What is estate planning?

Estate planning is a process. It involves people—your family, other individuals and, in many cases, charitable organizations of your choice. It also involves your assets (your property) and the various forms of ownership and title that those assets may take. And it addresses your future needs in case you ever become unable to care for yourself.

Through estate planning, you can determine:

How and by whom your assets will be managed for your benefit during your lifetime if you ever become unable to manage them yourself.  This planning for your own care during your own lifetime is probably the most important part of estate planning.

When and under what circumstances it makes sense to distribute your assets during your lifetime.

How and to whom your assets will be distributed after your death.

How and by whom your personal care will be managed and how health care decisions will be made during your lifetime if you become unable to care for yourself.

Many people mistakenly think that estate planning only involves the writing of a will. Estate planning can also involve financial, tax, medical and business planning. A will is part of the planning process, but you will need other documents as well to fully address your estate planning needs, for example, a power of attorney, an advance health care directive, and a living trust.

The purpose of this pamphlet is to summarize the estate planning process, and illustrate how it can help you meet your goals and objectives. You will discover that estate planning is a dynamic process. Just as people and assets and laws change, it may well be necessary to adjust your estate plan every so often to reflect those changes.

What is involved in estate planning?

There are many issues to consider in creating an estate plan. First of all, ask yourself the following questions:

What are my assets and what is their approximate value?

Whom do I want to receive those assets —and when?

Who should manage those assets if I cannot — either during my lifetime or after my death?

Who should be responsible for taking care of my minor children if I become unable to care for them myself?

Who should make decisions on my behalf concerning my care and welfare if I become unable to care for myself?

What do I want done with my remains after I die and where would I want them buried, scattered or otherwise laid to rest?

Once you have some answers to these questions, you are ready to seek the advice and services of a qualified lawyer. Such a lawyer can help you create an estate plan, and advise you on such issues as title to assets and the management of your estate.

Who needs estate planning?

You do — whether your estate is large or small. Either way, you should designate someone to manage your assets and make health care and personal care decisions for you if you ever become unable to do so for yourself.  For many, such “life planning” is the most important aspect of an estate plan.

If your estate is small, your plan may simply focus on who will receive your assets after your death, and who should manage your estate, pay your last debts and handle the distribution of your assets. If your estate is large, your lawyer will also discuss various ways of preserving your assets for your beneficiaries and of reducing or postponing the amount of taxes which otherwise might be payable after your death.

If you fail to plan ahead, a judge will simply appoint someone to handle your assets and personal care. And your assets will be distributed to your heirs according to a set of rules known as intestate succession. Contrary to popular myth, everything does not automatically go to the state if you die without a will. Your relatives, no matter how remote, and, in some cases, the relatives of your spouse will have priority in inheritance ahead of the state. Still, they may not be your choice of heirs; an estate plan gives you much greater control over who will inherit your assets after your death.

What is included in my estate?

All of your assets. This could include assets held in your name alone or jointly with others, assets such as bank accounts, real estate, stocks and bonds, and furniture, cars and jewelry. Your assets may also include life insurance proceeds, retirement accounts and payments that are due to you (such as a tax refund, outstanding loan or inheritance).

The value of your estate is equal to the “fair market value” of all of your various types of property — after you have deducted your debts (your car loan, for example, and any mortgage on your home).

The value of your estate is important in determining whether your estate will be subject to estate taxes after your death and whether your beneficiaries could later be subject to capital gains taxes. Ensuring that there will be sufficient resources to pay such taxes is another important part of the estate planning process.

Will my beneficiaries’ inheritance be taxed?

It depends on the circumstances. Assets left to your spouse (if he or she is a U.S. citizen) or any charitable organization will not be subject to estate tax. Assets left to anyone else — even your children — will be taxed if that portion of the estate (including gifts made during lifetime) totals more than the lifetime gift and estate tax exemption (which is $11.7 million in 2021, and, under current law, is scheduled to rise to account for inflation). For estates that approach or exceed this amount, significant estate taxes can be saved by proper estate planning before your death or, for couples, before one of you dies.

In addition, while you are living, you can give away as much as $15,000 a year to each of your children or to anyone else without incurring gift tax. (This annual gift tax exclusion amount is also indexed for inflation.)  You could also pay your grandchild’s college tuition or medical insurance premiums (or anyone’s tuition or medical bills, for that matter) free of gift tax — but only if the payments are made directly to the educational institution or medical provider.  Gifts in excess of the annual exclusion amount reduce ones “estate tax exemption” (discussed above) and should be reported to the IRS.

Keep in mind that tax laws often change. And estate planning for tax purposes must take into account not only estate and gift taxes, but also income, capital gains, property and generation-skipping taxes as well. Qualified legal advice about taxes and current tax law should be obtained from a competent lawyer during the estate planning process.

Does the way in which I hold title make a difference?

Yes. The nature of your assets and how you hold title to those assets is a critical factor in the estate planning process. Before you take title (or change title) to an asset, you should understand the tax and other consequences of any proposed change. Your estate planning lawyer will be able to advise you.

If you are married or a registered domestic partner, assets earned by either you or your spouse or domestic partner while married or in the partnership and while a resident of California are community property. (Note: Earned income in domestic partnerships, however, may not be treated as community property for federal income tax purposes.)

As a married individual or registered domestic partner, you may continue to own certain separate property as well — property which you owned prior to the marriage or domestic partnership. A gift or inheritance received during the marriage or partnership would be considered separate property as well. Earnings associated with such separate property, even if earned during a marriage, retain their character as separate property.

Separate property can be converted, or transmuted, to community property (and vice versa) by a written agreement (it must conform with California law) signed by both spouses or domestic partners. However, taking such a step can have significant tax and other consequences. Make sure that you understand such consequences before making any such change.

If you own property as tenants in common and one co-tenant (co-owner) dies, that co-tenant’s interest in the property would pass to the beneficiary named in his or her will. This would apply to co-tenants who are married or in a domestic partnership as well as to those who are single.

Co-owners (married or not) of a property can also hold title as joint tenants with right of survivorship. If one tenant were to die in such a situation, the property would simply pass to the surviving joint tenant without being affected by the deceased person’s will.

If you are married or in a registered domestic partnership, you and your spouse or partner could also hold title to property as community property with right of survivorship. Then, if your spouse or domestic partner were to die, the property would pass to you without being affected by the deceased person’s will.

Married couples and registered domestic partners also have the option of jointly holding title to property as community property. In such a situation, if one spouse or partner were to die, his or her interest would be distributed according to the instructions in his or her will.

Are there other ways of leaving property?

Yes. Certain kinds of assets are transferred directly to the named beneficiaries. Such assets include:

Life insurance proceeds.

Qualified or non-qualified retirement plans, including 401(k) plans and IRAs.

Certain “trustee” bank accounts.

