Well, the answer depends on whether or not you have taken steps to write your wishes down in a will or trust, or do any other advanced planning.  Many of us intend to one day set aside the time to get our affairs in order and have an estate plan drawn up to make sure that our assets will go to who we want when we die.

The problem is that many of us don’t make it a priority, and for various reasons: maybe you don’t think you have enough assets to make it worthwhile, or you expect your family to get along and sort it out for themselves, or because maybe you are healthy and young so there is no sense of urgency.  The problem is you never know what might happen.

What do you think will happen?  Well, if you die intestate (which simply means without a will or anything), then your assets will pass to heirs under the California Probate Code.  If you are married or in a registered domestic partnership then your half of any community property will automatically pass to the survivor along with any separate property you own if you don’t have any children.  So, where your assets go will depend on the nature of the property—community or separate, and who survives you.

If you die intestate with assets valued at more than $150,000, then someone will have to go to the probate court to get appointed to manage your affairs and to change title to your assets.  And even if you have a will, it has to go through the probate court too!  One of the few differences being that if you die intestate, then the court will appoint someone (not necessarily who you would have chosen), called an “administrator,” versus if you have a will, then it will be the person you appointed in your will, called the “executor.”

Someone will have to take steps to begin this process by filing a petition in the probate court.  The cost of filing this petition is $395, and the process, which can be quite lengthy, is also expensive because it also involves administrator/executor fees as well as any attorney fees before your assets are distributed to your heirs.  Again, if you die intestate then who inherits depends on the type of property left and who survives you.  If you leave a valid will, then your assets will pass to those named under your will (assuming no one contests or challenges—if so the court will resolve any disputes).

So, a big chunk of your “stuff” may be spent on court costs, administrator/executor fees, and attorneys’ fees before it can be distributed to your family members.  On top of that your estate may be subject to estate taxes, but this will depend on the year you die and the value of your estate.  For people passing away in 2012, the first $5,120,000 will pass free of estate tax, but under the current law this will go down to $1,000,000 in 2013.

Many of you are probably wondering how can I avoid probate?  A living trust can avoid probate not only after you pass away, but also during your lifetime should you become too ill or disabled and no longer able to manage your affairs.  I’ve previously covered some of the benefits of having a living trust versus a will alone, view it here: http://www.falkandcornell.com/blog/2011/10/benefit-living-trust-checks-balances/.  A living trust can also reduce estate tax consequences.

By taking steps now you can save your family a lot of time, money, and aggravation.  And there are other factors you should consider as well.  For instance, if you are a parent of minor children, you may want to designate who would be guardian over your children.  For more information about appointing a guardian, see my previous blog entry here: http://www.falkandcornell.com/blog/2011/09/parent-young-children/.  We’d be happy to answer any specific questions you may have during a complementary meeting to discuss your individual situation.  So stop putting it off, take action now to get your affairs in order.  Your family will thank you for it.

Falk, Cornell, & Associates, LLP is a member of the American Academy of Estate Planning Attorneys.

With recent legislation in some states validating and recognizing same-sex marriage, it is only a matter of time before the Courts and the legislature will be forced to consider other non-traditional types of marriages, as is evidenced by a recent Texas case, currently on appeal, addressing the validity of a marriage between a man and his transgender wife.

Nikki Aragguz has filed an appeal with the 13th District Court of Appeals in Texas, from a May 26, 2011 ruling declaring her marriage to fallen firefighter Thomas Araguz void, making Nikki ineligible to receive death benefits due to Thomas’ tragic death. Nikki was born as a male – Justin Graham Purdue on June 4, 1975 – but ultimately transitioned to female, having successfully undergone reassignment surgery two months after she and Thomas were wed. According to Nikki, she told Thomas that she had been born a male at the very beginning of their relationship, and, Thomas actually cared for her following her reassignment surgery. Thomas never discussed Nikki’s gender with his family, and, in fact, in a family law matter relating to custody of his children with a former wife, he denied ever knowing that Nikki was born male when shown a copy of her birth certificate.

