Estate Planning
Category: Business & Finance
Expert: Michelle GoffAttorney Michelle Goff of Goff, Conway-Spatola Law Group in Sacramento, takes your questions on wills, trusts and estate planning.
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Questions 217 - 228 of 616 (Page 19 of 52)Q: My parents died leaving a house and land that is paid for.There was no will. My brother lives in the house. My brother asked us to give him power of attorney to take care of things pertaining to the property if we are not there. We found out he took the power of attorney to make himself executor and sole beneficiary. Is this legal, and is there anything we can do. There is myself and another sister.
A: Based upon the circumstances, it appears from your comments that your brother obtained the power of attorney from your parents before their death and used the power of attorney to modify the disposition of their assets at death or possibly during lifetime. The power of attorney may not have granted your brother the authority to do so.
I recommend that you contact a probate litigation attorney to assist you in determining if you have a right to recover your share of the house and land that should have passed by intestacy to you, your sister and your brother in equal shares.
Q: Is it necessary to have a living trust? How much do they cost?
A: In California, whether or not to do a living trust is primarily driven by the desire not to have a formal probate proceeding at death to transfer your assets. California law provides that a formal probate proceeding is required if your gross assets exceed $100,000.00 in value. Your gross assets exclude property that would pass by beneficiary designation, joint tenancy, transfer on death or otherwise directly to a beneficiary.
The cost of having an attorney to prepare a trust varies greatly. The rate of the attorney generally relates to the specialty of the attorney, the years of experience and the credentials of the attorney. The cost of preparation also relates to the amount of documents that the attorney will prepare and whether the attorney is preparing the asset transfer documents. In general, the range in the Sacramento area to prepare a trust and the supporting documents for a general plan is between $1500 to $3500.
Q: I keep getting advertisments from Attorneys and financial planners warning me that our living trust needs to be brought up to date. Ours was made in the early ninties with only a few minor changes to it. If so, where can I find out what needs to be updated or lacking that, can I make an appointment with you to look it over to make sure it's valid? I'm 87 years old and want to make sure everything is valid.
A: You should have your trust, will and any other estate planning documents reviewed approximately every three to five years to see if any law changes may have affected any of the terms in your existing plan. I recommend that you make an appointment with an estate planning attorney to have it reviewed. I do review trusts and wills, so if you wish to do so you may schedule that appointment with me.
Q: My Mom left a Trust naming my sister as Trustee.... She will not give me my 50% of the monies nor a reconsiliation... What can I do ?.. Thank you.
A: Your sister has a fiduciary duty to all beneficiaries of the trust. She is also required to deal with all claims against the trust and to confirm all taxes have been filed and paid. In addition, she must follow California law with giving the required statutory notices upon the trust becoming irrevocable. If it has been an appropriate time since the trust became irrevocable due to the death of your mother and you sister is unwilling to cooperate with you or if you just want to find out what is an appropriate period of time of administration in your circumstance, I suggest that you retain counsel. The attorney should be able to give you direction on whether to make a demand for an accounting and distribution or to wait a longer period of time for the administration to complete.
Q: My sister's estate is formed into a trust as per her will; Trust's primary purpose has been to provide for 3 nieces educations for 10 years and then remaining sum to distribute amongst 7 nephews and nieces(including the three). The trust also allows the trustee to distribute the sum anytime as per the will(7 divide equally) . The trustee wants to continue on with the trust because he gets to withdraw about $12k per year(not in the will but the Max legally allowable cost/fees of the trust) for the trust balance of 3.5M. Now the trustee has had past misconducts in the similar family estate in the past; can we(beneficiaries) remove/vacate him file a motion in the court? Can we force him to make distributions as per the will?
A: A trustee of a trust has a fiduciary obligation to follow the terms of the trust and to act in the best interests of the beneficiaries. The terms of a trust established by will are set forth in the decree of final distribution, which is an order entered by the court. It is the decree of final distribution that you should review for the terms of the trust instead of the will. I suggest that you retain legal counsel to assist you on whether the actions by the trustee are sufficient in this trust to be considered a breach of fiduciary duty that would subject the trustee to removal. Actions in another estate will not usually subject the trustee to removal in your trust.
With regard to compelling distribution, you may file a petition seeking to compel a distribution pursuant to the terms of the trust. I would again suggest that you have an attorney review the terms of the trust to determine if you should file the petition to compel or make demands of the trustee to force termination of the trust.
Q: My wife and I had a revocable family trust in which we accumulated stock.Upon her demise three years ago,as Trustee I placed the trust inthe A-side and other assets in the B-side.I now want to sell some of the stock.Do I use the cost basis on the date of purchase or the value on the date of her demise? If the latter do I use that date as the acquition date?
A: If the stock was community property at the time of your wife's demise, then the cost basis of the stock is the fair market value on the date of death. The fair market value of the stock is the median price of the stock on that date. I suggest you consult with your stock broker or your accountant to determine the median price on that date.