Pay on death (or POD) assets, a common title on U.S. savings bonds.

Keep in mind that these beneficiary designations can have significant tax benefits and consequences for your beneficiaries — and must be carefully coordinated with your overall estate plan.

What happens if I become unable to care for myself?

You can help determine what will happen by making your own arrangements in advance. Through estate planning, you can choose those who will care for you and your estate if you ever become unable to do so for yourself. Just make sure that your choices are documented in writing.

A power of attorney is a written legal document that gives another person the right and authority to act on your behalf. It can be limited to special circumstances or it can be general. That authority will end if you become incapacitated—unless you have a durable power of attorney. A durable power of attorney will remain in effect while you are incapacitated. Or you might set up a springing power of attorney, which would only become effective at a specified future date or event (your loss of capacity, for example). These powers of attorney all expire when you die.

If you set up a living trust, it is the trustee who will manage the assets held in trust. Even if you have a living trust, you should still consider setting up a durable power of attorney for property management as well as to handle limited financial transactions and to deal with assets that may not have been transferred to your living trust, such as retirement accounts.

With an advance health care directive, you can designate someone to make health care decisions for you in the event you become unable to do so for yourself. In addition, this legal document can contain your wishes concerning such matters as life-sustaining treatment and other health care issues and instructions concerning organ donation, disposition of remains and your funeral.

If you become unable to make sound decisions or care for yourself and you have not made any such arrangements in advance, a court could appoint a court-supervised conservator to manage your affairs and be responsible for your care.

Who should help me with my estate planning documents? 

Can I do it myself? Yes. It is possible for a person to do their own estate planning with forms or books obtained at a stationery store or bookstore or from the State Bar, if one’s situation is fairly simple.  However, you should make sure that the materials you are using have been customized to comply with California laws.  Each State has its only unique laws pertaining to estate planning.  At the very least, a review of such forms can be helpful in preparing you for estate planning with a qualified professional. If you review such materials and have any unanswered questions, or your situation involves complex or unique circumstances,  you should seek professional help.

If you do seek a professional’s help, keep in mind that wills and trusts are legal documents that should only be prepared by a qualified lawyer. Many other professionals and business representatives, however, may become involved in the estate planning process. For example, certified public accountants, life insurance salespersons, bank trust officers, financial planners, personnel managers and pension consultants often participate in the estate planning process. Within their areas of expertise, these professionals can assist you in planning your estate.

The State Bar urges you, however, to seek advice only from professionals who are qualified to give estate planning advice.   Generally, the professional must be licensed by the State in order to provide such guidance.

Ask the professional about his or her qualifications. And ask yourself whether the advisor might have an underlying financial incentive to sell you a particular investment, such as an annuity or life insurance policy. Such a financial incentive could bias that professional’s advice. Unfortunately, some sellers of dubious financial products gain the confidence and private financial information of their victims by posing as providers of estate or trust planning services.

Should I beware of “promoters” of financial and estate planning services?

Yes. There are many who call themselves “trust specialists,” “certified planners” or other titles that suggest the person has received advanced training in estate planning. California has experienced numerous promotions by unqualified individuals and entities which only have one real goal—to gain access to your finances in order to sell insurance-based products such as annuities and other commission-based products. To better protect yourself:

Consult with a lawyer or other financial advisor who is knowledgeable in estate planning, and who is not trying to sell a product that may be unnecessary — before considering a living trust or any other estate or financial planning document or service.

Ask for time to consider and reflect on your decision. Do not allow yourself to be pressured into purchasing an estate or financial planning product.

Know your cancellation rights. California law requires that sellers who come to your home to sell goods and services (with some exceptions) that cost more than $25 must give you two copies of a notice of cancellation form to cancel your agreement. You, the buyer, generally would be able to cancel this transaction up until midnight three business days later. Depending on the circumstances, you may have longer to cancel life insurance or annuity transactions. If you are 65 or older, for example, you would have 30 days to cancel.

Be wary of organizations or offices that are staffed by non-lawyer personnel and that promote one-size-fits-all living trusts or living trust kits. An estate plan created by someone who is not a qualified lawyer can have enormous and costly consequences for your estate. Do not allow yourself to be pressured into a quick purchase.

Be wary of home solicitors who insist on obtaining confidential and detailed information about your assets and finances.

Find out if any complaints have been filed against the company by calling local and state consumer protection offices or the Better Business Bureau.

Insist on the person’s identification and a description of his or her qualifications, education, training and expertise in estate planning. Also, keep in mind that legal document assistants are not permitted to give legal advice. And paralegals must work under the direct supervision of a lawyer. (As a precaution, ask to speak directly to the supervising attorney if you are not given an opportunity to do so.)

Be aware that state law prohibits some professionals — broker-dealers, investment advisors and insurance brokers, for example — from using senior-specific certification, credentials or professional designations to mislead consumers. Insurance brokers and agents cannot use certain “senior designations” that even imply special expertise or training in advising seniors in particular on finance, insurance or risk management unless certain conditions are met. For more information, go to insurance.ca.gov and type senior designations into the search box.

Always ask for a copy of any document you sign at the time it is signed.

Report high-pressure tactics, fraud or misrepresentations to the police or district attorney immediately.

How much does estate planning cost?

It depends on your individual circumstances and the complexity of documentation and planning required to achieve your goals and objectives. The costs may vary from lawyer to lawyer. Generally, the costs will include the lawyer’s charges for discussing your estate plan with you and for preparing your will, trust agreement, power of attorney or other necessary legal documents. Some lawyers charge a flat fee for estate planning services. Others charge on an hourly basis or use a combination of both types of fees.

How do I find a qualified lawyer?

If you do not know a lawyer who is qualified to help you with your estate plan, ask someone whose judgment you can trust—a friend or employer, for example. Or call a local State Bar-certified lawyer referral service. Or check the Yellow Pages of your telephone directory or contact your local bar association.

State Bar-certified lawyer referral services, which must meet minimum standards established by the California Supreme Court, can help you find the right lawyer for your situation. Most of these services offer half-hour consultations for a modest fee. Attorneys who are members of certified lawyer referral services must carry insurance, agree to fee arbitration for fee disputes, meet standards of experience and be State Bar members in good standing.

In addition, the State Bar certifies “specialists” in 11 legal areas, including estate planning, trust and probate law. The designation of “specialist” means that the attorney has met certain standards. However, there are lawyers with experience in estate planning who do not seek such certification.

What is a will?

Your will is a legal document in which you give certain instructions to be carried out after your death. It becomes irrevocable when you die. In your will:

You may name beneficiaries (family members, friends, spouse, domestic partner or charitable organizations, for example) to receive your assets according to the instructions in your will. You may list specific gifts, such as jewelry or a certain sum of money, to certain beneficiaries, and you should direct what should be done with all remaining assets (any assets that your will does not dispose of by specific gift).

