San Diego Estate Planning Lawyer Blog

In California probate proceedings are governed by the Probate Code which sets forth certain time limits. Once a petition for probate is filed, you will receive a date for the first hearing in which an administrator or executor is appointed. The hearing is often 2-3 months after the petition has been filed. Once the representative has been appointed, notice has to be given to creditors of the decedent. Creditors have four months after publication of the notice of probate or 60 days after receiving actual notice, whichever is later to file a claim. Then the process begins of collecting and valuing all of the decedent's asset, paying the debts, taxes, possibly liquidating some assets, and finally distributed the assets to the heirs or beneficiaries.

The normal time for probate in San Diego county is between 9 months and 18 months. There are a number of factors that may make the probate process take longer. Some of these are:

1. Many beneficiaries
2. Beneficiaries that cannot be found.
3. A will contest brought to dispute the validity of the will. If a contest is filed, it will have to be decided before the estate can be distributed. Sometimes this can take years if there are depositions that have to be taken and either mediation or a trial.
4. Disagreements among the beneficiaries such as who should be the administrator, whether the accounting is accurate, whether there are beneficiaries that should be disqualified, or having to set up a guardianship of the estate for minors. Each time a petition or motion is brought in the probate matter to resolve a disagreement, it lengthens the time for closing the estate.
5. A taxable estate. If the estate has to pay federal estate tax, this can delay closing the estate. This is not a problem for decedents who passed away in 2010, however in 2011, if the Legislature does not act, the federal estate tax threshold will revert to $1 million making many more estates subject to estate taxes.
6. A complicated estate with unusual assets. Typical estates consist of real property, bank accounts, investment accounts, etc. If one of the assets is a business, however, it can take time to appraise such an asset. The same is true of oil or mineral rights or other unusual assets. If there are many assets, it can also take additional time to appraise all the assets and liquidate them if they need to be.

The estate planning attorneys at Scott C. Soady, A Professional Corporation handle many probate matters and can make the whole process easier for an executor or administrator. We offer free consultations so if you have a probate matter, give us a call.

A previous post mentioned that this is the year for billionaires to die without their estate being responsible for any estate taxes. One of this country's billionaires is Donald Bren of the Irvine Company in California. Estate taxes were far from his mind when this week in Orange county, a jury decided the interesting case of whether he owed his biological children by a mistress approximately $130 million in back child support. The causes of action brought by the mistress and the two children, now 22 and 18, were based on fraud and breach of contract on the premise that Bren had not given enough emotional and financial support to the children. At one point Bren was giving each child $18,000 a month. The children claimed that he was required to pay them support according to his "circumstances and station in life," arguing that he should be required to pay them $400,000 per month applied retroactively.

Bren, now 78, has an estimated net worth of $12 billion dollars and is married with a 7 year old child. The jury decided in favor of Bren and ruled that the children were not entitled to additional support. So now Bren's billions are intact and he can plan for how best to leave his billions without paying billions in estate taxes. Next year unless the Legislature acts before the end of the year, the federal estate tax exemption is set to return to a level of $1 million. Millions of Californians will then have estate tax issues just like Donald Bren. There are ways to minimize estate taxes including irrevocable life insurance trusts, gifting, and other advanced estate planning techniques.

If you have questions or want to consult with an experienced estate planning attorney about your estate and how to minimize estate taxes, call us at Scott C. Soady, A Professional Corporation for a free consultation. Also go to our family law website where you can read articles about child support and other family law issues. Consultation for family law are also available.

When someone dies, either with a will or a trust, the assets owned by the decedent have to be valued to determine the fair market value. The date used for valuation of assets is usually the date of death. Sometimes the document, whether a will or a trust, will provide that another date can be used such as 6 months from the date of death. The important thing is that the date is consistent for all of the assets.

Assets that have to be valued can be real property, personal property, investments, bank accounts, IRAs, pension and retirement plans, stocks, bonds, mineral rights, and business interests. Some of these may not be trust assets but still have to be valued if there is going to be an issue with estate taxes. For example, assets held in joint tenancy may not be subject to probate or trust administration, but they still have to be valued for estate tax purposes.

Property such as real property is valued by obtaining a written appraisal by a licensed experienced professional appraiser. The appraisal should include descriptions and photos of the subject property, comparable sales, and a determination of value. Sometimes real property can also include having to appraise personal property as well such as farm equipment, livestock, crops, etc. or in the case of a professional building, the value of equipment and trade fixtures.