When Thomas Arraguz was killed in a fire, he died intestate, i.e., without a will. He did, however, have several life insurance policies – one worth $60,000, in which he designated Nikki as beneficiary, and others totaling approximately $600,000, in which no beneficiaries were designated. According to Texas law, if no beneficiary was named on the policy, the proceeds would be split equally between the spouse of the decedent and his children. In the event that there was no spouse, proceeds would all go to Thomas’ children.

Thomas’ parents and ex-wife joined forces and filed a lawsuit claiming that Thomas never knew that Nikki was born male and that under Texas law, the marriage was void since both Nikki and Thomas were born male. The lower Court in Texas agreed, and on May 26, 2011, it issued a ruling declaring Nikki and Thomas’ marriage void. It relied, in part, on an earlier case which states that gender is determined chromosomally, and that, accordingly, an individual could never have a valid sex change. Since same-sex marriage is not currently recognized in Texas, the marriage was void, according to the lower Court.

While this case raises a plethora of legal and philosophical dilemmas, the one thing which remains constant is that a valid estate plan is essential in order to ensure that your assets go to whom you want them to go to. Part of preparing a good estate plan is properly designating beneficiaries of various assets, among them, life insurance. Had Thomas simply designated a trust, or in the alternative, Nikki and/or his children as the beneficiaries of any policies, this lawsuit would never have been filed. Although many commentators view this lawsuit as a huge step backward for gender-variant individuals, depending upon how it is ultimately decided, it could, ironically, be a huge step forward.

Falk, Cornell, & Associates, LLP is a member of the American Academy of Estate Planning Attorneys.

 It is a misconception that a Last Will is only needed by people who own real property or who have a sizeable estate. Today, regardless of your wealth you should leave a Last Will identifying who your legal representative, often called an executor, should be and to ensure your belongings are distributed according to your wishes at your death. While many wills customarily leave assets to a surviving spouse, family members or friends, the individuals listed below have unique wishes and designations, most not discovered until after the individual’s death. It is important to remember, while you as an individual can leave your estate to whomever or whatever your wish, not all provisions in a Last Will will be held up in court.

1. Harry Houdini
The renowned master escapee and daredevil died in 1926 on Halloween. Towards the end of his life, Houdini had become mystified by the idea of an afterlife and spiritual mediums. Houdini promised his wife, Bess, that he would contact her in the afterlife, using a pre-planned ten digit secret message that only she would know, to silence naysayers when she eventually reported his presence (she never did). His last will and testament also stated that a séance should be held each anniversary of his death.

2. Gene Roddenberry
The creator of Star Trek and inventor of the notable quote “to boldly go where no man has gone before” made certain to maintain that statement long after his passing. His last will and testament included instructions to have his ashes scattered via a space satellite orbiting earth. The act was carried out in 1997.

3. Charles Vance Miller
 This Toronto-based attorney with a love of practical jokes kept on laughing straight to the grave after his death in 1926. His last will and testament bequeathed a large sum up for grabs to any Toronto woman who could produce the most offspring in the decade following his death. The result became known as the “Great Stork Derby.” Four winners emerged in a tie for nine children; each received about $125,000.

4. Leona Helmsley
The tales of ’80s greed wouldn’t be the same without the real estate investor and hotel owner dubbed the “Queen of Mean”. While she donated about $35 million to charities in the final years of her life, her good deeds were overshadowed by instructions to establish a $12 million trust to her Maltese dog in her last will and testament. The amount was later reduced to $2 million by a judge. By comparison, her grandsons were left $5 million each, but only on the condition that they visit the gravesite of their father each year.

5. Eleanor Ritchey
Heiress to the Quaker State Refining Corporation, Ritchey left about $14 million to her 150 stray dogs. When the last dog died, the remainder was to go to Auburn University Research Foundation with the funds dedicated to research on canine disease.

6. Thomas Shewbridge
While not hugely famous in life, California prune rancher Thomas Shewbridge’s last will and testament edged him a bit closer to notoriety following his death. He turned over shareholder rights of his estate to his two dogs, making them owners of 29,000 stock shares in the local electric company. The dogs regularly attended stockholders’ and board of directors’ meetings.

