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As of January 2017 a regular revocable trust can now defer a Medi-Cal estate claim if there is a surviving spouse or surviving child with a disability.
Professional counsel is still strongly recommended in navigating the savings and costs of the various estate planning options, e.g. Special Needs Trust.
The best option is still having “little assets” at the time of death, by planning in advance.
For more information please contact the Law Offices of Hanlen J. Chang.
A Pet Trust is usually a Subtrust built into the regular Revocable Trust.
The Pet Trust can nominate its own set of Trustee(s) or depend on the parent or Revocable Trust’s Trustee(s).
The Pet Trust will usually be funded with a lump sum of money sufficient for the lifetime care of the Pets.
Other common provisions include designating a veterinarian, a request to keep your Pets together if more than one, and a designating Pet Sanctuary as fail-safe contingency.
An alternative to the Pet Trust involves gifting your pet to the preferred individual or organization along with a lump sum of money for the care.
Under California Law, a pet is considered the personal property of the owner.
For more information please contact the Law Offices of Hanlen J. Chang.
It is common to encounter A/B Trusts created for married couples before the year 2010.
Back in the day the A/B Trust was primarily established to avoid the tax impact of exceeding the then much lower Estate Tax limit.
The mechanics of an A/B trust involves setting up so called reciprocal “lockboxes”, first coming into effect when the first spouse passes.
At the time of the first death, the Trust estate (assuming all community property) gets divided 50-50 , with one-half transferred into the deceased spouse’s “Bypasss Trust” and the other half into the surviving Spouse’s “Survivor’s Trust”.
Once the first spouse passes, the surviving Spouse will only be able to modify or dispose of the A/B trust mechanism with a Court Order, as the so called “lockbox” becomes irrevocable.
In the year 2018 each spouse has an Estate Tax credit of eleven million dollars ($11,000,000.00). Thus, the A/B Trust is no longer a required tax planning mechanism for the vast majority of U.S. taxpayers.
Other overlooked implications of the A/B Trust are that illiquid assets, e.g. real estate, at the time of death, have to be divided into two (2) shares, the Survivor’s Trust and the Bypass Trust. This could be impracticable and contrary to long term estate planning goals.
If a married couple has a strong and straight forward relationship, where the goal is to simply leave everything to the Surviving Spouse, then it is strongly advised to have an Estate Planning attorney review the Trust documents, and if indicated, update it to a Non-Formula Trust.
If you are unsure if you have an A/B Trust or want to update to a Non-Formula Trust, please contact the Law Offices of Hanlen J. Chang located in San Francisco and Palo Alto.
For Sale by Owner (FSBO) is suitable for situations where the seller has already found a buyer. This alternative hourly rate or flat fee service can save costs compared to hiring a realtor who will be compensated on commission.
A Lawyer-Broker can assist with preparing the real estate documents and arranging for escrow. This service requires an average of 11-24 hours.
Common situations include:
A Realtor service is more suitable when there is no a pre-determined buyer and marketing is required.
If you believe your situation may benefit from a For Sale by Owner alternative hourly or flat fee service, please contact the Law Offices of Hanlen J. Chang for more information.
There are three scenarios upon the passing of an individual:
Whatever the scenario, there are additional post death administrative tasks to handle.
Passing With a Trust
The most efficient and secure succession setup and mechanism is to have a Trust.
One major benefit is that it bypasses the need for Probate Court (more specifically explained below).
Of importance is understanding that assets have to be transferred into Trust before death and out of Trust after death.
Equally important is the before and after tax planning and management of the assets.
Common Post Death Trust Administration tasks include:
Another Trust advantage is when a beneficiary is a Non-Resident Foreigner, bypassing delays, verification, and tax withholding by financial institutions or third parties.
Passing With a Will or No Will
Probate Court is required if you pass with a Will or No Will (“Intestate) and there is an asset worth more than $150,000.00 for which there is otherwise no succession mechanism (e.g. beneficiary designations).
For assets below $150,000.00 those items can be collected by an out of court small estates procedure on behalf of the successors-in-interest.
The Schedule of Probate Fees is as follows:
• 4% of the first 100,000 of the gross value of the probate estate
• 3% of the next $100,000
• 2% of the next $800,000
• 1% of the next $9 million
Both the executor (individual nominated in the Will) or administrator (individual appointed by the court) and the attorney are entitled to this fee. Thus, the Probate Fees when multiplied by two (2) can become costly when compared to a Trust setup where the settlor (person establish the trust) gets to set the Trustee fee according to her or his preference.
The executor or administrator will essentially handle the same functions as the Trustee but under court supervision and approval.
Another consideration and possible drawback includes the time lag for completing the Probate process, which could be anywhere from 1 year to 3 years.
