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California Living Trust creation: should you do it yourself?

Estate planning: Do-it-yourself versus seeking experienced legal advice

If you are considering a DIY California Living Trust creation service or software, please read this article before doing anything.

It is only in the last 13 years or so that the first online service for the creation of legal documents appeared. Since that time various websites and software have popped up all over the web. There is a lot of money to be made for these businesses that can use legal boilerplate to mass produce legal documents to the public. But the question remains, is it a good idea to utilize a California Estate Planning creation kit or website?

The main distinctions between an attorney and a DIY website

Drafted by an Attorney

There is a huge distinction between do it yourself estate planning and an estate plan created by an attorney. The California estate planning lawyers at the Law Offices of Jack B. Friedell have drafted over a thousand estate plans. In doing so, we have dealt with a wide range of clients with countless nuances pertaining to family, health and finances. The knowledge and wisdom that this experience brings is priceless.

No DIY website or software can come close to providing its users with the same education. However, that does not stop the websites and software creators from making claims that with just a little effort you can educate yourself on the main points of a solid estate plan. Of course, these same sites back that claim up with a disclaimer to any liability that the company’s do-it-yourself software may cause. Don’t be fooled; there is a reason these sites are riddled with disclaimers.

How much time did your attorney take with you?

This is an important question to consider. The reason this is important is because there are various associations out there where you pay a membership fee to have access to a network of attorneys. By paying the association dues you receive a huge discount on the cost of legal services. But here is the problem. The attorney you are speaking with (typically over the phone) will spend on average about 20 minutes with you. For some people this might be a sufficient amount of time. However, unless you are a turn key family with no desire to do anything other than avoid probate chances are you need to have an in depth conversation with your estate planning attorney to really get to the heart of matter. Unfortunately, that is not what you will receive for your discounted membership price. Instead, you will get a cookie cutter estate plan that was put together over a 20 minute phone call.

Poignant Questions

When you first visit the Law Offices of Jack B. Friedell for a free consultation of your California Estate Planning needs you will notice that we do not rush our clients. Instead, we sit down with our clients and educate them on the estate planning process. We talk over the various documents in a typical estate plan such as a Living Trust, a Will, a Power of Attorney, and an Advance Health Care Directive. We highlight key areas of each, uniting our client’s desires and needs with the specific document that incorporates that desire and need.

Further, for clients with sizable estates looking to avoid estate taxes or for clients seeking to provide for a new spouse, we offer valuable solutions in the form of more advanced estate planning tools such as AB or QTIP trusts, Irrevocable Life Insurance Trusts, Qualified Personal Residence Trusts and Qualified Terminable Interest Property Trusts.

In contrast, DIY trust and will creation websites and software ask the same specific questions to every individual. Any follow up questions are pre-programmed into the software. There is no personal touch whereby an experienced attorney guides you through the various nuances of your specific estate plan based on your specific desire and needs.

The reality is, most people don’t know the right questions to ask when it comes to formulating an estate plan. Even worse, most people don’t know the consequences of choosing a do it yourself estate plan compared to having an attorney prepare your plan. The number one consequence is the high cost of correcting any errors or having your estate go through the probate process because your trust was not properly funded.

Do you really save that much money?

Consider this: in California your home is valued at the fair market value and not the net value (FMV minus your mortgage). The threshold for probate in California is $150,000. That means any homeowner with a home valued at $150,000 or more will have their estate probated when both spouses die if the home is not in a California living trust. An estate worth $150,000 will pay $5,500 in probate fees alone. Therefore, doesn’t it make sense to pay the few hundred dollars more now for a proper California estate plan than roll the dice and hope your DIY living trust you prepared through a kit or website was done correctly?

And for those California residents who only have a Will, please note that a Will does not avoid probate in California. A Will is a road map for the court on how you want your assets distributed upon your death. All California estates with or without a Will must pass through probate if the estate is valued over $150,000. Therefore, if all you have is a Will and you have assets above $150,000, you need to consider creating a living trust.

The bottom line is this: paying an attorney between $1,000 to $3,000 for a rock solid estate plan is pennies on the dollar compared to doing it incorrectly and having your entire estate probated. A typical probate will consumer about 4-6% of your total estate in court costs, legal fees, appraisal fees, CPA fees, etc…That means for an estate valued at $1,000,000, the total fees associated with having to go through probate could be between $40,000-$60,000.