7. Nina Wang
Once dubbed the richest woman in Asia, Wang left her entire estate valued at $12.8 billion USD to a charity that she and her late husband, who was kidnapped, founded in 1988. The will was bitterly disputed in a lengthy and dramatic court battle between the charity and Wang’s lover at the time of her death, Tony Chan. A fortune teller, married man and “opportunist”, according to the judge who tried the case, Chan was accused of forging a fake will in an attempt to claim rights to the fortune.

8. Dusty Springfield
 The British singer, known for such hits as “I Will Follow Him” made her cat a priority in her last will and testament. Instructions stated that the cat was to be fed imported baby food and serenaded with Springfield’s songs. Additionally, the singer also arranged for the cat to marry his new guardian’s pet cat.

9. Doris Duke
The heiress and daughter of James Buchanan “Buck” Duke, founder of the American Tobacco Company and North Carolina’s Duke University, is said to have “never smiled in pictures” from childhood to death. Her passing created the Doris Duke Foundation, a charitable organization worth more than a billion dollars. However, her last will and testament also stated that $100 million was to be secured in a pet trust for her dogs. The matter was disputed in court for nearly ten years. In 2004, a judge finally awarded $20,000 to two of her former servants who had been caring for the dogs.

10. Mark Gruenwald
The Executive Editor of Captain American and Iron Man, as well as being involved in other Marvel Comics, Gruenwald stated that he wished for his ashes to be mixed with the ink used to print the comic books. They were.

For the complete article, please reference the article 10 Strange Will and Testaments

Falk, Cornell, & Associates, LLP is a member of the American Academy of Estate Planning Attorneys.

Just a couple weeks ago over 2 billion people all over the world watched the Royal wedding. And it got me thinking. Weddings, new births, and divorces are all big life changing events, and they can all affect your wishes as to who will inherit your property when you pass away.

Have there been any recent weddings or births in your family? If so you may want to consider reviewing and/or updating your estate plan or creating one if you haven’t already.

And not everyone gets married. For the many couples out there who don’t want to marry, you should be aware of the consequences this can have when they die. No automatic benefits are reserved for co-habitants the way they are for spouses and domestic partners. Also, a lot of people may not realize that California does not recognize common law marriage so, though you may have lived with your partner for many years, it doesn’t mean either of you are automatically entitled to something when the other dies.

So, if you and/or your partner want to make sure the other will inherit something from you, then perhaps you should consider doing some planning.

Depending upon your situation, and especially if you own property or have minor children, you should consider setting up a trust, or at the very least a will, so that your estate passes as you desire. And if you already have a plan in place, you may want to consider reviewing it to make sure it still serves your needs.

Falk, Cornell, & Associates, LLP is a member of the American Academy of Estate Planning Attorneys.

Your home really is your ‘castle’ as it’s one of your most important investments. Your home can be your biggest investment, especially in California, and as such, needs to be titled in your trust. Our office makes sure that your home is titled in your trust when your living trust is created.

What happens if you sell your house? Your old home will be titled as the new owners wish. You need to make sure that your new dwelling is titled in your trust. Inform your realtor and the title company that you want your house titled in the trust, and provide them with the name of your trust. For ease, we provide our clients with laminated “business cards” which have the formal name of their living trust. We put them in the front of their red Estate Planning Portfolio binder containing the copy of their estate planning documents. Just give the formal living trust name to the institution drawing up your paperwork, and the institution should draw the paperwork up with the house as part of the trust.

What about refinancing? This is can be little trickier. Most homeowners assume, since nothing is changing is terms of ownership, that the house will continue to be titled in the trust. This is not always the case! Some institutions take the house “out” of the trust during the refi process, i.e, the institution will create a new deed transferring the house from “Home Owner, Trustee of the Homeowner Living Trust, Dated January 1, 2000” to just “Home Owner” to make it easier to complete the refi process. However, the house doesn’t always make it back into the trust. You, as the homeowner and trustee, need to be vigilant to make sure your house stays in the trust, or “goes back in” the trust when the refinancing is complete. We have seen a probate case due to a refinance which took the home out of the trust, but didn’t retitle it back into the trust at the completion of the refinance process. Just be vigilant with your realtor and/or banker to ensure your home is kept in the trust, or put back in the trust. We are always happy to help our existing clients with this process.