With regard to whether the stock was community property, your trust may contain a provision that confirmed that the stock was community property or you may have a property agreement that you and your spouse signed that confirmed the community property character.
Q: My parents have both passed away, and we have not been able to find a will. They own a home in Southern California. It is paid for. There are nine surviving children (including me). One sibling has been living in the house since my parents passed away in 2006. She has not paid any rent but is paying the property taxes. None of the siblings want to discuss the property. What is the best way to handle this dilemma? What are my rights?
A: If there is no will, then the estate passes by intestacy. Intestacy would pass the property to each surviving child and to the children of a deceased child. Although it always better to work with family consensus, you may proceed without their consent and file a petition for probate to probate the interest in the house. The court can then either order the sibling to vacate the property for its sale or order rent to be paid to the estate. I recommend that before proceeding that you consult an attorney that is familiar with probate law to assist you.
Q: My aunt died in 2009 and my brother and I were named equal beneficiaries on a small life insurance policy ($22K total) and her pension ($400k total). She also left everything in her trust (house, stocks, bonds, bank accounts totaling over $3.5 million) to us in equal shares. To date, we received the life insurance proceeds and pension proceeds, but probably won't receive the trust for a few months. We know we'll pay taxes on assets exceeding $3.5 million, but we're not sure if the life insurance money and pension are excluded. Please clarify. Thanks!
A: All assets are includable in the taxable estate of a deceased individual no matter how it passes to the beneficiary, including by trust, will, joint tenancy, and beneficiary designation. Therefore, you will pay estate tax on the life insurance and pension proceeds. You need to obtain a document called a Form 712 from the insurance company to attach to the estate tax return to report the proceeds, if you have not already done so.
Q: My parents set up an A-B trust over 20 years ago. My father passed away 8 years ago. At that time my mother, sister & I were listed as co-trustees. Since then my sister has fallen out of favor with our mother. My questions are: (1) Can my mother change the trustees at will on the B-trust? (2) Can my mother change the B-trust terms after my fathers passing? (3) When should co-trustees know what is in the trusts? Our mother does not trust any of her children.
A: A trust established as a bypass trust is irrevocable at the death of the first spouse. Its terms may not be changed unless there are specific provisions in the trust to authorize a change. Often a trust will have a provision allowing the surviving spouse to change the trustees of the bypass trust. Also, a trust may include a limited power of appointment granted to the surviving spouse. A limited power of appointment allows the surviving spouse to modify distributions of the bypass trust upon the spouse's death within a class of individuals, usually the children or grandchildren.
As co-trustee of a trust, you are entitled to receive information regarding the assets held in the trust and should be participating in the decisions regarding the investments and other actions of that trust.
Q: I am executor of my parents trust. All assets have been distributed except for the house. So far, it's been almost three years since their passing, but we still have not emptied out the house and sold it. It is free-and-clear, and vacant. Is there a time limitation where I MUST take action to sell it and distribute the final proceeds?
Thanks.
A: In most circumstances, the trust terminates at the death of the settlors. The trustee then has an obligation to take reasonable steps to wind down the trust and distribute the estate. Three years is a long-time to wind down the administration. Unless you have a reason for holding the property and all beneficiaries consent to your continued delay, you should take steps to complete the administration process by distributing the contents and selling the house.
Q: In 2001 my husband and I established a will and named co executors. The value of our estate is approximately 3.5 million dollars. I have been told that our will is structured so that at the death of either of us the will will reform to become a trust. We have not put any of our assets into a trust at this time. Is it possible to form a will to become a trust whenever the husband or wife dies? If so, what are the advantages or disavantages of this type of will?
A: You can have a trust created upon death within a will which is called a testamentary trust. The downside of a testamentary trust is that it does not avoid probate. Most individuals who decide to use a trust want to do so in order to avoid the administration of their estate in a court supervised probate proceeding in order to limit the cost of administration. By creating the trust within your will, a probate proceeding becomes necessary to create and fund the trust at your death. Another downside of using a testamentary trust is that the trust which is created and funded in the probate proceeding generally remains court supervised until distribution. This additional supervision increases the costs of administration of the trust.
Q: My Mother passed away in January (Age 86). She had a Living Trust which included her Home that was originally purchased in 1949. My sister and I am the Trustees of the Trust and Beneficiaries.
In February, we sold the House ($325,000) and received the proceeds of the sale. Are the proceeds taxable to my us? I seem to recall that the Cost Basis of the Home after death is stepped up to the current market value. So does this mean that there would be no capital gains that we would have to pay?
A: In 2010, the children of a deceased parent may obtain a stepped up basis on up to $1,300,000 in property. Since you sold the property very close to the timing of death, you may use the sales price as the value of the property at the time of death. Therefore, you should not have any capital gains tax on the sale of the property since it appears the estate fell below the stepped up basis limitation this year.
