Yu & Yu Law

Why estate plan with a will and trust?

Save money, time, and privacy by avoiding probate, designate guardians for your minor children, reduce risks of estate litigation, provide protection against beneficiary creditors, properly designate beneficiaries, title real estate a certain way and understand why you should title it that way, prevent in-laws from taking your children's money, set up a college or other financial plans for in-laws, care for your pet after your passing, state your preferences on DNR or not, designate who should be your funeral agents, indicate whether you wish to donate your organs, gain understanding of how funeral and other post-mortem actions are taken, have your beneficiaries potentially save on taxes, and the many other benefits too numerous to list here.

Like many things in life such as car and life insurance, an estate plan serves as a safety net against a wide variety of unexpected and unfortunate life circumstances that can fall on any family.

Without proper estate planning ahead of time, such tragic situations are worsened with potential probate or conservatorship proceedings and other invasive, expensive legal procedures.

Estate planning is not just about money and it is not just for the wealthy. It is for everyone who wants to provide a safety blanket and gain some peace of mind for those difficult times that we hope never arise.

Learn more about estate planning today: https://www.yuandyulaw.com/do-i-need-an-estate-plan

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Probate: What is It and Why Avoid It?

Probate is a court proceeding in which the validity of a will is proven, distribution of assets are made, title is cleared, and debts are paid.

This all sounds like a good and proper thing to do. So why avoid it?

Probate is (1) expensive, (2) public, and (3) time consuming.

(1) Up to 10-15% of your gross estate can be taken by the court, lawyers, appraisers, and other people who are not your beneficiaries.

(2) Probate proceedings are held in open court. This is how and why we know about every detail of the wills left behind by famous people.

(3) It takes time for probate proceedings to finish, sometimes up to 6-18 months. During this time, assets can be frozen and family members left without any cash while their expenses remain fixed.

By setting up a proper estate plan you can have your assets bypass probate and ensure that your loved ones inherit your property without the consequences of probate. As estate planning attorneys, we may help you by:

(A) Preparing a Trust, Will, and other estate planning documents to protect your estate and family.

(B) Reviewing your financial documents to confirm if they may already bypass probate, including accounts such as life insurance, IRAs, pay on death, and others.

(C) Recommending specific forms of property titling to bypass probate for your specific situation.

What is a Will and why do I need it in my estate plan in addition to my Trust as part of my overall comprehensive estate plan?

Wills allow people to direct where their assets should go after their passing. Wills are an important part of an overall estate plan. A specific type of will, called a pour-over will, is incorporated into an estate plan for clients.

A person who creates the will is known as the Testator (sometimes called a Testatrix, for females).

A person who is asked to represent the testator's estate after the testator has passed away, is known as the Executor.

A will:
• May direct that your assets be transferred to your trust, so it can avoid probate
• May otherwise distribute assets to any persons or entities
• May name guardians for your minor children
• May be modified or revoked as long as the Testator is alive and competent
• Does not grant any monetary or other rights to anyone until Testator has passed away

What is one of the biggest drawbacks of having just a will?
• Wills need to be probated. Probate is expensive, time-consuming, and invades privacy.

How do I properly sign a will?
• Wills must be signed by at least two competent disinterest witnesses.
• For purposes of this discussion only:
○ Competent: mentally healthy and over 18.
○ Disinterested: does not receive any assets from the will.
○ Signed: at the same time Testator signs the will.

Learn more: https://www.yuandyulaw.com/

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Happy 4th of July! Wishing you a happy and safe holiday from our estate planning team at Yu & Yu Law.

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"The entire [probate] case [to distribute assets] can take between 9 months to 1 ½ years, maybe even longer" per the California Court website.

This is probate. Time-consuming, invasive, and expensive. Probate can take 5-15% or more of your assets before your loved ones receive it. Your estate can avoid probate with a simple and affordable revocable living trust.

Have a licensed, insured, and experienced estate planning team at Yu & Yu Law provide you with a free legal consultation of your specific situation.

