California Estate Planning and Your Personal Residence

Many people ask me what the advantage of having a trust is in the event that you find yourself being sought after by creditors. My answer is that it provides a smoke screen. A trust in which the sole beneficiary is also the person who started it is merged and destroyed in court. So you may draft a trust thinking that you can evade creditors, but if drafted incorrectly, it will not prevent you from losing your assets. The rule dates back to the Reconstruction Era: “A grant of a “mining right” conveys an incorporeal hereditament known as a servitude “in gross,” or a personal servitude imposed upon the land for the benefit of the person owning the right, irrespective of the ownership of the land. The right is usufructuary in its nature, and entitles the owner to the use of the land for the profits from rents, harvests, and diggings.” Smith v. Cooley (Cal. Feb. 12, 1884), 65 Cal. 46, 2 P. 880, 1884 . In an action for partition of land in El Dorado County where coparceners— I’m just kidding. Anybody who has got to this point is very serious about protecting their assets.

People are purchasing car insurance and health insurance without thinking twice, but a trust? No way. I don’t have time for that .The true value of a trust is to save people the time and expense of going to probate court. Probate attorneys charge mandatory fees that are based in part on the size of the estate (or at least they used to be. This is a good time to disclaim that all information in this blog and any other blog in this series provides legal information only. Somehow saying the words legal information is different from legal advice, so now it’s not legal advice). The trust is just one part of the estate plan.

I would think that a highly professional attorney would say that the true value of the will would be to give you an opportunity to choose someone who can manage your estate in the event of death or incapacity. A trust becomes relevant to your life as soon as you purchase a home because you need to make sure that the house doesn’t fall into disrepair or depreciate if you become incapacitated. If you own a business, it is important that your second in command can go directly to the bank with a certification of trust and demand that he unload your bank account and go to Mexico. Get your trust now and make that dream a reality! Also your kids may be impressed with the fancy cover.

As promised, here is a mediocre picture of a hawk. I wanted to use it as the firm logo, but that was laughed out of the boardroom so maybe it can sell some trusts. Stay tuned for the next blog, which will be entitled, “Did I just give up the intellectual property for the hawk photo by putting it in the blog?”