The value of personal property also is determined by an appraisal. For household furnishings, the IRS requires an itemized list of the furniture values. Items of jewelry or art should also be appraised by someone experienced in jewelry appraisals such as a gemologist or an appraiser that works in the art field. Other personal property that may need to be appraised may be automobiles, planes, or collections such as coins or stamps.

A business such as a family run business, a professional corporation, or a limited partnership also has to be appraised. Specialized appraisers may have to be retained to value the fair market value of the business and the decedent's interest in the business.

For stocks and bonds that have to be valued, their value on the date of death can be determined by the average selling price of the stock or bond on the date of death. Mutual funds can also be valued using the bid value or public redemption price of the fund on the date of death.

Bank accounts can be valued as of the date of death by bank statements.

Valuing assets can be a tricky and time consuming task requiring experienced consultants and an experienced estate planning attorney. We can assist with this task at Scott C. Soady, A Professional Corporation.
Call us if we can help.

One of the documents of our revocable living trust package is a document called a "pour over" will. Many clients ask why they need a will when they are doing a trust. Wasn’t one of the reasons to create a trust to avoid the probate process that is necessary with a will?

A “pour over” will is a specific type of will that accompanies a living trust. A “pour over” will is like a safety net. If you transfer all of your assets into your revocable living trust, then the pour over will not be necessary. But what if you accidentally or intentionally leave an asset out of your trust? In some situations a decedent may forget to title an asset in the name of his trust. A common example is when you refinance your home. Lenders ask you to take your property out of the name of the trust but don’t always put it back into the trust for you after the refinance. If you did not have a “pour over” will, the property would have to be distributed according to the laws of intestacy, which may not be the same as the beneficiaries of your trust.

With a “pour over” will, any assets owned at death and not otherwise titled will be “poured over” into your existing trust and be distributed according to the trust provisions after the asset is probated. Only the one asset not titled in the name of the trust, or otherwise transferred because of a beneficiary designation, will have to go through probate. In the example of a refinance, suppose you took your residence out of your trust to refinance and forgot to put it back in. Your trust provides that your residence is to go to a specific charity. With no “pour over” will, the residence will go through probate and be distributed to your intestate heirs, probably your children if you have no spouse. With a “pour over” will, the residence will still go through probate but will be “poured over” into your trust and be distributed to the charity you named.

If you have questions about a living trust, the probate process, or any other estate planning questions, call us or email the experienced estate planning attorneys at Scott C. Soady, A Professional Corporation.

Remember when hotel magnate Leona Helmsley left $12 million to her dog Trouble? It's happened again! The late Miami heiress Gail Posner who recently died in Miami left $3 million to her dog Conchita and 2 other dogs who will live in her 7 bedroom $8.3 million mansion cared for by housekeepers, bodyguards, and other staff members who themselves were left a total of $26 million. Mrs. Posner's son Bret received a mere $1 million. He has challenged the trust alleging undue influence and fraud on the part of the staff memers and the attorney who drafted the trust.

If you want to provide for your pet after your death, there are several ways you can do it with a lot less money. The most common way is to leave a designated amount to a friend or family member to care for your pet. This would be a non-enforceable bequest so you need to be sure that the person you choose will follow through. You could also leave a monetary gift to a charity that will keep your pet for a fixed fee. Apet trust is another way to provide for a pet and it is enforceable by the court. You leave a certain amount of money or percentage of your estate to fund a pet trust for your pet(s). The trust is enforceable by a person named in the trust or by a person appointed by the probate court, any other person interested in the welfare of animals, or a nonprofit charity who cares for animals. The pet's care is taken care of and after the pet dies, there are remainder beneficiaries who inherit the balance of your estate.

Often clients care as much about their pet as they do about the rest of their personal property. We can draft provisions for your pets in your own revocable living trust or we can create a "stand alone" trust for your pets. Contact us at Scott C. Soady, A Professional Corporation for a complimentary consultation.

Recently Warren Buffett and Bill Gates decided to begin a philanthropic campaign called the Giving Pledge Campaign. Buffet and Gates have each pledged to give half of their wealth to charity and have contacted a number of other billionaires world wide to make a similar pledge.