Schedule your free call here: https://www.yuandyulaw.com/schedule

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Stop worrying and get your Will & Trust done today by a licensed California attorney so that you and your loved ones can have more peace of mind.

From the California State Bar:

"Who needs estate planning?

You do — whether your estate is large or small. Either way, you should designate someone to manage your assets and make health care and personal care decisions for you if you ever become unable to do so for yourself. For many, such “life planning” is the most important aspect of an estate plan."

This rings very true in my experience as an estate planning attorney. Many families come to me for help in setting up their will and trust so that their children and loved ones can receive their assets when they pass away without the need for probate.

However, not many people are aware of the need for life planning, which involves anticipating for and preparing against unexpected circumstances. If a tragedy occurs and someone ends up in a coma, then a formal conservatorship proceeding may be required which can cost upwards of $10,000, or more. This can be avoided with proper planning.

While it is difficult to face our own mortality, it is always better to prepare for unexpected circumstances ahead of time. Just like life insurance, it is something that most parents should have to protect their children and family.

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Get ready for time tomorrow/Sunday! Set your clocks +1 hour before you sleep tonight and please be extra careful on the road this coming week, as studies suggest increased auto accident rates due to loss of sleep over DST.

Happy ! We love our furry family members. Study after study has shown that spaying ultimately helps prevent suffering of vulnerable pets and animals. It ensures a longer, healthier life for our beloved companions while helping to reduce the number of animals in shelters.
Did you know you can include a Pet Trust in your Estate Plan to ensure their quality of life continues if you become unavailable? Ask us about it, we are more than happy to help!

Yu & Yu Law -- Wills, Trusts, Estate Planning Lawyer Attorneys, Yu and Yu Law, Award-Winning, High Reviews, Best Wills, Trusts, Estate Planning, and Probate Attorney Lawyers in Southern California. Award-winning best customer service law firm in all fields of estate planning, healthcare directive, power of attorney, conservatorships, guardianships, serving clients from China, India, Korea, Philippines, and eve

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Yu & Yu Law Wills, Trusts, and Estate Planning for Californians.

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What is a power of attorney? What is a living trust? Who is a testator and a trustee? Here are a list of estate planning words and phrases that are useful to know as you plan your own estate.

https://www.yuandyulaw.com/glossary-of-estate-planning-terms

Administration The process during which the executor or personal representative collects the decedent’s assets, pays all debts and claims, and distributes the residue of the estate according to the will or the state law intestacy rules.

Administrator The fiduciary appointed by the court to manage an estate if no executor or personal representative has been appointed.

Attorney-in-Fact The person named as agent under a power of attorney to handle the financial affairs of another.

Beneficiary A person who will receive the benefit of property from an estate or trust through the right to receive income or trust principal over a period of time.

Community property A form of ownership in certain states, known as community property states, under which property acquired during a marriage is presumed to be owned jointly. California is a community property state.

Conservator An individual or a corporate fiduciary appointed by a court to care for and manage the property of an incapacitated person, in the same way as a guardian care for and manages the property of a minor.

Decedent An individual who has died.

Descendants An individual’s children, grandchildren, and more remote persons who are related by blood or because of legal adoption. An individual’s spouse, stepchildren, parents, grandparents, brothers, or sisters are not included. The term “descendants” and “issue” have the same meaning.

Disclaimer The renunciation or refusal to accept a gift or bequest or the receipt of insurance proceeds, retirement benefits, and the like under a beneficiary designation in order to allow the property to pass to alternate takers.

Durable power of attorney A power of attorney that does not terminate upon the incapacity of the person making the power of attorney. Also known as a “DPOA.”

Estate planning A process by which an individual designs a strategy and executes a will, trust agreement, or other documents to provide for the administration of his or her assets upon his or her incapacity or death.

Executor A person named in a will and appointed by the court to carry out the terms of the will and to administer the decedent’s estate. May also be called a personal representative. If a female, may be referred to as the executrix.

Fiduciary An individual or a bank or trust company designated to manage money or property for beneficiaries and required to exercise the standard of care set forth in the governing document under which the fiduciary acts and state law. Fiduciaries include executors and trustees.

