Services

• Foundational and advanced estate planning
• Trust administration
• Probate
• Beneficiary representation

• Avoiding a costly and public probate process.  A trust is a private document which directs the disposition of one’s property after death.  By contrast, a will goes through a court process, which is open to the public and subject to relatively high statutory fees.  For example, if one’s probate estate (all property owned at the time of death) has a gross (not net) value of $500,000, California law provides that the attorney who helps to navigate the often complicated probate process is entitled to $13,000 in fees.  The executor is also entitled to the same fees, but executors are often family members who do not take such fees.  For a $1,000,000 estate the statutory fees are $23,000 each for the attorney and executor.
  
  
• Saving time and reducing stress for surviving loved ones.  The probate process described above is not only more costly, but it generally takes longer than a trust administration, because the probate process is slowed down by the court system.  Moreover, navigating the court system is often more stressful than a private trust administration.  By creating a living trust you can alleviate for your loved ones who survive you the time consuming and often stressful public court system.
  
  
• Reducing the tax burden on your estate.  A well-designed trust instrument will minimize the amount of estate taxes one’s estate must pay, resulting in more money and property in the hands of surviving loved ones.  If nothing changes in the law, the estate tax is set to return in 2013 to a $1M exemption with a graduated tax of up to 55% on the fair market value of property beyond a $1M exemption.  Thus, while very few people need to concern themselves with estate and gift tax savings under today’s $5M exemption, many people may have such concerns if Congress fails to amend the current estate and gift tax regime between now and January 1, 2013.  One would be hard pressed to find an estate planning lawyer in Palo Alto, or elsewhere for that matter, who would confidently predict what Congress will do in this regard, because many estate planning lawyers predicted with unjustified confidence in 2009 that Congress would act to impose an estate tax in 2010, when the estate tax was temporarily repealed by a 2001 law.  Also, one should note that life insurance proceeds are taxable under the estate tax regime.  When a life insurance sales person advises that life insurance payouts pass to life insurance beneficiaries "tax free", the reference pertains to income tax, not estate tax.  Therefore, an estate with significantly less than $1M may be affected by estate taxes if the person creating the trust owns a $1M life insurance policy.
  
  
• Directing how property should be used and distributed to your surviving children.   A trust can direct the trustee to preserve trust funds and use them for the benefit of minor children, and it can also direct use and distribution of trust property for the benefit of adult children.  Often, people will leave money (savings and/or life insurance proceeds) to be used for the care of surviving minor children, and the trust is the vehicle directing the trustee on how to use that money (often for health, education, maintenance of lifestyle, and support).  In reality, however, few people want to leave an eighteen year old child a large sum of money in a lump sum.  A trust can resolve this issue by directing a trustee to make partial distributions of trust property at different ages.  Because the trust instrument is so flexible, a settlor can mold the distribution scheme to fit the particular needs of a particular child (e.g., a child with special needs, or an adult child who has a history of misusing money) so that the trust property may be used and preserved for maximum benefit.

• Unlike a trust, a will is a public document which, after death, can be viewed by any member of the public after death.   
• A will usually costs thousands of dollars more to probate than a trust costs to administer, because an attorney’s fees in probate are set by the state as a percentage of the decedent’s estate.  
• The probate process, because it relies on extensive court supervision, tends to take much longer than the trust administration.
• Procedures for selling a house in probate are more complex and time-consuming than normal real property sales.  Some people will not buy real property subject to the probate process, because the closing period is longer than usual.  Also, under probate law, real property must be "auctioned" in open court after an offer is made, which means that any member of the public may show up at a public court hearing and outbid the buyer.  By contrast, a trustee simply uses her/his best judgment in selling trust real property, and is only constrained by the terms of the trust (as determined by you) and the trustee's duty to be reasonably prudent.
  
• In probate, a court-appointed probate referee values all of a decedent's property and those valuations must be shared with the IRS when a Federal Estate Tax Return is filed.  With a trust, the trustee can vet valuation experts who are sure to understand concepts such as fractional interest discounts and restrictions on alienation.
  

With all of these disadvantages, one might ask, "Why have a will at all?"  There are at least two general answers to this inquiry, depending on one’s situation.  First, a certain type of will acts as a backstop to a revocable living trust (explained below).  Second, a will is a convenient method for directing the guardianship of minor children.  Third, a will makes more sense than a trust in certain circumstances.

Where a revocable living trust is in place, it is advisable to have a type of will known as a pourover will.  Ideally, with a revocable living trust, there would be no property subject to probate once a person dies.  As a stopgap, the pourover will essentially tells the person named in the will to represent the estate (known as the executor) to “pour” into the trust any property in the decedent’s estate which for some reason has not already been placed into the trust.  The pourover will furthers the stopgap measure by telling the executor that if for any reason a trust is not in existence at the time of death, a new trust is to be formed to hold the property in the decedent’s estate.  Finally, in the off chance that the trust fails completely, the will acts as an alternative means for disposing of the decedent’s property.

