Basics Of Estate Planning
Transcript of The Basics Of Estate Planning: By Steve Bliss Video
But those are pretty much the areas of life that I concentrated. However if you have a question about something and you want to talk to a lawyer. Just call me. I’m glad to help. I started out with what you call a vacuum cleaner attorney. That means something revealing it comes in the office whether it’s criminal. Personal Injury or work comp in. The end of the month check the bag. I hope there is enough money to pay your rent. So that’s kind of how I started out but really what I wanted to be doing was estate planning in the name of bankruptcy and corporate practice.
So this is what I’m talking about today. This is really what I enjoy talking about. Most people say while you’re talking about death dying in capacity why you enjoy it so much. Because my job is to protect people. I’m a walk and talk and read an example of estate planning. When I was 5 years old my mom and dad did their estate plan. This was back in 1965. My my dad died five years later from a heart attack. I was 8 years old. Back and you couldn’t leave money to the spouse.
Because the federal government took 70 percent of it in death tests. So we had a family trust and we had a bank as a CO trustee along with my mom so she got to keep all the money. My sisters are doing very well. They have graduate degrees I have a law school degree. My mom lives comfortably over at the University of Sydney University City. And so I can tell this is what I know. I started dealing with the bank as a beneficiary from my mom’s benefit when I was about 18 years old and so when I went to law school I just naturally gravitated toward this.
Okay I may seem a little nonchalant about talking about the subject but I have to because if I get emotional about it that doesn’t do my client service. So sometimes people say well geez you’re awfully cold about this I said No I’m not. I’m just very determined. OK. So you know what we’re gonna be talking about today is that going on Cassidy but just kind of person I am I was like to start off with something funny. So there is two guys Bill and Dave and they’re big baseball fans and so they’re wondering you know when they die is there going to be baseball in Heaven.
And so unfortunately on his way home did get hit by a bus and he dies and he goes up down. And safety comes walking up to him God damn you look a little lost what’s going on. So we’ll see. Peter I just got a question. Well what is it do. Well there’s a baseball in helmet. And I think you know yeah we got day games night games double headers you name it we got. Oh you know my friend Bill is you know he’s still alive and he’s wondering the same thing. So I think to say let’s just get out to having cell phone.
You get build on a belt. Let’s just say Peter. Well I’ve seen Twitter law. What’s up. He said I really want to know if just baseball in him. Neil says well yeah I do. He goes Well no I didn’t. And I have been OK. Peter what’s the good news. The good news is there’s baseball and heaven. Well what’s the bad news. Well the bad news Bill here tomorrow starting pitcher
So that’s just kind of the thing none of us knows when our number is coming up. So you got do the planning okay. I’ve heard people come into my office looked me straight in the face and say I don’t give a damn about my kids. Let them handle it. And. That stuff happens all the time. And so I’m here to talk to the people that hey hey you know I want to find out what’s going on so I can really understand it. Now this class is nuts and bolts.
I am going to move extremely fast because I have a lot of information to cover. If you have questions please wait till the end or talk to me in private especially if it’s a family personal kind of thing. Because I’m pretty sure I only ask you a question. OK. Now as far as we’re going to talk about we’re going to talk about the sex issues distribution issues. Who gets what when and how well he handles what job responsibility. Then we’re going to talk about the probate system in California. And then I’m going to talk very briefly about the feds and death taxes right now because of what happened last December in Washington at the very last minute.
But most people. Estate taxes are not a problem thankfully. It’s the kind of thing stay tuned every few years depending upon which way the wind blows. But I’ll talk a little bit more about that afterwards. Yeah yeah. Well we’re going to be talking about our documents. It’s the only way to let somebody know what you want. If you’re incapacitated or a deceased is by putting it down on paper. So we talked about management issues during your lifetime. I think if you become incapacitated we’re going to talk about why our financial manager power of attorney and why our health care record and we talk about distribution I definitely hear talk about why you have a will and why you have a trust.
Now first thing we’re gonna do it we’re going to talk about estate planning is defined what is in the state. Everything you own. The prices all these categories of assets and there are several others like business interests and things like that but these are the big ones. Now some people have a lot of real estate. Some people have a lot of investments. Some people have a lot of money and foil in case. So people have a lot of personal property collectibles. Everybody’s estates different. So you want to go. On. To Legal Zoom and do their cookie cutter deal.
Best wishes. OK. I’ve cleaned up their stuff too many times. OK. And so the idea is everybody has their own estate. So you want to plan for yours. OK. Now. First issue to deal with distribution issues. Who gets what. Well it’s understood if you’re married and you die everything goes to your surviving spouse. But then the issue is what happens when the surviving spouse dies. Or in the case of an unmarried person. What happens when they die first issue tangible personal property your stuff gun collections jewelry tools whatever.
Everybody thinks the big fights and families are over the money. So. It’s often the stuff. Mom only has one diamond ring engagement ring. And I got two sisters. Who. I’ve seen families where they fight they don’t talk to each other for 20 years about this. It’s like the diamond ring it’s like Solomon with the baby you can’t cut the baby out. He goes one way or goes the other. Way. Funny story.
I have. To do a lot of work for San Diego Police Department and. Long. Time ago Dave. Dave and Tina came in to see me. And to give you a visual on Dave. He’s about six four. To 30. Motorcycle cop with the big black leather boots de short really crew got gray hair the sunglasses the helmet. I mean this guy pulls you over. He’s not the cop you’re going to start mouthing off to. This guy is. Yes sir. No sir. Whatever you say sir.
So I’m sitting there talking to him about spoiling K. and his house and all this stuff. And he goes Steve but that’s not what I’m most concerned about. And I’m like OK. So my next question is OK. Dave Well what is it you’re most concerned about. I see you can see how intelligent they might get. OK. Now he looks at me straight in the face and says. My partner does. The only thing that came out of my mouth at that moment in time was come again and my natural intelligence. There you go.
OK. Well it turns out he and his wife were big collectors of Barbie doll stuff I guess late 60s 70s. He was only 500 of one outfit or a thousand of one particular doll. And these it’s this is big business. I didn’t know this you have dolls everywhere. Twenty five thousand. Not. So they have this collection worth probably a hundred thousand dollars. And all of your kids are anyway. So they’re afraid that kids kids are gonna start fighting over all this stuff. So.
So the trust itself was a nice simple trust except for the one who listens said this is good this outfit goes here and that one goes there. And they put it into my office like every four years update now list as they keep buying and selling stuff. But that’s what they’re most concerned about. Okay. All right. Real estate investments. I really prefer that you do if you get kids equal shares. Or if you don’t have kids or you have kids and you have other people you want to leave it to percentage here percentage their percentage your percentage there.