You may nominate a person to be responsible for your child’s personal care if you and your child’s other parent die before the child turns 18. You may also name a guardian—who may or may not be the same person — to be responsible for managing any assets given to the child, until he or she is 18 years old.  Nominations of guardian may also be set forth in a separate writing, other than a will.  It is recommended that such a writing be signed by all of the child’s parents.

You may nominate a person or institution to collect and manage your assets, pay any debts, expenses and taxes that might be due, and then, with the court’s approval, distribute your assets to your beneficiaries according to the instructions in your will. Your executor serves a very important role and has significant responsibilities. It can be a time-consuming job. You should choose your executor carefully. An executor is entitled to compensation for the services provided.

Keep in mind that a will is just part of the estate planning process. And whether your estate is large or small, you probably need an estate plan consisting of other documents to fully address your needs, for example, a power of attorney, an advance health care directive, and a living trust.

Does a will cover everything I own?

No. Generally speaking, your will affects only those assets that are titled in your name at your death, and for which there is no designated beneficiary. Those assets that are not affected by your will include:

Life insurance. The cash proceeds from an insurance policy on your life are paid to whomever you have designated as beneficiary of the policy in a form filed with the insurance company — no matter who the beneficiaries under your will may be.

Retirement plans. Assets held in retirement plans, such as a 401(k) or an IRA, are transferred to whomever you have named as beneficiary in the plan documents — no matter who the beneficiaries under your will may be.

Assets owned as a joint tenant with right of survivorship. Assets such as real estate, automobiles, bank accounts and stock accounts that are held in joint tenancy with right of survivorship will pass to the surviving joint tenant upon your death, and not in accordance with any directions in your will.

“Transfer on death” or “pay on death.” Certain securities and brokerage accounts include a designation of one or more beneficiaries to receive the assets in that account when the account owner dies. The names of the beneficiaries are preceded by the words “transfer on death” or “TOD.” Other assets, such as bank accounts and U.S. savings bonds, may be held in a similar form using the owner’s name and the beneficiaries’ names preceded by the words “paid on death” or “POD.”

“Community property with right of survivorship.” Married couples or registered domestic partners may hold title to their community property assets in their names as “community property with right of survivorship.” Then, when the first spouse or domestic partner dies, the assets pass directly to the surviving spouse or partner without being affected by the will.

Living trusts. Generally, assets held in a revocable living trust are distributed according to the instructions in the trust regardless of the instructions in your will — with no need for court supervision. A living trust does not, however, remove all need for a will. Generally, you would still need a will — known as a pour over will — to cover any assets that have not been transferred to the trust.

Your spouse’s or domestic partner’s half of community property. In California, any assets acquired by you and your spouse or registered domestic partner from earnings during your marriage or registered domestic partnership are community property. You and your spouse or registered domestic partner own equal shares of those assets. Your will, therefore, affects only your half of the community property. Assets that either of you owned before your marriage or registered domestic partnership, and gifts or inheritances acquired later, together with the earnings from such interests, are usually separate property. Your will affects all of your separate property assets.

Even if your entire estate consists of assets held in joint tenancy, a life insurance policy and a retirement plan, there are still good reasons for making a will. For example, if the other joint tenant dies before you do, then the property held in joint tenancy will be in your name alone and subject to your will. If named beneficiaries die before you do, the assets subject to a beneficiary designation may be payable to your estate. If you receive an unexpected bonus, prize, refund or inheritance, it would be subject to your will. And if you have minor children, providing for someone to manage assets on their behalf should both parents die, is very important.

If you die without a will (referred to as intestate), California law will determine the beneficiaries of your estate.

Can I name alternative beneficiaries?

Yes. You should consider alternative beneficiaries in the event that your primary beneficiaries do not survive you.  And if a beneficiary is too young or too disabled to handle an inheritance, you might consider setting up a trust for his or her benefit under your will or a living trust.

Once you have decided who should receive your assets, it is very important that you correctly identify those chosen individuals and charitable organizations in your will. Many organizations have similar names and, in some families, individuals have similar or even identical names. An estate planning lawyer can help you clarify and appropriately identify your beneficiaries.

Who should be my executor?

That is your decision. You could name your spouse or domestic partner as your executor or trustee. Or you might choose an adult child, another relative, a family friend, a business associate or a professional fiduciary, such as a bank or individual licensed to act in such a capacity by the State of California. Your executor or trustee does not need any special training. What is most important is that your chosen executor or trustee is organized, prudent, responsible and honest.

Discuss your choice of an executor with your estate planning lawyer. There are many issues to consider. For example, will the appointment of one of your adult children hurt his or her relationship with any other siblings? What conflicts of interest would be created if you name a business associate or partner as your executor? And will the person named as executor have the time, organizational ability and experience to do the job effectively?

How should I provide for my minor children?

In your will, you should nominate a guardian to supervise and care for your child (and to manage the child’s assets) until he or she is 18 years old. Under California law, a minor child (a child under age 18) would not be legally qualified to care for himself or herself if both parents were to die. Nor is a minor legally qualified to manage his or her own property. Your nomination of a guardian could avoid a “tug of war” between well-meaning family members and others.

You also might consider transferring assets to a custodian account under the California Uniform Transfers to Minors Act to be held for the child until he or she reaches age 18, 21 or 25. Or you might consider setting up a trust to be held, administered and distributed for the child’s benefit until the child is even older.

Are there various kinds of wills?

Yes. In California, you can make a will in at least one of three ways:

A handwritten or holographic will. This will must be completely in your own handwriting. You must date and sign the will. Your handwriting has to be legible, and the will must clearly state what you are leaving and to whom. A handwritten will does not have to be notarized or witnessed. However, any significant typed material in a handwritten will may invalidate the will. (A typed will must be signed by two witnesses, who jointly witnessed the execution of the will or were both present when you acknowledged that you had signed the will. ) It is a good idea to consult with a qualified lawyer to make sure your will conforms with California law and does not have any unintended consequences.

A statutory will. California law provides for a “fill-in-the-blanks” will form. (This form can be printed out from the State Bar website.) This will form is designed for people with relatively small estates. If there is anything you do not understand or if you are making any provisions that are complicated or unusual, you should ask a qualified lawyer to advise you.

A will prepared by a lawyer. A qualified estate planning lawyer can make sure that your will conforms with California law. The lawyer can make suggestions and help you understand the many ways that assets can be transferred to or for the benefit of your beneficiaries. A lawyer can also help you develop a complete estate plan and offer alternative plans that may save taxes. This kind of planning can be extremely helpful and economical in the long run. Your lawyer will either personally supervise the signing of your will or will give you detailed instructions on the rules for its execution by you and two witnesses (who are not beneficiaries of your estate).

California, as do most states, has unique laws as to what constitutes a valid will and how one should be executed.  Extreme caution is advised if you try to draft a will using a will drafting kit or software.

