Estate Planning for the Recently Divorced

Sunday, September 8, 2013

You Gave Up What?!? – The Disclaimer

When someone passes, let’s be honest, we mourn the loss, and then get in line with our hands out, to get what’s coming to us. While an Estate Plan can be created with certain right and benefits in mind, facts change, needs change and taxes change, such that it might be prudent to give up the gifts from a Will. This is done through a “Disclaimer”. In this day and age of a weird economy, this may sound silly, but there can be really good reasons. I plan on having a series of blogs just on tax and Estate Planning very soon from a contributing CPA. We are going to talk some tax issues here, so just roll with me. That said, let’s start with some mechanics of the process.

A Disclaimer is any document the declines, refuses, denounces or disclaims any interest that would otherwise be taken by a beneficiary. PC §265. These rights, procedures and formalities are all outlined in the Probate Code, but we will not walk through the technicalities here. Suffice it to be said that there are strict formalities that must be followed as to writing and timing of the Disclaimer. It should be noted that the Disclaimer must be done before the beneficiary receives any benefit from the gift to be disclaimed and may not direct the advancement or other recipient of the gift. Once done, a Disclaimer is finally binding on party passing up the gift.

Unless the creator of the gift provides for a specific disposition in the event of a Disclaimer, the interest Disclaimed shall descend or be distributed as if the Disclaimant predeceased. PC §282. As you may no doubt be thinking, how does this affect who gets what under the inheritance and representation discussion a few weeks ago in the “Come ‘n’ Get It” blog. Again, with a variety of complexities, the Probate Code address these permutations in various code sections, so please consult with an attorney before acting on any Disclaimer.

Back to the main question, why would anyone pass up a gift under a Will? Actually, there can be several good reasons, but the primary reason may be taxes. Every year, the Federal Estate Tax level changes, and the pertinent Exclusion can be significant. Congress couldn’t even get its act together in 2010, when the Estate Tax was 0. Other years, the Exclusion has been $10,000,000, meaning that there are no taxes on the first $10,000,000! I believe the current Exclusion is $5,000,000 but again consult with your CPA, and be aware of the variability of rates when you create your Estate Plan.

How would this work? An example, taken from the LexisNexis treatise, California Wills and Trusts, would be as follows:

Husband has an Estate of $3,000,000. Wife has nothing. Husband’s will leaves all of his Estate to Wife, but provides that any interest Wife may disclaim will be distributed to the trustee of a “Disclaimer Trust”. Wife will have the lifetime income interest in the trust. Husband and Wife’s children are the remainder beneficiaries. Husband dies in 2004 when the applicable Exclusion was $1,500,000. Wife was the surviving spouse. What should Wife do?

Normally, all of the $3,000,000 Estate could pass to Wife free of Estate Tax since all of the Estate could qualify for the Marital Deduction. However, on Wife’s death, all of her Estate would be subject to Estate Taxation. Assuming Wife dies in 2005, and the Estate of $3,000,000 is still intact, in 2005 the applicable Exclusion amount was $1,500,000. The Estate Tax was about 46%. Therefore, $1,500,000 of the $3,000,000 Estate is excluded, leaving $1,500,000 subject to tax at 46%, creating a tax bill of about $695,000!

However, by using the Disclaimer, Wife could make her Widow’s election to take her $1,500,000 and leave $1,500,000 in the Estate. Then Wife could Disclaim the remaining $1,500,000 at Husband’s death, which would pass into the Disclaimer Trust, which would pass free of taxes upon Wife’s death. Wife has the benefit of income from the Trust during her life and the family is saved from paying about $695,000 in Estate Taxes.

