Posted on February 04, 2025 in Estate And Probate Administration

Credit card debt in the United States has reached record highs in recent years. This has caused some people to be cautious, avoiding credit card use as much as possible to prevent overwhelming debt.

But what happens if someone passes away while still carrying a substantial amount of credit card debt? Suppose adult children have been careful about avoiding credit card use, only to find out that their parents passed away with $20,000 in debt. Will those children suddenly inherit the credit card debt along with their parents' estate?

Paying down the debt

In most cases, the debt still needs to be paid, but that does not mean the beneficiaries will inherit it. Unless they cosigned on the credit card accounts, they are not personally responsible for the debt.

Instead, the estate executor typically pays off the credit card debt along with other obligations such as income tax, property tax and utility payments. It is the executor's job to handle debts on behalf of the estate after someone passes away.

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 Posted on January 22, 2025 in Trusts

Establishing a trust for your children can be one of the most impactful decisions you make in securing their future. They can not only safeguard your assets but also ensure that your young children have financial stability and guidance long after you are gone.

Here are three compelling reasons to consider setting up a trust for your young children.

Minors cannot inherit directly

Children under the age of 18 cannot inherit assets directly. If you die without a trust in place, assets for your kids must pass through probate. The court will appoint a guardian to manage these assets until the children are adults.

Unfortunately, this may not align with your wishes for how the assets should be managed. A trust empowers you to designate a trusted individual to oversee the assets for your children's benefit.

Distribution via a will can be risky

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 Posted on January 08, 2025 in Estate And Trust Litigation

A will is an invaluable estate planning document, outlining how a person's assets should be distributed after their death. For a will to be valid, the maker must have testamentary capacity at the time it is created.

If you suspect that the maker of a will lacked sufficient testamentary capacity at the time it was created, you may have grounds to challenge its validity in court. For your case to hold, you must provide evidence demonstrating that:

Testator did not have a rational distribution plan

If the testator's distribution plan seems irrational or inconsistent with their previous intentions, it may suggest a lack of testamentary capacity. For example, leaving the majority of the estate to a distant acquaintance without explanation can raise concerns. Courts may scrutinize these decisions, especially if they conflict with the testator's past behavior or relationships. Evidence like prior wills or testimonies from close relatives can support the claim that the distribution was not rational.

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 Posted on December 18, 2024 in Trusts

Are you creating trusts to hold your young beneficiaries' inheritance until they're ready for the financial responsibility? If so, you want to select trustworthy trustees who you can be sure will look out for your beneficiaries' best interests.

Selecting the wrong individuals can jeopardize your family's financial future and undermine the work you put into building the wealth you've generated for the next generation. Conversely, when you make the right choice, a trustee can provide stability, transparency and prudent management.

Understand the role of a trustee

Before selecting trustees, you should understand what you can expect from them. Grasping their responsibilities allows you to identify individuals who embody the skills and values you're looking for. Trustees are more likely to adhere to the terms you set for various trusts if they are prudent individuals who take their fiduciary responsibilities seriously. You also want to select individuals who will be proficient in:

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 Posted on December 05, 2024 in Estate And Probate Administration

The executor of a will has significant authority to manage and distribute the estate's assets, including selling property. However, this power is not absolute and must align with the law and instructions in the will.

Understanding an executor's rights and limitations as a will beneficiary can help you navigate probate confidently and look out for your interests.

The will can provide directions

The first place to look is in the will. If it explicitly grants the executor full authority to sell assets, they generally have the legal right to do so without requiring approval from the beneficiaries or even the court in some instances.

Should the court decide supervision is necessary, or the executor has no independent authority to dispose of estate assets, they may need court approval before selling certain assets.

The executor still owes the estate a fiduciary duty

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 Posted on November 20, 2024 in Estate And Probate Administration

A probate court usually oversees the distribution of a deceased person's assets and settles their final affairs. However, some estates or properties can skip this process entirely, saving time, money and stress for the person's loved ones. Understanding these situations can help you plan your estate more effectively or navigate a loved one's passing with less difficulty.

If you have a small estate

In California, estates valued at $184,500 or less (as of April 1, 2022) may only need a small estate affidavit. This process allows beneficiaries to claim personal property, such as bank accounts or stocks, without going through full probate. To use this method, at least 40 days must have passed since the person's death, and no formal probate case should be open. However, take note that this process is not applicable to real property like houses or land.

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 Posted on November 08, 2024 in Estate Planning

Perhaps you understand how essential estate planning is for you, your family and your assets, and you are ready to create your plan. You may prioritize convenient and low-cost planning, but choosing the wrong approach could compromise everything you care about.

Before you select a method that seems affordable and easy, take time to learn about some of the estate planning scams that are used to prey on people. Being aware of scams and risks helps protect your assets and avoid fraud.

Phony charity scams

These scams involve urging people to leave part of their estate to a fake charity or ask for donations to a non-existent cause. Always verify the legitimacy of any charity before making donations or including them in your estate plan.

Living trust mills

These involve individuals posing as estate planning experts and offering cheap living trust packages, often targeting seniors. They use high-pressure sales tactics to sell generic, one-size-fits-all documents that may not serve your best interests. Be cautious of aggressive sales pitches.

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 Posted on October 25, 2024 in Probate Litigation

Before contesting your loved one's will, it helps to understand the legal complexities and emotional challenges involved. Contesting a will is not something to be taken lightly. It can strain family relationships and lead to lengthy court proceedings.

However, if you believe the will doesn't reflect your loved one's true intentions or there were legal issues in its creation, contesting it may be the right move to protect your inheritance. Here is what you need to know before taking this significant step.

You must have valid legal reasons

You can't simply contest a will because you don't like its terms. You must have valid legal grounds. These include:

• Lack of testamentary capacity by the owner of the will
• Undue influence
• Fraud or forgery
• Improper execution of the will

Remember, the burden of proof lies on you, which means you must present evidence supporting your claims.

Not everyone can contest a will

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 Posted on October 10, 2024 in Estate And Trust Litigation

A trust is a legal tool used to manage assets. Generally, the settlor (the person who creates the trust) uses it to pass assets onto beneficiaries. The individual tasked with managing the assets in a trust and carrying out its functions is the trustee.

Trustees hold a very important position, and they have fiduciary duties. In a nutshell, fiduciary duties mean acting in the best interests of the beneficiaries. However, below is a more in-depth overview of the fiduciary duties of a trustee.

The duty to act in good faith

Honesty is at the center of all fiduciary roles. A trustee must always communicate openly and act with integrity. Hiding important information from beneficiaries and other interested parties could amount to a breach of fiduciary duty.

The duty of loyalty

Being a trustee can be hard work. It is a huge responsibility that requires time and effort. The trustee must be prepared to put in this effort and remain loyal to beneficiaries at all times.

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 Posted on September 24, 2024 in Estate And Probate Administration

A loved one or someone you know on a professional level has asked you to become their estate's executor, and you told them you need time to think. How should you respond? Should you accept the role, or do you think it's wise to turn it down?

Before responding, here are two things to consider:

How complex is the estate?

The first thing to consider is the complexity of the estate. Ask the testator (the person who drafted the will) about the properties included, the uniqueness of the assets, the number of beneficiaries and so forth. When adequately informed about this matter, you can determine if an estate is complex and whether or not you can administrate it competently.

Note that small estates can also be complicated. An estate may have fewer yet unique assets, like stock options, digital currencies or artwork. Further, an estate with fewer beneficiaries doesn't necessarily mean administration will be smooth. If one contests the will, you may have a challenging process.

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