?" "Oh, we don't know." "When is your power of attorney effective?" "We don't know."
That's not very good, because having an estate plan is great, but if you don't know how to use it, and if your family doesn't know how to use it, your trustees don't know where it is, your healthcare agents wouldn't know the first thing about what to do, that's not very helpful. What I do is I try to help my clients understand not only having an estate plan, but what it actually says. What does their living trust really say? What happens when someone passes away? When are these documents effective? Under what circumstances should they be used?
As a matter of fact, in most cases I ask my clients to bring their trustees and their agents and their executors to the final meeting so I can brief the entire family about what this estate plan says, what it does, how it's used. Answer all questions, because it's nice to have everybody on the team there. So again, ask yourself, "If I have an estate plan, do I even know what it says?" And shouldn't you?
So if you want to understand what your estate plan says, or you want to get an estate plan, and really know what you're doing and understand the meaning of the legal tools that you are creating give my office a call and we'll do our best to help you. Thank you very much for watching this video.
If you need help with your estate plan, call us at (661) 414-7100 to see if we can assist you.
Hello, everyone. This is Robert Mansour. Today I want to make a brief video about the fundamentals of estate planning. I have my handy dandy whiteboard here. I'm going to give you like a "macro view," a "flyover" view of estate planning and what the basic components are all about.
In most estate plans, there are legal tools that we can create that can help you and your family in case something goes wrong. I call this the "legal toolbox." Inside this legal toolbox are a whole bunch of tools that people can reach for in case this happens, or this happens, or you pass away, or you have dementia or Alzheimer's disease, or you're in a car accident, etc. Sometimes we need to have legal tools to help ourselves, and to help others help us. A lot of people don't have a legal toolbox. If you don't have a legal toolbox, you might find yourself in court, seeking an order from a judge. If you have all these things set up in advance, you don't need to involve the court. You already have the legal tools that you need.
There are four major tools in most estate plans. The first one is this - The living trust. The living trust is the first major tool. A lot of people think the living trust is the estate plan. No, it's not. People call me all the time and they say, "We need you to do our living trust," and I say, "Do you mean an estate plan?" They're like, "Oh no, no. Just, just the living trust." I tell clients, "That's like buying the engine of the car and nothing else. No steering wheel, no wheels, no seats, no nothing." This is just a part - It's a big part - but it is a part of the estate plan.
The living trust has three major players in it. The first major player is someone called the "settlor." If there's two of them, they're called the "settlors." The settlors are the people who create the trust. You will always be the settlor of your own trust. The next cast member, if you will, are the "trustees." The trustees are the people who are in charge of the trust. In the very beginning, you are going to be your own trustee, or a married couple would be their own trustees.
After you pass away, or you can no longer handle your own affairs, you name people called "successor trustees" to manage your trust. The person who is the trustee, they get to manage every thing inside the circle. When I say "inside the circle," I mean that title to the asset actually says, "Smith family trust" or "Johnson family trust." The title on the asset has to be changed in order for something to be "in" your living trust.
The final cast members of the living trust are the people called the "beneficiaries." The beneficiaries are the people who benefit from the living trust. In the very beginning, that's going to be you, whoever sets up this trust. You're the settlor, the trustee, and you are also the beneficiary.
Before I get to the next one, I want to talk about three main reasons people set up a living trust. The first reason is this: Everything in the name of your trust avoids the court system. The reason it avoids the court system is because you've taken care of things in advance. Number 2: Your successor trustees (the people that you name) in the order that you name them are allowed to manage everything in your trust - Not anybody who wants the job, only the people that you've named. Finally, number 3: There are rules of your trust. At the end of the day, this is a legally enforceable document. What it says has to be followed. You get to set out the rules as to who gets what, and how they get it, and when perhaps they don't get it. The living trust can be a very powerful tool.
The next tool in our toolbox is something called the will. The will that goes with the trust is not any kind of will. Most people have a will that says, "Johnny gets this, Sally gets that, Vinny gets this, my brother Skippy gets that." Your will is going to do one thing only. It's going to direct everything back to your living trust. In fact, we call this type of will a pour-over will because everything "pours over" back into the trust.