No matter what kind of will you use, the will should be solely yours and not a joint will with your spouse, registered domestic partner or anyone else.

Also, keep in mind that your will is not a living will. The term living will is used in many states to describe a legal document that states you do not want life-sustaining treatment if you become terminally ill or permanently unconscious. In California, advance health care directives and durable powers of attorney for health care decisions are used for that same purpose.

What if my assets pass to a trust after my death?

You may make a provision in your will for your assets to be distributed to a trust upon your death. When trusts are created under a will, they are known as testamentary trusts. With an appropriate beneficiary designation, testamentary trusts can even be beneficiaries of life insurance policies and retirement plans.

If you have a living trust, (that is, a trust established during your lifetime) then your will is often referred to as a pour over will. Such a will includes instructions to transfer all remaining assets (assets that were not transferred to your living trust during your lifetime) to the living trust at the time of your death.  Such trusts are also referred to as an “inter vivos trust,” “grantor trust,” or “revocable trust.”

Can I change or revoke my will?

Yes. You should review your will periodically. If it is not up to date when you die, your estate may not be distributed as you wish.

Your will can be changed through a codicil, a legal document that must be drafted and executed with the same procedure that applies to wills. A codicil is an amendment to your will. You should not change your will by simply crossing out words or sentences, or by making any notes or written corrections on it.

You may also establish a new will and, in doing so, revoke your old will. If you get married or divorced, or establish a registered domestic partnership or terminate one, you should seek the advice of a lawyer and make a new will, as such a change in status results in automatic changes to your will. You should also review your will when there are any other major changes in your family (such as births and deaths), when the value of your assets significantly increases or decreases, and when it is no longer appropriate for your proposed guardian or executor or testamentary trustee to act in that capacity.

If you have moved to California from another state and have a will that is valid under the laws of that state, California will honor its validity. It is important for you to review your will with a qualified California lawyer, however, since California law will govern the probate of your will if you live here at your death. And if you move out of state, your California will should be reviewed by a lawyer there.

How are the provisions of a will carried out?

They are usually carried out through a court-supervised process called probate. Typically, the executor named in your will starts the probate process after your death by filing a petition in court and seeking official appointment as executor. The executor then takes charge of your assets, pays your debts and, after receiving court approval, distributes the rest of your estate to your beneficiaries. Simpler procedures are available for transferring assets to a spouse or registered domestic partner, or for handling estates with assets under $166,250.

Who should know about my will and my other financial information?

No one — other than you and the lawyer who wrote the will — needs to know the contents of your will. But your executor and other close friends or relatives should know where to find it. Your original will should be kept in a safe place such as your safe deposit box or a locked, fireproof box at your residence or office.

Make a list of your assets and debts. This can be extremely helpful when you are no longer around to provide such information. Make sure that your executor or other family members know where to find the list. Include your bank accounts, safe deposit boxes, stocks and bonds, real estate, and other assets on the list, including on-line accounts. Also, list the names and addresses of anyone to whom you owe money.

Make and circulate a list of your professional advisors. Letting your family members and professional advisors know the other professionals who you work with can improve communications and encourage teamwork among your advisors, streamline tasks being done for you, and ensure that the proper people are contacted in the event of your death, sickness or incompetence.

Will my beneficiaries have to pay estate taxes?

It depends on the circumstances. Assets left to your spouse (if he or she is a U.S. citizen) or any charitable organization will not be subject to estate tax. Assets left to anyone else — even your children—will be taxed if that portion of the estate (including gifts made during lifetime) totals more than the lifetime gift and estate tax exemption (which is $11.7 million in 2021, and, under current law, is scheduled to rise to account for inflation). For estates that approach or exceed this amount, significant estate taxes can be saved by proper estate planning before your death or, for couples, before one of you dies.

Keep in mind that tax laws often change. And estate planning for tax purposes must take into account not only estate and gift taxes, but also income, capital gains, property and generation-skipping taxes as well. Qualified legal advice about taxes and current tax law should be obtained from a competent lawyer during the estate planning process.

How can I find a lawyer to write a will for me?

If you do not know a lawyer who is qualified to discuss your assets and your estate plan with you and to write a will for you, obtain referrals from someone whose judgment you can trust— a friend or employer, for example.  Or call a State Bar-certified lawyer referral service in your area. Or check the Yellow Pages of your tele¬phone directory or contact your local bar association. Some lawyers who work in the estate planning area are “certified specialists in estate planning, trust and probate law.” This means that they have met standards for certification set by the State Bar. (Not all lawyers who have experience in estate planning, however, seek such certification.)

Probate is a court-supervised process for transferring a deceased person’s assets to the beneficiaries listed in his or her will, or managing a person’s assets while they are living but incapacitated in what is known as a conservatorship.

In the former situation, the executor named in your will would start the process after your death by filing a petition in court and seeking appointment as executor. Your executor would then take charge of your assets, pay your debts and, after receiving court approval, distribute the rest of your estate to your beneficiaries. If you were to die intestate (that is, without a will), a relative or other interested person could start the process. In such an instance, the court would appoint an administrator to handle your estate. Personal representative is another term used to describe the administrator or executor appointed to handle an estate.

Simpler procedures are available for transferring property to a spouse or domestic partner, or for handling estates in which the total assets amount to less than $166,250.

In a conservatorship, a person (called the petitioner) files a petition to conserve another person (called the conservatee) on the basis that they are unable to make sound decisions or care for themselves or protect themselves from fraud or undue influence.  The petitioner nominates a person (called the conservator) to manage the conservatee’s affairs.

The probate process has advantages and disadvantages. The probate court is accustomed to resolving disputes about the distribution of assets fairly quickly through a process with defined rules. In addition, the probate court reviews the personal representative’s handling of each estate, which can help protect the beneficiaries’ interests.

One disadvantage, however, is that probates are public. Your estate plan and the value of your assets will become a public record. Also, because lawyer’s fees and executor’s commissions are based on a statutory fee schedule, a probate may cost more than the management and distribution of a comparable estate under a living trust. Time can be a factor as well. A probate proceeding generally takes longer than the administration of a living trust. Discuss such advantages and disadvantages with an estate planning lawyer before making any decisions.

If you die without a will (referred to as intestate), California law will determine the beneficiaries of your estate. Contrary to popular myth, if you die without a will, everything does not automatically go to the state. If you are married or have established a registered domestic partnership, your spouse or domestic partner will receive all of your community property assets. Your spouse or domestic partner also will receive part of your separate property assets, and the rest of your separate property assets will be distributed to your children or grandchildren, parents, sisters, brothers, nieces, nephews or other close relatives.

