San Diego Estate Planning Lawyer Blog

Celebrity deaths often highlight various estate planning issues as prior posts have discussed. Michael Jackson's death brought public awareness to issues about choosing your executor and trustees, pour over wills, and guardianship. You may recall that Michael Jackson named his mother as guardian of his children. His second choice was Diana Ross. If Michael Jackson's mother had predeceased him, would he still have wanted Diana Ross to raise his kids, rather than a family member? We'll never know.

The lesson to be learned is first of all, to name someone you believe will be the right person to raise your children. Do they share your values? Are they stable individuals who will likely be able to provide the necessaries of life? Do they have any medical issues? What if you chose a couple and they get a divorce?

It is important to review your guardian nominations from time to time. As time passes, circumstances and people change. People you choose early in your childrens' lives may not be the ones you would choose for teenagers. Maybe you named your parent and that parent is now too old to raise your children. Maybe the original guardians have moved away and you want someone local to raise your children. Maybe you have siblings you are close to now and they would be a good choice to raise their nieces and nephews.

The New Year is a good time to review your estate plan to be sure it is up to date, including the nominations of guardians. It is a good idea while you are at it, to also review other aspects of your estate plan. Are the ages that you want distributions to your children still what you want? Do you want to add provisions to your trust about distributions for college, buying a house, or having a child? Do you need to add spendthrift provisions or substance abuse provisions for a particular child?

Call us at Pinkerton, Doppelt, & Associates LLP to set an appointment to review your estate plan.

Every revocable living trust should have a Schedule A attached to it. This is a document prepared by your estate planning lawyer to list all of the assets that are part of your trust, ie. they have been titled in the name of your trust “John Doe, Trustee of the John Doe Trust.”

There are two important things to keep in mind about your schedule A. First, it is just a summary of your trust assets. What is critical is that assets you want to be in your trust are indeed titled in the name of your trust. Assume for example that you buy a new home and that the deed to your new home lists your trust as the owner but you fail to get out your estate planning binder to add it to your Schedule A. Is the home “in” your trust? Is the home now a “trust asset”despite not being listed on your Schedule A? Yes, because what matters is how the deed is written, not whether you actually wrote it on your Schedule A.

The second important thing to know about a Schedule A is that although it is just a list, that list can in some circumstances assist in avoiding probate. As an example, suppose your Schedule A lists a particular brokerage account that you intended to title in the name of your trust but somehow forgot to mail in the necessary paperwork to make the change. Is the brokerage account “in” your trust (ie. is it a trust asset?) No, because it has not been properly titled in the name of your trust. In California however, if you have an assets listed on your Schedule A and have not transferred that asset by making the title change, you can file a petition called a Heggstad petition to show the court your intent was to transfer the asset into the trust.

Also important is that you keep your Schedule A up to date. Does it list bank accounts that you opened after you executed the trust? Does it show a vacation property you own? Are any businesses you operate in the trust? Have you sold some assets and bought other assets and listed those new assets on the schedule? An updated schedule can assist you during your lifetime in knowing which of your assets are trust assets and it can be useful for your successor trustee in handling your trust administration upon your death.

If you are now thoroughly confused about your Schedule A and its importance or not sure whether you have one, please give us a call at Pinkerton, Doppelt, & Associates and we would be happy to help.

There are 3 types of probate conservatorships that can be obtained in the San Diego Probate Court. The first is the general conservatorship of a person where the Probate Court gives a responsible person (the conservator) the ability to take care of another person (the conservatee) or to manage someone’s financial affairs. With a conservatorship of the person, the conservator takes care of the conservatee's health care, housing, food, clothing, and other personal needs. A conservatorship of the estate pays the conservatee's bills, taxes, asssets and manages other aspects of finances.