This one example of how a Disclaimer may save money in the overall Estate Plan. I touched on several different tax and planning concerns, Estate Taxes (Federal & State), Tax Exclusions, Marital Deductions as well as Elections and Disclaimers. These are all separate technical concepts. We have talked about Elections and Disclaimers. We have not talked about Estate Taxes (Federal & State), Tax Exclusions, Marital Deductions. These will be discussed in special blogs in the near future. Please be aware that each of these concerns and concepts will have different impact on each and every estate. Also, for smaller estates, they may be of no concern, which is why not everyone needs a complex Estate Plan. However, there are countless reasons to consult with an Estate Planning attorney to determine which of the many Estate Planning tools can be used by you, your family and friends in order to retain as much wealth as possible while sustaining your own financial health.

I hope you will review your Estate Plan with you're “A” Team, or at least begin to seek out an Estate Planning Attorney to start this process. Stay tuned for future blogs. However, if you have any questions, feel free to respond below, or if you are interested in learning more about an Estate Plan, Wills, Trusts, Advanced Healthcare Directives, or Divorce, Custody, Visitation, Child Support, Spousal Support, Property Division, Modifications, Remarriage, or Pre-Nuptial Agreements, please contact me at please contact me at fbegun@gmail.com, or through my other websites, www.fcbegun.com, or www.linkedin.com for Fred Begun.

Sunday, September 1, 2013

Married Persons Property Problems

While this blog is directed at Estate Planning for the Recently Divorced, we are creatures of habit. If you were married, you will probably marry again. Even so, you might be reading this blog while going through a divorce, or even if you are happily married, because I am trying to give everyone some good information. Under any of these situations, in California, we need to understand several property concepts, including: Separate Property, Community Property, Quasi-Community Property and how these may affect you ability to plan and give.

Let’s start with some definitions. Assuming you are single, and have never been married, then Separate Property is whatever you have. However, if you are or have been married, then you need to know that Separate Property of a married person includes all property owned by that person before marriage, all property acquired by that person during marriage by gift, bequest, devise or descent, and the rents, issues, and profits from any of the aforementioned property. Family Code §770. Community Property is all property, real or personal, wherever situated, acquired by a married person, during marriage, while domiciled in California. Family Code §760 and Probate Code §28. You may have noticed that Community Property had an added layer of time, status and location, that is, being married while in California. This distinction is important when understanding the third property type, Quasi-Community Property, which is all property, real or personal, wherever situated, acquired by either spouse, during marriage, while domiciled other than in California, which would have been considered community property if they had been domiciled in California OR in exchange for real or personal property, wherever situated, which would have been community property under the code. Family Code §125 and Probate Code §66. These classifications sound more difficult than they are, but are very much driven by actual facts of date, time, location and source of funds. This must be determined in order to decide if you have any power or control to include these in your Estate Plan.

Obviously, as a single person, never married, this is a non-issue. As a married person, you and your spouse should know and discuss these questions in developing either a single Estate Plan or compatible separate Estate Plans. As someone who was married and is now recently divorced or coming out of a divorce, you must be clear and careful that all property disposed of, allocated, or divided through the divorce has gone through this filter, and is properly re-titled so that you can make a clear Estate Plan.

So, what difference does property type make? A married person can have Separate Property. A married person may convey the Separate Property any way they want, and without consent from their spouse. FC §770(b). Equally, they have complete discretion and full testamentary power over their Separate Property. PC §6101. Additionally, a married person may “transmute” or convert their Separate Property into Community Property. FC §850. This can be a part of your Estate Planning process or equally a mistake if not fully understood.

As for Community Property, as well as Quasi-Community Property, both spouses have a present, existing and equal ownership interest during their marriage. FC §751. While both spouses are living, they each have an equal and undivided one-half interest in that property. However, while this is a joint interest in the property, upon the death of either spouse, one-half of that community property automatically belongs to the surviving spouse and the other half belongs to the deceased spouse and may be disposed of under the deceased spouse’s will. PC §100 and PC §6101. This is a critically important point, as the issue of taxes and basis value create the reasoning behind the Estate Plan to be discussed in future blogs.