If you are not married or in a registered domestic partnership, your assets will be distributed to your children or grandchildren, if you have any — or to your parents, sisters, brothers, nieces, nephews or other relatives. If your spouse or domestic partner dies before you, their relatives may also be entitled to some or all of your estate. Friends, a non-registered domestic partner or your favorite charities will receive nothing if you die without a will. The State of California is the beneficiary of your estate if you die intestate and you (and your deceased spouse or domestic partner) have no living relatives.

Without estate planning, some or all of a person’s financial and health matters could be subject to a probate court proceeding, generally called a conservatorship. 

If a person becomes unable to make sound decisions or care for themselves or protect themselves from fraud or undue influence, and they have not made any arrangements for that situation in advance by establishing a power of attorney or living trust, another person could initiate a conservatorship proceeding by filing a petition for conservatorship.  A judge will then determine whether the person should be conserved. The court must determine that a conservatorship is the least restrictive alternative available to protect the person.

If the court determines that a conservatorship is the least restrictive alternative available, the court will appoint a responsible person (called a conservator) to assist the person (called a conservatee) who is unable to provide for their personal and/or financial needs.

There are generally two kinds of conservatorships:

The conservator must report back to the court on their activity on a regular basis, which provides the conservate with some safeguards to ensure the conservator is acting appropriately.

Even if a person appoints an attorney-in-fact who could manage their assets and make future health care decisions for them, that person should still document their choice of conservator in case a conservatorship is ever necessary. The conservator might be someone whom the person previously nominated. Or, if no one had been nominated, it might be the person’s spouse, registered domestic partner or another family member. If none of those persons are available, then it might be the public guardian.

Conservatorship proceedings are designed to help protect a person at a time when they are vulnerable or incapable of managing their assets. However, conservatorships are public in nature and can be cumbersome, expensive, and time-consuming because of the substantial court intervention. Conservatorship proceedings may be less flexible in managing real estate or other interests than a living trust or appointment of an attorney-in-fact under a power of attorney.

One special type of conservatorship is called the limited conservatorship. A judge appoints a responsible person (i.e., the conservator) to assist an adult with developmental disabilities (i.e., the conservatee) who is unable to provide for their personal and/or financial needs.

An adult with developmental disabilities is someone who has severe and chronic disabilities because of a mental or physical impairment. Generally, a person is developmentally disabled if they have an IQ less than 70 or they are diagnosed with autism. Other conditions can qualify too.

A limited conservator’s duty is to help the limited conservatee develop maximum self-reliance and independence. At the court hearing, the judge will say exactly what rights the limited conservator has. Because developmentally disabled people (abbreviated as DD, below) can usually do many things on their own, the judge will only give the limited conservator power to do things the conservatee cannot do without help. The limited conservator may:

• Decide where the DD adult will live (but, NOT in a locked facility).
  • Look at the DD’s adult confidential records and papers.
  • Sign a contract for the DD adult.
  • Give or withhold consent for most medical treatment (NOT sterilization and certain other procedures).
  • Make decisions about the DD adult’s education and vocational training.
  • Place the DD adult at a state hospital for the developmentally disabled (a locked facility).
  • Give or withhold consent to the DD adult’s marriage.
  • Control the DD adult’s social and sexual contacts and relationships.
  • Manage the DD adult’s financial affairs.

The Court will supervise the limited conservator, who will have to report at least annually to the Court. A Court investigator will review the case one year after the conservatorship is granted, then every two years after that. The investigator will also visit the conservatee.

The court proceeding is initiated by filing a petition for conservatorship.  Any adult can file a petition for conservatorship. The person who files the petition for conservatorship is called the petitioner. Conservators are usually parents, sisters, or brothers. But, any responsible adult can act as conservator. And, there can be more than one limited conservator.

The Court will appoint a lawyer to represent the interests of the proposed limited conservatee and to review the petition for limited conservatorship. These services are free, unless the proposed conservatee can afford them.

What is a revocable living trust?

A revocable living trust is a legal document that can, in some cases, partially substitute for a will. With a revocable living trust (also known as a revocable inter vivos trust or grantor trust), your assets are put into the trust, administered for your benefit during your lifetime and transferred to your beneficiaries when you die—all without the need for court involvement.

Most people name themselves as the trustee in charge of managing their living trust’s assets. By naming yourself as trustee, you can remain in control of the assets during your lifetime. In addition, with respect to revocable trusts, you can revoke or change any terms of the trust at any time as long as you are still competent. The terms of the trust generally become irrevocable when you die. However, in trusts created by married couples, the entire trust, or some portion of the trust, may continue to be revocable by the surviving spouse.

In your trust agreement, you will also name a successor trustee—a person or an institution—that will take over as the trustee and manage the trust’s assets if you become unable to do so. Your successor trustee would also take over management and distribution of your assets when you die.

Your living trust agreement:

• Gives the trustee the legal right to manage and control the assets held in your trust.
• Instructs the trustee to manage the trust’s assets for your benefit during your lifetime.
• Names the beneficiaries (e.g., persons or charitable organizations) who are to receive your trust’s assets when you die.
• Gives guidance and certain powers and authority to the trustee to manage and distribute your trust’s assets. The trustee is a fiduciary, which means he or she holds a position of trust and confidence and is subject to strict responsibilities and high standards. For example, the trustee cannot use your trust’s assets for personal use or benefit without your explicit permission. Instead, the trustee must hold and use trust assets solely for the benefit of the trust’s beneficiaries.

A living trust does not, however, remove the need for a will. Generally, you would still need a will to govern the posthumous transfer to your trust of any assets that were not transferred to your trust during your lifetime. This type of will is commonly referred to as a pour-over will.

You should consult with a qualified estate planning lawyer to assist you in the preparation of a living trust, your will, and other estate planning documents. Also, keep in mind that your choice of trustees is extremely important. That trustee’s management of your living trust assets will not be automatically subject to direct court supervision.

What if my assets pass to a trust after my death?

You may make a provision in your will for your assets to be distributed to a trust upon your death. When trusts are created under a will, they are known as testamentary trusts. With an appropriate beneficiary designation, testamentary trusts can even be beneficiaries of life insurance policies and retirement plans.

For relatively small gifts to beneficiaries who are minors, you might also consider providing for transfers from your estate to a custodian under the California Uniform Transfers to Minors Act.

What can a living trust do for me?

It can help ensure that your assets will be managed according to your wishes—even if you become unable to manage them yourself.

In setting up your living trust, you may serve as its trustee initially or you may choose someone else to do so. You can name a trustee to take over the trust’s management for your benefit if you ever become unable or unwilling to manage it yourself. And at your death, the trustee—similar to the executor of a will—would then gather your assets, pay any debts, claims and taxes, and distribute your assets according to your instructions. Unlike a will, however, this can all be done without court supervision or approval.

Should everyone have a living trust?

