Shawna Murray Law

Wills + Trusts

Wills + Trusts

What is a will?

A Will is a set of instructions of your last intentions for your property. It is a legal document that indicates who gets what, how and when after your death. Only the beneficiaries named in your will have a right to your property.

A Will does not take effect until after the author's (referred to as the testator) death. Then, the Will must be probated, which means that a court will oversee the distribution of the assets after all debts are paid. The bottom line is that your heirs get considerably less because of all the additional costs. 

In California, where probate fees are high, a Revocable Living Trust is the most popular method used to distribute your assets instead of a Will. Working with an attorney to create a Trust is less expensive than the costs of probate in California.

What is a trust?

A Trust is a legal document created with the primary purpose of specifying who gets what, when, and how much of your wealth, after your death. Strictly speaking, it is a separate legal entity which creates a fiduciary arrangement with a third party who will manage your wealth after your death or during your incapacity.

The most common Trust is the Revocable Living Trust and it takes effect once you have signed it. In California, the Revocable Living Trust is the primary method of distributing your assets after your death when you want to avoid the costs of probate court and its public records. Other advantages include incapacity planning and quicker distribution of assets to the beneficiaries.

Do I really need a trust?

Although many people equate “estate planning” with having a Will, there are many advantages to having a Trust as the centerpiece of your estate plan. While there are other methods for passing some of your property (such as joint tenancy, community property with rights of survivorship, transfer on death, beneficiary designations, to name a few), only a Trust provides comprehensive management of your property after your death or in the event you can't make financial decisions for yourself (commonly called legal incapacity).

Moreover, Trusts save money and keep your personal affairs private. A properly funded trust will keep your estate out of the probate court and save your family, thousands, if not tens of thousands, of dollars in probate fees. In addition, the distribution process through probate court is much longer because it requires judicial approval. Beyond the cost and time of probate, this court proceeding, make your entire financial life and last wishes, part of the public record.

Dying without a Will is referred to as dying “intestate.” California state law determines who gets what from your estate. You will have no say in who gets your assets or how they will be divided or when they will get distributed. Bottom line, your “heirs-at-law” have the right to collect your property.

Plus, if you own additional real estate in another state or country, another probate must be opened in that location and that state's laws will decide who gets what according to that state law. 

What if I die without a will?

Anyone can be the beneficiary of a Will. However, if the beneficiary is a resident of a foreign country, there may be issues with treaties - or the lack of them - between the United States and the other country.

Charities can also be beneficiaries of a Will. So can pets.

What is a beneficiary?

A beneficiary is a person (or thing) who gets something from a Will or Trust. You are a beneficiary of the Will if the author of the Will (aka, the testator) instructs that some of his/her property be given to you.

Who are the heirs?

The heirs are the people who are entitled to get the decedent's (the person who died) property according to state law if the decedent had not written a Will. Most frequently, this includes the decedent's surviving spouse and children. However, just because you are an heir does not mean that you also will be a beneficiary.

Who can be the beneficiary of a Will?

Anyone over age 18 and who is mentally competent ("of sound mind") can write a Will. Cal. Probate Code 6100(a).

How do you know if someone is mentally competent to write a Will?

You are mentally competent in California if you are capable of (1) understanding that you are creating a will that disposes of your property upon your death; (2) that you understand what your property is and where it is; and (3) that you understand the relationships with your heirs and beneficiaries. This means that you know what the consequences will be depending on how you leave your property. Cal. Probate Code 6100.5(a).

Plus a conservator, with court approval, can also write a Will for their conservatee. In addition, a mentally competent conservatee, over age 18, can write their own will (and revoke or revise the one their conservator wrote for them). Cal. Probate Code 6100(b).

Who can write a will?

No, it just needs to show you intend to give the beneficiary something at your death. The Will can be a formal Will, signed and witnessed by two people, and is usually written by an attorney.

You can use a "form will" such as those that you can buy online. Also, the California Bar Association has created a copy of California's Statutory Will, which is a free, do-it-yourself will. The form instructions need to be followed carefully and then you sign it in front of two witnesses.

California even allows informal, handwritten wills - they are referred to as Holographic Wills.

Could a single sheet of paper be a Will?

Yes. It could be a Holographic Will. These informal Wills must be made entirely in the decedent's handwriting and they do not need to be witnessed (or even dated). California Probate Code Section 6111. 

Does a will have to be in a certain format to be valid?

The process of retitling your house from your name to the name of the trust is a part of funding your Trust. You will need a new deed prepared, changing the current names on the deed to the name of your trust. For example, if the deed to your home indicates that the home belongs to Dan and Anne Jones, husband and wife, then you will change that deed to read something like, Dan and Anne Jones, Trustees of the Jones Family Revocable Living Trust. Finally, your new deed will get recorded.

A basic estate plan will include the transfer of your residence into your trust. If your house is not retitled at the time of your death, your loved ones will have to jump through a few extra hoops to get that property put back into the trust.

How do I put my house in my trust?

Yes, you can refinance your property after you put it into a Revocable Living Trust. California escrow and title companies are familiar with revocable living trusts and understand how to deal with the refinance of a house that is inside of revocable living trusts.

In fact, you can retitle your property back to your own name if you wish, for some reason, to revoke or revise your trust. You can revise it and/or revoke at any time you wish during your lifetime, just so long as you are not incapacitated – this is a safeguard against the wrongdoing of those who might seek to take advantage of your incapacity.

Can I refinance after I put my house into a Trust?