Falk, Cornell, & Associates, LLP is a member of the American Academy of Estate Planning Attorneys.

Is a trustee free to do whatever they want? For instance, can trustees make changes to a trust? I was recently asked these questions by a family member and I think it is worth explaining as many people are probably wondering the same thing.

First, whether or not changes can be made to a trust depends on whether or not the trust is revocable. Some trusts are irrevocable when they are created; an example is an Irrevocable Life Insurance Trust. A trustor (also known as a grantor or settlor) is the person who sets up a trust. Often, trustor(s) act as trustees of their own trust during their lifetime. On the other hand, if the trust is revocable, then the trustor can make any changes they want to their trust during their lifetime, and can even revoke it entirely. If the trustor is not acting as trustee of their own trust they may have to notify the trustee of any changes they make (depending on the terms of the original trust), but only the trustor has the power to change the terms of the trust.

Once the trustor either passes away or becomes incapacitated, whoever is designated as the successor trustee(s) would step in to administer the trust. It is the trustee’s duty to administer the trust according to its terms. Also, once the trustor(s) passes away, the trust becomes irrevocable, thus no further changes can be made to the trust except in rare circumstances and only by court order. So the answer is no–trustees’ powers are limited by the express terms of the trust and only the trustor(s) who created the trust has the power to make changes.

Falk, Cornell, & Associates, LLP is a member of the American Academy of Estate Planning Attorneys.

You’ve probably seen on television or in movies a scene where surviving beneficiaries and other family members gather together for a formal “reading of the will” at an attorney’s office. Such scenes are very dramatic and often involve dialogue contesting the terms. In real life, formal reading of a will by a lawyer does not really take place; however, if the person died testate (meaning they had a will or a trust) then the beneficiaries and heirs are entitled to receive a copy of the testamentary document.

The first step in the process of administering an estate is to locate the will or trust. (It’s a good idea to inform your loved ones of where your important documents are kept so they can be easily located after you pass away to best ensure your wishes are carried out.)

Once located, the document itself provides some direction regarding the next steps. A valid will appoints an executor and a trust lists successor trustee(s) to administer the estate/trust. Whoever is listed in the document does not automatically have power to act, but rather must take steps to acquire authority to act on behalf of the estate. In fact, the person may decline to do so, which is why many list alternates in the event the first person named cannot or chooses not to act.

A person appointed under a will must petition the probate court for appointment as personal representative, and successor trustees named in a trust must take an oath in order to have legal authority to act on behalf of the estate. They will notify the beneficiaries and provide copies of the testamentary document. In the case of trusts, a notification is sent to the beneficiary to notify them that they are a beneficiary or heir and are entitled to receive a full copy of the trust upon their request if a full copy of the trust is not included with the notice letter. Trusts can be very long (100+ pages) so often the notice letter is sent without a full copy of the terms of the trust, however explaining to the beneficiary that they are entitled to a full copy should they request one. This also provides the beneficiary and heir with a defined period in which they can contest the trust.

So, back to the original question—when does the reading of the will take place? Well, probably not too long after the person passed away, but the real question has more to do with where a will it take place? If you are a beneficiary, most likely in the privacy of your own home after you have received a copy in the mail.

Falk, Cornell, & Associates, LLP is a member of the American Academy of Estate Planning Attorneys.

In a previous blog we discussed the importance of the Trust being the record owner of your home. In funding living trusts, many people remember their home, however they often forget undeveloped lots and out of state property.

Though lots may not be developed, they do constitute a valuable asset. Remember that to avoid petitioning the court in California, the total value of real property outside of the trust must be less than $20,000. An undeveloped lot, not titled in the trust, could very well be the reason your Trustee has to petition the court and prove that it was your intention to put the property in your living trust.

