Are letters of intent binding?

Many people in the community who lost homes in Coffey Park, Fountaingrove, Mark West Springs, Wikiup and elsewhere are continuing to work on rebuilding their homes.  Builders sometimes ask people to sign a letter of intent as part of this process.  The builder may want you to sign a letter of intent to show that you are serious about working with them. Is a letter of intent nonbinding ?  It may surprise you to hear that a letter of intent can sometimes be binding.  That would be unusual, and it would probably happen when there is a lot of detail in the letter of intent about what the parties are agreeing to.  Even if a letter of intent is not [...]

By |2018-02-27T14:18:54-08:00February 27th, 2018|Uncategorized|

Understanding The Difference Between Wills And Trusts

When you are trying to decide on the ideal way to pass on your assets to the next generation, understanding the difference between wills and trusts is vital. While both have their advantages, every person should be aware of the advantages and disadvantages for their unique situation in order to make an informed decision as to which is better.   Wills   A will is a legal document that details who gets which of your assets after you die. Your will allows all assets to be processed through probate court and then released as appropriate to your heirs and beneficiaries. Your will allows you to do several vital things, including:   Name an executor to manage the distribution of your [...]

By |2018-08-10T14:19:23-07:00May 20th, 2016|Uncategorized|

Forms for designating beneficiaries

I have written about the importance of keeping your beneficiary designations current on your IRAs, life insurance policies and so forth.  It is also important to coordinate the distribution of those assets with the distribution of the assets in your trust. When designating beneficiaries, you don't necessarily have to use the form that the company provides.  I do recommend starting there, but you should feel free to attach your instructions to the form rather than trying to fit everything into their form.  For that matter, you are not obligated to use their form and can create your own form.

By |2016-05-21T21:28:09-07:00August 19th, 2015|Uncategorized|

Trustee Surcharges

I often represent trustees who have gotten into a conflict with one or more beneficiaries of a trust after a loved one dies.  I see this, for example, when the second parent of a couple dies, and the couple's assets are to be distributed to their children.  The couple names one of the children as the trustee, and her siblings may question how she is carrying out her duties as trustee. If a trustee has in fact done something wrong, the Probate Court could order a "surcharge" against her--this basically means that she has to pay some money to the trust to make up for her mistake. When I negotiate such issues, I sometimes find that the parties get confused [...]

By |2018-08-10T14:19:23-07:00July 23rd, 2015|Uncategorized|

Do You Need a Bypass Trust (Revisited)?

In my last post, I talked about why most people probably don't need a bypass trust in their estate plans anymore.  This is because most peoples' estates are below the threshold for paying any estate tax--in 2015, $ 5,430,000 for an individual and $ 10,860,000 for a couple. However, people may still want to establish some sort of a bypass trust in order to control who gets their assets when the second spouse dies.  While both spouses are alive, they can agree on who gets their property when the second of them passes away.  When the first spouse dies, his property goes into the bypass trust for the lifetime benefit of the second spouse.  At that point, the bypass trust [...]

By |2018-08-10T14:19:23-07:00July 20th, 2015|Uncategorized|

Do You Need A Bypass Trust ?

I have seen a number of clients in the last twelve months who have provisions for a "bypass trust" in their current estate plans.  In the usual scenario for plans in the past, a bypass trust is created and funded when the first spouse of a couple dies.  Some (perhaps all) of that spouse's property is put into the bypass trust for the benefit of the surviving spouse.  When the surviving spouse dies, that property is distributed to the final beneficiaries (often the couple's children). Estate planners drafted for bypass trusts in the past because it was a way of reducing estate taxes.  If someone died in the year 2000, for example, an estate worth over                $ 675,000 would be taxable.  [...]

By |2018-08-10T14:19:23-07:00July 13th, 2015|Uncategorized|

Rule Against Perpetuities

The "Rule Against Perpetuities" is something I thought I had left for the most part when I finished law school.  I have found, however, that it can come up when someone would like to keep an asset in a trust indefinitely.  For example, a client may want to keep some real estate "in the family," so she wants to put it in a trust forever. Under California Probate Code Section 21205, a client generally has to pass property within 21 years of the death of a person alive at the time the trust is created, or within 90 years, whichever is longer.  This generally means that my client cannot keep her family home in her trust forever.  At some point, a family member will [...]

By |2018-08-10T14:19:23-07:00June 23rd, 2015|Uncategorized|

Selling Real Estate When You’re the Executor or Administrator

I have worked with a number of clients over the years who were the executors of a loved one's will.  When an executor wants to sell some real property, there are some rules in the Probate Code that she needs to think about.  The rules are generally more cumbersome than those for a trustee of a trust who wants to sell some real estate.  I wrote about that in an earlier post. Sometimes a client is the administrator of the loved one's estate.  This happens when a person dies with neither a trust nor a will. Whether the client is the executor or the administrator, he has to follow the rules in the Probate Code for selling real estate through [...]

By |2018-08-10T14:19:23-07:00May 22nd, 2015|Uncategorized|

Selling Real Estate When You’re the Trustee

I often meet with trustees who want to sell the family house that is in the trust.   This is frequently the parents' house, and the surviving children don't want to own and manage the house together. The trustee usually has the power to sell real property without getting anyone's permission, but I generally recommend that a trustee obtain the agreement of all the trust's beneficiaries.  If not everyone will agree, then the trustee can submit a petition to the Probate Court requesting approval of the sale. Taking these steps protects the trustee from a potential lawsuit by one of the beneficiaries.  If the trustee just sells the house, a beneficiary can always complain that she got too low a price, or paid [...]

By |2018-08-10T14:19:23-07:00May 12th, 2015|Uncategorized|
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