Grantor A person, including a testator, who creates, or contributes property to, a trust. If more than one person creates or contributes property to a trust, each person is a grantor with respect to the portion of the trust property attributable to that person’s contribution except to the extent another person has the power to revoke or withdraw that portion. Also known as “settlor” or “trustor” or “testator” or “donor”.

Grantor trust A trust over which the grantor retains certain control such that the trust is disregarded for federal (and frequently state) income tax purposes, and the grantor is taxed individually on the trust’s income and pays the income taxes that otherwise would be payable by the trust or its beneficiaries.

Gross estate A federal estate tax concept that includes all property owned by an individual at death and certain property previously transferred by him or her that is subject to federal estate tax.

Guardian An individual or bank or trust company appointed by a court to act for a minor or incapacitated person (the “ward”).

Health care power of attorney A document that appoints an individual (an “agent”) to make health care decisions when the grantor of the power is incapacitated.

Heir An individual entitled to a distribution of an asset or property interest under applicable state law in the absence of a will. “Heir” and “beneficiary” are not synonymous, although they may refer to the same individual in a particular case.

Income The earnings from principal, such as interest, rent, and cash dividends. This is a fiduciary trust accounting concept and is not the same as taxable income for income tax purposes.

Interest of a beneficiary The right to receive income or principal provided in the terms of a trust or will.

Intestate When one dies without a valid will, such that the decedent’s estate is distributed in accordance with a state’s intestacy law.

Irrevocable trust A trust that, in general, cannot be terminated or revoked or otherwise modified or amended by the grantor.

Issue An individual’s children, grandchildren, and more remote persons who are related by blood or because of legal adoption. An individual’s spouse, stepchildren, parents, grandparents, brothers, or sisters are not included.

Life beneficiary An individual who receives income or principal from a trust or similar arrangement for the duration of his or her lifetime.

Life estate The interest in property owned by a life beneficiary (also called life tenant) with the legal right under state law to use the property for his or her lifetime, after which title fully vests in the remainderman (the person named in the deed, trust agreement, or other legal document as being the ultimate owner when the life estate ends).

Living trust A trust created by an individual during his or her lifetime, typically as a revocable trust. Also referred to as an “inter vivos” trust, or “revocable living trust.”

Marital deduction An unlimited federal estate and gift tax deduction for property passing to a spouse in a qualified manner. In other words, property transfers between spouses generally are not taxable transfers because of the marital deduction.

Non-Resident Alien An individual who is neither a resident nor a citizen of the United States. A non-resident alien nonetheless may be subject to federal estate tax or probate with regard to certain assets situated in the United States. An estate tax treaty between that individual’s home country and the United States may affect this result.

No-Contest Clause A provision in a will or trust agreement that provides that someone who sues to receive more from the estate or trust or overturn the governing document will lose any inheritance rights he or she has.

Operation of Law The way some assets will pass at your death, based on state law or the titling (ownership) of the asset, rather than under the terms of your will.

Personal representative An executor or administrator of a decedent’s estate.

Per stirpes A Latin phrase meaning “per branch” and is a method for distributing property according to the family tree whereby descendants take the share their deceased ancestor would have taken if the ancestor were living. Each branch of the named person’s family is to receive an equal share of the estate. If all children are living, each child would receive a share, but if a child is not living, that child’s share would be divided equally among the deceased child’s children.

Pour over will A will used in conjunction with a revocable trust to pass title at death to property not transferred to the trust during lifetime.

Power of appointment A power given to an individual (usually a beneficiary) under the terms of a trust to appoint property to certain persons upon termination of that individual’s interest in the trust or other specified circumstances. The individual given the power is usually referred to as a “holder” of the power. The power of appointment may be general, allowing the property to be appointed to anyone, including the holder, or limited, allowing the property to be distributed to a specified group or to anyone other than the holder. Property subject to a general power of appointment is includible in the holder’s gross estate for federal estate tax purposes.