So, while you have testamentary capacity over all of your non-transmuted Separate Property, as well as half of the Community and Quasi-Community Property, what happens if you try to Will-away more than your half? You trigger the Widow’s Election. If the first spouse to die tries to dispose of more than their Separate Property and their share of the Community and Quasi-Community Property, and in doing so adversely affects the surviving spouse’s property rights, then the surviving spouse is put into a situation where to they cannot simultaneously take under the will and take their share. It may sound unusual, but the surviving spouse is in an all or nothing situation. Take your automatic property rights or take through the will. There is no partial or picking and choosing. This is based upon old doctrines of law, which we won’t get into here.

What is the survivor to do? The surviving spouse, widow or widower, can consent to the excessive gifting, to the survivor or away from the survivor. The survivor may elect to take their right in property. This is the election, to agree or not to agree. The reasons and ramifications are too complex for this blog right now. Suffice it to say that there are control reasons, such as family business or property to move to the next generation, there may be control reasons to provide for management and income for a surviving spouse, and also issues of probate, tax and overall financial impacts. Rather than forcing this dilemma through a Will as the sole Estate Plan, similar and less stressful results may be accomplished through a more routine Trust mechanism.

Sunday, August 25, 2013

Time to Talk Stuff – Property Under Your Will – The Devise

Time to talk about the property given under your Will. First, “property” is used as an overall term to include anything that you may own, which may be disposed of under your Will. PC §62. We go on to define property in all sorts of classifications, including “Real Property” which is any kind of land, “Personal Property” which is any other type of thing you have that is not land. There are all kinds of other sub-definitions, but I don’t want to take your time here to recite a legal dictionary. Also, while we are usually talking about things of value, we may also have to deal with things of negative value or debts. Not the fun stuff, but of major concern in your Estate Plan.

Second, we need to determine if the things you want to deal with in your Will are in fact things that you can direct or give away. This is the question of whether something is “Subject to Will”. I know, you are going to say, how would anyone try to give away something they don’t have the power to give away? The answer is, they do try, because they don’t realize they can’t. Simplest example is when you and your spouse own property Jointly with rights of survivorship. Upon your death, this property likely passes directly to your spouse, by their express right of ownership, and not your Will. Another good example, not with your spouse, would be certain forms of title in holding land or other things. It is not uncommon in California for people to hold title to land as “Joint Tenants”. When land is held that way, upon the death of one person, any other person or persons jointly owning that land automatically takes title possession of that land. There may be a fractional change in ownership, but it has nothing to do with your Will. There need be no Will, Trust or Probate of that particular land, yet sometimes people include that land expressly in their Will. Another good example of this would be Joint bank or investment accounts. A final example for our discussion is that if some property is placed in a Trust, but in an abundance of caution, the property owner also tries to pass the same property through their Will, that gift in their Will is ineffective as the property is already in the Trust, and the administration of the Trust will govern what happens upon death. For reasons like these, and others not discussed here, it is very important for you to work with your Estate Planning Attorney, and the rest of your “A Team” to clearly identify everything you have so you can determine the correct way to pass or dispose of your stuff and avoid complications if possible.

Third, we need to talk about property that can be disposed of or passed by your Will. Conveniently, this would include all property you own at death, even if acquired after the Will was made, that is not otherwise disposed of as discussed above, by virtue of some other title or ownership presumption. There are still many considerations, which is why you need to consult with a professional and your “A Team”, but lets discuss some of the more frequently seen issues. Obviously, anything you own outright, with no shared interest in, you have the undisputed right to gift it any way you want. We mentioned how Joint Tenant property automatically goes to the surviving joint tenants. However, in California, we also hold property as “Tenants in Common”. Unlike Joint Tenants, when title is held as “Tenants in Common” you CAN Will away your share of the property. Frequently you plan on gifting your share in the Tenants in Common property to the other Tenants in Common, for example, if a family owns a family farm, or some other investment property, you give your share back to your family. However, just a common, you may pass your share in the family property to your children. All you have is your fractional share, so that is all you pass, but you can pass it on nonetheless. Another right is that you may own a “Power of Appointment”. This is a particular right or “Power” that someone has given to you, likely under your sole control, wherein you have the right give to “Appoint” a certain thing. The Power could be general, special or testamentary, and we won’t concern ourselves about those distinctions here today. Essentially, someone has given you're the right to give away their stuff. For instance, your parents gave you the right to use their land and the right to appoint that use, as you deem best. They did not give you the land, just the right to use it, but also said, you could direct it as you want at some later point in time. I will dedicate a whole blog to Powers of Appointment, but take my word for the fact that this could happen.

