This week’s question:

I have several items of fairly low value that I want to pass on to my children.  The problem is that if I list them in my will and then change my mind, it may cost more than they are worth for my attorney to change my will.  Is there any way around this?

/s/Stephanie S.

Almaden Valley

Dear Stephanie—

I can understand your predicament, Stephanie.  From your point of view, the attorney’s fees for a new will or codicil or amendment to your present will made cost more than some of the items are worth.

Fortunately, the California legislature has been aware of this problem as well.  In 2006, the legislature enacted Probate Code §6132, entitled “Writing Directing Disposition of Tangible Personal Property.”

This law basically states that your will may refer to a writing that directs disposition of tangible personal property.  There are a few exceptions, such as money that is common coin or currency and property used in a trade or business.  And there are some monetary limitations.

So, what you might want to do is to leave a list of which items pass on to what people if something happens to you and make sure that the list is referred to in the will.  You will also want to make sure the list is kept up to date.

I would also check with my attorney to make sure that my will refers to the list and that the list of items is proper in all respects.  Then, you may be able to just change the recipient names or the items as time goes on.

If you would like to read the key provision authorizing such a list, you can go online with your favorite search engine and enter California Probate Code Section 6132.

You will see that the will needs to be unrevoked, i.e. it must be your current, valid will.  Also, the writing needs to be dated and either in your own handwriting or the list needs to be signed by you, the testator or will maker.

Another requirement is that the writing must describe the items and the recipients of the property with reasonable certainty.  For example, I would think that “My wedding rings to my niece Patsy Faye” or “My toy car collection to my grandson Benjy” would be OK.

In this manner, if you change your mind later on about who gets what, you can just change the list without incurring the legal expense of a new will or codicil (amendment) of your current will.

Good luck with your list, Stephanie.  I hope it works out OK.

/s/Donald J. DeVries

Almaden Valley

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This week’s question:

My wife and I have a living trust, wills, and related documents, but I am curious about this question.  If I were to die, just who are my heirs? Where would my property go? Where can I go for more information about this topic?

/s/Henry H.
Almaden Valley

Dear Henry—

Thank you for emailing in that question. And it’s good to know that you and your wife already have a living trust, wills, and related documents. You should be in good shape legally if something were to happen to you.

Listing your heirs really depends on a lot of things. First of all, you would want to look at your legal residence, since many state laws are different. Let us assume you live in California when you die.

By the way, if a person dies without a will, we say that the person died “intestate.”

Next, you would look to see your marital status. If you are married, your surviving spouse has certain rights if you die without a will. Some of these rights are stated in California Probate Code §6401.

If a person dies as a single person, his or her property usually passes to the decedent’s “issue”, or children, in equal shares, under California Probate Code §6402(a), and if there is no surviving “issue”, to the decedent’s parent or parents equally.

If there is no surviving “issue” (children) or parent, then to the issue of the parents or either of them, i.e., brothers and sisters of the decedent, under Probate Code §6402(c).

Of course, there are provisions in the law for more remote relationships, just in case that becomes necessary. One can envision where it may be necessary to pass property interests to great grandchildren, or even first, second, or third cousins thrice-removed. Of course, the decedent may not have ever met these people.

A colorful chart showing some of these relationships can be found by going online to MyStateWill.com. You can readily see various “Degrees of Kinship by the Rules of Civil Law” prepared by the author of that work. A note of caution is needed, however, and that is to always determine what state the information applies to, since each state has different laws when it comes to trusts, wills, and related issues.

Another note of caution for our Almaden Times readers: you will always want to consult with your own attorney to see how these general legal principles may or may not apply to your particular situation. It seems like for every rule there are numerous exceptions, and only your own personal attorney can advise you properly.

/s/Donald J. DeVries
Almaden Valley

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This week’s question:

My husband and I are thinking about drawing up a living trust and related documents but are concerned about the need for a separate tax identification number for the trust. We would both be trustees of our family trust. Can you shed some light on this topic?

