Common Estate Planning Misconceptions –  Many people have some firmly held — but incorrect — beliefs regarding estate planning concepts.  These misconceptions can negatively affect how people choose to proceed.  Let’s debunk some common misconceptions with a Lake County estate planning attorney.

          If I have a will does that mean my estate avoids probate? No.  Having a will is often a ticket to a probate.  When a California resident dies with a probate estate that has a gross value of $150,000 or more the will is submitted to court for probate.  A Trust could have been used to avoid probate.

          If I have a Trust does that mean I do not need a Will?  No.  Having a Trust means that the assets transferred into the trust avoid probate.  Usually people keep some assets outside their trust (e.g., vehicles and day to day checking account).  A pour over will accompanies a trust and directs that these assets be transferred to the trust.  So long as under $150,000 in assets pass under the will no probate is required.  In addition, a will may be used to make certain smaller gifts to friends outside of the trust in order.  That way, these minor beneficiaries, unless they are also heirs, do not then have to receive a copy of the trust.

          If I am named as the executor in a decedent’s will doesn’t that make me the executor?  No.  The will has to be admitted by court order to probate and letters testamentary have to be issued.  Only then does the nominee become the executor.

          Isn’t a will notarized?  No.  Unlike trusts and deeds wills are not notarized.  Wills are witnessed by two disinterested persons who sign an attestation clause.  By disinterested I mean that the witnesses receive no personal benefit to themselves or to their family under the will. 

          If I have a Trust doesn’t that mean no administration is needed once I die?  No.  A trust still requires administration to settle the trust estate.  That said, settling a trust estate generally involves less expense, less time, and less aggravation than settling the same estate (assets) inside a court probate.

          If I don’t have a will or a trust then won’t my assets simply go to the State?  No.  Not having a Will or a Trust invites an intestate probate without a Will, unless the estate is under $150,000 in which case small estate procedures can be used.  The decedent’s heirs stand to inherit the decedent’s estate, subject to creditor claims.  If the heirs don’t claim their inheritance, then the estate of a deceased resident of California may “escheat” to the State of California.

          If I want to disinherit one or my heirs then don’t I leave him or her $1 in my will?  No.  If you want to disinherit someone expressly say so in your will and trust using a Disinheritance Clause.  Leaving a $1 bequest is unnecessary and offensive. 

          If I get married doesn’t that mean that my assets become community property assets?  No.  Certain assets can remain your separate property even during marriage.  Any premarital assets, any inheritances and gifts received during marriage are all your separate property, provided you keep them in your name and don’t otherwise transmute (change) them into community property by signing a written transmutation instrument.

          If I live with someone as though we were married for seven years in California doesn’t that create a Common Law marriage?  No.  But while Common Law marriages are not created in California, they are still recognized here if one was validly created elsewhere in a Common Law state. 

          If one or more of the foregoing misconceptions apply to you, then what other misconceptions do you also have?  How are these misconceptions affecting your choices and actions?  What are you going to do about it?

“Serving Lake and Mendocino Counties for nineteen years, the Law Office of Dennis Fordham focuses on legacy and estate planning, trust and probate administration, and special needs planning. We are here for you. 870 South Main Street Lakeport, California 95453-4801. Phone: 707-263-3235.”