Finally, you need to be aware that there are some property or assets that are subject to nonprobate transfers, or transfers outside the Estate Plan process. You may recall, several weeks ago I already discussed “Money Outside Your Estate Plan”. See my blog of 5/20/13. For being complete, a short list of significant assets possible under this idea and NOT included in your Estate Plan would include things like Insurance Policies, Retirement Assets, Pensions, Profit Sharing Plans, IRAs 401Ks, Employment Contracts and similar items that commonly permit for the benefits to pass to designated Beneficiaries upon your death. Probate Code §5000 et.seq. (sorry, et.seq. is fancy lawyer talk for “the following sections”) lists many assets that are expressly allowed and directed to pass outside probate or your Estate Plan. Just because they pass outside your Will does not mean we simply ignore them. There may be certain tax consequences to your spouse, the Estate and/or the recipient, so we still need to know and share this info with your “A Team”.

Last comment. This blog is directed at Estate Planning for the Recently Divorced. Thus, I assume you do not have a current spouse. However, I want everyone to know about Estate Planning. I believe almost everyone could benefit from some sort of Estate Plan, ranging from simple to complex according to their needs. My next blog will specifically address some of these issues relative to surviving spouses, in California, as we are a community property state. Just be warned.

By the way, in last week’s blog, “Come ‘N’ Get It”, I ended with a question, “What do you think Jane’s heirs would receive by “representation” under PC §246.” Here’s the question and answer:

Grandma Jane had 3 children, George, Helen and Mike. George died before his mother, leaving two children, Greg and Grace. Helen also died before her mother, leaving one child, Hal. Mike is alive and well. Who is around to take from Jane’s will? The last son, Mike, and 3 grand children, Greg, Grace and Hal. By representation or §246, the will is divided in thirds for each child, since Mike was alive. Mike gets 1/3. Hal gets Helen’s 1/3. Greg and Grace each get 1/2 of George’s 1/3 or 1/6 each.

Saturday, August 17, 2013

Come ‘N’ Get It! Who takes under your Will – The Devisees

Let’s get to some brass tacks about who gets your stuff under your Will. We need to start with some basics from the California Probate Code.

PC §7000 states that “Title to a decedent’s property passes on the decedent’s death to the person to whom it is devised in the decedent’s last will or, in the absence of such a devise, the decedent’s heirs as prescribed in the laws governing intestate succession.”

PC §32 defines a “Devise” as either a disposition of real or personal property by will or the act of disposing of real or personal property by will. Depending on whether it is a noun or a verb. One of those weird words from grammar class . . . do they still teach grammar? Thus, under PC §34, the “Devisee” is the designated recipient of the devise.

Like with the making of the Will itself, there may be issues of capacity to take under the Will, but while it seems more difficult to make a Will, the list of people or entities that can receive under a Will is pretty broad. That said, there are a few common exceptions, such as you cannot kill someone and benefit from their killing by inheriting their possessions. Witnesses of the Will are not automatically eliminated, but there can be some problems, so it is best to avoid the presumption of undue influence.

As important as it is to include proper persons to receive under the Will, complications can arise for people that are skipped or omitted from the Will. If someone makes a Will and later marries, but never modifies the Will, their spouse may be deemed omitted. As such, the omitted spouse will have other statutory rights, including ½ of the community property, ½ of the quasi-community property and even a share of the decedent’s separate property if the decedent passed without a Will, but in no event more than ½ of the value of the separate property. Probate Code §100 and §101. Similar rules apply for omitted children, in that they too would presumptively be entitled to a share as if the decedent passed without a Will. The issue here is that there might be intentional exclusion of a child. Nothing says that in a written Will you have to treat everyone equally or fairly. Granted, every rule seems to have exceptions, but we will not go into this detailed area here.

