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ESTATE PLANNING 101

Easy to understand Estate Planning Guide.

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Frequently Asked Questions

1. REVOCABLE LIVING TRUST

 

  • What is the Revocable Living Trust?

    • The Revocable Living Trust is an estate planning document that allows the assets in the trust to be distributed to your beneficiaries without having to utilize the formal proceedings involved with probate. The trust documents will be the documents in tab 4 of your estate plan binder. It will identify who is distributing the trust assets and who is getting distributions along with the amounts that you have indicated in your consultation with the attorney

  • What or who is the Successor Trustee(s)?

    • The Successor Trustee(s) are very important for your trust to get executed properly upon your passing. They are the designated agents that will distribute the assets owned by the trust. They will take care of transferring your property to the correct beneficiaries and in the correct amounts based on your distribution schedule. This is an administrative role. You will want to name someone that you have a great deal of trust with. They are named on in Article III Paragraph 3 in section 4 of your estate plan binder. ***Please note: your Executor for the Will is always the same as your Successor Trustee. They share the same responsibilities.***

  • What or who are the beneficiaries then?

    • The beneficiaries are the people or entities that you are giving the trust assets to. They will be

      receiving the specified amounts detailed in your distribution schedule. They are named in Article IX

      Paragraph 22(A). This is also where you will find your distribution schedule.

  • What if the beneficiary is a minor at the time of distribution?

    • Beneficiaries are considered to be minor children when they are under 21 years of age by default

      for the purposes of distribution. They cannot take full distribution until they reach 21 years of age. Their share will be held in the trust and managed by the Successor Trustee until they reach the age of distribution

    • The trust that we prepared provides a Sprinkling Trust feature that allows the Successor Trustee to allocate funds to the minor child for educational expenses and necessary living expenses before they reach 21 years of age.

  • What if you want to disinherit someone from the trust?

    • It is important that you specifically indicate that you are disinheriting a specific individual.

    • This will appear in the distribution schedule acknowledging that you have not provided for that

      specific person.

  • What is the distribution schedule?

    • The distribution schedule is how you want the trust assets to be divided. You will indicate specific gift amounts for your beneficiaries in whole dollar amounts first, then you will allocate the remainder in percentages. ***Please note: you must name at least one person to receive the remainder and if there are multiple beneficiaries the percentages must equal 100%. Leaving trust assets unaccounted for can open the door for probate***

    • The distribution schedule should address allocations of the assets owned by the trust. You can allocate personal possessions here, but it is not a requirement for the distribution schedule. There is a document in tab 9 of your estate plan binder titled “Directive to the Successor Trustee” that is utilized to indicate your wishes for your personal possessions. *Please see section 9 for details*

    • The distribution schedule appears in Article IX Paragraph 22(A). You will find it in middle of section 4.

  • What does “per stirpes” and “per capita” mean?

    • PER STIRPES means that if a beneficiary predeceases you or both of you, then their share will be allocated to their children (blood related or legally adopted only). If there are no living children, then the share will be distributed equally to the surviving beneficiaries. It becomes per capita at that point.

    • PER CAPITA means that if a beneficiary predeceases you or both of you, then their share will be divided equally amongst the surviving beneficiaries

    • You can have specific direction for the predeceased beneficiary, but you must convey that to the attorney during the phone consultation, or in response to the “ESTATE PLAN SUMMARY”. So, if you want a predeceased beneficiary’s share to go to a specific alternate, we will need that information from you before we ship your estate plan.

2. CERTIFICATE OF TRUST

  • What is the Certificate of Trust?

    • The Certificate of Trust is the document in tab 3 in your estate plan binder. This is the document that the notary will stamp with their official notary stamp.

    • You may want to have your bank accounts titled in the name of the trust to establish ownership of the account by the trust. You will take the notarized Certificate of Trust to your bank or credit union to have them take care of putting the accounts in the name of the trust.

3. DURABLE POWER OF ATTORNEY FOR FINANCIAL DECISIONS

  • What is the Durable Power of Attorney for Financial Decisions?

