Estate Planning, Trusts, Wills & Probate
Kendal E. Cornell Law is a Law Corporation Specializing in Bankruptcy as well as Estate & Property Planning, Trusts, and Wills & Probate
Many people think you need to be wealthy to benefit from a trust, but the truth of the matter is that anyone with an estate in excess of $100,000 can benefit from a trust. Since the fair market value of a home is included in the value of an estate, most people would benefit from a trust.
The Law Office of Kendal E. Cornell offers services in the preparation of Revocable and Irrevocable Trusts, Healthcare Directives (Living Wills), Durable Powers of Attorney, Wills and other California estate planning documents. We assist in putting your affairs in order so as to avoid Probate and minimize Will contests and other problems that may occur at death.
We have listed some of the more common questions regarding estate planning below. After reviewing this basic information, we hope that you will see the urgency in no longer putting off consulting an estate planning attorney. Feel free to call our office to set up a personal consultation with an attorney at no charge.
Law Office of Kendal E. Cornell
Chico Office: (530) 891-6222
For Online Inquiry, please fill out the Contact Information Form.
What is Estate Planning?
Estate planning is a broad term that includes preparation of wills and trusts, gifting issues, including contributions to charitable organizations and other issues relating to the distribution of estates, including tax issues and insurance. Often estate planning includes strategies to avoid probating an estate. We believe estate planning should always be a part of business planning, where wills, trusts, and all aspects of an estate plan need to address both individual and business needs.
Why have a Trust?
All of the property that is inside the trust avoids probate. A trust can provide significant estate tax savings and, in some cases, totally eliminate estate taxes. Trusts allow for professional management of your investments during your lifetime. A trust can protect your assets if you are unable to manage them yourself for some reason and can also be used to collect assets for your beneficiaries upon your death. Trusts are established and drafted based on the needs and goals of each client.
What is a Living Trust?
A Living Trust is a binding legal agreement in which a person called a trustee owns, maintains, manages, controls and eventually gives to others (beneficiary) the property of the person who created the trust (i.e., the trustor). The trustor (creator of the trust) is able to act as the trustee as long as they are alive. Since a Living Trust is created while you are still alive, it is called a Living Trust.
Trusts are sometimes thought to be only for the wealthy. Not true. A trust is for anyone who would like to avoid the costs associated with probate, avoid paying some death taxes, and provide some limitations on their young children's ability to access money left to them.
What are administrators and executors?
The administrator or executor is the person designated in the trust or will who is responsible for handling the assets in the estate of the deceased person. Because this is a complicated process, usually an administrator retains an attorney to assist and ensure it is executed properly.
What is the difference between a Will and a Living Trust?
A Will does not take effect until you die.
A Living Trust is effective as of the date it is executed (signed) and, therefore, operates during your life and after your death. A Living Trust allows you to manage and control your property while you are living. Therefore, you do not lose the ability to use, control, and benefit from your property after it has been put into the trust. Also, a Living Trust provides for the property placed in the trust to pass to the beneficiaries you have named after your death without any probate proceedings.
What is a Revocable Living Trust?
A revocable trust is a trust that is established and maintained during the creator's (trustor) lifetime and may be changed, modified, and even terminated during the life of its creator.
What is an Irrevocable Living Trust?
An irrevocable trust is established and maintained during the creator's (trustor) lifetime, but it cannot be changed once it's established.
Is a Revocable Living Trust just a tax loophole that the government may close down?
No. The Revocable Living Trust (RLT) has been authorized by the law for centuries. The RLT can be utilized to reduce or eliminate estate taxes based on the tax laws in effect at the death of the trustor.
Is a Revocable Living Trust recommended for a single person?
Yes. If you are widowed, divorced, or unmarried, a Living Trust protects your estate. It completely eliminates Probate, while providing you with a unified incapacity plan (Healthcare Directive). Click here to see question below: What is a Health Care Directive (aka Living Will)?
Are there any major disadvantages in having a Revocable Living Trust?