A limited conservatorship is one that is set up for a developmentally disabled adult. If an adult with developmental disabilities is unable to care for himself or herself or their property in certain ways but not to the extent of needing a regular conservatorship, a limited conservatorship may be appropriate. The difference between a limited conservatorship and a general conservatorship is that a limited conservatorship is only available to adults with developmental disabilities. This could be something like autism, a brain injury at birth such as cerebral palsy or mental retardation, or other disability that arose before the age of 18, which is expected to continue indefinitely and constitutes a substantial handicap. The handicap could be in the area of self-care, receptive and expressive language, learning, mobility, self-direction, capacity to live independently, or economic self-sufficiency. Some of the powers that can be granted to the limited conservator are the power to decide living arrangements, the power to a sign a contract, and the power to make decisions about education or health care.

A third type of conservatorship is one under the Lanterman-Petris-Short Act for persons who are gravely disabled. “Gravely disabled”means a person, who as a result of a mental disorder or chronic addiction is unable to provide for their personal needs for food, clothing, or shelter. Usually this type of conservatorship is necessary for an individual who is seriously mentally ill or needs specialized care.

The process of establishing a conservatorship can be complicated and lengthy. If you need help with your conservatorship matter, feel free to call Pinkerton, Doppelt, & Associates, LLP for a free consultation.

In addition to handling probate, trust administration, and preparation of all types of trusts, we often get inquiries from heirs and beneficiaries with concerns about the way an executor, administrator, or trustee is administering an estate in San Diego. Sometimes beneficiaries cannot get an accounting of the trust assets. Sometimes they have issues with the distribution of assets. In some cases, they may have suspicions that the individual handling the estate is self-dealing or guilty of outright fraud.

The executor, administrator or trustee of an estate has a fiduciary duty to the beneficiaries. This means that they must act with the highest degree of honesty and integrity. They have certain duties under the law that they must fulfill. Among those duties are the duty to collect and protect the assets; duty not to commingle estate assets; and a duty to be impartial. They also are required to communicate with the beneficiaries, provide an accounting of the assets, and distribute the assets according to the testamentary instrument (will or trust) or if there is none, according to the Probate Code.

Pinkerton, Doppelt, Associates, LLP represents heirs and beneficiaries as well as executors, administrators, and trustees. If you can concerned about the way an estate is being handled, you have options and remedies. One remedy could be filing a petition in the Probate Court to have the Court address the issue, order an accounting, or remove an executor, trustee, or beneficiary. There are also civil remedies for fraud, breach of fiduciary duty, or constructive trust. If you are over 65 years if age, you may have a action for elder abuse.

Contact us for advice about your options if you are a beneficiary and have concerns about the way a will or trust is being administered or if you are an heir and believe you are entitled to an inheritance.

With the recent downturn in the economy, San Diego has been one of the hardest hit with declining property values and unemployment. According to the Feds, the states in a full recession are California, Florida, Arizona, and Nevada. California has reached 11%unemployment and San Diego is in the top five cities for decline in property values. Because of these factors, San Diegans may need to review their estate plan and possibly amend their will or trust.

Suppose your trust leaves a cash bequest to a particular beneficiary, maybe a charity, and then divides the rest of your estate into percentages. When the value of your assets goes down, because of lower real property values or a decline in your investments, that in turn will affect the amount other beneficiaries receive as a percentages. As an example suppose an individual decided to leave $100,000 to his favorite charity and the rest of his estate is to be divided between his four children. The trust was done at a time when the rest of his estate had a value of $1 million. With the problems in the economy, now the estate is only worth $700,000. Instead of each child receiving 1/4 of $1 million, they will be receiving 1/4 of $600,000. Since the cash bequest to the charity comes out of estate before the rest of the estate is divided, the children are now going to have a $100,000 per child reduction. Instead of each child inheriting $250,000, they will only inherit $150,000. The trustor may want to rethink the amount of the cash bequest to charity and amend his trust accordingly.

Another example is where you leave one child your trust assets and other children non-trust assets such as an insurance policy. The amount of the life insurance proceeds are not going to change because of the economy but the trust assets very well may. If your goal is to treat all your children equally, then maybe your trust should be amended.