Help With Funding Your Trust

A trust is only as good as the assets that are inside the trust. Failure to properly fund your trust can cause all sorts of problems, with the most painful being that your estate is forced to go through a costly California probate. At the Law Offices of Jack B. Friedell, we help guide our clients through the funding of their trust. We will even talk to the various financial institutions on our clients behalf if necessary. We go the extra mile for our clients. No do it yourself estate plan will provide this level of service to make sure your trust is properly funded.

Free Follow-Up Consultation

Finally, another difference between the Law Offices of Jack B. Friedell and the various DIY Will and Trust companies is that we offer a lifetime free follow-up consultation. Once we have worked with you to create your estate plan we welcome our clients to call with future questions. We also offer periodical free consultations to see if your documents align with your current needs. Estate planning for us is not a onetime affair but a lifelong relationship. No online trust creation service offers this type of personal attention and level of care.

Finally, if cost is an issue please ask us about our estate planning payment plans.

Familiarize yourself with the ins and outs of estate planning here.

The authors, publisher and host are not providing legal, accounting, or specific advice to your situation.

Don’t forget to fund your Living Trust!

Funding Your Living Trust in California

Creating a Living Trust in California is great but there is one additional step that needs to be taken in order to make sure your assets are protected from the dreaded Probate Court.: you need to fund the Trust!

Imagine your Living Trust as a large box. Everything in the box is protected from probate. However, everything left out of the box is vulnerable to a potential probate. Therefore, in order to protect your assets you need to place them in your Trust. Placing your assets in your Trust is termed, “funding the Trust”.

But who controls the Trust assets?

Once your assets are placed into your Trust, the Trustee of the Trust will have all the powers that you had when the assets were in your name. That is why the Trustee of your Trust is typically you, the Trustor or Settlor of the Trust.

Funding the Trust

Funding a Living Trust in California is an easy enough process, although it can be time consuming. What is needed is for the title of your assets to be changed from your name to the name of the Trust. We normally will transfer your Real Estate into your trust. We also provide you with an Assignment of Personal Property which will place your personal property that you currently own and will own in the future into your Trust. You will also receive a worksheet to make specific personal property gifts. Lastly, we will also provide you with a detailed guide on how to place your remaining assets into your Trust.

Note: not all assets should be placed in the Trust. It is important to know which assets to place in the Trust and which assets to leave out.

Assets to leave out of your Living Trust

Some assets, such as life insurance, retirement accounts and IRAs, may have adverse tax consequences if placed in your Trust. Therefore, it is important to discuss with an experienced California Living Trust attorney what assets to place in your Trust and what assets to leave out. At the Law Offices of Jack B. Friedell, we take the time to explain the advantages and disadvantages of placing specific assets into your trust. We offer you California estate planning legal advice to ensure your specific goals are being met.

Note: since not all of your assets should be placed into your Living Trust, it is imperative that we also create a Durable Power of Attorney for you. A California Durable Power of Attorney will allow your agent to access all of your assets outside of your Living Trust.

A couple “safety nets”

If you have a Living Trust but fail to properly fund the Trust, we also provide you with a “pour over will” and a Declaration of Trust to make sure that all your assets end up in the Trust.

A “pour over will” is simply a Last Will and Testament that can grab up to $150,000 of assets not in your Trust and “pour” those assets into your Trust. Then, once the assets are part of your Trust, the provisions in your Trust will dictate how the assets are distributed.

A Declaration of Trust is a final line of defense that we create for you in the event that the assets outside of the Trust exceed $150,000. The Declaration of Trust simply acknowledges to the Probate Court that you intended all your assets to be placed in your Trust.

We are here to help

There really is no better time to get your estate plan in order. Please contact an experienced trust and estate lawyer in California today!

Stop by our estate planning 101 section to learn more about why you need an estate plan.

The authors, publisher and host are not providing legal, accounting, or specific advice to your situation.

Estate Planning 101: What does a typical estate plan include?

Estate Planning FAQ: What an Estate Plan from the Law Offices of Jack B. Friedell Includes.

Brought to you by the Law Offices of Jack B. Friedell.