No. You have complete control of all assets in your trust, and you are free to manage your trust in any way. Also, because your trust is revocable, you retain the right to make any changes in it while you are alive and competent.
What happens to my property if I die without a Will?
California has intestacy statues. These are laws which specify who is to receive your property at death if you have passed away without a will. Under intestacy laws, property generally passes to your surviving spouse and then other relatives. If you want to leave some of your property to a friend or to a charitable organization, you will have to execute a will, as intestacy laws do not consider these outcomes.
What is Probate?
When a person dies without a Revocable Living Trust, a probate of the estate needs to be opened. A Will also needs to be probated. The transfer of the deceased person's property (after debts against the estate are paid) is a process administered by a probate court, and these proceedings are called "probating the estate". The court's supervision ensures that your outstanding debts, taxes and claims against you are paid and that your remaining assets are divided among your heirs. These are often long, agonizing proceedings that take eight months to two years. They cost the estate in terms of attorney's fees and costs and are entirely public affairs. Once documents of any type are filed with the courts, they are a matter of public record. Anyone can go to the court house and pull the file on the deceased person to determine what they owned, where it is and what it is worth.
If you are in the midst of a probate right now, an experienced probate lawyer can answer your questions and put your mind at ease. Feel free to call the Law Office of Kendal E. Cornell to talk to an experienced probate attorney.
What is a Healthcare Directive (aka Living Will)?
Healthcare Directives are included in an Estate Plan. These documents allow you to direct a physician to withhold or withdraw life-sustaining procedures in future circumstances. They are legally binding documents. In fact, many medical facilities ask if a patient has a Healthcare Directive during the admission process. Most, if not all, jurisdictions now recognize a patient's right to make these decisions in advance of a terminal condition, if death is imminent, and/or if life-sustaining measures serve only to postpone death. When acting pursuant to a properly prepared and executed Healthcare Directive, a physician who withholds or withdraws life-sustaining measures is protected from civil and criminal liability. Healthcare Directives must be prepared and executed pursuant to stringent state statues to be valid and effective. It should include authorization for your agent to obtain your medical records under federal and state law. The acronym for the authorization is HIPPA and CIMA.
Why is a Healthcare Directive recommended?
The purpose of a Healthcare Directive is to allow a trusted decision-maker to spare those who are unconscious (or otherwise usable to make decisions for themselves) from enduring unwanted healthcare treatments. In order for you to direct these difficult healthcare decisions, a Healthcare Directive must be in place. Without this document, family members may only be able to guess what you would have chosen for yourself. In the event there is disagreement over treatment, a physician will typically opt to continue life support. Thus, planning is critical.
Often, sudden trauma or serious illness brings family members together for the first time in years. Heart-wrenching decisions now have to be made. In some families, there may be a natural decision-maker. In others, too many options, too many conflicting values, too much friction, and too little practice in making joint decisions create fierce disagreements that may hurt both the family and the patient.
One should ask himself (herself): Do you trust your family members to make good healthcare decisions on your behalf? Does your family know the quality of life with which you are willing to live? Most people envision a peaceful death at home, surrounded by loved ones. But, 80% of us will die in long-term care facilities or hospitals. In these settings, many modern healthcare treatment options are readily available to prolong a life. Unfortunately, when a patient can no longer weigh these options themselves, difficult healthcare decisions falls to distraught family members. A Healthcare Directive avoids this conflict. It is a legally binding document that states what end-of-life treatment you want.
What is a Durable Power of Attorney for Property Management?
A Durable Power of Attorney (DPA) is a document that when properly executed will allow an agent to act on your behalf. A DPA for property management is a simple and reliable way to arrange for someone that you trust to make your financial decisions should you become unable to do so yourself.
If you do not have a DPA, a court proceeding will be required to give your loved ones authority over your financial affairs. This can be an expensive and public process. Many married couples think that they do not need such a document because everything is in both names. The truth is that your spouse has limits on his/her ability to deal with affairs, particularly on the selling of property owned by both of you.