No. Whether or not to create a trust is a personal decision. Young married couples without significant assets and without children, who intend to leave their assets to each other when the first one of them dies, do not necessarily need a living trust. However, if the couple should die in a common accident, or shortly after each other, without a trust their estate(s) may be subject to a probate proceeding. Other persons who do not have significant assets (less than $166,250) and have very simple estate plans also do not need a living trust. Finally, anyone who believes that court supervision over the administration of his or her estate would be beneficial should not have a living trust. The greater the value of your assets (particularly if you own real estate), the greater the benefits of a living trust. And having a living trust could be important in the event of an accident or sudden illness.

How are my assets put into the living trust?

Once your trust has been signed, an important task remains. To avoid court-supervised conservatorship proceedings if you should become incapacitated, or the probate process at your death, your assets must be transferred to the trustee of your living trust. This is known as funding the trust.

Deeds to your real estate must be prepared and recorded. Bank accounts and stock and bond accounts or certificates must be transferred as well. These tasks are not necessarily expensive, but they are important and do require some paperwork.

A living trust can hold both separate and community property. This makes it convenient for spouses and registered domestic partners to plan for the management and ultimate distribution of their assets in one document.

If you own real estate in another state, you might (depending on that state’s law) transfer that asset to your trust as well to avoid probate in that other state. A lawyer from that state can help you prepare the deed and complete the transfer. If the real estate is located in California, a California lawyer should prepare the deed and advise you on transferring the property.

A lawyer can help you address the transfer of other assets as well. In addition, you should consider changing the beneficiary designations on life insurance to the trust. As for the beneficiary designations on a qualified plan (such as a 401(k) or an IRA), you should seek a qualified professional’s advice as distributions after death are subject to different income tax treatment depending on the designation.

What are the disadvantages of a living trust?

Because living trusts are not under direct court supervision, a trustee who does not act in your best interests may, in some cases, be able to take advantage of you. By contrast, in a probate proceeding for assets passing under the terms of a will, direct court supervision of an executor reduces this risk.

In addition, the cost of preparing a living trust could, in some cases, be higher than the cost of preparing a will. However, it depends on the particular estate plan. The difference in cost may not be significant if the estate plan is complex.

Also, keep in mind that a living trust can create additional paperwork in some cases. For example, lenders may not be willing to lend to a trust and may require that real property be taken out of the trust (by a deed) before they will agree to a loan on that real property. 

If I have a living trust, do I still need a will?

Yes. Your will affects any assets that are titled in your name at your death and are not in your living trust or some other form of ownership governing disposition (e.g., joint account or pay-on-death account). If you have a living trust, your will would typically contain a pour-over provision. Such a provision simply states that all assets should be transferred to the trustee of your living trust after your death. This does not necessarily mean, however, that your beneficiaries can avoid going through a probate proceeding for these assets.

Your will can nominate guardians for your minor children as well. Any assets held in a trust for your children would still be managed by the trustee.

Will a living trust help reduce estate taxes?

Generally, no. While a living trust may contain provisions that can postpone, reduce, or even eliminate estate taxes, similar provisions could typically be placed in a will to accomplish the same tax planning.

Will I have to file an income tax return for my living trust?

No, not during your lifetime. The taxpayer identification number for accounts held in the trust is your Social Security number, and all income and deductions related to the trust’s assets are reportable on your individual income tax returns.

After your death, the income taxation of the living trust is similar to a probate.

What other kinds of trusts are there?

Testamentary trusts and irrevocable trusts are two other types of trusts:

Testamentary trusts are trusts that are based on instructions in your will; such trusts are not established until after the probate process. They do not address the management of your assets during your lifetime. They can, however, provide for young children and others who would need someone to manage their assets after your death.

Irrevocable trusts are trusts that cannot be amended or revoked once they have been created. These are generally tax-sensitive documents. Some examples include irrevocable life insurance trusts, irrevocable trusts for children, and charitable trusts. A qualified estate planning lawyer can assist you with such documents.

Who should draft a living trust for me?

A qualified estate planning lawyer can help you prepare your living trust, as well as a will and other estate planning documents.

While other professionals and business representatives may be involved in your estate planning, a living trust is a legal document, which should be prepared by a qualified lawyer.

In addition, you should seek advice only from professionals who are qualified to give estate planning advice. Many professionals must be licensed by the State of California.

Ask the professional about their qualifications. And ask yourself whether the advisor might have an underlying financial incentive to sell you a particular investment, such as an annuity or life insurance policy. Such a financial incentive could bias that professional’s advice.

A living trust is often held out as an enticement or “loss leader” by offices that are not staffed with competent and qualified estate planning lawyers. Unfortunately, some sellers of dubious financial products gain the confidence and private financial information of their victims by posing as providers of trust or estate planning services.

Should I beware of “promoters” of financial and estate planning services?

Yes. There are many who call themselves “trust specialists,” “certified planners,” or other titles that suggest the person has received advanced training in estate planning. California has experienced numerous promotions by unqualified individuals and entities that only have one real goal: to gain access to your finances in order to sell insurance-based products such as annuities and other commission-based products. To better protect yourself:

Consult with a lawyer or other financial advisor who is knowledgeable in estate planning, and who is not trying to sell a product that may be unnecessary—before considering a living trust or any other estate or financial planning document or service.

Always ask for time to consider and reflect on your decision. Do not allow yourself to be pressured into purchasing an estate or financial planning product.

Know your cancellation rights. California law requires that sellers who come to your home to sell goods and services (with some exceptions) that cost more than $25 must give you two copies of a notice of cancellation form to cancel your agreement. You, the buyer, generally would be able to cancel this transaction up until midnight three business days later. Depending on the circumstances, you may have longer to cancel life insurance and annuity transactions. For example, if you are 65 or older, you would have 30 days to cancel.

Be wary of organizations or offices that are staffed by non-lawyer personnel and that promote one-size-fits-all living trusts or living trust kits. An estate plan created by someone who is not a qualified lawyer can have enormous and costly consequences for your estate. Do not allow yourself to be pressured into a quick purchase.

Be wary of home solicitors who insist on obtaining confidential and detailed information about your assets and finances.

Find out if any complaints have been filed against the company by calling local and state consumer protection offices or the Better Business Bureau.

Insist on the person’s identification and a description of qualifications, education, training, and expertise in estate planning. Also, keep in mind that legal document assistants are not permitted to give legal advice. And paralegals must work under the direct supervision of a lawyer. As a precaution, ask to speak directly to the supervising attorney if you are not given an opportunity to do so.

Always ask for a copy of any document you sign at the time it is signed.

Report high-pressure tactics, fraud, or misrepresentations to the police or district attorney immediately.

How much does a living trust cost?

It depends on your individual circumstances and the complexity of documentation and planning required to achieve your goals and objectives. The costs may vary from lawyer to lawyer. Generally, the costs will include the lawyer’s charges for discussing your estate plan with you and for preparing a living trust agreement, your will, power of attorney, or other necessary legal documents; supervision over their execution; and services or instructions for funding your living trust.

