Dying Without a Valid Will (Intestacy)                                 

If you don’t leave behind any instructions for how you want your property divided (such as with a valid will or living trust), then California law steps in so that the probate court can distribute your property to your heirs.  A person who dies without a valid will is said to have died “intestate.”  In these situations, California’s intestacy laws apply.  These laws decide which family members will inherit by creating a hierarchy.  Sometimes things get more complicated, but here are the basics:

      ●    If You’re Survived by a Spouse or Domestic Partner

Your surviving spouse or domestic partner will receive your full share of “community property” (your shared marital property as determined by California’s community property laws).  You might also have your own “separate property” (usually this is property you owned before marriage or inherited while married).  Assuming that your separate property never turned into community property, then your spouse or domestic partner will get a share of those assets.  He or she will either get all, half, or a third of your separate property depending on whether you have certain relatives.  Those relatives (usually children) would receive the rest. 

      ●    If There’s No Spouse or Domestic Partner

If you had children (or a grandchild from a child who died), then they’ll inherit your estate.  If you didn’t have any children, then the hierarchy goes from parents, to siblings, to grandparents, to aunts and uncles, to cousins, and then more distant family members.  Keep in mind that once there’s someone eligible to inherit, the probate court won’t give property to anyone who’s further down on the hierarchy.  For example, if you have children, your parents will not inherit anything from you under the intestacy system.

What the Intestacy Rules Leave Out

When there’s no will or trust, the rules for distributing your property ignore many things that you probably think are very important.  For example:

      ●    Strained Family Relationships - Maybe someone who you wouldn’t want to inherit from you will under California’s intestacy rules.

      ●    Protecting Adult Children (From Themselves) - You may have a child who’s over 18, but who’s likely to seriously mismanage his or her inheritance, or lose it to creditors.  To avoid this situation, you’d probably want to establish a trust that can include safeguards.

      ●    Some People & Organizations Can Never Inherit From You - Even if you’re in a long-term relationship, your significant other won’t be eligible to inherit from you if you didn’t marry or enter into a domestic partnership.  Your friends, charities, and other organizations that you may want to leave a gift for also won’t receive anything. 

      ●    Leaving Loved Ones Out, Even If They’re Related - Your family member may not get to share in the inheritance, even if you would have wanted them to.  California’s intestacy system is a hierarchy.  Certain relatives (like a spouse or children) are higher up on the hierarchy than others (like parents, aunts, uncles, or cousins).  Under this system, your property is meant to be inherited by the relatives who are as high up on the hierarchy as possible.  As soon as there’s someone who can inherit, relatives who are lower on the list are shut out.

Create Your Own Plan Instead

If you create a will or trust, then you can usually decide who gets what and how.  You’ll also be able to control how much they get.  For example, even if you want your children to receive most of your property, you can still make gifts to a niece, friend, or others. 

After you’ve made your will and trust, watch out for pitfalls that can lead to intestacy (or partial intestacy).  In part, this means making sure all your property is covered by a valid estate plan.  If you get new assets after creating your will and living trust, then let us know.  For the same reason, any changes to your will or living trust need to be made carefully. 

We’ll advise you on your best options, so you can learn about the benefits of estate planning.  Remember, avoiding probate is not your only goal.  Estate planning is about taking control, while also finding the best way to minimize any taxes.  Get essential help with your will and living trust by contacting San Diego Law Firm’s experienced estate planning attorneys at (619) 794-0243.

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Your choice of guardian is one of the most important decisions you’ll make in your will, so how do you decide?  In “How to Choose a Guardian,” mother of three Denise Oliveri proposes that you figure this out by answering five questions.  To decide who will be right for the job, she suggests you evaluate age and health concerns, moral and educational values, financial ability to care for a child, and whether your child would have to move away.

Property & Money Matters

Splitting up responsibilities – Sometimes you’ll find it’s best to name different people to handle the parenting and the finances.  This will depend on the personalities, schedules, and skills of those who you would want to care for your child.  In this case, you can name a “guardian of the person” to raise your child, and a “guardian of the estate” to manage money and assets left behind for your child. 

Decide how the inheritance should be handled – Remember that you may only want certain property to be gifted under your will if your chosen guardian accepts the appointment in court.  That way, you can make sure these resources are available for your kids even if the person you nominated turns down the guardianship.  We’ll ensure you take this and similar considerations into account so that your will matches your wishes.  Another option is to create a living trust that names a trustee to manage finances.  This can be a better option for you and your kids, and give you more control over how and when money will be spent. 

Making sure your wishes are carried out

Choose alternates – In the event the guardianship becomes necessary later on, what happens if the person you choose can’t act as guardian any more?  You can plan for this possibility by naming alternate guardians.  This gives you greater security that your child or children will be cared for by someone you’ve chosen.