People say, "Why would I even need this thing?" Here's why: Remember, I told you that assets in the trust avoid the court system. However, sometimes you might find an asset that was not in the trust. For some reason or another - a clerical error, you forgot, you didn't get around to moving that asset into the trust. The will catches that and directs it back into the trust. The person in charge of your will, by the way, is called your "executor." The person in charge of the trust is the "trustee." The person in charge of the will is the executor.
The next major tool is something called the power of attorney. The power of attorney is the next major tool. This person is called your "agent." Power of attorney simply means the following: You appoint someone, usually your spouse or a friend or a family member, as your agent. They get to act on your behalf in many different circumstances. Sometimes people tell me they say, "Wait a minute. That sounds like the trustee. Isn't the trustee acting on my behalf?" The answer is yes, they are. However, there are many things in our lives that have nothing to do with our trust. For example, let's say my wife needs to speak to my former law firm, my former employer, and she needs to get information. That's not part of the Mansour family trust. That's just some kind of HR file. She needs to act on my behalf. She can do so with a power of attorney. Or she needs to speak to a credit card company, or you need to help somebody with X, Y, or Z. You may need to use this tool to do that.
The final tool in the toolbox is called the Advance Health Care Directive. As the name implies, this person is also called your agent, this person makes health care decisions for you if you cannot. The thing that most people think about when I talk about this is they say, "Oh, this is the 'pull-the-plug' person." I'm like, "Well, kind of...I would say it's about 20% 'pull-the-plug' and 80% 'advocate'." There are going to be times when you are sick, when you need people to advocate for you. You need people who are going to get answers, talk to doctors, talk to hospital staff, make difficult decisions. These people that you've chosen, in the order that you choose them, get to serve in that capacity. Sometimes this is a very tough job.
There you have it. This is a macro view of the basic components. There are others, but these are the big four tools that go into most estate plans. I hope you found this helpful. If you'd like, you can call my office at (661) 414-7100 and set up an appointment to set up your own estate plan. Thank you very much.
We've all seen the movies - the old rich person is laying on their death bed, signing a will and other legal documents with the lawyer standing bedside. The entire family is waiting in the hallway, biting their nails.
In fact, most people think estate planning is for old people. Here's the truth - estate planning is not for old people. It's for wise people! Estate planning is about "planning" - creating legal tools that will be available in case something happens to you. You could be in your 20's, 30's, 40's. It doesn't really matter. You've got to sit down and come up with a plan for your estate. How are you going to protect yourself? How are you going to protect your family? These are questions that are not exclusive for "old people" or "rich people."
One reason people most people who create an estate plan are "old" is because they keep procrastinating. Some people think if they create their estate plan, prepare a will or living trust, they're going to die sooner. I have news for you - you're going to die anyway so you might as well make sure you are ready for it and you have a good plan in place so that you're protected.
Here's another myth I hear all the time - "Estate planning is for rich people." This is probably the biggest misconception. Estate planning is not just for rich people. While "rich people" do indeed create estate plans, we need to learn from their example. They're not rich by mistake. They are rich for a reason. They are rich because they use the very same tools that are available for average people. Average people just don't take the time to do it, and so most "average" people generally lose their family wealth within one or two generations. They think estate planning is for rich people and therefore, they don't bother learning about it.
Finally, there is a condition called "paralysis by analysis." Sometimes people can't agree on who their trustees are going to be, who their executors are going to be, or who they're going to name as guardians for their children. They spend so much energy "analyzing" things, they become paralyzed. Too much analysis leads to paralysis which leads to absolutely nothing. Thinking about creating an estate plan is not the same thing as actually sitting down, rolling up your sleeves, and creating one.
So here is my message to you: Estate planning is not only for "old" people or "rich" people. Those are common myths. Consult with an estate planning lawyer and learn how these legal tools can be used to protect you and your family. Yes, there will be tough decisions, but don't spend too much time analyzing everything or you risk doing nothing at all. You can always fine tune your plan as the years go on.
