Plan of Action

For readers who have yet to complete their estate plans, here is a simple Plan of Action:

1.  Choose the qualified attorney you would like to work with. Call the attorney to discuss availability, pricing and schedule an appointment.

2.  Complete the attorney’s questionnaire that asks for detail information such as full legal names, dates of birth, contact information, etc.  Then gather relevant documents such as your
current estate documents (if any), deeds to your real property, contracts for burial (or cremation).

3.  Meet with your attorney.  At the end of this meeting, sign a retainer agreement to hire your attorney, pay the retainer amount.

4.  Attorney drafts your documents based on your meeting and sends them to you via email or US mail.

5.  You review the drafts carefully to make sure they reflect your wishes.  Call your attorney with comments or questions.

6.  Your attorney revises the drafts until you and your attorney are satisfied with them.

7.  Meet with your attorney for you to sign your documents. Take your current, valid driver’s license for the notary process.

8.  Your attorney records any deeds that you have signed and sends the originals of all your
documents to you.

9.  You transfer any other accounts into your trust and change any beneficiary designations to
complete your plan.

10.  You review your documents annually for any changes such as births, deaths, marriages, financial changes.

See, now isn’t that easy??

Originally posted by Susan on January 13, 2014

The Complete Estate Plan

For the vast majority of clients, a complete estate plan includes four documents: a Revocable Living Trust, a Pourover Will, a Power of Attorney and an Advance Health Care Directive. Each document covers a different set of concerns, assets, and effective time period. The two basic set of concerns are financial and health care. The two basic time periods they cover is either before or after death, and the two basic types of assets are trust and non-trust assets.


For your financial concerns the grid looks something like this:

A valid Revocable Living Trust operates during your lifetime and after your death. Because of its longevity, a Trust can help manage your affairs during your senior years or incapacity, and it can distribute your assets to your loved ones on your death. However, it only governs assets that you have transferred into your Trust estate.

A Power of Attorney operates only during your lifetime and only governs non-trust assets. If you have a bank account in your individual name (not in the name of your trust), your agent under your Power of Attorney can access the money in that account. If the Power of Attorney allows, your agent can file your tax returns, use your credit cards and access your safe deposit box, among other things. However, at your death, the Power of Attorney terminates.

Just as the Power of Attorney terminates, your Will becomes effective. A Will becomes effective at the moment of your death, and it governs only non-trust assets. The sole purpose of most Wills is to transfer assets on your death. To do this, you name a person to be in charge of the transfer (called the “Executor”) and you instruct the Executor how you want your non-trust assets distributed.


An advance health care directive deals only with your health care and personal care, and it is effective both before and after death. So, whomever you name as your agent under an advance health care directive is authorized to make decisions about whether you will receive medical care, what kind of medical care and the treatment of your remains. The agent’s decisions must be consistent with your instructions. So, if your agent knows that your religious convictions do not include medical treatment, your agent should not authorize medical treatment for you. If your agent knows that you do not want life sustaining treatment, your agent should not authorize it for you. If you instruct your agent to have your organs donated and your remains cremated, your agent should follow those instructions. However, you have the right to make these decisions for yourself as long as you have the mental and physical capacity to do so. In other words, you can delegate someone else to make these decisions for you if you don’t want to make them or if you can’t make them, but as long as you have the mental and physical capacity, you can override your agent’s decisions.

Keep in mind that these four documents are the skeleton of a complete plan, and your situation may differ. Many clients also have separate property trusts to maintain their separate property apart from their community property, life insurance trusts to more efficiently manage large life insurance policies, irrevocable trusts for a variety of reasons, community property agreements, pre-nuptial agreements, etc. However, if you have these four documents in place, they offer complete coverage both before and after death, both trust and non-trust assets and both financial and personal concerns.

Originally published by Susan on June 16, 2014.

7 Most Common Estate Planning Mistakes

1.  NOT MAKING AN ESTATE PLAN (and the corollary: not updating your existing plan when your life changes.) You know the saying that showing up is one half the battle.  Writing your estate plan is at least half the battle.  Keeping your documents current is important, too.  If your documents name individuals who are no longer a part of your life, or if they do not fit your current financial status or current laws, you will need to update them so that they meet your goals.

2.  FAILING TO PUT ASSETS INTO YOUR REVOCABLE LIVING TRUST. If you do not transfer assets into your trust, the trust may fail (meaning that the terms of it will not be honored.)  At the very least, those assets left outside of the trust will not be subject to the oversight of your named trustee and will not pass according to your distribution plan.

3.  LISTING YOUR REVOCABLE LIVING TRUST AS THE BENEFICIARY ON YOUR RETIREMENT ACCOUNT.  Doing this can mess up the calculations for the required minimum distributions.  It is better to consider your entire estate as a whole and to name adults as the beneficiaries of your retirement accounts. Under some circumstances (only minor beneficiaries or a special needs beneficiary), it may be your only option, but consult with your attorney or financial advisor before doing so.