Another area with possible odd developments is simultaneous death. Who gets what when a family dies in an accident? We have a variety of laws, rules and presumptions to address this and other oddities. We could probably fill a book on such weird cases and the history of heirs fighting over the money and courts trying to do what’s “fair”, but we have boiled this down over many years of such fights and have rules for guidance. Suffice it to say, if you are aware of any unusual fact related to someone’s death, ALWAYS consult a lawyer.

The last general area I want to discuss about who gets your stuff, is to be aware of class gifts. That is, giving to a group of people. The most common class gift is, “to my children”. Assuming we don’t omit a spouse or a child born after the Will is made, and assuming we don’t make specific gifts to specific children, this is the easiest way to give equally to your offspring. Bu what happens if you have several children, who have children, so now you have several generations living? Next let’s assume that one of your children die before you, but leave grand children. How do you intend to give. Never fear, the law is here! If you do not specifically name each child, grandchild or other offspring, but simply leave everything to your “children”, your “heirs”, your “issue” your “descendants”, you have created a class gift. While there are all sorts of weird rules, like pregnant but not born, at the time of your death, or half-siblings, step-children, adopted children, and even bastard children, no not that, bastard simply means born out of wedlock, and the like, we will keep it simple for now. The Probate Code provides 3 basic ways for class gifts to pass:

- Distribution for cases of intestacy (without a Will) or where the Will does not specify (as per PC §245) follow under PC §240

- Distribution “per stirpes” or “by representation” under PC §246 or

- Distribution “per capita” at each generation under PC §247

Break out your calculators, here we go!

- Distribution for cases of intestacy (without a Will) or where the Will does not specify (as per PC §245) follow under PC §240

PC §240 states that property be divided into as many equal shares as there are living members of the nearest generation still living, and deceased members of that generation who have issue living. Each living member of the closest generation gets one share, and the share of each deceased member that leaves living issue, is passed to the next generation and divided in a similar manner to that next generation. Example time. Grampa Jo dies, leaving two children, Tom and Sally. Tom has two children, Tony and Ted. Sally has one child, Seth. Tom died before Grampa Jo. Who gets what? Tom and Sally would each get 1/2. However, since Tom has passed, Tony and Ted share Tom’s 1/2, so they each get 1/4. Seth gets nothing, because Sally is alive and she takes priority. If Sally had also died before Grampa Jo, Tony, Ted and Seth would each get 1/3.

- Distribution “per stirpes” or “by representation” under PC §246

PC §246 states that where a will calls for property to be taken under §246 or by representation, the property shall be divided in as many equal shares as there are living children of the designated ancestor, if any, and deceased children who leave issue then living. Each living child of the designated ancestor is allocated one share, and the share of each deceased child who leaves issue then living is divided in the same manner. So what about Grampa Jo’s family? Under §246, Tom and Sally would each still get 1/2. However, since Tom has passed, Tony and Ted share Tom’s 1/2, so they each get 1/4. Seth gets nothing, because Sally is alive and she takes priority. However, is Sally died, under §246, Tony and Ted each get 1/4 and now Seth gets 1/2.

- Distribution “per capita” at each generation under PC §247

PC §247 states that where a will calls for property to be taken under §247 or per capita, the property shall be divided into as many equal shares as there are living members of the nearest generation of issue then living and deceased members of that generation who leave issue then living. Each member of the nearest generation of issue then living is allocated one share, and the remaining shares, if any, are combined and then divided and allocated in the same manner among the remaining issue as if the issue already allocated a share and their descendants were then deceased. This needs a slight more complex family to see this weirdness. Grandma Jane had 3 children, George, Helen and Mike. George died before his mother, leaving two children, Greg and Grace. Helen also died before her mother, leaving one child, Hal. Mike is alive and well. Who is around to take from Jane’s will? The last son, Mike, and 3 grand children, Greg, Grace and Hal. Pure per capita divides equally among all survivors, so everyone gets 1/4. There is no benefit to different generations, or representation taking of different percentage.