If you want help or wish to learn more about estate planning, call our office at (661) 414-7100 to see if we can assist you.
Hello, everyone. This is Robert Mansour, and today I wanted to shoot a brief video about the importance of a detailed estate plan. When I say detailed, I'm not just talking about lots of legalese. I'm speaking about an estate plan that handles many of life's circumstances that you may not expect. For example, what to do if there's fighting among the children, what to do with your real estate. What if there's a disagreement about what to do with your real estate? What if one of your children has an alcoholism problem or one of your children is a spendthrift, can't handle money? Who is going to be the trustee of your trust, and who is going to be the second person in line after that? What if you have co-trustees? What if there's a disagreement among those co-trustees?
The reason I'm bringing all this up is because many times clients come to my office and we work on the estate plan, and I ask them, "Well, what if this happens, and what if this happens, and what if this happens?" They invariably say, "Oh, my goodness. I didn't even think about all that." Here's the thing - The more detailed your plan is and the more issues it addresses, at least as close to completely as possible, the less problems you're likely to have on the back end.
Sometimes if there is a disagreement in the family or there is a question about how to handle something or what to do with the family's real estate, etc., if the estate plan addresses that issue, it makes it much less likely that it's going to be a problem. Let's say one of the children has an alcoholism problem and there's a question about how to distribute money to that individual. Are there provisions in the estate plan that address that situation? How and when does that individual, no matter what their challenge might be, whether it's a spendthrift that can't handle their money, a daughter-in-law or a son-in-law who might get their hands on the money, alcoholism, etc. The more detailed your estate plan is, the less likely you're going to have a problem on the back end.
You see, the trustees that you pick, they really want specific instructions about what to do and how to do it. If you leave too much to the imagination, sometimes that can lead to a problem. Now there are some families where everybody gets along famously and there's absolutely zero chance of anything going wrong, or perhaps a sole beneficiary; one child is going to be the beneficiary and nothing more. Then you might be able to get away with more general instructions, but generally speaking, the more beneficiaries there are, the more issues there might be, the more detailed you want that plan to be so that it addresses that issue - so it's less problematic for the family after you pass away.
This has been Robert Mansour talking to you about having a very detailed estate plan and the benefits of doing so. Thanks for watching.
If you need help with your estate plan, give us a call at (661) 414-7100.
Often, in the scope of my practice, I am asked to review documents that my clients already have. Either they have documents from an online company like LegalZoom or they have previous documents from another lawyer.
One of the things I review is how complete and thorough the documents are. Sometimes, the documents are rock solid - they are comprehensive and really capture what the clients are trying to accomplish. Other times, they are decent documents but they don't capture what the clients want. In other words, when I tell the clients what the documents say, the clients will often say, "We don't want that. We didn't know that was in there."
There are times when the document are entirely inadequate. However, what I find more often than not is documents that aren't bad....they just leave too many things to interpretation. Also, many important issues to the clients are either entirely not addressed or inadequately addressed. Those "holes" in the plan can lead to trouble.
You see, in many cases, it's not what the documents SAY that is the problem. It's what is left UNSAID that can be the problem. Therefore, it is important to make sure that your documents say exactly what you want them to say. If something is important to you, the documents should address that issue. You also want your documents to address important variables that can occur - some are more common depending on your family situation. If your documents are silent on important issues like what to do with the home after you pass away, how to care for a certain individual in your family, or whether people should inherit directly or in stages, etc.
When a living trust or other document is silent on important issues, it leaves too much to the imagination, and that's where families get into trouble. When people can't agree what to do and the documents are silent on a particular issue, that just leaves everybody in a state of confusion.
Certainly, there are families that get along in every respect, and everyone agrees on everything. However, that is probably the exception and not the rule. If people differ on how to handle the estate and the documents offer little direction as to what to do in certain circumstances, entry-level estate planning documents aren't going to offer much guidance. Therefore, sometimes I tell clients that there's nothing actually "wrong" with their documents per se. It's what the documents leave unaddressed that is often the problem.