4.  FAILING TO SPLIT YOUR TRUST ON THE DEATH OF THE FIRST SPOUSE TO DIE.  If you may be subject to federal estate taxes, and if your trust provides, you should split your assets when the first spouse passes on so that you can take full advantage of the exemption amount (the amount that you can pass on your death without paying estate taxes.)

5.  NOT HAVING YOUR ORIGINAL DOCUMENTS.  This one is not the clients’ fault; it’s the fault of the overly protective (or overly greedy) attorney.  The file is YOUR file, not his file, for goodness’ sake.  Call or send a letter requesting your original documents.  On receipt, store them in a safe place.

6.  WRITING ON YOUR ORIGINAL DOCUMENTS.  If you have your original documents, it’s important to treat them appropriately.  Do not write on them.  If you feel compelled to edit them, copy the originals and write on the copies.

7.  NOT KNOWING WHAT YOU HAVE.  Review your documents annually.  If after reviewing them, you are not sure what they mean, call the attorney who drafted them to make sure that you understand them at least on a basic level.  If they are not appropriate for you at this point in your life, schedule an appointment to discuss changing them.

Originally published by Susan on January 20, 2014.

Why Avoid Probate?

You may have been advised to avoid probate at all costs, but do you know why?

Sometimes probate is a good choice.  Probate is a court-supervised distribution of your assets after your death.  There are systems in place to manage the collection, valuation and distribution of those assets.  Court approval is required for appointment of your representative and for many transactions.  If there are objections to the appointment of the representative or any of the transactions, the judge will listen to those objections and make a decision.  For
these reasons, it is a safe and effective way to distribute the assets.  However, it can be expensive and slow.

In California your representative and the attorney for your representative are paid on a percentage basis that is set by law.  They each receive 4% of the first $100,000, 3% of the next $100,000, 2% of the next $800,000, 1% of the next $9,000,000 and 0.5% of the next $15,000,000 and a reasonable amount over $25,000,000.  For an estate of $500,000, the attorney and the representative would each receive $13,000.00.  There are also court filing fees and referee fees, and if extraordinary services are rendered, the attorney and the
representative could be awarded much more in fees.

In Orange County, a simple probate takes about one year from filing the Petition to termination, and a complex probate estate or a probate where the parties disagree could take years.  That means that your loved ones will not receive their distributions until long after your death. 

If you factor in the public nature of probate and the hassles of your representative appearing in court, taking time from work and navigating the legal system, probate is not an attractive choice especially if you compare probate to the cost of preparing a revocable trust (most likely less than $3,000) and the ease of transferring assets from trustee to beneficiary.  I suggest that you weigh all of these factors when deciding whether to try to avoid probate or not.

Originally posted by Susan on September 24, 2012

D-I-Y Estate Planning

People often ask me about writing their own Wills, and they are usually referring to holographic Wills. A holographic Will is a signed, hand-written document that shows an intent to dispose of assets on the writer’s death. If properly prepared, it can be admitted to probate just like a witnessed Will such as an attorney would normally prepare. Usually these types of Wills are prepared in emergency situations when the writer simply does not have the time necessary to hire an attorney to prepare a witnessed Will. Sometimes, however, people write holographic Wills to avoid attorneys.

Several years ago I probated a holographic Will. Although I never met the woman who wrote it, it appeared that she had wanted to avoid the cost of hiring an attorney to draft a witnessed Will for her. While she was successful at avoiding the up-front cost of hiring an attorney to draft the Will, the cost to probate the Will was far more than she would have paid to have a properly drafted Will.

One problem with her Will was that she did not follow all the rules for a holographic Will, and she did not follow all the rules for a witnessed Will. Her Will was a mix between the two, and the judge decided to treat it as a witnessed Will. However, it was not properly witnessed, so I had to locate the witnesses and have them sign an Affidavit which provided the information that she had left out of her Will. It was a good thing that her witnesses were both still alive, cooperative and had ties to the family so that we could locate them and provide the missing information. If not, the Will would not have been admitted to probate, her estate would have passed by intestacy as if she had not written a Will, and it would have been distributed to different people than she had named.

Most of the time, I recommend that my clients designate their distributions in percentages. So that instead of giving a loved one, say $100,000.00, they give 5% of the estate. With percentages the gifts remain consistent regardless of the value of your estate on your death, and all of your beneficiaries are likely to receive a portion of your estate even if the value of your estate drops significantly. The woman who wrote the holographic Will did not designate percentages for her beneficiaries, but items. So she designated that one of her loved ones would receive a particular piece of jewelry and that another would receive a particular dish. During her lifetime, she had given away some of the items mentioned in her Will, and this created confusion over who was to receive these items at her death. Some of the items she mentioned in her Will were very small value (teacups.)