Out of state properties must also be named in your living trust. Though we cannot transfer the properties for you, as we are only licensed in California, we work closely with attorneys in other states which can facilitate the transfer for you. If an out of state property is not correctly titled in your living trust, your Trustee will have to file probate proceedings in that state, subject to that state’s laws.

The process of petitioning the court, especially a court outside of California, will surely expend unnecessary funds and be inconvenient for your successor trustees. Make sure all real property in California and outside are titled in the name of your living trust.

Falk, Cornell, & Associates, LLP is a member of the American Academy of Estate Planning Attorneys.

When you are the one entrusted by your loved one to administer his/her estate, many unexpected issues can arise. Certain issues require some additional action, and one of those issues is the proper handling of unregistered guns. Assuming that the guns are not classified as firearms under the National Firearm Act (i.e., machine guns, short-barreled rifles, short-barreled shotguns, etc., in which case, different requirements apply, and you should contact your local ATF office), the following are some guidelines which should provide you some peace of mind.

If you are the trustee of your loved one’s estate, and you come across a gun which you believe to be unregistered, there is no need to panic. The first thing to do is ensure the gun is not loaded and it is placed in a locked, secure location within your possession and control.

Once the gun is safely locked and secured, you can obtain a form from the California Attorney General’s website (www.ag.ca.gov/firearms/forms) called an “Operation of Law or Intra-Familial Handgun Transaction Report.” Once you have completed the form and submitted it to the Department of Justice at the address provided, the gun will be properly registered to you as trustee of your loved one’s estate, which should take approximately 4 to 6 weeks.

What if, once you have registered the gun, your cousin who lives across the country wants it? No problem. After you have given the proper notice to all people entitled to inherit, presuming no one objects to your cousin receiving the gun, you can contact any local Federal Firearms Licensee (“FFL” – a fancy name for a gun dealer) and explain that you would like the gun sent to an FFL in the state in which your cousin lives. (Your cousin should provide contact information as to the designated FFL to which he/she wishes the gun to be sent). Your local FFL will then send the gun to your cousin’s designated FFL for registration in his/her name. There will be a transfer fee associated with the transfer of the gun, so it would be prudent to contact several FFLs to confirm that you’re paying a reasonable fee.

Once your cousin’s designated FFL receives the gun, the FFL can assist your cousin to ensure that the gun is properly registered pursuant to his/her state’s registration requirements.

What if you ascertain, after the appropriate notice, that no one wants the gun? Easy. Save yourself some headache, not to mention paperwork, and simply surrender it to your local police or sheriff’s department, and be sure to request written confirmation that you have done so.

Falk, Cornell, & Associates, LLP is a member of the American Academy of Estate Planning Attorneys.

The purpose of a living trust is to protect the value of your estate, and to make sure your assets are given to the people or places you chose. But what about your tangible personal property – a grand piano, artwork, or even your favorite crystal vase that always receives compliments?

After an individual passes away, frequently the most contentious issues involve personal items rather than the house or the money. That crystal vase everyone liked could end up with family you did not like and it can destroy family relationships. Here’s how to avoid having your tangible personal property become the basis of arguments.

The General Assignment of Property, a document included when you signed your trust, simply assigns all your personal property to the trust. If you have specific bequests you want to make, you can make a list of the items and include the list with your trust paperwork. Make sure you sign and date the list; you can change or update the list at your convenience, making sure to sign and date it each time and to throw away the previous list.

For smaller items, such as photographs, dishes, or other sentimental items, put the intended person’s name on a sticker or piece of paper, attach the paper underneath the item, and avoid any confusion about who should receive it. Or leave notes in your trust to have a “lottery”, where each beneficiary chooses one item, continue through all beneficiaries, and continue until all items are chosen.

Beneficiaries can draw straws to see who goes first.

An even better way might be to ask your beneficiaries if there are particular items they would like; you might be surprised at their responses. This makes it easier for you and for your beneficiaries. Just remember that a bit of planning on your part can help avoid family disputes when you’re gone.

Falk, Cornell, & Associates, LLP is a member of the American Academy of Estate Planning Attorneys.