Not all estate plans are equal. A typical California estate plan drafted by the Law Offices of Jack B. Friedell will include:

Living Trust
Last Will and Testament (pour over will)
Durable Power of Attorney
Advance Healthcare Directive
Assignment of Personal Property
Certificate of Trust
Declaration of Trust
Quitclaim Deed
Estate Organizer

A living trust in California will help keep your assets with your beneficiaries and away from the probate court.

A Will, also known as a pour over will, lets everyone know that you intend for all your assets to pour into your living trust.

A power of attorney will allow your agent to manage your financial affairs if you become incapacitated. Most importantly, it will allow your spouse to continue to make gifts or to move assets around to ensure that you qualify for medicare or Medi-Cal.

Your advance health care directive, or living will, takes care of your end of life decisions so those you love do not have to make the hard end of life decisions for you.

An assignment of personal property lets the world know that you intend for all your non-titled assets to flow into your trust.

A declaration of trust declares to the world that you intend that all your assets are to be trust assets. This is a great tool to protect your estate from a potential probate and bring property or assets into your trust that were left out during your life.

A quitclaim deed is simply a form that your estate planning attorney fills out on your behalf to place any real property into your trust.

Finally, an estate plan organizer keeps all your pertinent files together so that your trustee can locate everyone and everything necessary to properly administer your estate. Plus, funding instructions are included to make sure all your assets are properly titled and place into your trust.

For questions on the above content or for any other legal advice dealing with estate planning in California, a California estate planning lawyer can help. Please contact the Law Offices of Jack B. Friedell today.

The authors, publisher and host are not providing legal, accounting, or specific advice to your situation.

Why you should establish an estate plan today.

Taking the first step in establishing an estate plan

Written by the Law Offices of Jack B. Friedell

Most people we come in contact with believe that an estate plan is important. When we ask them why, they typically don’t know why but heard somewhere that it was important. Then the conversation will end and move on to other topics such as sports.

A lot of people find it difficult to talk about estate planning. One reason is due to their lack of knowledge about estate planning. Another reason is that people don’t like to think about the things estate planning involves: death, taxes, end of life planning, etc…

Here are just a few of the areas that estate planning covers:

  • Revocable trust– also known as an inter vivos trust or living trust. All your assets are placed into your trust so that your estate can avoid a costly probate upon your death. The minimal price it costs to set up a trust is small compared to the cost of having your estate go through probate. A trust also ensures privacy, where as a probate is public and available to anyone.
  • Power of attorney – who will handle your finances in the event that you cannot manage them yourself? If you do not have a power of attorney set up and you become incapacitated, then the court will assign a conservator who will have power of attorney. Having a plan in place ensures that you decide who will handle your financial affairs.
  • Pour over will – A pour over will in California will provide directions that all your assets are to be placed into your trust upon your death. Basically, any asset not included or funded in your trust will “pour” into your trust upon your death.
  • Advance healthcare directive – An advanced directive, also known as a living will, allows doctors, family and friends to know your health care wishes so that if you are incapacitated there is a plan in place. You make the decisions ahead of time so that your family and friends are spared the pain of having to make potentially life ending decisions if you cannot. This includes directions on what to do if you are in a vegetative state. As many as 30,000 persons are kept alive in comatose and permanently vegetative states.
  • Finally, any good California estate planning attorney will help you transfer title to real property into your trust. A quitclaim deed is used to transfer your real property into your trust. If you have refinanced your home recently your home may have been taken out of your trust. It is important that your property is transferred back into your trust because the title company seldom does this. You will want to make sure what is probably your biggest asset is protected from probate.

Hopefully you can see the importance of having an estate plan in place. If you still have questions you can read more about estate planning on our estate planning 101 section.  If you are single but you own a lot of assets, you might want to consider an estate plan. If you are married, then an estate plan should be at the top of your to-do list. If you own a home in California, then a properly funded living trust will help your estate avoid probate. Take the first step today and educate yourself on the importance of an estate plan.

For questions on the above content or for any other legal advice dealing with estate planning documents in California, an estate planning attorney in Carlsbad, California can help. Please contact the Law Offices of Jack B. Friedell today.

The authors, publisher and host are not providing legal, accounting, or specific advice to your situation.