I get really nervous when people start saying I want to leave. The Washington Street house here did this to him and the avenue Adams Avenue house to you. OK. Because what happens if you sell that Adams Avenue house and you buy home and real estate property. When I die what does she get. Nothing much you know we don’t own heirlooms anymore. So what are you going to do. You got to go back to the lawyer and amend the document over and over and don’t get me wrong I like repeat business I like clients coming back to do stuff I just don’t like it when they’re coming to me unnecessarily.
OK. Now if it’s like the Wisconsin dairy farm that’s been in the family generation Fred for 27 generations and you want to leave it to her. I’m all for that. But if you have stuff that is basically generic you know like a piece of real estate this or that. I’m a lot happier if you just use shares or percentages because it doesn’t matter what you have when you die. We just add it up and we value it and we allocate it and that’s how it goes. It’s nice it’s clean it’s simple.
And the big thing you got to remember here is if you give someone a reason to sue. They are going to sue. And so what I’m all about is setting this up in a way to limit litigation. That’s the big thing. I’m very happy when people come in we administer it. There’s no hassle and it’s done. I love it. OK. No special needs concerns. That has to do with. Down syndrome. You know other forms of mental retardation physical disabilities quadriplegics all those kinds of things.
OK. What special needs basically means. Is welfare. We’re talking about Social Security disability otherwise known as SSI and Medicare. OK. Those are welfare benefits. You don’t like to call them that. But that’s you know. Really what they are. You have to be indigent in order to receive those benefits. So you if you’re a beneficiary of somebody who’s a state and they die or you are you still indigent. Guess what happens to the money.
It goes to places you don’t want it to go. So you can set up what are called special needs trust. Basically the idea is I leave the money for the benefit of the beneficiary subject is rules and regulations and blah blah blah. The idea is you didn’t give it to them you gave it for them for specific purposes that are allowed under the law. That’s the way around it. That’s a whole different class. And I could go into it for an hour and a half but just suffice it to say if you know people with special needs kids. They need to feel like.
OK. Multiple marriage situation this is your Brady Bunch deal where he’s got three kids and she’s got three kids we get together with Alice and Tiger and everything’s all wonderful and when we’re both gone everything goes out equally to all six kids. Then what happens. If she dies and he finds kids wonderful number three. And what happens to her kids. Who knows. If anybody’s telling you there is a perfect situation to what’s called the Blended Family which is the nouveau riche name for for the.
Dog kids from both sides on second marriages. There is no perfect situation. There just isn’t. You can lean heavily towards protecting the surviving spouse will be heavily towards protecting the kids or whatever but there just isn’t a perfect solution. That’s the kind of thing where you come in I give you the information you go home you talk about it you make a decision. OK. People say well gee that kind of stinks. What would you rather the other thing is you didn’t even do anything and planning and then something happens to you and what happens to your kids.
OK. That’s why if anybody’s telling you this stuff perfect. It’s not. All you’re trying to do is just do the best you can and make the best decisions you can at the time. OK. So next puts. OK. Next question. When do they get. If you don’t do anything in advance everything jumps in the probate court.
Kids get it when they turn age 18. I don’t know about you but I’m just not the sharpest financial song in the shed. When I was 18 years old. OK so what you want to do is set up age restrictions and sharing scheme. When an age restriction basically says. Is for example until you’re 25. You need money for school. Down payment on starting a business. Whenever. Trustee has discretion you give you money for those purposes. But in terms of handing you ten thousand dollars to go blow on the craps table in Las Vegas.
Now. Then you can decide whether they get it dollar 25 where your tier for instance. Quarter or whatever it’s worth the 25 quarter or whatever it goes to a 30 balance of 35. There’s multiple variations on that but that’s the basic idea. OK. Why do that. Well number one you get multiple shots at the money. If you give it all to one in one shot and they lose it. No second chance. And generally speaking people become more financially astute the older they get.
So the idea is give it to them as they age and they’ll do better. Also it will protect against an early marriage early divorce. There’s a lot of times what happens is people will take the money. Which by the way just so you know most people don’t know this but. Inheritances are the only exception to the community property law. The only property means all assets acquired during marriage so the day you get married your paycheck becomes community property. Inheritances are the one exception to that rule.
You get an inheritance it’s yours not your spouse’s unless you put it in the joint bank account. Or unless you mingle it with other investments. So let’s keep it separate. It stays yours. But what happens is they get married young they get convinced Oh honey let’s do this and blah blah blah and then. Poof divorce comes in not. Bagels and money. OK. It also protects against creditors when the kids are young too. Because if they haven’t reached the age that too right they haven’t achieved much the attained age to get the money. Creditors can attach it.
So lots of reasons to do that. OK I got some custom stuff that people like the police officers made me do the drug testing stuff. So I designed that for them basically just dirty. You get no one. There’s variations on that like doing rehab and all that but most for the most part my non law enforcement clients don’t like that unless they have a kid with a drug problem and then you almost have to put that provision in because if you had the drug addict a bunch of money they’d kill themselves. Major. In. College.
And a lot of people that are very adamant that they don’t want their kids to become the late great Christian Brando. I mean if you remember who Christian Brando was. Hey Marlon Brando’s kid big trust baby. Didn’t do anything when his life and finally died of a drug overdose. Most people don’t want that for their kids so they put in provision that says free if you want your money at 25 I want a degree. How do we know money. Still get when you get older but. That’s if you can do variations on that too.
But he said that’s the stuff that the people like for customs stuff. Now next as a result of planning you’re going to decide who you want to fulfill the various job responsibilities. Probably the most important one is guardians of the kids. We’re going to take care of. Health care agents who’s going to make health care decisions for you if you can make them for yourself financial agents who is going to manage your finances if you’re incapacitated. Who’s going to run your trust when you’re gone. If you’ve got to go to probate court who is going to be executor of your will. And if we need to do a conservatorship which I’ll explain shortly there’s going to be a conservative.
Now I’m going to go through all of these as we go through the documents that don’t feel like telling me all this stuff but it doesn’t make sense. Well. That’s. The basic point about this is you have several different jobs to fulfill. The. One person might not be the right person for all of us. For example in my family my is a registered nurse. She makes the health care decisions for Mom. Mom can’t do that. I’m the financial person so I run the trust. Fund. Another thing I want to point out.
Is that. As I’m going to show you trust to private. There’s no court supervision which is what you want. Trying to keep the government out of your business. So a lot of times people say well I want my sister to be guardian of the kids and I want her to be trustee of the trust. The problem with that is you have the same person taking care of the kids it’s guardian that’s watching the money. You don’t have any system of checks and balances there she could just as easily use that money for her kids as she could for years. No disrespect to anybody sister.
But. As we all come to know. Money changes people. And big money changes people big time. OK so I’m an advocate of having the person that takes care of the kids be different from the person who runs the money. OK. That way you have the person who’s taking care of the money. Watch what’s going on with the kids. And you have the person who’s watching the kids watching what the trustees doing with the money. It’s really a good thing to do. I just I’m very conservative in that respect. Some people have overridden that. I want my sister to do it.
