Aren’t I Covered by a ‘Transfer on Death’ Designation on My Accounts?

Not necessarily.  A trust is a better way to control who gets what when you pass away.  A ‘Transfer on Death’ (called a “TOD”) or a ‘Payable on Death’ (“POD”) designation on your checking, savings and brokerage accounts is a good idea if you do not have a trust but having a trust is an even better idea.  Why?  A trust has many more contingencies inherit in it than a TOD or POD can have.  Some do not allow for multiple beneficiaries by different percentages but even when they do, there may not be a provision for what happens if one of your beneficiaries dies before you do.  Grandchildren might be left out.  Or there might be a perception that one child got favored treatment and a bigger share of the estate by being the POD or TOD designee when others were not (or were on other accounts that lost value in comparison). This can be entirely avoided by having a trust, simply re-titling the account in the name of the trust, and have all the assets put in one big “pot” to be divided as you see fit.  Fluctuations in value won’t matter.  Grandchildren will inherit in place of a child if the child predeceases you.  And if you need someone else to manage your financial affairs while you are still living, your trust can provide for this.  A POD or TOD account designation won’t help with that but a trust, in combination with a Durable Power of Attorney for Financial Management, will.

Call the Law Offices of Ann Saponara today at 510-797-8902 to schedule a free consultation about foundational estate planning.

Is a Will Good Enough?

Yes, if you have assets that do not exceed $150,000.  But if you have assets that exceed that, your estate will have to be probated.  Probate Court is time consuming and expensive.  It serves an important role in our society of distributing an estate’s assets but most people would like to avoid it if they can.  And your heirs can if you have set up a trust (and if there are no contests to the will or trust after you pass and if assets are appropriately titled in the name of the trust — we give you advice about this).

Almost anybody in California who owns real property needs a trust because the fair market value of property in California usually exceeds $150,000.  A mortgage doesn’t count in determining gross assets of an estate for probate purposes.  So having a will together with a trust is a very good idea.   A will allows you to designate the beneficiaries of your estate (those people whom you want to inherit your assets).  A trust controls your assets and you control the trust for your benefit during your lifetime.  You can revoke the trust or amend it and nothing changes but the names on your deeds and accounts.  When you pass, things are a lot easier on your heirs.  At that point, your choice of successor trustee takes over and he or she pays off debts and then pays for the care of your dependents until the ages you specified and then distributes assets for outright inheritance.  It can be done smoothly, efficiently and privately, without court interference.

Do you still need a will if you have a trust?  Yes.  In conjunction with a trust, we prepare what is called a “pour-over will.”  This has a provision that says ‘anything I forgot to title in the name of the trust pours over to the trust.’  It’s a safety net.  The other reason to have a will even if you have a trust is that is where we make guardianship designations for minors until they reach age eighteen (18).

We can provide you with guidance about all these issues and many more.  Schedule a consultation with attorney Ann Saponara at (510) 797-8902.