Power of attorney Authorization, by a written document, that one individual may act in another's place as agent or attorney-in-fact with respect to some or all legal and financial matters. The scope of authority granted is specified in the document and may be limited by statute in some states. A power of attorney terminates on the death of the person granting the power (unless “coupled with an interest”) and may terminate on the subsequent disability of the person granting the power (unless the power is “durable” under the instrument or state law; see entry above for Durable Power of Attorney).

Principal The property (such as money, stock, and real estate) contributed to or otherwise acquired by a trust to generate income and to be used for the benefit of trust beneficiaries according to the trust’s terms.

Probate The court supervised process of proving the validity of a will and distributing property under the terms of the will or in accordance with a state’s intestacy law in the absence of a will.

Probate tax A tax imposed by many jurisdictions on property passing under an individual’s will or by a state’s intestacy law.

Property Anything that may be the subject of ownership, whether real or personal, legal or equitable, or any interest therein.

Residue The property remaining in a decedent’s estate after payment of the estate’s debts, taxes, and expenses and after all specific gifts of property and sums of money have been distributed as directed by the will.

Revocable trust A trust created during lifetime over which the grantor reserves the right to terminate, revoke, modify, or amend.

Settlor Term frequently used for one who establishes or settles a trust. Also called a “trustor” or “grantor.”

Tangible personal property Property that is capable of being touched and moved, such as personal effects, furniture, jewelry, and automobiles. Tangible personal property is distinguished from intangible personal property that has no physical substance but represents something of value, such as cash, stock certificates, bonds, and insurance policies. Tangible personal property also is distinguished from real property, such as land and items permanently affixed to land, such as buildings.

Terms of a trust The manifestation of the grantor’s intent as expressed in the trust instrument or as may be established by other evidence that would be admissible in a judicial proceeding.

Testamentary Relating to a will or other document effective at death.

Testamentary trust A trust established in a person’s will to come into operation after the will has been probated and the assets have been distributed to it in accordance with the terms of the will.

Testator A person who signs a will. If a female, may be referred to as the testatrix.

Transfer on death designation A beneficiary designation for a financial account (and in some states, for real estate) that automatically passes title to the assets at death to a named individual or revocable trust without probate. Frequently referred to as a TOD (transfer on death) or POD (payable on death) designation.

Trust An arrangement whereby property is legally owned and managed by an individual or corporate fiduciary as trustee for the benefit of another, called a beneficiary, who is the equitable owner of the property.

Trust instrument A document, including amendments thereto, executed by a grantor that contains terms under which the trust property must be managed and distributed. Also referred to as a trust agreement or declaration of trust.

Trustee The individual or bank or trust company designated to hold and administer trust property (also generally referred to as a “fiduciary”). The term usually includes original (initial), additional, and successor trustees. A trustee has the duty to act in the best interests of the trust and its beneficiaries and in accordance with the terms of the trust instrument. A trustee must act personally (unless delegation is expressly permitted in the trust instrument), with the exception of certain administrative functions.

Will A writing specifying the beneficiaries who are to inherit the testator’s assets and naming a representative to administer the estate and be responsible for distributing the assets to the beneficiaries.

See how much money your family can save with a proper estate plan. Without a proper plan your case may end up in probate court, where the government can take 5-15% of your assets before your loved ones see any of it.

Whether you need a revocable living trust, a complex will, or to properly arrange for transfer documents, get your free consultation with estate planning attorney Jay Yu today.

https://www.yuandyulaw.com/

Who takes care of my minor children if I pass away unexpectedly? There are assumptions that our loved ones such as our parents or siblings can step in automatically to act as their legal guardian but this is not true. There may be time-consuming court proceedings and expensive professionals to pay to ensure that the minor child is properly taken care of by a competent adult that you trust. By setting up a proper estate plan today, you can help save your loved ones a lot of money and time in the future.

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Yu & Yu Law Wills, Trusts, and Estate Planning for Californians.

Talk to Jay to see how our lawyers can help you and your family save money, time, and stress through a proper will and trust.

See how we strive to be the #1 customer-friendly law firm in California.

Will is a good place to start your estate plan. You can dictate where your assets go, who should serve as executor, and it is better than not having a Will.