The main thing is to review your trust or other estate plan periodically. Also review your assets and their current value to see if your estate plan still makes sense and fulfills your goals. Look for a later post on how the federal estate exemptions for 2010 and 2011 may affect your estate plan. We are happy to answer any questions or review your existing documents to see if they need to be amended. Contact us if we can help.

Previous posts have discussed how to disinherit your heirs such as a child, sibling, or parent. But what if you want to disinherit your spouse?

Some people may want to disinherit their spouse because they have already provided for him or her elsewhere in their estate plan. Another reason for disinheriting a spouse may be because the spouse has his or her own assets. As an example, suppose a couple marry later in life and each have children from a previous marriage. Neither needs the assets of the other and want to simply provide for their own children. How best to accomplish that?

The best way to disinherit a spouse is by a prenuptial or postnuptial agreement. If spouses sign a waiver and agree to receive nothing or less than the law allows, there is no problem.

The prenuptial or postnuptial agreement containing the waiver should be prepared by an attorney to avoid a situation that occurred in the California case of Estate of Will, 170 Cal. App.4th 902 (2009). A couple in their 80's married and each had grown children. They signed a prenuptial agreement in which they essentially agreed that they would each keep their own assets and waived the right to inherit from each other. When the husband died a few years later, the wife petitioned the court for a share of her husband’s estate, arguing that the Probate Code protects a spouse who is not mentioned in estate planning documents executed prior to marriage. (The husband had not amended his will or trust after the marriage).

Section 21610 of the Probate Code gives an omitted spouse a statutory share of the other spouse’s estate but not if (1) the decedent’s estate plan specifically disinherits the spouse (2) the spouse receives assets outside of the estate, or (3) the spouse executes a valid waiver. The waiver signed by the wife was not done correctly and her husband had not specifically disinherited her in his estate plan so she argued that she was entitled to her statutory share of her husband’s estate. The California court found that the waiver she signed, although not completely in accordance with the Family Code, barred her from receiving anything from her husband’s estate.

If you are considering disinheriting a spouse for any reason, you want to be sure you do it correctly with a prenuptial or postnuptial agreement plus an estate plan (or amendment to your existing plan) with the appropriate language. The attorneys at Pinkerton, Dopplelt, & Associates, LLP have experience in both estate planning and family law and can assist you with these issues.

When you die without a will or a trust, you are said to have died “intestate.” The Court in the probate proceeding ,which will have to occur when someone dies"intestate,'" will determine who receives your estate based on California law. So if, for example, you are single with no children, your parents are your heirs and your estate will be divided between your mother and father.

But what about a situation where a father abandons his child at birth, has had no contact with his child, never paid child support, i.e. not really much of a father. Should that type of father inherit his son’s estate when the son dies? You are probably hoping the answer is “no”. Unfortunately the answer is that the father will inherit from the son, no matter what kind of a father he has been.

In a California case called Estate of Shellenbarger, decided by the Second District Court of Appeal in 2008, there were similar facts. The son died intestate (without a will or trust). Since the son was unmarried with no children, his parents are his heirs under California law. The administrator appointed by the Court tried to argue that the father should not receive any inheritance based on fairness, because he had left the mother prior to his son’s birth and never made any child support payments. The Court ruled that intestate succession is purely based on statute and a Court cannot disinherit an heir even on equitable grounds.

A similar result would occur if a father died intestate with no wife and 2 sons, one of which he had no contact with after the son left home at 17. The other son took his father into his own home and cared for him before his death. The two sons would inherit equally even though it may have been the case that the father would not have wanted his wayward son to inherit anything.

What this illustrates is that if someone dies without a will or a trust, the heirs are set by law. The statute which is set out in California Probate Code Section 6402 doesn’t take into consideration whether that heir had a relationship with the decedent or any other factors. A “bad” heir is still an “heir”.

If you think you might have a situation similar to the above examples, it is so important to get a will or a trust. Pinkerton, Doppelt, & Associates, LLP can help you with the process of
naming the specific beneficiaries who will share in your estate upon your death so that your assets will be left only to someone you would have wanted to receive them.