Fine as long as you’re informed. About what the risk what the risks are. You want to go forward with it. I’m fine with the. Integration with financial planning tax planning and assets structure. This has to do with retirement accounts for one case IRAs annuities. All of those things. They’re what I call problem children and estate planning. And the reason is is that while you contribute into these assets the IRS is not getting paid. And as we all know.
The IRS always gets paid. So you’ve got to be careful when you’re dealing with your in case. I’ll talk about that a little bit more later in in the seminar. Liquidity for survivors. This has to do with life insurance. You can have the greatest set of documents in the world but if you don’t have the money to take care of your family if something happens to you. The documents are worthless. My dad had a bunch of life insurance. That’s why I’m here. That’s also why I’m in the insurance business because I was watching what other people were doing to my clients.
I like it. I got my license. OK. So. In any event I don’t care whether you get the cheapest. Term insurance out there. Just get it. OK. Because I have seen things you know people say you know oh nothing’s going to happen to me I’m in perfect health. Yeah you are in perfect health and kill it till you came driving down from Verona and some drunk killed you. You ever notice it’s really nice people to kill baby kill by the drunk drivers. Ok so the bottom line is make sure you take care of yourself.
And you feel. OK. It clearly helps to avoid conflicts delays and expenses the big ones are gonna be probate court costs of attorney fees. Why bother. Well good news if you planned in advance you get to take action and reap the rewards. That is you don’t plan in advance. You have to react and suffer the consequences. I get phone calls like this on a yearly basis so-and-so died. We don’t have any money to pay the gas and electric bill we don’t know what we’re going to do we don’t know what you’re going to do. We don’t know what we’re going to do. And they expect me to have like all the magic interests and I don’t.
On the other side. Four years ago I lost one of my best friends. And she is a wonderful lady you know. And. She had four kids from her first marriage and then a second husband and kids and the second husband didn’t really get along on that one. And. She died at age 51 from colon cancer. She had all her ducks in a row. I mean nothing was locked up tight. We did everything at her dining room table. Her sister was the successor trustee.
We dealt with the ex-husband. The kids were all taken care of and the kids. Three of the kids now are over twenty four years old they own a house up in Temecula. The youngest one is just finishing up college and is looking forward to buying his house too as soon as he gets a job. The second husband went back to Arkansas. And he’s sitting on his house and his leg is fishing every day doing whatever he wants. There was no government involvement. There was no arguing there was no fighting. There was no litigation. There was no nothing. Everything just went nice and smooth.
That’s the benefit of doing what you’re doing now you’re not good enough. But your family. OK so now let’s talk about California probate system and state not federal state specific. Every state has their own set of probate rules so what goes on in New York New Jersey or Nevada. I have no idea. I’m licensed to practice in the state of California. OK. So if you move there I have no idea what to tell you about what’s going to happen you have to consult an attorney there when I can tell you is this from what I’ve seen in California documents travel really well.
Please find him. From everything I see. OK. Now. He goes You live in California. And you are a resident of the state of California. You are subject to the just to the. Division of the Superior Court of the state of California. OK. Now if you get a dispute with somebody you go to the civil division car accident real estate dispute employment dispute. Divorce a custody go to the family division people that get arrested go to the criminal division.
And then the division that we’re going to talk about is the probate division. Everybody always wants to know what is probate. It’s a courtroom. What is the purpose of the probate court is to protect legally incompetent parties deceased disabled incapacitated. So if your loved one or you or one of those three you or your family goes and sees the probate judge now. First thing everybody wants to know. If my spouse died doing I’d go for it. He answered No.
If you’re married and you ask this to be the community property which is all property acquired during marriage or hell in the form of ownership called Husband and wife is joint tenants. There is no probate at the desk for a spouse. That obviously begs the question why is probate necessary in the first place. And the answer to that question. Really. Has to do with a concept that I’ve turned signature authority I’ve never heard anybody define any any more clearly in that so I just picked signature authority.
If you think about it. There’s two ways that you could voluntarily transfer your property from you to somebody else get to the end and offer like a man and a. Woman. The clicker. When. You say no. Right. Nobody says wave and minute what about point and click on it. That’s an electronic signature isn’t it. You check the little boxes as I have agreed and blah blah blah. So when you sign your name what exactly are you doing. You’re voluntarily transferring something from you to somebody else.
And transferring money in return for goods and services like at the grocery store or the electronic store or whatever. Well you’re transferring services in return for money. Like here at work you probably sign an employment agreement somewhere along the line so you get services they give you money. Where that all happen is you sign your name somewhere. Whether it’s a check credit card slip purchase and sale agreement whatever what you did when you sign was I hereby voluntary voluntarily transfer this in return for that check.
Everything looks great. But if there’s no signature gift is that shit worth anything. No. That’s what binds you your signature. So always keep that in mind. That’s why everybody says it’s not a done deal unless. You sign on the dotted line. OK so that’s voluntary transfer. Let’s talk about involuntary transfer. But when the state can substitute their signature for years and transfer your assets without your consent the only one who can do that is a superior court judge by his or her signature on a court order.
I’m sorry. I want you for my team my team. So my team driving down the road. Runs all the well. Mr. and Mr. Motorcycle. Mr. Motorcycle gets upset gets hurt. Goes to the doctor then goes sees the personal injury lawyer. Personal Injury Lawyer sues my team. Judge says my team it’s your fault. Hey Mr. Motorcycle ten thousand dollars. Well what does Martin say. She says it was not my fault. I’m not paying a dime.
You do that show up. OK. So what can the little Mr. Motorcycle do. Well he can get a court order signed by the judge to either garnish your wages or levy her bank account. What a court order is. Is a piece of paper signed by a judge. That piece of paper signed by the judge shows up at payroll here and what do they do. They take the money out of her paycheck. And give it to Mr. Motorcycle. OK. So in effect what happened the judge’s signature was substituted for her is to move the money to live up to little Mr.
Motorcycle. Student. So we know if the way you voluntarily transfer property is by signing something. And we know the only way property can be taken away from you involuntarily is via a signature on a court order. I have a question for you. Have you ever seen anybody in a coma in a casket sign her name. Probably not. Good morning Alina. Welcome to the probate court. I’ll get away by tells you probate is nothing more than a really cumbersome. And overly legislated asset transfer procedure.
The bottom line is you can’t sign for yourself and the only one who can substitute for you is the judge. That’s why back when we talked about community property a joint tenancy. There was no probate at the death of the first spouse. Why. Because when you’re talking about community property and joint tenancy how many signers are we talking about. Something happens to one. Survivor can still sign. But now we have a single person there either I’m married divorced or widowed and they can’t sign. Now we need to judge.
