Common California Estate Planning Misconceptions

Most people are generally familiar with the estate planning process, or with what an estate plan is. And many people understand that an estate plan, drafted with the assistance of an experienced California estate planning attorney, is the best way to avoid the probate process and ensure that their assets are passed on in accordance with their wishes. Unfortunately, however, there are several common misconceptions out there regarding the estate planning process. Below are some of the most common of these misconceptions.  

Common Estate Planning Misconceptions

Wills

Common misconceptions about wills include:

When a person has a will, no probate is required This often isn’t true. In fact, unless the testator’s probate estate has a gross value of less than $150,000, or the estate is left to his or her surviving spouse, the will is likely subject to probate.

Wills must be notarized. Wills don’t require notarization in California. In order to create a valid will in California, the testator should sign the will in the presence of two disinterested witnesses. There are other ways to create a valid will as well, but they also don’t involve notarization. 

A copy of a will is always valid. A copy of a will is not as effective as the original. In order for a copy of a will to be deemed valid, a court must be convinced that the original will is missing but not destroyed. If the court believes that the original will was destroyed, with the intention to revoke it, then the court won’t enforce the terms of the copy. 

If you have a will or are named as an executor or beneficiary in one, you should consult with an experienced estate planning attorney if you’re unsure how the will should operate, or whether a probate or other court order will be needed to administer the estate.

Powers of attorney 

Common misconceptions about powers of attorney include:

A power of attorney continues to be effective after the person who executed it dies. When the person named as the principal in a power of attorney dies, the power of attorney becomes completely ineffective. However, if a person named as an agent in a power of attorney dies, he or she may be replaced by another agent, if a backup agent is listed in the instrument.

All powers of attorney are legally valid once executed. A power of attorney signed by an individual who lacks capacity or who signs under coercion is invalid. Also, some powers of attorney “spring” into effect only when the individual is found to lack capacity.  Until then, the agent does not have the power to act.

If you have a power of attorney or are named as an agent in one, you should consult with an experienced estate planning attorney if you’re unsure how the power of attorney should operate, or whether the power of attorney is in effect or not.

Trusts

Common misconceptions about trusts include:

All trust assets go to the surviving spouse if the couple established a revocable living trust together.  For certain trusts, this isn’t true. For example, joint living trusts established prior to 2002 are subject to complicated transfer rules that sometimes result in trust assets going to someone other than a spouse. Moreover, an individual may provide for other beneficiaries in his or her living trust, even if he or she is married.  

Once I execute my trust, all of my assets are automatically transferred to the trust At the time you execute your revocable living trust, you will normally specify whether some or all of your assets should be transferred into the trust. However, to complete the transfer, you must often execute additional documents, such as trust transfer deeds for real property, and you must also change the title in financial accounts that you wish to transfer into the trust. If a decedent dies before his or her assets are properly transferred into the trust, a probate may be needed, in some cases. In other cases, the trustee may petition the court for an order transferring the assets into the trust without a probate. 

If you have a revocable living trust or are named as a trustee or beneficiary in one, you should consult with an experienced estate planning attorney if you’re unsure how the trust should operate and who should receive trust assets outright or in trust.

You should also consult with an experienced estate planning attorney if you’re unsure whether the trust has been properly funded, or if you need help ensuring that the title in real property and financial accounts properly reflects that the assets are trust property. 

Let us walk you through the estate planning process   

The best way to clear up common estate planning misconceptions and avoid costly mistakes is to hire an experienced estate planning attorney to walk you through the process. At Loew Law Group, PLC, our California estate planning lawyers represent clients throughout San Mateo County, including Belmont, Burlingame, Foster City, Hillsborough, and Redwood City. When you entrust us with your estate planning needs, you can rest assured that we’ll provide you with a carefully crafted, detailed, and customized estate plan. If you would like to begin the estate planning process today, please contact us for a consultation.