Frequently Asked Questions

This is where we answer some of the most common questions regarding what we do.

Use the drop down menu to navigate to the section you wish to explore.

If you have have questions about your matter, please do not hesitate to contact us!

What is a Living Trust?

A living trust, also called an inter vivos trust, is created by a written declaration or agreement.  A living trust is different than a testamentary trust, which is a trust created by the court, in a probate proceeding, based on the decedent's will.  The principal reason for creating and funding a living trust is to allow the trust assets to be distributed upon death without the need for probate.  (For an overview of Probation, see answers to FAQ regarding probate.)


If I execute a living trust, why do I need a will?

When you sign a living trust, you should also sign a "pourover will" to be sure that assets solely in your name at your death will be administered as provided in your trust.  For example, many clients decide not to re-title their cars in their names as Trustees.  As long as the total value of assets which "pour over" into the trust does not exceed $150,00.00, no probate is required.  (See answers to FAQ regarding Probate.)


Will re-titling my home in the trust cause a reassessment?

No.  A transfer to a revocable trust is not a "change of ownership" for property tax assessment purposes.


Should I add my children's names to title on my bank accounts?

Adding a child's name to an account as a joint tenant is a very common method for not only avoiding probate, but also allowing a child to access your account for your benefit. However, there are risks:

  • Your child(ren) will have present access to the account.  If you are concerned with a child's trustworthiness, you should not add that child's name to your account.
  • A bank account with your child's name on it is subject to your child's creditors.  If your child has had problems with paying his or her own bills, you should not add that child's name to title to your bank account.
  • The law presumes that when one joint tenant dies, the account belongs entirely to the surviving joint tenant.  This can result in conflict upon your death.

Why do I need a Power of Attorney For Asset Management if I have a trust?

The reason is that you probably own assets that are not appropriate to add to your trust,or that you may not need to add to your trust.  Such assets often include retirement accounts, automobiles, life insurance policies, time shares and small lots.  A general power of attorney will allow your attorney-in-fact to manage such assets for you.


What is the difference between Medi-Cal and Medicare?

  • Medicare.  Anyone who is age 65 or older and who is covered by Social Security or Railroad Retirement Benefits is eligible to receive Medicare.  Medicare also covers persons who are disabled under certain circumstances.  Medicare Part A provides hospital insurance; Medicare Part B, if you are entitled to it, covers 80% percent of other medical expenses.  Medicare is not needs based, that is, your entitlement to Medi-Care benefits does not depend on the value of your assets.
  • Medi-Cal (Medicaid).  Medi-Cal is California's name for the federal Medicaid program.  Medi-Cal is the only government program that pays the on-going cost of nursing home care for eligible person who cannot afford to pay for such care.  Medi-Cal recipients are either "categorically eligible" (because they receive SSI or AFDC benefits) or are eligible because they are "medically needy".  Medi-Cal for long-term care is needs based; you often have to spend down in order to qualify.

What is a Special Needs Trust?

A person with a disability is often entitled to receive Supplemental Security Income (SSI) benefits.  To qualify, the person can have no more than $2,000.00 of countable resources, and limited income.  SSI is a very important benefit since it entitles the recipient to Medi-Cal benefits.

A parent who wishes to benefit a child with a disability after the parent's death can do so by providing for the creation and funding of a special needs trust, a very restrictive trust designed to provide for the child's needs which are not met by public benefits, while, at the same time, not disqualifying the child from continued receipt of SSI.  The assets in a properly structured special needs trust will not be considered available to the beneficiary during his or her lifetime, nor will the trust assets be subject to recovery by the state upon the death of the beneficiary.


My parents signed a Living Trust, but they did not re-title the family home in the trust name before they died.  Will probate be required?

In many instances, no.  A court can make an order after death finding that the home is in fact an asset of the trust if you can prove that was your parents’ intent.  That order will allow you, as the Successor Trustee, to sell or distribute the home as though it had been titled in the trust name at the time of death. The petition requesting such an order is usually referred to as an "Heggstad petition", or an "850 petition" (which references the probate code section frequently used for such petitions.)


What is a "stepped-up" basis?

When an individual sells an asset, such as stock, that is a taxable event; the gain, the difference between what it sold for and its basis, is taxable.  The basis is what the individual paid for it, plus, in the case of real property, the cost of improvements.  However, if the individual continues to own the asset until he or she dies, the basis is stepped up at death, that is, the basis is increased to the value at the time of death.  That will minimize, if not eliminate, any gain when the asset is sold by the Successor Trustee or personal representative.  In short, a stepped-up basis is generally a good thing.  For this reason, we generally recommend that clients who wish to transfer appreciated assets to their children do so by will or trust rather than by lifetime, or inter vivos, gift.


Who Is A Disqualified Beneficiary?

California law, specifically California probate code sections §§21360-21392, provides that certain transfers (such as gifts made t death by will or trust) are presumed invalid.  Subject to certain exceptions, the following are each presumed invalid:

  • a gift to the person who drafted the instrument;
  • a gift to a "fiduciary" (such as an agent under power of attorney) who transcribes the instrument (or causes it to be transcribed);
  • a gift to a care custodian of a dependent adult;
  • a gift to a person related to or associated with any such person.