OK so everything I’m going to talk about from here on out is talking about putting documents in legal entities in place so you or your family doesn’t have to go see the judge. So. First thing. Well let’s talk about incapacity and disability. You become incapacitated. We have to go to court and get a conservatorship appointed over a conservatorship of the conservator of your person. Means who takes care of you physically what doctors you go to where you live.
What clothes you wear et cetera conservator of your estate is who manages your money. You can have two separate people one for the conservator for the person and one for the conservator for the estate. Breaking out one person do both jobs. It’s a matter of personal choice. Follow this conservatorship. They’re expensive. OK. In court filing fees and investigative fees right at the beginning you’re talking 50 young bucks. We did not even include talking to tournaments. OK. Get in the system. OK.
That means the wheels of justice turn slowly in this county we use debt for probate courts. Then it went down to three and because of the budget cuts they just closed the North County Court probate court. And we’re down to two judges. That are doing the job that four judges used to do. So if you think court gets delayed before you were dealing with this. It’s even worse now. OK. And it’s emotionally traumatic. You’re basically traipsing mom in the court telling the judge Mom’s incompetent.
Mom’s not going to like hearing. I don’t know if any of you have ever had any experience with people suffering from Alzheimer’s and dementia. But one of the first warning signs is anger. And you start talking about taking away their freedom and doing things for them. And look at you step foot in a conservatorship in the middle of this. It is not a fun place to be. I don’t know any kids that are conservators of their parents then enjoy it.
OK. It’s just not a good place to be. So the way you stay out of this is to do the two documents I talked about beginning and if you look here on the right inside the hand up there right there. By the way the handouts I think are the important handouts for you to take away that hopefully jog your memory when you. Back. Yeah yeah. First off it is called the drove a private journey for financial management otherwise known as a CPA. OK. What is path journey of attorney says I get my team the right to sign my name.
That’s what. Our attorneys. Right. Now. First thing you want to know about the power of attorney is. When I die. It dies with me. You cannot have power of attorney for a dead person because they have nothing to give you at that point in time. I hear it all the time. Joe had power. Joe died but I got power of attorney. Now. When Joe dies we look to his will and his trust to see what to do. But while you’re alive powers of attorney are very used. Now. There. Is that magic word of a different durable.
Because a regular power of attorney in order to be effective has to have two things. Number one when I do it. I’m competent. And I’m alive. But if I become incompetent you can’t even do a durable power of attorney. You can only do a power of attorney when you’re competent. OK. So that’s why you want to do him in advance and might getting sick. So that first thing is is that I have to be competent and I have to be alive. But if you have a durable power of attorney.
The only thing that matters is is it when I did the power of attorney I was competent. If I gave my team back durable power of attorney and I later became incompetent to power of attorney still good. If it’s durable. That’s what’s different from a regular power of attorney when I’d go incompetent it’s gone. That’s why the courts put in the legislature put in the durable power of attorney law. So as long as I was competent when I did it. And I’m alive. She can use it doesn’t matter whether I have Alzheimer’s a quadriplegic whatever. Now you can make a power of attorney general.
Which means you do everything my 401k came my checking account my house my life insurance. My personal property whatever. Or if you want you can give somebody unlimited power of attorney which means you can sign my checks and that’s it. You. Can’t touch my house my flow and cane. Hey. You can have an effective today. So I give you power journey right now. You go to Las Vegas right now and get a limo. You beat my wife. You. Mentioned Manhattan. All right.
Or you can make the power of attorney springing which means a name you today. But you can only sign for me if and when I become incapacitated. And then it springs into action. That sounds like a really wonderful thing isn’t it. Yeah. He had signed me until I got. What’s the problem with that document. How do you determine income. I have seen these ones that have getting to doctor’s declarations.
And you get your doctor on phone. Maybe. OK so the problem is is that the determination of incapacity because he even like mine I have one that says you. I did three people say thank you you and you and plus my treating doctor. I call it the Gang of Four. If two of you say I’m incompetent then she can sign. But even that’s difficult because the banks look at the declarations where they notarized were they not notarized is who you know.
OK. And while this all is going on she needs to get to the bank because the nursing home needs a check to get me a check in here. And the nursing home isn’t saying well you know that’s fine we’ll take your mom now and you can give us the money next week. No they want my cash on the back. So. That’s why there is no perfect solution for this and the risk of fraud and abuse is huge with this you’re giving someone the right to sign your name. OK. All right.
Elder abuse is the second fastest growing primary United States second only to identity theft and it’s a most disgusting crime around. Them. Because usually the victim and the perpetrator know each other. And the victims don’t want to come forward because that’s the only person that’s taking care of. And when you get elderly you could feel like that you’re the you know the abusers. One of the things that abusers do. Is they try to get the victim to feel like it’s their fault.
And that’s what happens when seniors get old they get frail and they’re afraid and they don’t know what to do. OK. So I think it’s like I heard statistically about over 60 70 percent of elder abuse cases never get prosecuted. Either because the victims don’t want to testify or the D.A. office doesn’t have the resources to prosecute all the cases. So you got to be careful. This is just a really dangerous document. But if it’s drafted properly under the guise of an overall estate plan.
It’s good it’s a good thing. Now on the medical side. There used to be an old of health care power of attorney and the separate living well everybody’s heard of those who don’t know exactly what they are but they heard of them. In California. Excuse me they don’t exist they were consolidated into the advanced health care directives in 2001. I just called the Medical Director it’s easy to remember. So what is it you did with your dad. It does what the old two did and adds a few things. First thing healthier aging. I can’t make health care decisions for me.
You make them for me if you can’t then you and if you can’t then well I’m. OK. Yeah. Life support. Do you want me in it. Do I want to be on life support or not on life support. I have seen people write three page diatribes about well if this happens and I’m in a coma and this happens but if it’s a one in a general condition if it’s just kind of condition blah blah blah and I just look at him and I go What. Because last time I checked nobody knows which what’s going to happen to.
You. OK. And I’m very pragmatic. I’m sure as you can all tell I’m kind of in nuts and bolts guy if you can’t explain it to me in three minutes or less I’m interested. OK. And so this is the way I see the document. You either give your agent discretion when to let you go. Or you don’t. It’s that simple. The whole question is do you trust your agent. I mean I’ve done over got I don’t know 12 15 hundred medical directives I can’t remember more than five times where people said I want to stay on you know people said keep me on life support.
Everybody is they trust their agent and they let them decide when the right time to go. If you don’t trust anybody. Don’t do. That. Now pain management. I don’t quite get this but it’s in the document and what it says is you can restrict pain management techniques if I’m terminally ill. And I’ve never had cancer but from people I know I’ve talked to that have cancer they said it is extremely painful. So I don’t know anybody that’s going to restrict pain management or terminal illness but it’s it’s there if you want to.
