Trusts, Estate and Probate FAQ

What is Probate?

Probate is a court administered proceeding that supervises the estates of those who can no longer make their own personal, healthcare and/or financial decisions. Probates generally fall into two categories; “Death Probate” for those who have passed away and have not made legal arrangements to avoid probate, and “Living Probate” for those who have become disabled or incapacitated and require the court to supervise their personal well-being as well as their finances. Probate proceedings can be very expensive, time consuming and emotionally draining for loved ones. They are also publicly-held proceedings and are a matter of public record. Many people proactively choose to avoid the probate process in order to save money, spare their heirs and other beneficiaries from the hassle, and keep their personal and financial affairs private.

What is a Will?

A will is a document used to provide for the orderly disposition of assets after death. Wills do not avoid probate. In fact, wills have no legal authority until the will maker dies and the original will is delivered to the probate court. Everyone with minor children needs a will to nominate a guardian or new “parent” in the event a child becomes orphaned. A backup will or “Pour-Over Will” is generally included as part of a living trust.

What is a Living Trust?

A living trust is a revocable and amendable legal agreement with three parties involved; the trust maker(s), the trustee(s) (or trust managers) and the trust beneficiary(ies). Typically, a husband and wife may name themselves to be all three parties at once, the trust makers who have the authority to manage all assets moved to the trust and retain the right to enjoy and have full use of these assets as beneficiaries. Back-up managers (successor trustees) are named in the event of a trust maker’s incapacity or death. Special provisions in the trust can control the management and distribution of trust assets when the time comes. And “death taxes” can be avoided or eliminated concerning the estate. A living trust can accomplish all these things without having to involve the expense, time and emotional stress that can come from having to go to probate court.

What is the difference between a Will and a Living Trust?

Like previously mentioned, a will does not avoid probate. The biggest distinction between a will and living trust is that a will is not “funded” with assets during the creator’s lifetime. Therefore, the court must step in and oversee the responsibility of transferring assets to the will maker’s estate upon incapacity or death. However, a living trust is funded during the trust maker’s lifetime, that is, the transfer of assets has happened in advancement of a trust maker’s incapacity and death, and allows the trust maker’s estate to avoid unnecessary court costs.

What does Intestacy mean?

If you pass away without even a will (intestate), the State of California, through the legislature, has determined who will inherit your assets and when they will inherit them. Often times, this may not be line with your wishes. Unfortunately, although you may not agree with this “plan”, roughly 70% of people in the United States use it.

What is a Living Will?

A Living will is a health directive which allows you to state your wishes in advance regarding the types of medical life support measure you would like to have and those you would like to have withheld or withdrawn if you are in a terminal condition without reasonable hope of recovery and cannot express your wishes yourself.

What is an Advanced Health Care Directive?

An Advance Health Care Directive allows you to name an agent to make healthcare decisions on your behalf in the event you cannot make them for yourself.

What is a HIPAA Authorization?

A HIPAA Authorization is a document whereby you can name others to have access to your private medical information when necessary.

What is a Financial Power of Attorney?

A Financial Power of Attorney, sometimes known as Durable Power of Attorney, allows you to appoint someone you know and trust to make financial decisions for you when you are unable to. If you become incapacitated without this document, then you and your loved ones may be involved in a “living probate”, the technical term in California being a “conservatorship”, where a judge determines who should make these decisions for you under ongoing court supervision.

What is an Assignment of Personal Property?

An Assignment of Personal Property is a document that transfers currently owned and later acquired tangible personal property to your trust including household furniture, furnishings and fixtures, clothing, jewelry, works of art, chinaware, silver, photographs, sporting equipment, electronic equipment, musical instruments, artifacts relating to hobbies, vehicles, recreational vehicles, and boats.

What is a Personal Property Memorandum?

A Personal Property Memorandum is an original form on which you can record written instructions directing the distribution of your personal effects. If you change your mind about a distribution of personal property after you fill out the form, you can remove the form, and execute a new one.

What is a Certification of Trust?

A Certification of Trust is a document specifying your living trust exists, that you are named a trustee, and that you have authority and power to transact business as a trustee. Your certification of trust provides only the information that third party persons or financial institutions you deal with need to see without disclosing confidential details.