Frequently Asked Questions

What’s the difference between a Will and a Trust? . . .

A will is an estate planning document that is only effective upon a person’s death. Wills are generally administered through a lengthy, public and formal court proceeding called a Probate Administration. A trust is an estate and incapacity planning document that names a successor trustee to immediately manage trust assets upon the incapacity or death of the trust creator (settlor), and privately administer the trust according to the directions provided by the settlor without the need for court involvement.

What in the world are Death Taxes and why such a morbid name? . . .

Death taxes are a politically tinged name for Estate taxes. In 2021, each U.S. citizen can leave nearly $12,000,000 to the next generation without incurring any estate tax liability. Under the current tax regime, only the genuinely wealthy (even by Bay Area standards) need to worry about Estate Tax liability.

Will a revocable trust protect me from liability? . . .

Not really. All assets held in a revocable trust that you can access can also be reached by your creditors. Assets held in an irrevocable trust or in an entity like an LLC or corporation can provide liability protection.

When would I need an irrevocable trust? . . .

• If you are a person of extremely high net worth, tax planners can recommend various types of irrevocable trusts to establish and fund during life that can minimize estate tax liability upon your death.
• If you have a beneficiary that is disabled and on public benefits, or has significant debt, or is likely to go through a divorce, etc., you can protect the beneficiary’s inheritance by leaving your assets to them in an irrevocable trust that is established upon your death.

How can I protect my companion animals if I die? . . .

Your estate plan can name the person or persons you wish to rehome your animals with if you die or become unable to care for the animal. I recommend leaving a cash gift with the animal to defray the costs of vet bills, kibble, etc. You can also establish a formal companion animal aka “pet trust” with all the bells and whistles. Animal charities are often named remainder beneficiaries should any funds remain upon the death of the animal.

Why can’t I just prepare my own estate plan? . . .

Go for it! There are a number of on-line DIY estate planning websites and I hear they are getting better. But if the stakes are high, such as you have minor children or folks who depend on you, hiring a lawyer to make sure your loved ones are taken care of is money well spent.

We just saw that Netflix show about that evil legal guardian. Can that really happen? . . .

Sigh. No, it cannot. The show ”I care a lot” inhabits a world without due process. In the real world, the Dianne Wiest character would have received at least 15 days notice of the court hearing and the right to an attorney to represent her interests. However, in the not-terribly distant past, before adequate legal protections were established, a couple of private fiduciaries famously swindled their clients out of millions.

How can I make sure I don’t need a conservator? . . .

Make sure you have an adequate financial power of attorney and advance health care directive. Make sure you name the appropriate people to help you should you become incapacitated.

I want to leave my children different amounts of money when I die. How can I do this without hurting their feelings or creating conflict? . . .

Each family is different. But generally speaking, being upfront with your children about the gifts in your estate plan and the reasons for the unequal gifts can diffuse tensions between your children after the fact. You can also memorialize the reasons for the disparate treatment of your children in a letter that you keep with your estate planning documents.