DISCLAIMER: THE FOLLOWING INFORMATION IS NOT A SUBSTITUTE FOR LEGAL ADVICE AND IS NOT A GUARANTEE, WARRANTY, OR PREDICTION REGARDING THE OUTCOME OF ANY LEGAL MATTER. NAKAHARA LAW, A.P.C. DOES NOT INTEND TO CREATE AN ATTORNEY-CLIENT RELATIONSHIP THROUGH PROVIDING THE INFORMATION BELOW.

Question 01

What happens if I die without a Will?

If a person dies without a will (intestate), the California Probate Code rules of intestate succession determines who inherits property owned in the decedent’s name alone. The laws of intestate succession do not affect property held in joint tenancy with rights of survivorship, property passing to designated beneficiaries by the decedent prior to the decedent’s death, transfer upon death accounts, transfer upon death deeds, and property held by a trustee in a revocable living trust.

Question 02

What is a revocable living trust?

A revocable living trust is a legal document that transfers the ownership of a person’s property to the trustee of the revocable living trust. The trustee holds, manages, and administers the trust assets for the benefit of the beneficiaries named in the trust instrument. The person who creates the trust (settlor) retains the right to amend or revoke the trust during his or her lifetime. In the case of revocable living trusts, the trustee(s) and main beneficiary(ies) are the person(s) who created the trust. In the case of a husband and wife, they may act as both the initial co-trustees and primary beneficiaries of the revocable living trust.

Question 03

Why do many people create living trusts?

Because legal title (ownership) of the settlor’s property is transferred to the trustee of the trust during the settlor’s lifetime, there is no need to open a court supervised probate to transfer the settlor’s property upon the settlor’s death. The terms of the revocable living trust direct the trustee to administer and distribute settlor’s property, which was previously transferred to the trustee during the settlor’s lifetime, upon the settlor’s death.

Question 04

If I move away from California and begin living in another state do I need to change my wills and/or trust?

While it may not be necessary to change your wills and trusts, you should have an attorney in the state of your new residence review your wills and trusts to determine if changes are necessary.

Question 05

Can I leave money to my pets so they can be taken care of after I die?

No. California law does not allow money to be left directly to a pet. However, money can be left to a trusted person in a Will or Trust to be used to look after the pet for his or her lifetime. This is often referred to as a “Pet Trust”.

Question 06

Q 17. What can I do if a person dies leaving a revocable living trust and the successor trustee refuses to provide a copy of the trust and takes no action to administer and distribute the trust assets to the beneficiaries named in the trust?

If the Settlor (creator) of a living trust dies, a beneficiary named in the Settlor’s revocable living trust can request a copy of the trust from the trustee. Probate Code section 16061.5.

If the acting Trustee does not administer and distribute the trust assets within a reasonable period of time, a beneficiary can request an accounting and explanation of the delay from the trustee. If the Trustee refuses to provide an accounting or explain the delay in distributing the trust assets, the beneficiary can compel the trustee to file an accounting with the probate court. Probate Code sections 16062 and 16420.

Question 07

Does California have an inheritance tax?

No. California repealed its inheritance tax law in 1982. However, California residents are still required to pay U.S. Estate Tax if the decedent’s estate exceeds the Estate Tax Exemption in effect on the date of the decedent’s death. Presently, the estate tax exemption for decedent’s dying in 2020 is $11,580,000 per person ($23,160,00 for a married couple). This exemption is adjusted each year for cost of living. However, this exemption can be changed by the U.S. Congress.
“No man’s life, liberty or property are safe while the Legislature is in session.”

Question 08

Does my real estate property tax increase upon my death?

A decedent’s real property located in the State of California is subject to reassessment for property taxes upon the decedent’s death, subject to two very important exceptions:
1) Transfer of property to the decedent’s spouse.
2) With some limitations, transfer of property to the decedent’s children.
3) A more comprehensive discussion is available on the Los Angeles County Assessor’s Website at:
https://assessor.lacounty.gov/wp-content/uploads/2015/02/E-32.pdf

Question 09

What is the maximum amount I can give away during my lifetime without having to file a U.S. Gift Tax Return?

For U.S. citizens and permanent residents, the 2020 annual exclusion for gifts is $15,000 per recipient.

Question 10

If I inherit real property from my parents, do I need to update the fire and casualty insurance on the property I inherit?

Yes. In most fire and casualty insurance policies, there is a clause that requires a review of the policy if there is a change in ownership from parent(s) to children, grandchildren, etc. Failure to notify the insurance company of a change in ownership resulting from inheritance of the property can create serious coverage issues if the change in ownership is not reported timely.