I bet you thought you were over the word problems in school! What do you think Jane’s heirs would receive by “representation” under PC §246. Post your answers if you dare. I’ll give you're the correct answer next blog!

I hope you find this as interesting as I do. How would you want to treat your heirs? I hope you will review your Estate Plan with you're “A” Team, or at least begin to seek out an Estate Planning Attorney to start this process. Stay tuned for future blogs. However, if you have any questions, feel free to respond below, or if you are interested in learning more about an Estate Plan, Wills, Trusts, Advanced Healthcare Directives, or Divorce, Custody, Visitation, Child Support, Spousal Support, Property Division, Modifications, Remarriage, or Pre-Nuptial Agreements, please contact me at please contact me at fbegun@gmail.com, or through my other websites, www.fcbegun.com, or www.linkedin.com for Fred Begun.

Sunday, August 11, 2013

Will Organization

Most every legal document is too long to comprehend in the whole. As such, over time we have devised a process of breaking these sensitive documents into sections of some kind in order to try to organize thoughts, intents and actions in some manageable chunks. Most Wills will have many of the following clauses, articles, divisions, provisions, parts or chunks:

Most Wills should start with some form of Declaration Clause. This clause makes the affirmative statement of who you are, that this document is intended to be your Will as of a certain date and that it revokes any prior Wills.

Some Wills have Introductory Provisions in addition to the Declaration. Again, we state your identity, but maybe with more detail, such as your place of residence, age, and capacity. We next flesh out the personal information to include marital status, including former marriages, spouses past and present, children, family, or the absence of any family. We might also begin to identify friends and other beneficiaries.

After identification and bookkeeping language, we start getting into more substance. We start by identifying all Property to be disposed of by the Will, and include particular gifts to particular beneficiaries. After that, we typically have Residuary provisions, saying that anything not specifically given to a beneficiary goes to some one, some charity or maybe the Trust that you created with your Will.

Next we usually have Executor Provisions. Who will be your representative after you die? Who is charged with the job of executing the terms of your Will and making things go as you intend? This is your Executor. These sections lay out the rights, rules, powers and obligations of this person or group of persons.

Since we’ve dealt with stuff, if you have children, we will also have Guardian Provisions. Who will be in charge of your minor children, (under the age of 18). Obviously, your spouse or ex-spouse, but stranger things have happened, and we have seen where both parents die.

We can also send your assets through your Will to a Trust, and so Trust Provisions could come next. In some instances we can create a Trust here, or send items to a Trust that already exists.

If you create a Trust, then you may also have Trustee Provisions. While the Executor handles the disposition of the Will, the Trustee handles the disposition of the Trust. Frequently this is the same person. Sometimes it may be a commercial entity. These sections lay out the rights, rules, powers and obligations of this person or group of persons.

Almost done, we begin to wrap up with the Concluding Provisions. These include a lot of the weird clauses that have proven necessary over time in order to create a valid death time document that a court can enforce.

Finally, we wrap up and sign off with Signatures and Attestations. You as the maker of the Will and of course Witnesses, who we discussed in prior blogs.

Not every Will will have all of these provisions. For example, if you have no children, you need not bother with the Guardianship sections. More complex estates, with extensive assets and more complex families may have even more descriptive sections. Point is, this is generally how Wills are structured.

The last few Blogs were about some basic Will aspects, trying to catch your interest and get you thinking about Estate Planning. Hopefully you will review your Estate Plan with you're “A” Team, or at least begin to seek out an Estate Planning Attorney to start this process. Stay tuned for future blogs. However, if you have any questions, feel free to respond below, or if you are interested in learning more about an Estate Plan, Wills, Trusts, Advanced Healthcare Directives, or Divorce, Custody, Visitation, Child Support, Spousal Support, Property Division, Modifications, Remarriage, or Pre-Nuptial Agreements, please contact me at please contact me at fbegun@gmail.com, or through my other websites, www.fcbegun.com, or www.linkedin.com for Fred Begun.