While I enjoyed this case on an intellectual level, and the clients and family members were delightful to work with, I couldn’t help but think how much easier the estate would have been for all involved if the woman had hired an attorney up front to help her draft the Will. Not only would she have been able to pass more money to her loved ones (by avoiding my probate
fee), she would have saved her loved ones the time and hassle of fixing her mistakes and trying to decipher her intent.

Can you write your own Will? Why, yes, you can, but you can also set your own broken bones, plumb your own house and build your own airplane. The prudent question may not be if you can but whether you should.

Originally published by Susan on May 5, 2014


In the 21st century we all live hectic, busy, crazy lives.  Few of us have time to ponder, to reflect, to plan and to consider.  Yet, there are times in our lives when it may be vital to our well-being to take the time to review where we are and to plan for where we’d like to be.  I call these breaks “360° Reviews” because you are looking at the full circle of your life.

 For your financial and legal documents, it would be best to review them once per year: perhaps at the start of a new year or on your birthday or anniversary.  In addition to this
standard annual review, I suggest that at each major life change you take some time to consider your financial and legal life. Is it where you’d like it to be?

Major life changes include inheritance, marriage, divorce, and retirement.  At each of these junctures, I recommend that you review your Will, Trust, Advance Health Care Directive and
Power of Attorney.  Do they still accurately reflect your wishes? Are the people you have named as your agents, executors and trustees still the people you would like to handle your affairs
when you can no longer do it for yourself? The people you have listed as your beneficiaries—are they still the people you would like to receive your gifts?

 If not, I recommend calling your attorney to update your documents to ensure that your documents are current. Do you remember how relieved you felt when you first signed your
documents?  By performing a complete 360° review and then updating your documents and keeping them current, you will feel just as relieved and ready to tackle what life brings to you next.

Originally posted by Susan on June 26, 2012.

Mediation, Arbitration or Litigation?

Conflict resolution. It may be a big part of your life even if you’re not a lawyer. Mediation training through the local bar association certainly helped my mothering skills, but I digress. Often conflicts are settled directly between the parties. However, assuming the parties cannot settle on an agreement between themselves, there are three main methods to resolve the conflict: mediation, arbitration and litigation.


Mediation involves all the parties coming together in one place to come to an agreement between themselves. The parties choose a mediator who guides the parties toward their resolution, but the mediator does not decide the outcome of the conflict. If there is a high amount of tension between the parties, the mediator may set ground rules for how the parties communicate (such as only to the mediator and not between themselves) or the mediator may talk to the parties in separate rooms. If there is less tension between the parties, they may all meet in one room and may even communicate between themselves.

The focus of mediation is on the parties reaching an agreement themselves. It is the least formal of the conflict resolution procedures and is completely voluntary and completely private.


Arbitration involves an arbitrator who decides the conflict. However, the parties to the conflict choose the arbitrator and set the ground rules for the arbitration themselves. This allows the parties to be as formal or informal as is warranted by the nature of the conflict and the wishes of the parties.

Arbitration can be binding or non-binding, meaning that as one of the ground rules they agree on before the actual arbitration, the parties can agree to abide by the arbitrator’s decision or to allow the parties to resort to litigation after they receive the arbitrator’s decision.

Arbitration can be less formal than litigation, more formal than mediation, depending on how the parties structure the proceeding. It is completely voluntary, although many contracts include an agreement to arbitrate conflicts arising from the contract. Like mediation, it is also private.


Litigation is the lawsuit. One party brings his case against another party in court and a judge decides all the issues that the parties cannot agree on. It is the most formal and restrictive of the three methods because the parties have little control over the process or the outcome. The process is governed by the civil procedure laws of that jurisdiction, and the parties have virtually no choice about which judge they are assigned to. Except in limited instances, litigation files and hearings are open to the public.

These three methods are not exclusive: one case can involve all three methods plus a settlement agreement between the parties. Conflicts are inevitable. Make sure you choose the resolution method or methods that best fit your conflict.


Originally published by Susan on January 20, 2015.

Conflicts of Interest

A conflict of interest is when one person has loyalty to two or more sides of a disagreement. Without the disagreement, you can have apotential conflict of interest when one person has loyalty to more than one person in a transaction. For me the situation arises most often when I represent husband and wife with their estate planning, but another common way conflicts arise in trusts and estates is when one person is both a fiduciary (such as an executor, trustee or agent) as well as a beneficiary.