    • The Durable Power of Attorney (DPOA) for Financial Decisions is a legal document that assign a trusted individual or individuals to make financial decisions for you in the event that you became mentally or physically incapacitated. This document will be in tab 6 of your estate plan binder.

  • What about your spouse or partner?

    • In a joint trust you and your spouse or partner are first DPOA options. You will be listed as primary DPOA’s by default.

    • The people that are listed on the “ESTATE PLAN SUMMARY” and in the trust are the individuals you are nominating to be the DPOA when the spouse or partner is unavailable or not able to serve as DPOA.

    • How many DPOA’s for Financial Decisions can I have?

      • We allow you to name three people to serve in succession of one another, or to serve jointly. In the case of a joint DPOA, there is language that allows for one DPOA to act as long as there is consensus with the other DPOA’s

4. HEALTH CARE DURABLE POWER OF ATTORNEY

  • What is the Durable Power of Attorney for Healthcare Decisions?

    • The Durable Power of Attorney (DPOA) for Healthcare Decisions is a legal document that assign a trusted individual or individuals to make health care decisions for you in the event that you became mentally or physically incapacitated. This document will be in tab 7 of your estate plan binder.

  • What about your spouse or partner?

    • In a joint trust you and your spouse or partner are first DPOA options. You will be listed as primary DPOA’s by default.

    • The people that are listed on the “ESTATE PLAN SUMMARY” and in the trust are the individuals you are nominating to be the DPOA when the spouse or partner is unavailable or not able to serve as DPOA.

  • How many DPOA’s for Health Care Decisions can I have?

    • We allow you to name three people to serve in succession of one another. ***Please note: The DPOA for Healthcare Decisions CANNOT serve jointly. They must be one at a time and in succession of one another. This is the law and is non-negotiable***In the case of a joint DPOA, there is language that allows for one DPOA to act as long as there is consensus with the other DPOA’s

  • What about the Advanced Health Care Directive?

    • We provide you with a California approved blank Advanced Health Care Directive. You will want to fill this document out to establish your wishes for healthcare in the event you are incapacitated. This gives your DPOA for Healthcare Decisions directions as to what your wishes are.

    • The law firm DOES NOT need your selections from you in regard to the Advanced Healthcare Directive.

 

5. POUR-OVER WILL

  • What is the Pour-Over Will?

    • The goal of your estate planning is to avoid having your assets be subject to probate. The Revocable Living Trust is the legal document that will make that possible.

    • The Pour-Over Will serves as a safety net for you in the event that you have an asset that is forced into being probated. It will direct the asset back to the trust after probate closes to be distributed according to your distribution schedule.

    • The Pour-Over Will is not the same as the trust. Anytime a Will is involved with your estate being distributed, then probate is involved. ***Please note: The goal is to NOT have to use the Pour- Over Will. The trust addresses all of the estate distribution as long as the information provided to the law firm is accurate.***

6. PROPERTY DEEDS AND TIMESHARE DEEDS

  • What deed documents does the law firm prepare?

    • In order to transfer your real property (real estate) to the trust, a deed must be recorded with the respective county that the property is located. The preparation of the first deed is included with the program. ***Please note: Additional Quitclaim Deed or Timeshare deeds will cost $100 per deed.***

    • We utilize Quitclaim Deeds to transfer the property to the trust. ***Please note: We are not a title company. We do not research chain of title or specific ownership of the property. You are responsible for identifying who owns the property and what share of the property you own.***

    • If you are providing the copy of the deed, it must be a Grant Deed or a Quitclaim Deed. Deeds of Trust typically do not contain the information needed to prepare a new deed. You can either maila copy, fax a copy (fax # 888-711-9861), or email them (processing@gmail.com). This applies to any additional supporting documents that you are requested to provide.

  • What is the Preliminary Change of Ownership Report for?

