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        The importance of AN UP-TO-DATE will and TRUST

 The importance of a Will and Trust Estate plan cannot be overstated says an article in the Tuesday, July 14, 2009 edition of the Los Angeles Times. (See Section B, front page).  The article states and properly so that “Hiring a lawyer to create a will can be costly, but do it yourself forms can prompt challenges.”   Experts agree, as quoted in the article that it is “important to have an up-to-date will, and probably also a trust, to ensure that whatever you have left over when you die goes where you want.”  A properly written estate plan can avoid the probate process in court.  The cost of using an attorney to put together a plan starts at about $1,500 states the article (and this is true).

While you can do your own will and a fully handwritten one is valid in California, it is not advisable in all cases.  For example, where you would like to disinherit a spouse or a child it may get tricky.  Or you may want to make special allocations of property, money or jewelry in the family to take place so that if any of the children marry the heirlooms will stay in the family such as a family trust. (Los Angeles Times;  7-14-2009, p.B1).

 MORAL

 I have seen some cases where the mother added the daughter in joint tenancy to her home and later wanted to sell, borrow money or just changed her mind and the daughter refused to cooperate.  It is easy to add to a co owner but to take them off can and often does require a lawsuit.  Putting the family home in a family trust allows you to change the beneficiaries of the home at will (if you will forgive the pun).  Thus if for some reason you want to do something different the trust allows you as the trustee to do as you will but adding the person on title does not.  In fact, the child can force a sale of the property once added to the title.  This is called a “partition action.”  Get a will, get a trust or you may find someone gets when you do not want them to get.

 FOLLOW - UP

If Congress does not enact new legislation soon then as of January 1, 2011 estate taxes will be back at the level they were starting January 1, 2011.  That means any bequest of more than $1 million will be hit with a heavy tax levy on any amount above the $1 million after December 2010.

By way of example, if you die this year and had a pre-existing "by-pass trust" you could accidentally disinherit your spouse.  These types of trusts tend to leave the children an amount equal to the estate tax exclusion.  For the 2010 this exclusion is unlimited and the children get everything and the surviving spouse gets nothing. Starting in 2011 unless there is a change in the law in 2010, the $1 million exclusion could be used to leave to your spouse, children or other heirs as you see fit such that they get teh full amount before estate taxes.  Consult your attorney now to update your will and trust.