Last thing is organ donations and this is a two part question. Question one is do you want to donate all some or none of your organs. If the answer is always some then question two is for what purpose. And therefore. Transplant pretty straightforward take money you give it to somebody else to save life. Number two is therapy. And I think what that has to do with is bodily fluids like blood. And things like that for therapeutic kind of purposes. I’m not exactly sure I never really got a straight answer on that. Excuse me.
Number three is research that puts you in the university lab in the university laboratory with Al Gore. Anybody remember that movie. You know what movie frontiers from any of Frankenstein. Value. OK. And number four is education that sends you to med school to be a cadaver. So people are OK with transplants some people are okay with all of them and some people say I’m alive. Do any of it at all. Bottom line is it’s your body you decide.
Because it’s at the hospital when mom doesn’t have a medical directive. And they’re telling her they’re telling the kids it’s time to shut the machine off. Then they come. I ask him Do you want to donate organs. That is a terrible thing to have to have your kids figure out. Absolutely terrible. So make sure you decide. OK even if you don’t want to hire me or any other lawyer you can get this document online and do it yourself. OK. So if you don’t want to do your whole estate planning at least do this and maybe give your family a whole lot of.
Peace OK. Yeah. Let’s talk about what happens when these the surviving spouse dies or in the case of an unmarried person when danger. If you grows both able estates less than 50 grand. So many administration piece of cake. If your gross estates more than 250 grand full blown growing. That obviously begs the question what is gross and why is probative only. Gross is where everybody gets caught. GROSS Me means we add the value of all your stuff but you don’t the doctor gets.
Why. Because we’re trying to figure out whether you’ve gone a little court. Or. Big cork. So if your house is worth five hundred grand and your mortgage is 450. Your net worth is 50 what your gross probate value. I. Think that’s why I always tell people generally with some guy 250 grand or home get a trust with probate and which means basically is the asset doesn’t have a beneficiary designation like life insurance and for one case.
Because if it has a beneficiary designation on it it’s already set up with the insurance company to pay it to whoever you need to go to. Probate able assets are basically cars. Bank accounts real estate investment accounts. Business interest personal property those kinds of things and I’ll talk a bit more about probate of all assets as we get into trust funding at the end. But the basic idea is if you own a home big 150 grand in investments. You want to get a trust. That people try to tell you it’s more complicated than that.
Right. Now. Next question. Did you do a well if you did not do well then you what’s called interesting which means you did not exercise Testament through capacity. Just a memory capacity means I decide where my stuff goes when I die. You do it in one of two ways you do a will you do it trust. You haven’t done either one in the state line of intestate succession kicks in through the probate system. If you didn’t do it well then we administer it well through the probate court. That brings us to this number two. I am say my estate will not go to Rob a.
Bank. All wills go to Brody. Only question is are you going on a little court a bit quiet. Why. What’s a little. Piece of paper Sunday dead person. They all say last will and testament. But how do we know which was the last one in which was the first one in which was the third one. All wills have to go to court to be proven out. I can’t take my genes well down at Wells Fargo and say give me her money because what do they say. Sorry I need a.
Friend. So. If you didn’t do anything and you go through the intestate succession succession statutes which means you didn’t control your distribution you did not nominate guardians for your kids which is a big. And it’s generally more costly because a lot of times we have to get investigators involved to find out where your stuff is or forward the mail and wait six months. All kinds of stuff. If there is one reason where I really say to a will.
If you haven’t. OK. Most people don’t realize this but if you want your best friends to be guardians of your kids. If they’re not nominated in a will. It’s not happening. OK. Family First then the state. So at a minimum you’re going to do a will and basically a Will says this. I nominate you as executor I nominate us guardian I leave my stuff to sell myself. That’s all it was losses. May put in their burial instructions if you want but that’s basically the long and short of what it will cost.
So. What happens in probing. Well. California we have probably the most complicated probate system in the United States. So what happens you go through the period your administration will file a petition. The original will with the court if people want to contest the will saying it was by fraud or. Somebody put a gun to your head to get you to make the will. That’s the time when you have will contest. If the judge approves of the will. He admits it to probate court and appoints the executor.
And the executor gets a quarter called Letters testimony. Nice fancy name. Oh it is just a court order authorizing the executor to administer the estate. So the executor does what you would think an executor does. They go get a tax I.D. number from the IRS. Open an estate bank account and start marshalling and liquidating all the assets. The guy sent notices to all the creditors to get paid and negotiate pay off all the debts and enjoy the appraisal of the assets which gets expensive.
And finally you do an accounting. And you submit the accounting to the court and the judge says OK I approved the accounting. And here you go kids here’s your piece of paper saying you own all this stuff. In return for the piece of paper signed by the judge here. The issue number one is a public proceeding. Anybody who wants to go your business can go to the court and pull your file. It’s public record. You may not care because you’re gone but you might want to care because the names and addresses of your beneficiaries and kids are in that court but.
There are unscrupulous business people that go looking for beneficiaries to sell them stuff and separate from the union money. OK. Now why do criminals do that. Why. Because they’re easy marks. They’re probably much younger. They probably don’t have as much experience with money. OK. And especially a lot of money and they’re generally acting on a lot of emotion because they just got here. So one of the nice things is they’re going to show you about doing trusts. And meetings right. That’s a big advantage.
Now it’s expensive the attorney and the executor get a natural fee based on the gross value of estate. So if your house is worth 500 grand I pick up about thirteen thousand. The executor picks up about thirteen thousand. And depending upon what kind of assets you have probably two or three grand in court plus. So if there wasn’t that much equity to begin with there probably isn’t that much money left over for the kids. And if there isn’t enough money to cash to pay we’ve got to sell off the house.
If you wanted the kids to live in the house and we need the money to pay the expenses the house gets sold and it’s time consuming it takes nine months to two years longer if contested. OK. And now with all the court delays it’s getting longer. I took over a probate that had been in the system since 1994. We finished it. We finished it three years ago I got it four years. Got to be here to clean it up. And. There was fraud misappropriation. I mean you could’ve written a move you could have you know it could’ve been a screenplay.
I mean this is unbelievable. But that’s what happens when this stuff ends up in the system. So you kind of want to stay out of it. So what do people do. They don’t want to hire. They’re going to do it themselves. And so they say you know what. I got three kids and I put my house into my oldest son Tony. Well so they do a deal transferring it from you know Steve Steve and Billy. Joint tenants. Sign the deed notarized it recorded it to county recorder’s office.
What did I just do. I just create a partnership didn’t it. So if I want to sell it and go spend the money in Vegas and Billy says no dad when you die I’m moving in who wins. Billy takes two to tango. Suppose Billy runs over a little old lady. You know what tough outs predators can go after them. And when I die Billy gets the house right now. I told him make sure he gives them brother and sister a third of the house. But what happens to the other two kids.