    • This is a form that is required to be filed in most counties in California with the deed. We provide it

      as a courtesy. Its main purpose is to let the county know that the recording of the deed is an exempt transaction, no reassessment to raise your taxes. We fill in the basic information, which is usually sufficient for the county after you sign it. ***Please note: if the county requires additional information, you will have to fill the form with the requested information. You are responsible for the accuracy of the document being recorded.***

    • The Preliminary Change of Ownership Report is only applicable to California properties. If you are having us prepare an out of state deed, there will not be a Preliminary Change of Ownership Report with it.

  • How do I go about recording my deeds?

    • In your estate plan binder in tab 10, there are specific instructions as to the ways you can record

      your deed. The document has page 10-1 at the bottom of the page. There are instructions for

      recording the deeds yourself or having the law firm do it for you.

    • You have only paid for the preparation of the deed documents to this point. The county recording

      fee is your responsibility. If you pay for the law firm to record the deeds, then the recording fees

      will be included in that cost.

  • What about the very last page of my estate plan that says Quitclaim Deed on it?

    • If the property deed that you are recording is your primary residence, you are exempt from the recording fee established in Senate Bill 2 in the state of California. You will include this form with the Quitclaim Deed and Preliminary Change of Ownership Report to claim the exemption.

  • Which out of state deeds do you prepare?

    • We will prepare deeds for any state in the United States. We do require for you to provide copies of the current property deeds if it is a Hawaii based property. We cannot obtain a Hawaii deed for you.

  • What about the timeshare you own?

    • Timeshares are handled just like any other property. You will need to provide the deed from

      Timeshare to the law firm. We do not have anyway to obtain them for you. You may need to contact

      the Timeshare company to obtain the deed to provide the law firm.

  • What if there is a deceased spouse on the current deed?

    • In order to remove a deceased spouse from a current deed, there will need to be an “AFFIDAVIT OF DEATH” prepared and recorded with the county. We charge $50 to prepare this document, and like the deed, you are responsible for the county’s recording fees. You will have to provide the law firm with a copy of the deceased spouse’s or partner’s death certificate.

7. ASSIGNMENT OF PERSONAL PROPERTY

  • What does the Assignment of Personal Property for?

    • There is a form called a “Directive to the Successor Trustee” in tab 7 of your estate plan binder. Thi

    • Is the form to indicate your wishes for the distribution of your personal property. You will fill out a form for each person receiving the personal possessions. It is advisable to make copies of the form if you have allocations for more than two individuals.

    • The “Directive to the Successor Trustee” can also be used to inform your Successor Trustee of assets held outside of the trust. The document is for the Successor Trustee’s reference. The document can be updated at any time and does not require a witness. There is no need to get this document notarized.

8. ASSETS THAT WILL FUND THE TRUST

  • What does “Funding the Trust” mean?

    • After you notarize your trust, it becomes a legal entity. In order for the trust to protect your assets

from being probated, the trust must own the asset. By “Funding the Trust” with an asset, you are

transferring ownership of that asset to the notarized trust which is now a legal entity.

  • What assets get funded to the trust then?

    • Real Estate

      • Your real estate property is the primary asset that will fund your trust with. The law firm will prepare the Quitclaim Deed to be notarized and recorded with the county. *Please see section 8 for details*

    • Bank Accounts (checking and savings)

      • You may want to have your bank accounts titled in the name of the trust to establish ownership

        of the account by the trust. You will take the notarized Certificate of Trust to your bank or credit union to have them take care of putting the accounts in the name of the trust. ***Please note: this can only be done after the estate plan is notarized***

      • Your financial institution may allow you to name a beneficiary through them. If that is the case, by naming a beneficiary, the account will not pass through probate. You may name the trust as the beneficiary to have the accounts distributed according to your distribution schedule.

    • 401K’s, IRA’s 457 Plans, Other Investment Accounts.

      • You cannot place these accounts in your trust as they must be held by a custodian. However, just as the same as bank accounts, you can name beneficiaries through the account’s provider. This will also ensure that the assets in the accounts do not have to be probated. Like bank accounts, you can name the trust as the beneficiary to have the accounts distributed according to your distribution schedule.