It is reported that there are approximately 403 billionaires in the United States. At www.givingpledge.org you can see which billionaires have pledged. In San Diego, Irwin and Joan Jacobs have pledged. Other notable billionaries who have agreed to give the majority of their wealth to philanthropic causes or charitable organizations are George Lucas (moviemaker), T. Boone Pickens (energy mogul), Barron Hilton (Hilton Hotels), Ted Turner (TV), and Larry Ellison (founder of Oracle). It is unknown how many billionaires there are world wide but India has the second largest number after the U.S.

You may not be a billionaire who can pledge half your wealth to charity, but many people with normal size estates make charitable donations to their favorite charities. Individuals who not have children or grandchildren frequently leave sizeable donations to charity. If you have considerable wealth, even if not in the millions or billions, you could pledge to leave half of it to charity. There are a number of ways you can do this in your estate plan. You can provide for a certain dollar amount to go to charity. You can provide that a certain percentage of your estate goes to a charity or charities. You can also create a charitable remainder trust, a charitable lead trust or leave an IRA or other asset to charity. Read about these different ways to implement charitable giving on our website and contact us if you want to incorporate these ideas in your estate plan.

If someone dies without a will or a trust, they are said to have died intestate. According to the Probate Code sections on intestacy ( Sections 6400 et seq.), that person's estate will be distributed to the persons specified in the Code. For example, if you die without a will and have a spouse and children, your estate will be distributed to them. If you have no spouse or children, it will go to your parents. If your parents are deceased, then it will go to your brothers and sisters, and on down the line until a relative is found.

But what happens if no heirs can be found? If someone dies with no living relatives, their assets will go the State of California who will auction off the property. Personal property is usually auctioned in the county where the decedent died. An interesting article in the LA Times recently told about the auctions held there several times a year. They are held in the City of Industry in the L A area. Huge crates contain the personal property divided into various categories.

Some of the interesting articles that have gone to auction include a 200 year old German violin, autographed memorabelia from the drummer for the rock bank Buffalo Springfield, classic Batman comics, and artwork claimed to be by Picasso. Sometimes the property which goes to the State can be of significant value. LA county had to dispose of an approximately $3.5 million estate, including homes in Malibu and Palm Springs, and a Rolls Royce alledgedly belonging to a Persian princess.

For people who have no relatives, estate planning is critical so that their estate doesn't go the State. With a will or a trust, an estate can be left to a charity or to friends if you have no relatives. For a will or a trust or other estate planning needs, contact us at Roy M. Doppet & Associates.

Past blogs on our website have discussed California Probate Code section 21350. That section limits certain individuals from receiving assets under a will or a trust in some circumstances. Some of the suspect transfers are to the person who drafted the will or trust, a conservator of the transferor, or a care custodian of the transferor. A "care custodian" is defined as a person or agency which provides health or social services to an elder or a dependent adult. The section states that such individuals are presumed to have unduly influenced the transferor to provide for them in their will or trust. Once the disqualifying relationship is established, the transfer is presumptively invalid and it is then up to the objecting party to show by clear and convincing evidence that the transfer was not due to fraud, undue influence, duress, or menace,

Probate Code section 21351 sets forth certain exceptions to these rules. If the transferor and the care custodian are related by blood or marriage, there is an exception. If the document was reviewed by an independent attorney who counseled the transferor and determined that it was not the result of fraud, menace, duress, or undue influence, there is an exception.

In 2009 a California case Estate of Pryor held that a care custodian who later marries the transferor before his or her death, can invoke the spousal exception of Probate Code Section 21351. The case involved Richard Pryor, the comedian, who died in 2005. He and his wife Jennifer were married in the 80's and then subsequently divorced. After the divorce, the ex-wife became Pryor's care custodian in 1994. In 2001 they secretly remarried. Pryor in his will left substantial assets to his wife rather than his children. The children claimed that the remarriage was due to undue influence and fraud and sought to have the gifts declared invalid as a presumptively invalid transfer to a care custodian. The Court found in favor of the wife, stating that section 21351 created an exception for persons who are related by blood or marriage. The section doesn't mention anything about showing that the marriage was not procured by fraud or undue influence. Since the Legislature had not indicated that the marriage could not be the result of fraud or undue influence, the Court felt it could not take it upon itself to make such a finding.

At Scott C. Soady, A Professional Corporation, we counsel clients who are thinking about leaving assets to a care custodian. We can draft a Certificate of Independent Review if we determine that the gift to a care custodian was not the product of fraud, undue influence, or duress. This can prevent litigation after your death about whether your care custodian should receive your gift.