Frequently Asked Questions

Like many of our clients, you may be wondering what all those documents are that we just listed.  Hopefully these brief definitions will help you understand why all of the documents are important:

• Living Trust:  A living trust is a trust set up while a person is alive and which remains under the control of that person until death.  Also referred to as an "inter vivos trust," a living trust is an excellent way to minimize the value of property passing through probate.  This is because it enables the "grantors" (the individuals who have established the trust) to specify that money or other property will pass directly to their beneficiaries at the time of their death, free of probate, and yet also allows the grantors to continue to control the property during their lifetime, to revoke or amend the trust, or to change the beneficiaries if they wish.

• Probate:  Probate is a court procedure in which a court determines whether the decedent left a valid will and then appoints someone to pay the decedent's debts and taxes, identify the decedent's heirs, and distribute the decedent's property in the probate estate according to the decedent's will, if the decedent left a will.  Probate may make sense in some cases. Probate in some states, such as Washington, can be a fairly simple and inexpensive process.

  In contrast, probate in California is costly in both time and money.  In California, probate fees to pay the personal representative and the attorney who must work on the probate process are set by statute, and are based on the gross value of the estate.   For example, the combined representative and attorney fees for the probate of a $400,000 California estate would be $22,000.  Cost of publication and filing fees can raise the cost by several hundred dollars.  Termination and distribution of a fairly simple trust with assets of $400,000 on the other hand should cost much less.  Note, however, that administration of a trust can be complex, and just because one has a trust does not mean that one avoids all administration costs, or eliminates all estate taxes. 

• Trust Administration:  Even with a properly funded trust, when the owner of the trust property (called the "Settlor") dies, there is work to be done. The assets in the trust must be appraised, and the assets outside of the trust, if any, not passing automatically to a new owner must be attended to. If the Settlor is married and the trust directs that a second trust shall be established on the first death, this subtrust must be established and funded. Any beneficiary of an irrevocable trust must be notified of the trust's existence, and certain state and federal agencies must also be notified of the Settlor's death. If estate taxes are owed, they must be paid within 9 months of the death, or penalties will begin to accrue.

• Will:  A will is a legal document in which a person states various binding intentions about what he or she wants done with his or her property after death.  In order for the instructions to be followed, a will must go through the probate process.  Compare to a trust, where the instructions are followed outside of the probate process, so long as the trust is properly funded, i.e., the decedent's assets have been transferred to the trust.  All properly prepared estate plans contain a will, if only a "Pour-Over Will" (see below) that transfers to the trust assets that were not transferred to the trust during the client's lifetime. A will may also be used to accomplish things a trust cannot.  For example, a will may be used to nominate guardians for minor children, provide funeral or burial instructions, or exercise a power of appointment.  A will alone, without a trust, is typically appropriate only if assets are limited, there is no spouse or child, and probate costs are not an issue.

• Guardian:  A guardian is a person appointed by court order to take care of the person, or property, or both, of someone unable to do so by reason of minority or incapacity. A “guardianship of the estate” allows a parent to nominate someone to manage and control the minor's property until the minor reaches age 18.  A “guardianship of the person” allows a parent to nominate someone to supervise the minor's daily living, including schooling, medical care, clothing, shelter, and food. The guardian of the person is also responsible for the nurturing aspect of child raising. 

• Pour-Over Will:  Pour-over wills are most commonly used for two purposes.  One purpose of the pour-over will is to protect against a possible failure to transfer later-acquired or overlooked assets to a Living Trust.  In California, if the value of the assets that were later-acquired or overlooked does not exceed $184,500 (Adjusted for inflation), the trustee may be able to collect the assets without a probate as a "small estate" (under California Probate Code 13100).  In Washington, a small estate is defined as an estate of less than $100,000 in probate assets.

  The second purpose of a pour-over will is for when a revocable trust has only nominal assets during creator's lifetime. This is sometimes a strategy used to maintain privacy of the trust distribution terms, because, for a will, the terms are public record.   In such instances, a pour-over will permits the property to be probated on death which may be desirable if there is a risk of significant creditor problems,while still avoiding the public disclosure of the final disposition of the property. A pour-over will in California can avoid a full blown probate if the Schedule A: Trust Assets is kept up to date. A pour-over will in Washington will only fund the Trust through probate.

• Health Care Directive:  Also known as a living will, the health care directive is a document that directs what you want to have happen to you if you are in the hospital if you are not able to speak on your own behalf regarding such important issues as treatement for pain or being placed on life support.   The health care directive allows you, as the “principal” to grant certain authority to another person, known as your “agent,” to act on your behalf.  The agent is the person who steps in to work with the hospital or other health care provider to decide what type of treatment you should receive, and whether you are to receive artificial life support if there is no reasonable expectation of recovery.

• Power of Attorney:  A power of attorney is a written document where you, as the “principal,” grant certain authority to another person, known as your “agent” or “attorney in fact” to act on your behalf. A power of attorney allows you to exercise your right to control your financial affairs during incapacity. 

Estate Planning & Trust Administration
Fee Schedule

We use a fixed fee format for an initial estate plan, so unless the work that you request us to do for you is significantly outside of that ordinarily required to prepare an estate plan, we will not charge you any additional amount. Our fee for a married couple's estate plan, including their Living Trust, Pour Over Wills, Health Care Directives, Power of Attorney Documents starts at $3200, and is based on overall complexity and whether both spouses are U.S. citizens.  Our fee for a single individual who would like an estate plan and needs a Living Trust starts at $3000.  If the work requested is outside of the normal range, or is to amend an existing plan, we bill at $400.00 per hour. 

Trust administration work is billed at $400.00 per hour, with a $1200 initial deposit.

First Steps.  My usual first step with prospective clients is that we set up an initial meeting (via Zoom in most cases) in order to discuss their needs and specific questions they may have about their particular situation.  As a courtesy, the first meeting, up to a maximum of 30 minutes, is free.  The basic questions of a typical estate plan or trust administration scenario can usually be answered in that time. After 30 minutes, I will ask if the client(s) wish to continue the estate planning or trust administration discussion.  If so, at that point billing begins at my usual hourly fee of $400/hour.  At the end of the discussion, should you decide to go forward with an estate plan, all fees from the initial discussion will be credited towards your estate plan (billed at a fixed fee).  If not, any fees (beyond the free first 30 minutes) will be due at the end of the initial consultation. Finally, note that any scheduled appointment canceled without appropriate notice (less than 24 business hours) is subject to a $200 cancellation fee.

If you would like to schedule an initial meeting with me, please use my online calendar or call my office at 408-741-2298.