/s/Jenny J.
Almaden Valley

Dear Jenny—

You have raised a very good question, Jenny. You must be concerned about the possibility of your trust needing separate annual fiduciary income tax returns, state and federal, with accompanying cost and nuisance factors.

Let us assume for the sake of discussion that you do in fact have a “living trust”. This is also called a “revocable” trust. (A few months ago an article appeared in this column pointing out the differences between revocable and irrevocable trusts which can be seen on my website.) The revocable trust or living trust is also known as a “grantor” trust.

You can think of the “grantor” of the trust as the “creator” of the trust, you and your husband. Other terms often used are the “settlor” of the trust or “trustor”. Sorry about all of this redundancy and possible confusion, that’s just the way it is.

Internal Revenue Code rules and Treasury Regulations generally provide that so long as the trust is a “grantor trust” and all income is distributed to or for the benfit of the grantor(s), no federal tax i.d. number (TIN) is required while the grantor, or at least one of the two grantors, serves as Trustee or Co-Trustee. If that is the case, the trust uses the grantor’s personal social social security number of either grantor as its TIN.

Thus, under the Treasury Regulations, if you and your husband have a typical living trust, you would continue to file your usual state and federal tax returns each year and report all income under your own social security numbers. In a sense, the trust is treated as one person for income tax reporting purposes.

As long as you and your husband are both living and filing your normal tax returns, then usually there would be no requirement to file separate state and federal fiduciary tax returns for the trust.

You will want to contact your own attorney, however, if part or all of the trust becomes irrevocable, through death or other means, or if someone else becomes trustee of your trust. Other exceptions apply too, for example, if the trust conducts a business as a sole proprietor. In those situations, a visit with your own attorney or CPA is essential.

Thank you for emailing in your question, Jenny. I think our Almaden Times readers will appreciate it.

/s/Donald J. DeVries
Almaden Valley

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This week’s question:

 

My wife and I are thinking about a new living trust, wills,

and other documents, including a durable power of attorney for asset management

and advance health care directive. It sounds like the volume of paperwork is

incredible! My question is a simple one: where do we store our documents once

they are all signed—at the attorney’s office?

 

/s/Larry L.

Almaden Valley

 

Dear Larry:

 

You have emailed in a very common question, Larry. At the

conclusion of most projects dealing with living trusts, wills, and related

documents, clients want to know about where to store the papers.

 

I think it is safe to say that practices vary a little bit

from office to office. Our practice has been for many years that we do not

like to retain original documents. We typically provide the originals and two

copies to the clients and we retain a copy of the signed documents for our

file.

 

With the advent of good photocopiers many years ago, there

is really no need for us as attorneys to retain the originals, and under the

California Evidence Code, a copy can usually be as good as the original.

 

We usually recommend that the clients place the original

documents in a very safe place, like a safety deposit at the bank and that they

retain at least one of the sets of copies at home for ready-reference.

 

A question that often arises is whether to give a copy to

the family, such as adult children or the Successor Trustee of the Trust and/or

Executor of the Will. We have found that this is a personal decision that

varies from family to family. Some clients like to keep all documents to

themselves, so to speak, and others like to provide copies to key individuals.

 

At the very least, key individuals, like the Successor

Trustee of the Trust and the Executor of the Will need to know where to find

the documents in case the need arises, like in a certain area of the home. 

Sometimes the key individuals are named and sign on bank deposit access cards

on file at the bank so as to have ready-access to the important documents in

times of need.

 

Of course, a copy of the Advance Health Care Directive

should be provided to the person’s doctors and hospitals, just in case

the need arises. In fact, hospitals are now required to ask if patients being

admitted have such a document. And for good reason.

 

Another good reason for clients to have copies of their

documents at home is for periodic review of them just to make sure they have

their legal papers in order. It is good to review them at least once a year if

not more frequently.