In automatic case of amnesia. Billy forgot. It’s not legally required to do anything. I call this one man’s justice a really and there’s capital gains problems with this but. That’s a discussion for another day two just to face it to say if somebody says put something in joint tenancy with somebody. We have. Now. So what we’re going to talk about now is the good planning and what it all starts off with a remarkable living trust is sort of like probate. You keep control of your assets which is what you want.
You want to maintain control of all your stuff until you die. And you want to keep the government out of your business. That’s the best of both worlds. Yeah. Everybody gets caught up in these words revoke of all or very vulnerable. It gets really confusing. But it’s not. What we lockable bull means is I can change it anytime I want. Well why would I want to change my trust. Well let’s say that I said you know what. Let’s assume I’m single today. OK.
And I say you know what. When I die I want all my assets held in trust for my kids and my team. I want you to be the trustee to take care of the money for my kids. Sign it notarized. Everything’s cool. Then click on line. Six months later I’m talking to Jennifer and Jennifer Stone. Hey you know my jeans doing really well out of Verona every night. So it is my trust is remarkable. I can do an amendment. That takes my gene out. And puts my friend Joey.
Unless there is a really good reason. You want your trust to remain re local. Irrevocable means exactly what it says. You cannot change. Irrevocable trust if a complex larger states and it generally involves tax planning to avoid paying the government a lot of money in taxes. OK. If people try to sell you on irrevocable trust you’re probably using for your sake. Oh so many could sue you and take your assets. And then every time somebody asks for example to me I say OK.
All right. Well what are you going to get sued over in the tobacco business. Are you running liquor in between interstate. Are you out shooting people on your front lawn. OK. Do you regularly drive drunk with a gun in your hand. When you need to. That’s usually I think you say well I have a rental property. OK. So did you quit your rental property in limited liability company or in corporation. What did you get a big umbrella liability policy from your property casualty person.
There’s nothing for you to really worry about all these irrevocable trust guys are trying to do is get your money. And create a whole set of problems with you that you’re not going to want. I’ve been practicing estate planning for 21 years I was a CPA before that. I understand all these schemes. They call them advanced estate planning techniques.
I call them revenue generation machines that have for the attorneys and the accountants because that’s always what happened when I started out I worked for a litigation attorney and all he did was two lawyers who pulled these games and what happened was lawyer would set this thing up and then two years later the IRS would put in a regulation shutting down what they did and guess what happens when the IRS shuts you down. Penalties interest and taxes. And very unhappy people. OK.
So when you do your planning you want to keep it refocus a while you’re alive. The only time you want it irrevocable is when you die. Because that’s my stuff when I’m gone. This is what goes down. And if you don’t like it that’s too bad. That’s the way it is. So that’s the big picture. OK. Now if people are telling you you trusted for better pension I already told you to go there for a statement. You have issues with creditors that’s what LLC is corporations and liability policies. Now. How does the trust work.
Well what we’re going to do is create a living entity separate apart from you that has the ability to carry out your wishes whether you’re alive or dead. If you think about what the problem is the solution very simple. Problem is. That I’m the only one who can sign on my stuff. So when I die everything I own. Is going to. Follow. Well if I don’t own anything when I die. Then there’s nothing to go to the probate court. Right. But if I don’t own it who does my trust.
See we’re we’re we’re all persons we’re natural persons. But there are other entities that are persons. Specific remit mechanical as a corporation it’s a person you work for you get a paycheck from it every couple of weeks. Then. Any liability company is a person. And. A trust is a person. So what are you going to do is you’re going to set up this trust this person. And it’s got to own your stuff.
Now you’re in complete control of it but you’re not it and it’s not you. Your two separate entities. So the idea is when you die it’s still around doing what you told it to do. That’s the big picture. OK. Now how does this all work legally. Well it all works because we’re able to separate your ownership interest and as you sit here today you have two kinds of ownership over your stuff. You’ve got the beneficial ownership. And you’ve got the legal ownership. There are so many attorneys don’t even understand this.
Hopefully you guys will get this and you’ll know something was done. Beneficial ownership means for whose benefit is my house. Oh my. I eat there I sleep there I drink there I party there I watch football games I raise my kids. But. I’m not touching the beneficial ownership of your house it’s your choice before you do the trust and it’s yours after you do the trust. What I’m going to screw around with is the legal ownership of your house.
The legal ownership means a form of title that you choose to use to show the rest of the world the debts your house. Well what are your choices. Well if you’re married I bet your house is either husband and wife his joint tenants. Or husband and wife is community property right. Or I could just as easily be Jennifer a married woman yes or someone separate property. Steve an unmarried man my teens Corporation. Rick’s LLC and then we’re going to add one more to it.
You know the Smith Family Trust. That’s the big idea. OK. Now how does this work. Well what I’m going to do is separate. I got to take him to the game. What are going to do is separate. What you do now into three separate job titles. So with regard to your house. You actually wear three hats. You are the owner of your house. The person is on record right. Right. And you are the manager of your house the person who signed on the dotted line whether it’s a kitchen construction contractor or a line of credit or whatever.
And you own and manage your house for the benefit of. Excuse me you. OK. Well guess what. In a trust there are three job titles as well. The owners of the trust are called the settlers. You’ll also hear the term grantor or trust or I like settler because it’s easy to remember because you suddenly have your family affairs. The only one that can change the trust are the settlers. So by definition when the settlers are dead there’s nobody around that can change the trust.
Then the trust becomes irrevocable so far. OK. And while you are alive you are also the trustee or trustees of your trust. Trust is a fancy name for manager whoever is trustee holds the pen and has a signature authority to sign on behalf of the trust. Why are we a probate quick. There was no one who had signature authority to sign right. OK. So while you’re alive your trustees of your trust and you own and manage your trust for the benefit of. Your.
So we signed this dress we know arise it is now now legal entity and then what do we do. We fund it. I I about trust funding in about five minutes. But bear with me. I want you to go to the last page your handouts. And you’re going to see it’s called the grant when you bought your house. So-and-so rented the house to you has been a wife these joint tenants has been away. It’s community property.
So and so as an unmarried person whenever we’re going to do another grantee and what does it say says John Ensign is the husband and wife his joint tenants hereby it’s ownership of the House to John and. Trustees and a public family trust gated blah blah blah blah blah. They sign this feed and we notarized it we ship it off to the county recorder legally we know everything’s all said and done. Who owns the house. OK. But who wants to trust. John and Sue.
So as far as the outside world is concerned is anything really changed. No. Before they were appointed as joint tenants now they own it in their trust. And if one of them dies it’s exactly the same as if a joint tenant died. If a joint tenant died where you got the soul of the surviving spouse owner manager beneficiary same thing surviving settlers surviving trustees value Minister Fisher. Why. Because the problem is not when the first spouse dies in it. Is. When the second spouse dies.