It is crucial to keep in mind that a living trust is a very important part of your estate plan. Avoid being lured by promotions for extremely low-cost living trusts without checking out those who are making the offer.

If you retain a lawyer, you should understand what services are to be provided and how much they will cost. California law generally requires that a lawyer explain, in writing, the nature of the services to be rendered, the cost of those services and the payment terms. Some lawyers charge a flat fee for estate planning services. Others charge on an hourly basis or use a combination of both types of fees.

How do I find a qualified lawyer?

If you do not know a lawyer who is qualified to help you with your estate plan, ask someone whose judgment you can trust—a friend, an associate, or an employer, for example. Or call a local State Bar-certified lawyer referral service. For an online list of certified lawyer referral services, visit the State Bar’s website at calbar.ca.gov/lrs. Or, for the phone numbers of certified services in your county, call 1-866-44-CA-LAW (442-2529). Out-of-state callers can call 415-538-2250 to hear the same message. Or check the Yellow Pages of your telephone directory or contact your local bar association.

State Bar-certified lawyer referral services, which must meet minimum standards established by the California Supreme Court, can help you find the right lawyer for your situation. Most of these services offer half-hour consultations for a modest fee. Attorneys who are members of certified lawyer referral services must carry insurance, agree to fee arbitration for fee disputes, meet standards of experience, and be State Bar members in good standing.

Some lawyers who work in the trust and estate planning area are “certified specialists in estate planning, trust and probate law.” This means that they have met certification standards set by the State Bar of California. Not all lawyers who have such experience in estate planning, however, have sought such certification. For a list of specialists and more information on the certification program, go to californiaspecialist.org. Or call 415-538-2120.

Who should be my trustee?

That is your decision. You could name your spouse or domestic partner as your executor or trustee. Or you might choose an adult child, another relative, a family friend, a business associate, or a professional fiduciary, such as a bank or individual licensed to act in such a capacity by the State of California. Your executor or trustee does not need any special training. What is most important is that your chosen executor or trustee is organized, prudent, responsible, and honest.

While the executor of a will is subject to direct court supervision and the trustee of a living trust is not, they serve almost identical functions. Both are responsible for ensuring that your written instructions are followed.

One difference is that the trustee of your living trust may assume responsibilities under the trust agreement while you are still living. Although many people serve as trustee of their own living trust until they become incompetent or die, others decide they need assistance because they are too busy, too inexperienced, or do not want to manage their day-to-day financial affairs.

Discuss your choice of an executor or trustee with your estate planning lawyer. There are many issues to consider. For example, will the appointment of one of your adult children hurt his or her relationship with any other siblings? What conflicts of interest would be created if you name a business associate or partner as your executor or trustee? And will the person named as executor or successor trustee have the time, organizational ability and experience to do the job effectively?

Will my beneficiaries have to pay estate taxes?

It depends on the circumstances. Assets left to your spouse (if he or she is a U.S. citizen) or any charitable organization will not be subject to estate tax. Assets left to anyone else—even your children—will be taxed if that portion of the estate (including gifts made during lifetime) totals more than the lifetime gift and estate tax exemption (which is $11.7 million in 2021, and is indexed for inflation). For estates that approach or exceed this amount, significant estate taxes can be saved by proper estate planning before your death or, for couples, before one of you dies.

Keep in mind that tax laws often change. And estate planning for tax purposes must take into account not only estate and gift taxes, but also income, capital gains, property, and generation-skipping taxes as well. Qualified legal advice about taxes and current tax law should be obtained from a competent lawyer during the estate planning process.

How could a living trust be helpful if I become incapacitated?

If you are the trustee of your own living trust and you become incapacitated, your chosen successor trustee would manage the trust’s assets for you. If your assets were not in a living trust, however, someone else would have to manage them. How this would be accomplished might depend on whether your assets were separate or community property, and whether you have a durable financial power of attorney.

If you are married or in a registered domestic partnership, assets acquired by either you or your spouse or domestic partner while married or in the partnership and while a resident of California are community property.

On the other hand, any property that you owned before your marriage or registration of your partnership, or that you received as a gift or inheritance during the marriage or partnership, and the earnings or appreciation associated with such property, would probably be your separate property.

In California, most transactions concerning community property could be managed by your spouse or registered domestic partner if he or she is competent. If you own separate property (or are not married or in a registered domestic partnership) and you become incapacitated, such assets could be managed by an agent or attorney-in-fact under a durable power of attorney. Without planning, however, some or all of your financial matters would be subject to a probate court proceeding, generally called a conservatorship.

During the conservatorship process, a judge could determine that you were unable to manage your own finances or to resist fraud or undue influence. The court would then appoint someone (a conservator) to manage your assets for you. And the conservator would report back to the court on a regular basis.

Your conservator might be someone whom you previously nominated. Or, if no one had been nominated, it might be your spouse, registered domestic partner, or another family member. If none of those persons are available, then it might be the public guardian.

Conservatorship proceedings are designed to help protect you at a time when you are vulnerable or incapable of managing your assets. However, they are also public in nature and can be costly because of the substantial court intervention. In addition, conservatorship proceedings may be less flexible in managing real estate or other interests than a well-managed living trust.

How could a living trust be helpful at my death?

The assets held in your living trust could be managed by the trustee and distributed according to your directions without court supervision and involvement. This can save your heirs time and money. And because the trust would not be under the direct management of the probate court, your assets and their value (as well as your beneficiaries’ identities) would not become a public record. Your heirs and beneficiaries would still have to be notified about the living trust and advised, among other things, of their right to obtain a copy of the trust.

If your assets (those in your name alone) are not in a living trust when you die, or do not otherwise pass by “beneficiary designation,” and the total of such assets exceed a specified threshold (currently $166,250), they would be subject to probate. Probate is a court-supervised process for transferring assets to the beneficiaries listed in one’s will.

After your death, a petition would be filed with the court (usually by the person or institution named in your will as the executor). After notice is given, a hearing would be held. Then your will would be admitted to probate and an executor would be officially appointed. An inventory of your assets would be filed with the court and notice would be given to your creditors so they could file claims. The process would end once the court approved a final distribution of assets.

Probate can take more time to complete than the distribution of property held in a living trust. In addition, assets tied up in probate may not be as readily accessible to the beneficiaries as those held in a living trust. And the cost of a probate is often greater than the cost of managing and distributing comparable assets held in a living trust.

What happens if I become unable to care for myself?

You can help determine what will happen by making your own arrangements in advance. Through estate planning, you can choose those who will care for you and your estate if you ever become unable to do so for yourself. Just make sure that your choices are documented in writing.

A power of attorney, for example, is a written legal document that gives another person the right and authority to act on your behalf. It can be limited to special circumstances or it can be general. That authority will end if you become incapacitated—unless you have a durable power of attorney. A durable power of attorney will remain in effect while you are incapacitated. This means that if you were suddenly unable to handle your own affairs, someone you trust—your legal agent or attorney-in-fact—could do so for you.