But a Will needs to be probated. And we want to avoid probate because the probate process can take 5-15%+ of your gross estate to the government and professionals before your loved ones see your assets.

Do what you can to bypass this probate process. You can set up a living trust, set designated beneficiaries in your accounts, or set up pay-on-death accounts/transfers for certain properties.

Probate can be avoided if you plan early, and we want to avoid probate.

What is estate planning?

Wealth transfer forms the heart of estate planning. Whether during our lifetime or posthumously, transferring our assets effectively is crucial while understanding the accompanying risks.

First, there's the issue of immature heirs. A young heir might not have the capacity or experience to handle sudden wealth responsibly. There's also the problem of the property's management if you become incapable of handling it yourself.

Secondly, an estate plan that doesn't align with state intestacy laws could leave your loved ones in legal limbo. Despite your intentions, these laws could distribute your assets in ways that you didn't intend.

Lastly, estate planning is about preparation for old age. It's about setting up safeguards to ensure financial stability irrespective of what life throws our way.

It is better to plan your estate today rather than having your family end up in probate court. Probate is a court proceeding in which the validity of a will is proven, distribution of assets are made, title is cleared, and debts are paid. Remember that having just a will is not enough, as wills need to be probated.

This all sounds like a good and proper thing to do. So why avoid it?

Probate is (1) expensive, (2) public, and (3) time consuming.

1. Up to 5-15% of your gross estate can be taken by the court, lawyers, appraisers, and other people who are not your beneficiaries.

2. Probate proceedings are held in open court. This is how and why we know about every detail of the wills left behind by famous people.

3. It takes time for probate proceedings to finish, sometimes up to 6-18 months. During this time, assets can be frozen and family members can be left without any cash while their expenses remain fixed.

By setting up a proper estate plan you can have your assets bypass probate and ensure that your loved ones inherit your property without the consequences of probate.

What type of trust do I use for my IRA? How do I make it a "see-through" trust?

Under a "conduit trust", all distributions made from the retirement plan to the trust during the lifetime of the “conduit” beneficiary of the trust must be passed out (after deduction of applicable expenses) more or less immediately to the individual life beneficiary. The conduit beneficiary is considered the sole beneficiary of that trust and of the plan, regardless of who will inherit the trust and remaining plan benefits if the conduit beneficiary dies prior to complete distribution of the retirement plan. So, a conduit trust “automatically” qualifies as a see-through trust.

Post-SECURE, leaving benefits to a conduit trust for a single individual beneficiary will still be treated, for minimum distribution purposes, the same as leaving the benefits outright to that individual. Accordingly, the individual will be deemed the participant’s sole designated beneficiary and the trust will be entitled to the “10-year payout rule”

With an "accumulation trust", the Trustee can “accumulate” retirement plan distributions in the trust during the lifetime of the initial beneficiary(ies) for possible later distribution to another beneficiary. All beneficiaries who might ever be entitled to receive such accumulations are “counted” as beneficiaries for purposes of applying the minimum distribution rules, except that a beneficiary who is a “mere potential successor” to another beneficiary is disregarded. An accumulation trust qualifies as a see-through trust only if all of the countable beneficiaries are identifiable individuals.

With the exception of certain trusts for the sole life benefit of disabled or chronically ill beneficiaries, an accumulation trust that is a see-through trust must take distribution of the entire plan balance within 10 years after the participant’s death.

Always remember that designated beneficiaries take precedence over people you name as your heirs in your will and trust. That is, if you can name someone as a beneficiary directly in situations like life insurance, IRAs, pension plans, retirement plans, pay-on-death, transfer-on-death, or any other instances where you can directly name a beneficiary, then that beneficiary will take precedence over any contrary distributions wishes you state in your will and trust.

Proper estate planning involves checking such accounts to make sure it fits your overall goals. Remember this important follow-up to your estate planning process.

[For general information purposes only. No content in this post or page or our website is intended to serve as legal advice. Estate planning is a serious matter and you should not rely on advice from internet strangers.]