So now in effect when one spouse dies it’s now exactly the same as if we have an unmarried person who set up a trust. If you have a one person trust settler trust you. Beneficiary. So we created the trust. We put everything into the trust and then the trust as who gets it. You’ve got to go to college and you’ve got to do a drug test and love that. But the key difference in the trust is you name a successor trustee. So for example my and my wife and my mind says we’re co trustees something happens to one of us to survive as the sole remaining trustee.
If both of us were gone then my sister Marlene becomes the new trustee. And. Someone both of us died. What happened myelin becomes a new trustee. She’s the successor trustee. OK. That’s the big difference. What happens. When they do. I just handed the chosen pen to my sister Marlene my chosen fiduciary successor trustee has what. Legal signature authority do exactly what I told her to while only a probate court. Because there was no one around signature authority.
We just created a trust where the successor trustee has signature authority and therefore you don’t need a court order. There’s no filing there’s no public disclosure. Privacy means Jack administrations quicker and easier and it’s tens of thousands dollars cheaper. So what do we do. We said while we’re alive we’re certainly as trustees beneficiaries when we’re both gone. No more settlers trust becomes irrevocable. We say to the new trustee is which is my sister. And who the new beneficiaries are. Make it.
Make sense. OK. So we put everything in the trust then we die everything goes to the kids except for what we’ve been talking about the state of California for the last 20 minutes who if we forget. Your friends in mine at the Fed or at the IRS. So they say when you die we want death tax. They call it the federal estate and gift tax system it’s death tax. To wealth accumulation tax and it’s based upon your net worth. And people don’t realize this but networth includes proceeds of life insurance people say no I’m not saying.
You’re wrong. Life insurance is tax free isn’t it. Yeah. Income tax. None. Death tax free. So they say Oh that’s great that you play it for your family and when you get one. Ten years ago and the letter was six or eight thousand per person. It was a big problem but now the limits 5 million per person. So go get all the insurance you want and how much you need to get. Now the estate tax system includes any and all assets the estate tax goes incredibly complicated.
So if you think you’re going to give away stuff six months before you die. They look back at all transfers within 36 months it’s just that if the estate tax goes like this thick and the red internal revenue the income tax code is like this. Why. Because there’s a lot more money involved. He got rich people with lots of lawyers and they fight. And they lobby and they get all the laws passed one day. So it used to be. Yeah. Now it’s called the Navy trust and I’m just gonna go through this kind of quit seeking idea get an idea how sneaky people were 35 40 years ago.
Let’s say you guys are married and your net worth is 10 million. That means under community property law five million it’s hundred five million is his. Right. OK well if I get 10 million my wife and I have 10 million and I die I leave everything to her. She’s got 10 million. And then the exemptions five million. So that means 5 million go straight to the kids and what happens to the other 5 million. It gets taxed at. Now the rate is 40 percent.
So what you used to do back in the day was set up a Navy interest. So what happens is everything’s in one big trust. Then when the husband dies. His money goes here and the wife’s money goes here. Then when they both die. When the white dies. Everything goes to the kids. So basically what happened was the husband left his money to the kids but it’s in trust until the wife dies. So the wife has used this money. There’s restrictions on it and stuff. But the idea is her husband left 5 million to the kids.
Wife my 5 million kids kids get 10 million IRS gets nothing. You don’t really have to do this anymore because they have this thing called portability which the rules are giving me a headache on right now. Stay tuned. It’s I get it people say well what what do you mean by that. I’ll just wait till Obamacare kicks in and you’ll understand. Now trust funding trust is only as good as what you put in. If you failed your fund your trust it’s useless. This is where all the mistakes are getting paid. OK.
I have people coming into my office with these beautiful. Leather bound notebooks and parchment paper and. God. It looks beautiful. Like how much you pay for them. Twenty five. Oh. That’s a case. Can I see the deed to your house. To your parents house. The what. The deed. See if your assets are not in the trust. Where are they going. OK. I get more trust.
I get one probate now for people that didn’t fund the trust than I do for people that didn’t do documents in the first place. Why. Because nobody ever teaches anybody what to do. OK. A lot of lawyers mentality is keep people in the dark. You make more money. OK. I know that sounds kind of mean. But that’s the way a lot of people operate. I have an empowerment mentality which is the more people I educate the more people prefer. That’s what my thinking on it. OK. So what happens is. You have all these different kinds of assets.
And you’ve got to figure out how to get them into trust. And it gets confusing. So when people get confused what they usually do. I think. So what I did was I boiled it down to one question. OK. And that question is. Whatever asset you’re looking at. The question is does it have the beneficiary designation on it. Yes. If it has a beneficiary designation on it you modify the beneficiary designation.
If it doesn’t have a beneficiary designation on it you’ve got to change a name on the ownership. And first of all what is the beneficiary designation beneficiary designation is a contract between you and a third party custodian. Life insurance company for one custodian IRA and you any company whatever the contract says that when I die they pay the money to whoever I listed on the beneficiary form or receipt. OK.
Well if there is a beneficiary named when I die. We can’t who owns it when I don’t know. The only is relevant when I get it. So why all these assets falling into IRAs in movies like The jury is going to give the accounts. No you don’t have to change the ownership. All you gotta do is play with one simple form that takes five minutes to fill up. You can even do it online. A lot of the companies have things we can change beneficiaries online.
The big thing is just not educated who you are and so you have to print it out. You got to put it in a number general envelope and you’ve got to get your priest to swear by it. Put it in the mail and then everything’s wonderful. But in the big scheme of things that’s about as difficult as it gets. OK. So what do you do with beneficiaries. Well normally there’s two. Primary contingent primary beneficiary wins by guy who gets being contingent means you’ll also hear the term alternate a secondary beneficiary means the exact same thing.
That means if she’s dead who gets it. She does. OK. So what do you do when you have a trust. The short answer is keep the spouse as the primary beneficiary for everything. I get arguments was about this all the time but just do it. OK. Because it’s simple spouse gets everything and if something happens to the spouse make the trust the private the secondary beneficiary the contingent beneficiary. The idea is lawyer alive maybe keep everything together.
And if something happens to both of us and everything defaults to the trust it’s the easiest way to do it. There are some problems with borderline case an IRA is if you send it to the trust rather than to the kids blah blah blah but hopefully they’re going to fix all that stuff in the next couple of years. But I would just assume you send everything to the trust because people say well if I send it to my kid my kid 20 years old he can blow on the money. Yeah. Because the idea is if everything defaults to the trust then the trustee is taking care of the money and that’s why you did the whole thing in the first place.
Right. So what about the stuff that doesn’t have the beneficiary designation. Real estate investment accounts bank accounts personal property kind of change in name on the ownership of real estate deeds. I do this for my clients all the time. And what you’ve got to watch out for is if you refinance. Why. Because the banks don’t like loaning money to you trust they want to loan it to you. So they make you do a deed reverse things. So U.S. Trust easier by grants to US joint tenants.