Or you might choose to set up a springing power of attorney, which would only become effective at a specified future date or event (your loss of capacity, for example).

You can authorize your agent to simply pay your bills. (This is usually a safer arrangement than adding someone else’s name to your bank account.) Or you can empower your agent to handle nearly all of your affairs. Your agent, however, cannot take anything of yours as a “gift” without your specific written authorization. These powers of attorney all expire when you die.

Make sure that you understand all of the terms before signing a power of attorney. And be absolutely certain that your chosen agent is both capable and trustworthy. There are those who have lost their life savings to unscrupulous agents—even to agents who are family members.

If you set up a living trust, it is the trustee who will provide the necessary management of the assets held in trust. However, even if you have a living trust, you should still consider setting up a durable power of attorney for property management as well to handle limited financial transactions and to deal with assets that may not have been transferred to your living trust, such as retirement accounts.

With an advance health care directive, you can also designate someone to make health care decisions for you in the event that you become unable to do so for yourself. In addition, this legal document can contain your wishes concerning such matters as life-sustaining treatment and other health care issues and instructions concerning organ donation, disposition of remains and your funeral. (You can revoke the directive at any time, as long as you are still competent.) Give copies to your health care agent, alternate agent, doctor, health plan representatives and family. And if you are admitted to a hospital or nursing home, take a copy with you.

If you become unable to make sound decisions or care for yourself and you have not made any such arrangements in advance, a court could appoint a court-supervised conservator to manage your affairs and be responsible for your care. The court’s supervision of the conservator may provide you with some added safeguards. However, conservatorships can also be more cumbersome, expensive and time-consuming than the appointment of attorneys-in-fact under powers of attorney or advance health care directives.

In any event, even if you appoint attorneys-in-fact who could manage your assets and make future health care decisions for you, you should still document your choice of conservators in case a conservatorship is ever necessary.

Consider preparing an advance health care directive or durable power of attorney for health care. This document allows the person named as attorney-in-fact to make health care decisions for you when you can no longer make them for yourself. It may also contain your wishes concerning life-sustaining treatment, other health care issues, organ donation, burial instructions, and your funeral.

How should I provide for my minor children?

First of all, in your will, you should nominate a guardian to supervise and care for your child (and to manage the child’s assets) until your child is 18 years old. Under California law, minor children (under age 18) are not legally qualified to care for themselves if both parents die. Nor are they legally qualified to manage property. Your nomination of a guardian could avoid a “tug of war” between well-meaning family members and others.

You also might consider transferring assets to a custodian account under the California Uniform Transfers to Minors Act to be held for the child until he or she reaches age 18, 21, or 25. Or you might consider setting up a trust to be held, administered, and distributed for the child’s benefit until the child is even older.

If you are like many Californians, your house is your primary asset and one that you would like to leave to your family members or other beneficiaries.

A Revocable Transfer on Death Deed is one of a few ways to transfer your home to others upon our death. 

What’s the purpose of a revocable TOD deed?

It’s meant to be an inexpensive way to pass your home to your beneficiaries when you die.

Now, if you own your house with another person, your deed already may reference a right of survivorship.  If that’s the case, and one owner dies, that owner’s interest will automatically go to the other owner, and there may be no need for a revocable transfer on death deed. 

If you are the sole owner of your home, you can create a last will and testament to designate who will receive it when you die.  But, in most cases, your home will need to pass through the probate process in the Superior Court, which likely will take six months or more and carry costs that depend on the value of your assets.

Many folks who own homes choose to create a revocable living trust.  If you have a trust, your house and other assets can pass when you die to the beneficiaries you name in the trust document without going through probate. 

A revocable TOD deed is an alternative to a trust that also allows avoidance of the probate process. 

How does a revocable TOD deed work?

The owner of a home must sign a special form of deed that complies with the statute.  Probate Code section 5642 includes the form of the deed along with frequently asked questions about how the deeds work.

You may obtain forms at your local county public law library, or visit the website of the Sacramento County Public Law Library.

You will need the legal description of your property.  You can find the legal description on the deed you received when you bought or received the property. 

You will need your assessor’s parcel number. 

You will need the full names of your beneficiaries.  They may be individuals, such as your children or they may be an entity like a charity. 

Your beneficiaries will receive the property in equal shares. 

For example, if you name your son and your daughter as the only beneficiaries, they each will receive a half interest in the property when you die. 

But if your beneficiary dies before you do, that person’s share terminates and the other beneficiaries will receive larger shares.  Going back to our example, if your son dies and then you die, your daughter will receive a full interest in the property and any children of your son will not get any interest in the property.

Your beneficiaries will not have any ownership interest in the house until you die and the deed takes effect.

What’s the process for finalizing a revocable TOD deed?

This type of deed must be notarized, witnessed and recorded.  Let’s break that down.

After you have filled in the document, you will need to sign it before a notary public, a person authorized to certify your signature.  You may find them at title companies, banks, and mailing services. 

You also need two other witnesses.  They should not be the persons named as beneficiaries in the deed.  Your witnesses must be present together when they sign, and you must acknowledge to them that it is your signature on the deed.

Once the deed is fully notarized and witnessed, you must record it with the county recorder.  You must do this within 60 days of the notarization date, otherwise the deed will be invalid. 

You don’t have to give a copy of the deed to any of your beneficiaries, but it may be helpful to them if they have it.

What do your beneficiaries need to do when you die?

Your beneficiaries will need to follow steps to obtain title to the home.

They will need to record an affidavit of death and file a change in ownership notice

They will need to provide a written notice of the deed to your heirs at law, your next of kin, and Record an affidavit confirming that the heirs were given written notice.

If you received Medi-Cal benefits, your beneficiaries will need to notify the State Department of Health Care Services of your death.

Will creditors be able to make claims against your beneficiaries?

Yes.  The house will be subject to any mortgage recorded against it, so your beneficiaries will need to deal with the lender.

If you have debts other than a mortgage when you die, your creditors may try to collect their debts from the beneficiaries who receive your house.   

How do you revoke a transfer on death deed?

You automatically revoke the deed when you sell or transfer the property.

You may record a new revocable TOD deed and it will replace the older one.

Otherwise you can prepare a revocation form.  Revocations needed to be notarized and recorded to be effective. 

Conclusion

A revocable transfer on death deed may help your beneficiaries avoid the probate process.   

But there are rules that you must follow to create a valid deed.  Your beneficiaries, after you die, must take steps to receive title to the property.

You can find the rules relating to this type of deed at California Probate Code sections 5600 to 5698.

You should plan ahead if you are interested in creating a revocable TOD deed.  An attorney licensed by the State Bar of California can advise you about whether and how to create such a deed.