If your assets are in your trust at the time of death, your will plays virtually no role. While it must be lodged or filed with the Superior Court within 30 days of the date of death, it is all but ignored.
Nevertheless, you sign a “pour over will”, just to be on the safe side, even if you have a trust. Your will says, in effect, that any assets you forgot or neglected to put into your trust are to go into your trust at the time of death under terms of the will. This is necessary because assets in your name (rather than in the name of your trust) are outside of and are not controlled by your trust. Some additional steps must be taken to get the asset into your trust. That is the role of your will.
If the total value of assets in your name and not in your trust at the time of death is under $150,000, probate is still unnecessary. There is a relatively simple procedure that can be utilized to get those assets into the trust. If the value exceeds $150,000, a probate process will be necessary.
Think of your pour over will as a clean-up document. If there is nothing to clean up – if there is nothing in your name and outside of your trust at the time of death – it plays no role. If there is such an asset, the will goes into effect and simply ensures that the terms of your trust will ultimately be respected.
Is it a good idea to transfer assets to other family members "just in case" nursing home care is ever required?
If you do not already have a living trust in place, you know that you should. A fully-funded trust avoids probate, saves money, and keeps your family out of the court system. A living trust is the cornerstone of your estate planning.
With rare exceptions, Medicare does not pay for the cost of long-term care. At most, it will pay for only a portion of your stay. Long-term care insurance can be expensive, and it may be difficult to obtain. Medi-Cal is a government program that will help you pay the cost of a nursing home once you qualify.
Here is the bottom line: there are many planning options.
In a very real sense, a Living Trust is a new being. It will hold your property while you are living, and it will continue in existence after your death.
How can my special needs child be cared for and have sufficient resources to maintain his quality of life?
It is critical that they are able to receive government disability benefits if necessary – especially if they are unable to work or live independently. For this reason, leaving them money directly can be problematic. A Special Needs trust is a powerful estate planning tool that can ensure that your child is eligible for government benefits, including SSI, Social Security Disability Insurance, or Medi-Cal while providing a valuable financial “safety net” to supplement public benefits and pay for items and services not covered by public benefit programs.
I or my spouse may need long-term care. How can I ensure we will be well cared for while safeguarding our estate?
The majority of us will eventually need long-term care. This includes at home care, assisted living, or nursing home care. This can be extremely expensive. Indeed, nursing home costs can exceed $120,000 per year. It is critical that you plan ahead for this possibility.
Fortunately, many planning strategies and options exist. Long-term care insurance is one possible approach. Medi-Cal planning, where strategies are used to protect assets while becoming eligible for Medi-Cal (which pays the cost of nursing home care) is also important. Indeed, we have helped countless families protect their estate while obtaining eligibility for government benefits.
See Facing the Reality of Long-Term Care (2014), authored by Michael Gilfix and Mark R. Gerson Gilfix, available here. This publication presents a comprehensive, practical and multi-generational analysis of this topic.
For more information on long-term care planning, click here.
I have worked hard to build my estate. What can I do to preserve my assets for my children and avoid estate or “death tax?”
An individual can pass up to $5.43 million to heirs, tax free. A couple can pass up to $10.86 million in 2015 with no estate tax exposure. Even if you are not exposed to estate tax, you must consider other issues. You want to be sure that assets do not go to your child before she is ready to manage them. You want to protect what you leave your child from divorce and litigation. This can be done, utilizing Family Protection Trusts, also known as “Dynasty Trusts”.
If your estate exceeds these levels, many strategies are available to reduce or eliminate this 40% estate tax. See Beat Estate Tax Forever (2013), authored by Michael Gilfix.
We have over 30 years of successful experience developing and implementing tax strategies to reduce or eliminate this tax, saving hundreds of thousands or even millions of dollars in estate tax liability. See our tax planning section.
The use of a Living Trust is critical – you can direct your assets to whom you want, in the manger that you want. For estate tax, divorce, and litigation protection, Family Protection or Dynasty Trusts represent the appropriate, powerful approach.
Do not wait until you are in a family or health crisis. It is critical to get a good estate plan in place. First, you must sign basic estate planning documents, including your living trust, your Durable Power of Attorney, your Advance Directive, and Family Protection or Dynasty Trusts for your children. You must be sure that assets (other than retirement accounts) are titled in your trust. You must pick reliable individuals to manage your estate if you become ill or incapacitated.
You are an individual. No one plan makes sense for everyone. After we get to know you, we can develop a plan that respects your wishes and ensures that your wishes – for your children and your grandchildren – will be honored. By doing things the right way up front, you can save your family and heirs massive problems and expenses.