Sunday, August 4, 2013

Certain Types of Wills

Time to start getting into some of the meat and taters of Estate Planning. The single most common item in an Estate Plan is your Will. There are several types of Wills and various treatments.

As we discussed last blog, there used to be Oral or Spoken Wills, but in California, that is no longer viable. While Oral Wills are the oldest format, the next oldest and by far most common is the Holographic Will, no, not the 3-D video, which would be cool, but simply a hand written Will. Prior to 1983, the law used to be that a holographic Will is simply a written Will, not witnessed, but written entirely in the hand of the Testator, the person making the Will, also signed and dated by the Testator. This has evolved over time, due to various cases, like the 1982 case, “Estate of Black”, that allowed use of writing on a printed form, and was then made into new laws regulating these modern details.

PC §6111(a) provides for a Holographic Will to be valid if, “the signature and the material provisions are in the handwriting of the Testator.” As with most laws, there are specific exceptions and concerns stated in the Probate Code, but we will not go into that here. However, be advised, if you want to have a Holographic Will or a loved one has passed leaving a Holographic Will, ALWAYS consult with an attorney to determine validity and other legal concerns. Please remember, while paralegals and notaries are valued service provides, some of whom help in the preparation or sign offs on printed or form Wills, they are neither licensed nor qualified to give legal advice.

A few oddities about Holographic Wills. While we have established that they can be printed forms, but must be signed and with handwritten specifics, when signing, the Testator need not use a legal or formal name. Nicknames or family affectionate names have been accepted by the courts. The signature doesn’t have to be at the end of the document. Seems weird, in that we see a signature at the end as being the wrap up of the document, but the point here is that the signature is evidence of intent, in this case that this document is the Will and the signature is evidence that the Testator adopts this document as the Will.

Another change as of 1983 is that the Holographic Will no longer has to be dated. Be Warned, while this may not be required, you really should date and sign. And here’s why. First, a fundamental question is whether the Testator had the mental capacity to make a will. If there has been health or aging issues, know that a Will was made years ago when someone was healthy, means that it is more likely to be valid. Second, what about someone who changes his or her mind over the years and has several Wills. The last in time will be presumed to be the most recent statement of what the Testator wanted done. Most Wills will state that all other Wills are revoked and replaced by this Will. We need to know which came first and which came last.

The last type of Will that I want to tell you about is the California Statutory Will. This is a printed form Will provided by the State Bar of California for anyone to use, and can be done without an attorney! As per PC §6220, any individual over 18, of sound mind, can use the Statutory Will. You get the forms, fill them out and sign. You must have witnesses, who actually see you sign the Will (PC §6221). There are various other considerations of the Statutory Will, but it is handled like any other Will and given the same respect and scrutiny. The one thing to be aware of here is that the Statutory Will accomplishes the basic goal of a Will, that being to not die with a Will and to direct the disposition of your stuff to your people. It is not useful if you have a slightly more complex story or if you are trying to do any kind of tax planning in your Estate Plan. No to be dismissive, but it is better than nothing.

Let’s be honest. Not everyone has a Will, and when they die, their stuff is dealt with by rules of law and the Probate Code. If you don’t have a Will, you are deemed “Intestate” or without a Testament, you know, the “Last Will and Testament” stuff we hear on TV and in movies. In many instances, this will be fine. If you do not have much by way of money or assets or if you don’t have much by way of family. The law of Intestate Succession will give your stuff, to your family, and do so equally, by degree of connection. For example, your spouse, then your children, then your parents, then your siblings, and so on. But if you want at least some control, then you should consider a Will. The last point I want to make here is that if you do not have a Will, and you have some stuff, your stuff will have to go through Probate. This means courts and court costs, attorneys and their fees. In addition to this money, matters could take time to process in the court system. Having a Will does not guarantee that you don’t have these fees and costs and time drains, but it can help remove the likelihood and can save some time and money.