 

/s/Donald J. DeVries

Almaden Valley

 

Donald J. DeVries is an attorney practicing law in the

Almaden Valley. Past Almaden Times articles

since 1986 can be accessed through his web site: www.almadenvalleylawyers.com. If

you would like him to answer your question in his next Almaden Times column, you can reach him by

email at don@almadenvalleylawyers.com,

with “Almaden Times” in the subject line, fax at (408)268-6502,

telephone at (408)268-9500, or mail at DeVries & Horowitz, 6475 Camden

Avenue, Suite 200, San Jose, CA 95120. Your matters are personal and private,

so of course, he will not disclose your identity or any details about your

situation. Mr. DeVries writes this column to provide you with general

information about important legal matters affecting California

residents—not to give you legal advice about your specific matter. No

attorney-client relationship is created by these articles. The law is complex

and constantly changing and varies from state to state. So you should consult

an attorney before taking any action that would affect your personal or

business matters.

 

 

 

 

This week’s question:

 

My parents live here in the Almaden Valley

and they have a living trust. My sister and I are very curious about what the

trust says but our parents say politely that it is none of our business. Since

our parents have said that my sister and I are the beneficiaries of the trust

and receive everything when they pass on, can’t we have a copy of the

trust and know all about it?

 

/s/Jimmy J.

Almaden Valley

 

Dear Jimmy:

 

You and your sister have some good questions, but your

parents’ business may be just that.

 

Since your parents are still living and presumably of

“sound mind”, they can presumably revoke (i.e., change, modify, or

cancel) any part of their trust. It is typically revocable during their lifetime.

 

Once one of your parents passes on, usually the trust

becomes “irrevocable”

as to the deceased person’s share, i.e., fixed, permanent, unchangeable.

 

Revocable living trusts are something like a will. And just

as a will “speaks” only as of the date of the testator’s

death, a revocable trust confers enforceable property interests in the

beneficiaries only at the time it becomes

irrevocable. Prior to that time, those beneficiaries have no rights

to the trust property, and thus no say in how it is managed. Or even what is

in the trust.



 

California Probate Code §15800 sets forth the

rule: “Except to the extent that the trust instrument otherwise provides

or where the joint action of the settlor [creator of the trust] and all

beneficiaries is required, during the time that a trust is revocable and the

person holding the power to revoke the trust is competent: (1) The person

holding the power to revoke, and not the beneficiary, has the rights afforded

beneficiaries under this division.”



 



Any interest that beneficiaries of a revocable trust have in

trust property is “merely potential” and can “evaporate in a

moment at the whim of the settlor”. A settlor with revocation power

retains the power and control of the trust estate and can with a stoke of the

pen divest the beneficiaries of their interest. 



 



Be sure to discuss the above general principles with your

own attorney to see how they may apply to your own situation. There is really

no substitute for that. 



 



You may also find a recent case helpful online, decided

September 27, 2011. Go to your favorite search engine and enter: Estate of William A. Giraldin or Christine Giraldin v. Timothy Giraldin. It

should be up on your screen in a heartbeat. It may be a little tedious, but

it’s good reading.



 



/s/Donald J. DeVries



Almaden Valley



 



Donald J. DeVries is an attorney practicing law in the

Almaden Valley. Past Almaden Times

articles since 1986 can be accessed through his web site: www.almadenvalleylawers.com. 

If you would like him to answer your question in his next Almaden Times column, you can reach him by

email at don@almadenvalleylawyers.com,

with “Almaden Times” in the subject line, fax at (408)268-6502, telephone

at (408)268-9500, or mail at DeVries & Horowitz, 6475 Camden Avenue, Suite

200, San Jose, CA 95120. Your matters are personal and private, so of course,

he will not disclose your identity or any details about your situation. Mr.

DeVries writes this column to provide you with general information about

important legal matters affecting California residents—not to give you

legal advice about your specific matter. No attorney-client relationship is

created by these articles. The law is complex and constantly changing and

varies from state to state. So you should consult an attorney before taking

any action that would affect your personal or business matters.