QUESTION 1: My wife and I just had our first baby. We don't have much money or property. Do we need a will?
ANSWER: Yes. One of the most important things you can do for your children is to designate your choice of the person who would raise you children if you and your spouse were both deceased. Ideally, you would choose someone in your age group that the children know and like and who has the same method of parenting as you and the same religion. Many parents don't have someone who fits the ideal description but you are the one best qualified to make the hard choice. Don't designate someone without talking to them ahead of time.
QUESTION 2: I have heard that probate is a very tedious and annoying process to go thru. What is probate?
ANSWER: Probate is the process of gathering together all of the assets of an estate, paying the creditors, and distributing the assets to the heirs of the estate under the surveillance of the court. It is the process by which the government tries to assure that no funny business takes place that deprives the heirs of receiving their share of an estate in a timely manner. It is not necessarily a bad thing.
QUESTION 3: I have heard that probate is very costly. Is that true?
ANSWER: There are 3 elements of the cost of probate. The first is the court costs which include the filing fee (currently about $200), cost of a bond if required (fee is based on the size of the estate) and the fee of the court appointed appraiser. The will can waive the bond, saving this expense, so these costs are usually modest. The second element is the fee paid to the executor or personal representative of the estate. This person does a lot of the leg work and has responsibility for the assets in the estate and their distribution. If this person is an heir, such as one of the children of the decedent, they routinely waive their fees. If they don't , they are entitled to be paid the same fee as the attorney for the estate. The attorney fees are set by statute as a percentage (sliding scale) of the estate and must be approved by the court. As an example, the attorney fees for an estate with a value of $250,000 will be in the range of $6,000.
QUESTION 4: If I have a will, will probate be avoided?
ANSWER: Not necessarily. It is the value of the estate, and the presence of real estate and a surviving spouse that determines the necessity of probate or a shortened version of it, not the absence of a will.
QUESTION 5: If I don't have a will, what happens to my estate?
ANSWER: The state has a plan all worked out for you called intestate succession. Based on your family situation, the state's plans assumes you would have wanted to distribute your estate in a particular manner. If the state's plan is not for you, you need to have a will to set forth your plan. Generally, it goes to a surviving spouse, but if none, to your children, but if none, to grandchildren, but if none, to you brothers and sisters, and so on. Instate succession does not include any provisions for friends, charities, or anything but close family members..
QUESTION 6: If I don't have any close relatives, and I don't have a will, what will happen to my estate?
ANSWER: The state will try very hard to find relatives, but if they fail within the framework of the state's plan, your estate will go to the state.
QUESTION 7: I am a divorced mother and my ex is a very bad person. How can I make sure he doesn't get the kids if I die?
ANSWER: You may not be able to make sure. You can designate your choice of guardian but if your ex contests the issue, the court will make a determination based on what is in the best interests of the children. All things being equal, the natural parent is preferred over a non-parent. If your ex exercises his visitation more or less regularly, and cannot be shown to be a foreseeable threat to the well-being of the children, he will probably be given custody of the children.
QUESTION 8: What is a Durable Power of Attorney for Health Care?
ANSWER: This is a document whereby you appoint someone to direct your health care if you are not able to do it yourself. If, because of age, or health status, you cannot communicate your decisions to your health care provider, the person designated in your Durable Power of Attorney for Health Care will do it for you. This is a simple procedure and can avoid the costly process of having a conservatorship set up for you in court.
QUESTION 9: What is a trust and what are the benefits?
ANSWER: A trust is an arrangement whereby one person who owns property (Trustor) gives the management and control of that property to another person (Trustee) for the benefit of another person (Beneficiary). It sounds more complicated than it really is. In a typical living trust for estate planning purposes, the same person fill all three roles. This owner of the property continues to manage the property for his own benefit during his life and then it goes to residuary beneficiaries. The benefit can be very substantial. Probate costs can be avoided and estate taxes can be saved. Savings of up to $200,000 can be achieved on estates in the million dollar range. Living trusts are easy to set up and operate and can be a powerful estate planning device.
QUESTION 10. Can I write my own will?
ANSWER: Yes, if you know what your are doing. The requirements of a formal will are fairly demanding and it is easy to make a mistake which could jeopardize the will. California is one state that will recognize a holographic will, one that is entirely in the handwriting of the person making the will. However, there are still requirement that have to be met. For basic wills, lawyers don't generally charge a great deal and the fee is worth the peace of mind of knowing its done right. Remember, if you make a mistake that invalidates your will, you don't get a second chance.
QUESTION 11. What if my situation changes after I have a will done?
ANSWER: Wills are prepared to meet the needs as they exist now. If the situation changes, you may have to make a new will, or if the change is simple, it can be done by a codicil. Having a new child, getting divorced, getting married, having the proposed guardian die or move out of state are all reasons why you should change your will. If there is any doubt, ask a lawyer.