Spouses can have different desires about how to set up their estate plans, such as who will receive their assets on their deaths, who will be their fiduciaries and how their distributions will be structured. As long as both spouses agree, I do not have a conflict of interest and can easily represent both spouses. This makes it easier and cheaper for you. When I represent both spouses to develop their estate plan, I ask them to sign a waiver of the potential conflict of interest in order to warn them of a potential problem in our lawyer-client relationship. If an actual conflict arises (for instance, if the spouses disagree as how to distribute their assets), then I need to withdraw as both spouses’ attorney. At that point I cannot represent one spouse to the disadvantage of the other.

Clients may be in a conflict position if they are both a fiduciary and a beneficiary. This can be a conflict of interest because a fiduciary often distributes assets to other people. For example, if a daughter is the trustee for her parents’ trust that distributes the parents’ assets between several siblings including herself, the daughter may not want to distribute the assets to her siblings. However, as her parents’ fiduciary, she is required to distribute the assets as her parents wished. This is not to say that you shouldn’t name one child as your fiduciary over another, but it is good to be aware of this potential problem area.

There are many other times that conflicts of interest arise, but these are the two most common. It is helpful to recognize that these conflicts exist and to prepare for them. If you have any questions or concerns, please feel free to call me.


Previously posted by Susan on March 9, 2015

No Contest Clauses

Although there are many reasons for preparing an estate plan, many people do it because they want to decide where their assets go after their death. While I cannot guarantee that your assets will be distributed according to your wishes, there are several tools that help protect your distribution plan. One of these tools is a No Contest Clause which states that if anyone contests the Will or Trust, they will not receive their share of the distribution.

Sometimes No Contest Clauses are appropriate, and sometimes they are not. They can be used to protect the client’s interest, but sometimes they can be used to shield the actions of someone trying to take advantage of the client. For instance, if a corrupt person influenced someone to write a Will giving money to that person and that Will included a No Contest Clause, it would be harder for an innocent person to contest the Will. Because of these issues surrounding No Contest Clauses, courts sometimes enforce them and sometimes they do not.

A “contest” is a petition or complaint filed with the court. Even with a No Contest Clause, there are certain types of contests that will be allowed if they are brought with “probable cause.” Because the analysis can be somewhat complicated, it’s best to discuss with your attorney before filing a contest whether it will trigger a No Contest Clause or not because you may need to decide whether it’s worth the risk to file the contest.

So, whether you are writing your Will or you are contesting someone else’s Will, it’s important to know about No Contest Clauses.


Originally published by Susan, April 22, 2015.

Welcome to 2017


For the past several years, there have been very few changes to the estate planning landscape, and the same holds true for 2017. However, with the presidential inauguration upon us and the change in administration, there may be many changes to come this year that will most likely take effect in 2018. Below are some of the changes in the law that became effective January 1, 2017 and that may affect you and your estate planning needs.



For 2017, the amount that a taxpayer can transfer on his or her death was increased from $5,450,000 to $5,490,000 (an increase of $40,000), but the estate tax rate is unchanged at 40%. This means that if the aggregate of the transfers made as the result of a taxpayer’s death that is greater than $5,490,000, the amount over that threshold will be taxed at 40%. Tools that estate planning attorneys use to double that amount for married taxpayers (to take advantage of both spouses’ shares) are still in effect.

The annual gift tax exclusion remains at $14,000 so that each taxpayer can give $14,000 each year to each recipient without any tax consequences.

Non-citizen spouses can be gifted $149,000, an increase of $1,000 from 2016 (compared to the unlimited marital gift deduction for citizens.)



Trusts are taxed at a higher rate than individuals. A single individual does not pay the highest income tax rate (39.6%) until he or she reaches $418,400 in income, and a married couple filing jointly does not pay the highest income tax rate until they reach $470,700 in income. However, when a trust is taxed at trust income tax rates, it reaches the same highest income tax rate (39.6%) at $12,500 of income. This rate does not apply to revocable trusts during the life of the trust creator.



A new law was passed in California that owners of internment rights must, at the time of acquisition, designate successor owner(s). If they do not designate a successor owner, it will go to the original owner’s heirs at law.



Personal representatives and trustees now have access to a decedent’s digital assets and electronic communications. After your death, your trustee can now preserve and transfer your photos saved into the cloud, your emails, and any other “electronically stored information.” However, if you have given someone custodial authority online, that designation will override a trustee or personal representative. If you have given your trustee or your agent the authority over your digital assets, that designation overrides anything in a “terms of service” agreement.



There is now a statewide POLST (Physician’s Order for Life Sustaining Treatment) registry to record the level of treatment that an individual wishes to receive at the end of his life. When your physician signs a POLST, he or she will automatically register it with the statewide registry unless you indicate that you do not want it registered. This registry is funded for 2.5 years.


The biggest news is that with the new administration, the estate planning landscape will probably change. I believe that the best way to prepare for change is to build flexibility into your estate plan. If you have questions about how much flexibility is right for you and how to bring more flexibility to your plan, please feel free to call.