Think your choices through in your will – If the person you’ve chosen is comfortable with taking on the role of guardian and accepts, then your next step will be to include your guardianship decisions in your will and the other parent’s will.  If you’ve chosen a couple to act as co-guardians, we’ll prepare your will to make sure it accurately reflects your intentions.  For example, if the couple later divorces or one spouse dies, will you still want either spouse to be your child’s guardian?

Don’t leave it all for the judge to decide

As long as you’ve nominated your guardian in a valid will, then the chances are the court will appoint the person you’ve chosen as guardian.  The court will only deny the appointment if it’s necessary to protect your child’s best interests.  You may recall Michael Jackson’s mother was approved as guardian to his three children, as reported by CNN, despite concerns of her age.

If you didn’t name a guardian in your will, then the decision will be left completely in the judge’s hands.  The court will try to make the best decision for your child, but the appointed guardian may be different from who you would have wanted.  Remember, it’s not enough to just come to an informal agreement about guardianship with your family and friends.  Your nomination has to be properly made in your will. 

Our experienced wills, trusts, and probate attorneys are here to help you understand guardianships and its responsibilities.  We’ll also prepare a will and living trust that’s comprehensive enough to truly carry out your goals.  Don’t miss a chance to help ensure your children’s security and well-being will be protected.  Contact San Diego Law Firm at (619) 794-0243.

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What are valid reasons for challenging a will or trust?  Hollywood’s favorite example is the deathbed will, where – in a dramatic portrayal – the will is signed just moments before passing away, disinheriting everyone except for the person who callously pressured the testator into signing.  If there were a will contest here, what would the empty handed family members allege as grounds for the challenge?   One issue is capacity, because the deceased may not have had the level of capacity legally needed to change or create the will if the testator’s mental competence had grown too weak in his or her final moments.  Not only that, but the benefited person may have exercised duress or undue influence over the testator.  Other common reasons to contest a will include forgery, fraud, the existence of a more recent will, omitted children or spouses, and errors in executing the will.  If under the facts the legal requirements are met for any of these grounds, then the will or part of it is invalidated and property will instead be distributed according to California’s laws on inheritance, or possibly according to another will or trust.

The new California law on no contest clauses will be applied starting January 1, 2010, but it will affect wills that became irrevocable as of January 1, 2001 (for example, if a person dies on or after this date, the will becomes irrevocable at that point).  The law lists three categories of actions that are considered “will contests,” and anything else will not trigger the no contest clause and its threat of forfeiture.  If the challenger wins the will contest, then the no contest provision has no consequence because the will is ignored.  If the challenger loses, then typically the no contest clause will be enforced unless there was “probable cause” to dispute the will. 

It may be time to create or update your will and living trust to reflect this new law as well as recent case law.  We’ll also plan on the most effective way to include a no contest clause when you make amendments to these documents, and discuss the pros and cons of these clauses so you can decide on whether to include a no contest clause in your will or trust.  If you think you’ll be involved in a will contest, we’ll assess whether you’re a proper party to bring the action, and if you have possible grounds for a contest.  Whenever possible we’ll seek resolution without resorting to litigation.  Also keep in mind that a will contest must be brought within certain time limits so act soon.  Contact San Diego Law Firm’s experienced attorneys at (619) 794-0243 for help with any aspect of the probate and inheritance process.

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To make or change a will, California law sets a threshold for mental capacity, requiring you to be of “sound mind.”  The level of capacity required here is different than it is for other legal matters, and generally means that you understand who your family is, what property you own, and recognize that the actions you’re taking are to create or change your will.  A person can be considered to lack capacity for many different reasons, including mental disorders if it affected the individual’s disposition of property, or even for temporary reasons like intoxication.  Even if a person has displayed a few isolated acts of questionable mental capacity, this doesn’t necessarily mean that at the time of making or changing the will, a person was of unsound mind, which is what’s required to prove a will is invalid on this basis.  That’s why the defense in the Brooke Astor case took great care in trying to establish that even though the prosecution’s witnesses testified to incidents demonstrating Astor’s possibly diminished mental capacity, at the moments at issue in the case, Astor knew exactly what she was doing. 