These last few Blogs were about some basic Will aspects, trying to catch your interest and get you thinking about Estate Planning. Hopefully you will review your Estate Plan with you're a Team, or at least begin to seek out an Estate Planning Attorney to start this process. Stay tuned for future blogs. However, if you have any questions, feel free to respond below, or if you are interested in learning more about an Estate Plan, Wills, Trusts, Advanced Healthcare Directives, or Divorce, Custody, Visitation, Child Support, Spousal Support, Property Division, Modifications, Remarriage, or Pre-Nuptial Agreements, please contact me at http://www.fcbegun.com/, fbegun@gmail.com or at http://www.linkedin.com for Fred Begun.

Saturday, July 27, 2013

Will Formalities – Those Picky Lawyers

Back again with more thoughts on Estate Planning after completing your divorce. Previously, we discussed components necessary to make a valid Will. In summary, you, as the person making the Will must have capacity and be competent to make a Will, with the intent to give upon your death, without outside influence, reduced to a writing, properly signed and witnessed.

Before we get into some of the substance of a standard Will, I thought it might be fun to hear some of the picky little requirements, that have had Will’s in court for hundreds of years as we perfect our rules to protect people in this gifting process. Below I will spew some rules of law and for those who like fact checking, I will refer to the Probate Code by section number, commonly shortened to “PC §”.

A Will shall be in writing – PC§6110 (a) and by this law, California no longer accepts spoken, oral or nuncupative wills and has not done so since 1983.

The Will shall be signed by the Testator (the person giving under the will), in the Testator’s name by someone else, but in the presence of the Testator and at the Testator’s direction, or by a Conservator (court appointed caretaker) for the Testator – PC§6110 (b)(1)(2)(3).

A Will can be a valid holographic will, if the signature and material provisions are all in the handwriting of the Testator – PC§6111(a).

With these basic rules in hand, the courts have gone on to say, that a valid Will could be – typewritten, handwritten, a letter, a printed form, a printed form with typewritten or handwritten additions. It may be one sided or two sided or multiple pages, even if not bound together. The Will need not have been made all at one time. The Will may be in pencil and/or ink, or different color ink, even at the same time. A valid will may even be a carbon copy (for those of us who are old enough to remember “carbon paper”) and may even be marked as “duplicate” or “copy”. A valid Will in California, may even be in a foreign language. I share all of these weird little comments, only because at some time, some one, or many have fought over a Will being valid or not, because one of these odd facts came up. For each of these odd facts, there are additional rules telling us how these are valid or not.

Another picky area for Wills, is witnessing the signature of the Testator. Witnessing or Attestation is governed by PC§6110(c)(1) which states that the witnessing must be of the act of signing of the Will by the Testator, during the Testator’s life, of course it is tough to witness the signed by a dead person, by at least 2 persons, both present at the same time, so they can witness each other witnessing. The witnesses may also both be present when the Testator claims that the Will was signed previously, so the Testator says, I signed this, and that is my signature. The witnesses must also understand that they are witnesses of a Will and that they are signing the Will as witnesses.

A quick warning before we finish, a Will and the witnessing can be valid if a witness is an interest party under they will, that is, they stand to receive a benefit under the Will. However this raises a presumption that the interested party procured their benefit under the will by some sort of duress or undue influence. If that is the case, then it might be better to not be a witness if you are getting something under the will, or to have additional disinterested witnesses. Just trying to avoid a family fight.

This was some odd bits in thinking about a basic Will. Next blog will deal with a few other types of Will, including Holographic Wills and Statutory Wills. However, if you have any questions, feel free to respond below, or if you are interested in learning more about an Estate Plan, Wills, Trusts, Advanced Healthcare Directives, or Divorce, Custody, Visitation, Child Support, Spousal Support, Property Division, Modifications, Remarriage, or Pre-Nuptial Agreements, please contact me at http://www.fcbegun.com/, fbegun@gmail.com or at http://www.linkedin.com for Fred Begun.