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Orange County Estate Planning Blog

Let's make a plan for your pet: How pet trusts give peace of mind

Society has not evolved to the level where we consider our pets to be special kinds of "fur friend citizens" who are capable of owning property. In fact, the legal system tends to treat our pets as if they are property themselves -- much like a horse, cow or pig. In other words, on a basic level, your will should indicate who shall inherit your "pet property."

The idea of bequeathing a pet to another person can be unsettling for many California residents who will be concerned about placing an undue burden on those tasked with caring for their pets and ensuring that their pets receive the same level of care, love, attention and companionship that they have received while the pet owner was alive.

Mistakes to avoid when naming your estate executor

Every step in the estate planning process is important – and every step brings the risk of making common estate planning mistakes. For example, the naming of your executor – although a relatively simple task – provides the opportunity for making a lot of errors.

Make sure to keep the following points in mind while you peruse your eligible executor candidates:

When should I update my will?

Your will is not a stand-alone document that should never change. In fact, you may want to review your will on an annual basis to ensure that it doesn't require any updates. When reviewing your will like this, here are some of the things you might want to look out for:

Divorces

California requirements for a valid will

If you've ever worried about whether your last will and testament is a valid document that will hold up to a challenge in court after you've passed away, you may want to review the various requirements that apply to these important legal documents. In California, the following requirements apply to all wills:

  • The testator must be 18 years of age
  • The testator must be of sound mind
  • The will must be written and not oral.
  • Preferably the will has been typed and not handwritten

While it's easy to prove that the will testator was at least 18 years of age when he or she signed the document, it may not be entirely straightforward to prove the second point above, that the testator was of sound mind. In this context, "sound mind" means that the will creator understood

  • What it means to create a will
  • Understood and knew the nature and situation of his or her property and could remember
  • Understand the people to whom he or she was related and who were affected by the will.

The biggest probate mistake: Not taking steps to avoid it

The biggest probate mistake happens many years before the actual probate process. It happens when estate planners don't make an effort to avoid probate proceedings for their heirs. Considering the fact that much -- if not all -- of this costly, time-consuming process may be avoidable, failing to take the necessary steps to protect one's heirs from probate represents a significant error on the part of the estate planner.

Here are a few issues associated with probate:

What if I die while owning property in different states?

Not all Orange County residents have all the land and real estate property they own within the confines of the state of California. In fact, it's not uncommon for someone to own real property throughout the nation. Whether it's a ski lodge in Vail, a beach-front condo in Miami or an undeveloped plot of land in Arizona, it's important to consider these properties -- and how they would be handled differently during probate proceedings -- while you're preparing your estate plan in California.

Every state has different estate laws, and if you own property in a state other than California, you need to determine how those different laws could potentially affect the probate process. In fact, if you die intestate -- meaning that you died before finalizing a will -- different state intestacy laws could result in different heirs having the right to inherit property found in other states. Also, the various rules and regulations that apply to wills in other states could alter the way your will is interpreted in these different areas of the country.

What can I do with a spendthrift trust?

Imagine your niece and nephew are the only potential beneficiaries you have. However, your nephew is perpetually in debt and asking you to borrow money on a monthly basis, and your niece struggles with a gambling addiction. You want to leave your substantial wealth and assets to them, but you know that they won't be able to manage the money responsibly and it will disappear quickly.

In these circumstances, a spendthrift trust can help. A spendthrift trust offers a way to leave money to your heirs, but it doesn't give them all of the assets at once. It also protects the bulk of the assets from potential creditors.

Why do people create trusts?

The most important decision in trust planning is whether you need or could benefit from a trust in the first place. Once you establish that you want to set up a document like this, the rest is relatively easy with the help of a California estate planning attorney.

Here are the most common reasons why people decide to create trusts:

  • Your beneficiaries don't have the education, experience or self-discipline to manage the financial assets they will receive.
  • You want to protect the assets from people who could manipulate your beneficiaries, creditors or in case of divorce.
  • You want your heirs or others to benefit from your assets in a certain way, such as through specific monthly distributions.
  • You don't want people to know your estate distribution plans, and you want to bequeath assets to your heirs confidentially.
  • You're concerned about people who will try to challenge or contest your will. A trust can serve as a more airtight document.
  • You want to use a trust for strategic exemption from specific types of taxes or minimize taxes paid by your estate and heirs.
  • You don't want your assets to be subject to probate proceedings and would rather pass them directly to heirs.
  • You have a disabled child to whom you want to bequeath assets, but you don't want those assets to interfere with his or her ability to receive disability benefits.
  • You want to set up a trust for the benefit of a charity.

Don't make these mistakes as an estate executor

Being an estate executor isn't an easy job. For one, you run the risk of being held liable for the beneficiaries of the estate if you make a mistake in judgment. Secondly, the beneficiaries might develop an antagonistic and distrustful attitude toward you due to no fault of your own. Still, you must carry out your executor duties with diplomacy, tact and attention to the details.

In order to prevent yourself from being targeted in a lawsuit, here are several things you'll want to keep in mind as an executor:

Are you in the throes of a trust dispute?

Trusts are powerful and flexible documents. Once you've appropriately drafted your trust in the custom-tailored way that serves you and your family's needs, its terms must be followed. Furthermore, if something goes wrong with the trust, e.g., if the trustee's actions don't reflect the terms laid out in the document, legal recourse will usually be available.

At Kinley & Styskal, we handle all types of trust litigation and disputes on behalf of our clients. Below are some examples of the types of cases we regularly accept.

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