    • Vehicles

  • Where do you list the assets that the trust owns?

    • Any asset that the trust specifically owns and has been titled to the name of the trust will be listed on SCHEDULE “A” in tab 5 of your estate plan binder.

​9. NOTARY APPOINTMENT INFORMATION

  • How do you schedule the notary appointment?

  • When your estate plan is printed and shipped, NAFS will be contacting you to schedule the notary appointment. If you have not received a call from NAFS to schedule the notary appointment, feel free to reach out to them at 1-800-900-4403 or 1-800-909-4591.

  • What will I need for the Notary Appointment?

    • You will need a valid ID, current, not expired (Driver’s License, State ID, or Passport). You will also need to have one witness available at the same time the notary is there. This person may not be related to you by blood or marriage and must be over 18 years of age. You will also need to make sure the signature lines match the ID, otherwise the Notary may not agree to witness the signature. You will also need to make sure that all your documents are accurate, and in order, including the deeds. Make sure you call us before you schedule the notary appointment, so that we can address any issues. If they notary has to come back for ANY reason, there will be a $40 fee.

  • What if I have difficulty finding a witness?

    • The nice thing about this program is that the Notary will meet you wherever you wish. It does not have to be in your home. Because of this, you can meet at a friend’s house or neighbors. You can go to a senior center, your workplace, even a friend or neighbor of your children. Some banks are  willing to offer some assistance.

10. BUSINESS OWNERSHIP

  • Sole Proprietorship

    • What if I own a small business?

      • If you (or you and your spouse) operate your business as a sole proprietorship, with all business assets held in your own name, you can simply transfer your business property to your living trust as you would any other property. You can also transfer the business's name itself: that transfers the customer goodwill associated with it. You will have to contact the county directly to do so.

  • Partnership

    • If you operate your business with partners, you should be able to easily transfer your partnership share to your living trust. If there is a partnership ownership certificate, it must be changed to include the trust as owner of your share. It's not common, but a partnership agreement may limit or forbid transfers to a living trust. If yours does, you and your partners may want to see a lawyer before you make any changes.

  • Closely Held Corporations

    • A closely held corporation is one that is not authorized to sell shares to the public. All its shares are owned by a few people (or just one) who are actively involved in running the business (orare relatives of people who are). Normally, you can use a living trust to transfer shares in a closely held corporation by listing the stock in the trust document and then having the stock certificates reissued in your name as trustee.

    • Check the corporation's bylaws and any shareholders' agreements, in case there are restrictions on your freedom to transfer your shares to a living trust. Also make sure that if you hold the shares in trust, you will still have voting rights in your capacity as trustee of the living trust; usually, this is not a problem. If it is, you and the other shareholders should be able to amend the corporation's bylaws to allow it.

    • One fairly common rule is that surviving shareholders (or the corporation itself) have the right to buy the shares of a deceased shareholder. In that case, you can use a living trust to transfer the shares, but the people who inherit them may have to sell them to the other shareholders.

  • Limited Liability Company

    • If your small business is an LLC, you'll need the consent of a majority or all of the other owners (check your operating agreement) before you can transfer your interest to your living trust. Getting the other owners to agree shouldn't be a problem; they'll just want to know that you, as trustee of your own trust, will have authority to vote on LLC decisions. You may also want to modify your trust document to give the trustee (that's you) specific authority to participate in the limited liability company. Another way to address this concern would be to transfer your economic interest in the LLC, but not your right to vote. The transfer itself isn't hard—you can prepare your own form and call it an Assignment of Interest.

11. MISCELLANEOUS ITEMS

  • What about the Special Needs Trust??

    • A Special Needs Trust is not included initial estate plan as part of the program. We will indicatethat a beneficiary has special needs or is on some sort of state aid. When the trust distributes, the Successor Trustee is responsible for creating the Special Needs Trust at that time. But any additional trust will incur a fee.