You may not find the need to change your will 38 times as did Brooke Astor, but it’s essential to have an up-to-date estate plan.  One of the main reasons behind having a will and living trust is to provide for your family according to your wishes when you’re gone.  Your personal and financial situation is bound to change, and so these documents need to be reviewed regularly to account for these changes.  Here are a few events or reasons that often trigger the need to update your will or living trust:

- Your marital status has changed, or you are unmarried but have a partner who you want to provide for

- You’ve recently moved to California, but had created a will or trust under another state’s law

- There’s been a significant change in your financial situation

- You no longer own assets specifically gifted in your will or trust

- You’ve had a child

- The person you elected to serve as your estate’s representative is no longer available

- You’ve decided to change gifts you made in a prior will or trust, or want to leave property to additional people

- There have been changes in income, estate, or gift tax laws affecting your plan

To amend your will, please Do Not simply take a pen to it and cross out what you want to change, while writing in new provisions in the margins.  If you do, you may be creating a legal nightmare later on for your kids or others who stand to inherit from you.  Many times, this can revoke what you’ve crossed out, yet what you’ve added in may not be a valid amendment, which could open the door to arguments during probate to try to at least bring back what you crossed out.  Valid changes to your will have to be written and executed just as your original will was.  If you need to make substantial changes to your will, then it may be easier to cancel your existing will through proper revocation methods and create a new one.  Make sure your will and living trust haven’t lost their value by becoming out-of-date.  Contact San Diego Law Firm’s wills and trusts attorneys at (619) 794-0243.

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Recently, much has been made about the many deals struck by the executors of Michael Jackson’s estate.  The Los Angeles Times reports on agreements for a movie, television special, tribute concert, merchandising, a high end clothing line, “digital apparel,” and a traveling memorabilia exhibition.  Just as they should have, the executors (who are also the trustees of Jackson’s trust), worked fast to secure these deals while demand soared high for anything related to the King of Pop.  This is because personal representatives (and trustees) have the duty to invest and manage assets.  For example, when there’s a large amount of cash left behind, the executor may need to invest the money as permitted by the will and California law to prevent losing income that can be earned for the estate.  Otherwise, the executor could be liable for the loss.                                           

Besides investing money, personal representatives also need to make the most out of the assets already in the estate, sometimes this requires selling property or renting out empty real estate.  Executors and administrators also need to find and collect all of the deceased’s assets, such as personal items, life insurance, partnership interests, and bank accounts.  Known creditors must be given notice and legitimate debts need to be paid off, so you have to make sure the estate will have enough money to pay for bills, costs, and expenses.  Federal and California taxes must be paid, and as the personal representative, you’re potentially liable for the value of distributed assets if there’s a deficiency.  Don’t assume that only fraudulent transactions and lying will get a personal representative into trouble, because at times mistakes can also lead to personal liability.

The bottom line is that you are a fiduciary, and everything a personal representative does needs to be in the best interest of the estate, which also means you have to be careful not to favor individual beneficiaries.  As assets are managed and distributed, we’ll consult with you about investments, handle title transfers, prepare and file required documents, work to resolve disputes, advise you on potential legal issues, and appear on your behalf in court.  Make sure you’re handling your responsibilities properly, speak with San Diego Law Firm’s knowledgeable probate attorneys at (619) 794-0243.

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You can transfer ownership of your business gradually, not only helping to keep things running smoothly since you’ll remain in control of the business, but also reducing tax liability.  Richard C. Morais of Forbes Magazine proposes that you start making transfers now, to take advantage of depressed values during the recession.  You’ll then be able to make transfers of a larger percentage of your business while staying within the limits of annual gift tax exclusions, all because for now, the business may be valued lower.

Plan now, because you don’t want to put your family in a position where they’ll have to sell the business when you’re gone, either because they can’t run it, or can’t afford the taxes.  If it’s best to sell the business, then the sale will likely be more profitable if you sell it yourself while the business has goodwill.  We’ll strategize and help you create a personalized and comprehensive business succession plan designed to meet your needs and that of your family.  Learn more from our attorneys, and benefit from our expertise in business, wills, trusts, and succession planning.  Contact San Diego Law Firm at (619) 794-0253.

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With an advance health care directive, you’ll name someone to make medical decisions for you if you’re unable to, and name a backup.  You’ll also detail your quality of life preferences by explaining what treatments you will or won’t want, stating preferences on resuscitation and life support, as well as whether you’ll want to be at your home, a hospital, or a nursing home.  Speak with your doctor to understand treatment options as you plan end of life options.  Then talk to your family and others close to you about these preferences, and give your doctor and family members copies of your advance health care directive to make sure your instructions are known and abided by.

We’ll take care to create a legally binding document that’s clear in its instructions and complies with California law, helping to minimize the risk of disagreement and uncertainty for your family.  If you have children from a prior marriage or are in a same sex relationship, an advance health care directive is even more essential to preventing conflict.  Now is the time to act if you want to carry out your wishes later. The same is true with your will and living trust.  Contact San Diego Law Firm’s experienced will and trust attorneys at (619) 794-0243 to prepare or update these important documents.

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Besides preventing disputes, you can cut costs by shopping around as you plan out burial and funeral wishes. Just as with the rest of an estate plan (i.e. your will and living trust), preparing burial instructions is an important step toward minimizing conflict and helping to ensure your plans are carried out. For help in meeting these goals, contact our experienced will and trust attorneys at San Diego Law Firm, (619) 794-0243.

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