They report that and they record their new mortgage otherwise known as a deed trust to California. Then you would think they would be kind enough to do another deed just like this. Pretty good backing you know iconoclasts let the trust for 20 years ago to do a review. Can I ask a stupid question. Is your house still in your trust. Of course it is. I wouldn’t. What did you refinance. Oh yeah like four times. First time it was like six and then there were five and this last time with three and a quarter and no closing costs.
And then I go online and I look up and I see sure enough he was taken now. There wasn’t one going back in in the face of just go away because what happens when you’re asked how you’re signing like 72 documents in 45 minutes signing it. I just did what I’m a trustee of the trust for one of my clients have passed away. I’m selling the house and I’m like I’m like I don’t even understand these disclosures and I’m a lawyer. And you’re sitting there it’s so easy to get in front of that cycle thank you very much.
Next document. But that’s what happens. So I always tell my clients if you refinance just call me I’ll walk you through it. OK. If you’re not my client you want to call me. I call him. OK. All right. Now investment accounts mutual fund brokerage Internet accounts. What usually happens is you have to go online and open a trust account. They have individual accounts joint accounts and trust account. You’re going to open a trust account and they’re going to say what kind of trust we’ve got. And then you threw all the information in and that’s it.
And then what you do is sign an account transfer for. What the account transfer form does is it moves it money from the joint account. Over into the trust. I like to put it like this moving the money from one warehouse to the other warehouse. Because there’s no capital gains involved there’s no taxes. All you’re doing is changing it from one warehouse to the other cabinet from all joint and you’re putting it in the trust extensible. On bank accounts. It’s going to change name on the account. Do you have to reorder checks.
No I don’t care what the checks is. Most people all get a check from the oh trust me. So I don’t care if you try if your checks just say Joe and Mary Ellen or Joe or whatever. That. Means nothing. I think it matters to me is who’s on the banks. Right now. Last question. Do you need. Well if you have a trust the answer is yes. It’s what’s called a. If nothing’s going to probate you don’t really need the will for anything right.
Well the main purpose of a will when you have a trust is that the document nominates the guardians for the kids. Some attorneys want you to nominate guardians in the trust and that is just like felony stupid. Because the document nominates the Guardian test to get filed in the court because that’s what the judge refused to make a legal determination on guardianship. So if you need it in your trust you have to file your trust with the court which means you just took you five private family trusts and turned it into a public bank.
So you haven’t very simple for what will I call it a skeleton trust that basically says Martine I named you as executor. Jennifer I need you as guardian and third I leave everything to my trust if I screwed up and didn’t put something in it like I was supposed to. Take. It For. And. Give it. I would do it to everybody okay from another five minutes. Yeah. OK. When I first started I had a really wonderful couple and they had three kids. They had two lovely girls.
And one son as I call him charles manson Junior. He was doing change up serious. He was doing 10 plus state prison for armed robbery and all kinds of stuff. And mom and dad were like not cool. So they left him 10 grand and everything else. And then as I found out a couple of years later they bought a condo up in Mammoth because they really liked it up there. They didn’t put it in their trust. It just printed joint tenancy. They forgot about it. And mom died and Dad died.
The girls came to me in a panic. They got stunned and trusted my father getting it third. And I said Can I see your mom. Well. The say well I did. Still good. Everything. What is the will say. As a mom leave everything in my trust. So we did a probate up in the county where mammoth is final result was the judge signed a court order that said the trust owns it. So that’s why you do it it’s more of a well it’s kind of like a failsafe. So I trust finding you trust is either going to be the beneficiary or if you screw up will get it via the will.
What’s the problem with using the well. Let’s go to probate which is what you’re trying to avoid in the first place. So last thing. What are you going to do about ways. He got a discount lawyers and good luck. Hey you go to the big firms downtown and they’re gonna get you for big money. They just. Sold those like me if you wanted to win. I run specials all the time. And. I don’t know I think I think reasonable day’s wage rip for a good job is worth it.
You can do it yourself but the problem with you when you’re on estate planning is you’re not going to know if you screwed it up. Your family. Yeah I know. So some people do their own bankruptcy. Some people do their own divorce and what’ll happen is acquittals say you screwed this this and this up. Fix it. You don’t have that opportunity with the state leading because you’re gone. So I think if there is really one time where you want company representation. It’s an estate planning. Malpractice insurance. Most people don’t realize this in California.
I know it’s really consumer oriented state but there is no requirement that attorneys have malpractice insurance has that right now. So if you hire a lawyer and the lawyer screws up that lawyer didn’t carry malpractice insurance no malpractice attorney is going to take your cases. And I understand. I haven’t had any claims in 21 years and my malpractice insurance five thousand dollars a year. And I’ve heard my buddies go through this family vacation to Hawaii.
Malpractice insurance. What do you do. OK I pay my malpractice premium because I don’t want to get hurt. OK. And stop being like that check is a bitch. Hey it’s big money a lot of words charge a lot. Well that’s what our insurance. So you got to look at that. So what I always tell people is I don’t care if you’re hiring the greatest golfer on the face of the earth. I asked him what the name of the malpractice carriers. You notice I didn’t say. Do you have malpractice insurance. Why.
Because it’s an easy lie. Ask him what is the name of your malpractice carrier minds. Because if they tell you what it is. Maybe they. OK. Far be it from a lawyer to ever lie. Never happened. Experience and technical knowledge. OK I can handle a civil litigation case it doesn’t mean I want to do it. OK. And what happens is. I might run into trouble if I did it.
I’ll. Do it. So make sure that when you’re hiring a lawyer make sure that you’re knowledgeable in the area of law there are a lot of people say well they usually want somebody that’s all they do. I don’t see how you can really make it into society if you’re not practicing in a couple of different areas of law. And I also wonder about your competency I see bankruptcy attorneys all they do is bankruptcy. I’m like I can do bankruptcy in my sleep. Give me something you know more technical or something really challenging because that’s you know I just think that’s how you really can tell a good lawyer if he can help you with pretty much every problem.
It doesn’t mean I’m there to represent you but if I get talked out here in LA about that particular area of law and it makes me wonder. So I need it as part of the young. Know you’re putting out a questionnaire. If anybody wants a free consultation just check the box and get the feeling that to Jennifer and I’ll be glad to meet with you and get those people up in Orange County I travel up here to and you know I think I ever asked. I’m glad to do all kinds of free stuff for you.
Email me call me whatever you like. Never ask is Did you know people that can use my services just please be firm. That’s all I ever ask. OK so thank you very much. Hope you guys enjoyed the class.
OUR COMMITMENT TO YOU
Each of our clients is incredibly important to us. We believe that every successful relationship is based on trust, integrity and exceeding expectations. And that’s the benchmark we always strive for.