A will is a sensible vehicle for directing the guardianship of minor children.  While a trust focuses mainly on the disposition of property, the will is much broader in scope.  Therefore, it makes sense to have the broader document direct the guardianship of a decedent’s minor children, while the living trust directs the financial aspects of the guardianship.  

If a person has no minor children, no real property and combined assets worth less than $100,000, there may be no point in creating a trust.  In California, the procedure for administering estates with no real property and less than $100,000 in assets is very simple and fast.  Thus, the reason a person in such a position (assuming there are no minor children needing care after death) is simply to make known to the people who survive you what you want to be done with your property.  In such a case, creating a living trust is likely to cost more than probate and many of the most compelling reasons for avoiding probate no longer apply.

Durable Power of Attorney

An estate planning lawyer helps not only with planning for the possibility of death, but also for the possibility of incapacity.  What happens with one’s business, accounts, bills, and other financial realities if one loses capacity to make decisions regarding finances (e.g., due to illness or a severe injury) but is still alive?  The durable power of attorney (DPOA) answers this inquiry by directing a person, known as the attorney in fact, to act in the incapacitated person’s place under such circumstances.  While the trust instrument provides many of the same powers as the DPOA, the DPOA for practical purposes is the instrument a person will present to a financial institution in order to show that she/he has the authority to act on behalf of the incapacitated person.  Another function of the DPOA is that it acts as a backstop to the trust in the event that the incapacitated person has assets not titled in the trust, but which need to be managed during the period of incapacity.  

Advance Health Care Directive

Another aspect of planning for incapacity involves the making health care decisions when one is no longer able to make such decisions.  The Advance Health Care Directive (AHCD), sometimes referred to as a living will, is the document that directs an agent to act on one’s behalf at times of incapacity where health care choices need to be made.  Like the Durable Power of Attorney, the AHCD gives the principal (person granting the power) broad discretion to direct her/his agent toward certain health care decisions.  A common decision important to most if not all people is whether to make all efforts to prolong life or, alternatively, to withdraw artificial life support when one is in a permanent vegetative state.  The AHCD is the instrument directing the agent to make such decisions according to the principal’s instructions and values.  By way of further example, AHCDs also direct a principal with regard to pain management, donation of organs, and disposition of one’s remains at death.

Advanced Estate Planning and Special Circumstances

Estate planning includes wide ranging tools for various situations.  For example, a married couple leaving money to a non-U.S. citizen spouse may want to use a Qualified Domestic Trust (QDOT) for the contingency that the non-U.S. citizen spouse survives, because the U.S. Government does not afford the same tax advantages to non-U.S. citizen survivoring spouses.  Also, non-U.S. citizens have different rights regarding estate and gift taxes.  Another special circumstance may involve leaving money to a child or dependent adult who has special needs, such as autism, dementia, or chronic illness.  A whole host of estate planning tools exist for reducing estate and gift tax liability in larger estates, such as creating fractional interests in real property, transfers of assets to various types of irrevocable trusts, forming family LLCs or limited partnerships, and much more.  Where a closely held business is involved, business succession planning can be paramount.  Where the closely held business is a family business, family relations add another dimension to the whole of the estate plan.  Thoughtful planning can help not only to preserve a family business, but also to preserve family relationships.

TRUST ADMINISTRATION

Trust administration involves representing the trustee (or cotrustees) of a trust in order to ensure that the trustee puts into effect the settlor's intent in creating the trust.  An attorney's advice in such matters can help to protect the trustee from liability while ensuring that beneficiaries receive the benefits due to them.  Because trust instruments are so varied and trust administration often involves many moving parts, a nearly endless number of situations may occur for which a trustee needs professional advice in the administration of a trust.

Often, there are aspects of administering a trust which may have costly consequences if not done properly.  For example, the proper transfer of real property to a beneficiary who was the child of a deceased settlor can help to ensure that the beneficiary does not incur elevated property taxes due to a reassessment of the value of real property. 

Many trust instruments include ambiguous or conflicting terms which may need an attorney's interpretation.  In some cases a court petition may be necessary in order to interpret or enforce a trust instrument.

PROBATE

Several situations can trigger the need for probating someone's estate.  If someone has a will, but does not have a trust, their property is subject to the probate process.  Probate may also be necessary where a decedent had a trust, but still had property in her/his estate which cannot be lawfully included in the trust estate.  Also, where someone dies with no estate plan (known as dying intestate), their estate must go through the probate process.  The probate process involves the court-supervised administration of a decedent's estate.  Navigating the court system can be arduous, tedious, time-consuming and sometimes confusing to a person who is not familiar with probate.

BENEFICIARY REPRESENTATION

Many times beneficiaries may need an attorney to help to ensure that the beneficiary receives what is due under a trust instrument.  In some cases this may be necessary where there is a direct conflict, such as hostilities, between a beneficiary and a trustee or another party.  In other cases there may be no conflict, but a beneficiary may benefit from the assurance that an attorney is representing that beneficiary's best interests under the trust instrument.