Orange County Estate Planning Lawyer BlogArticles Posted in Administration of trusts and probate estates
Is My Inheritance Taxable
Can I Really Spend All My Inheritance Money, or Does Uncle Same Get a Portion?
DOESN’T MATTER IF IT COMES FROM AN ESTATE OR TRUST
Is My Inheritance Taxable – Your inheritance of money or property may come from the estate of a deceased person or from a trust established previously. These types of things are generally referred to as “bequests” or “gifts” as far as tax law is concerned. People receiving bequests or gifts are referred to as “beneficiaries”.
Inheritance Rights For Children
How did that kid get so much money to blow!
18 is the age of majority
When a child turns 18 years he or she is considered to be an adult under California law. In legal terms, children under age 18 are called “minors” and when they reach age 18 they are called “adults”. Minors and adults are treated differently as far as inheritance rights are concerned. Minors still have rights to inherit but any inheritance which comes to them is subject to certain legal controls because the law presumes that minors are not capable of handling money or property as well as adults.
Probate – Inheritance with Simultaneous Deaths
How Do You Figure Out Who Gets What? – Inheritance with Simultaneous Deaths
LEGAL BACKGROUND: 2 WAYS TO INHERIT
Under California law a person can inherit money or property (1) as a result of being named in a legal document such as a will or (2) inheritance can occur because a person is related by blood or marriage to the deceased if there is no will.
Getting Money Out of a Trust
My Sister is the Trustee and She Refuses to Pay My Share
Trust terminology basics
A trust is created by a written document known as a declaration of trust, and is then funded by transfer of money into trust bank accounts and/or deeding or transferring of properties to the trust. The creator of the trust is known as the “Trustor” or the “Settlor.” Trusts are usually prepared by attorneys because each trust is custom for the situation and there are many types of trusts. The persons who are to receive money and property out of the trust are known as the “Beneficiaries.” The person or institution that takes care of the money and property of the trust is the “Trustee”. The trustee is bound by law to follow the directions contained in the declaration of trust.
Wills – Presumption of Fraud or Undue Influence Where Beneficiary is a Fiduciary or Care Giver
Wills benefiting the attorney or caregiver are suspect
Abuses in formation of wills and trusts
In California over the last few decades there have been some situations whereby attorneys or caregivers have had wills or trusts prepared that benefit them. There was a famous case of a 95-year-old lady whose will left the bulk of her fortune to the people taking care of her. It turns out that the people taking care of her, known as “care custodians” had the will prepared under suspicious circumstances such that the 95-year-old lady probably didn’t know what she was signing. This and other similar situations led to recent legislation to correct abuses.
Wills – No Contest Clauses
Cut out the heirs who challenge the will using No Contest Clauses
Challenges can occur
If a will or a trust does not make an equal division of the estate then an unhappy heir might want to make a challenge. The law does not require you to equally divide your estate equally amongst your children or to give anything to them for that matter. Most children or in some instances brothers or sisters where there are no children feel that they are entitled to an inheritance. Not everybody understands or believes that a person making a will or trust can leave his or her assets to anyone. This has led to litigation challenging the provisions of the will or trust.
Trust Administration Basics
I was just put in charge of a trust so what do I do?
Trust Administration Basics for Newly Appointed Trustees
Events triggering administration. Trust administration is needed when or both of the Trustors (i.e. persons who created the trust) passes away or resigns voluntarily or becomes legally incompetent.
Allowing Some Children to Live in Mom’s House Messes Up Other Kids Inheritance
Letting Some of the Kids Live in Mom’s House May Lead to Costly Litigation
Frequently we run across situations where parents will leave their residences to one or more of their children in their will or their trust. If they only have one child then the situation is usually okay but when there are multiple children and some are living in the house and some are not there can be problems. Allowing some children to live in Mom’s house messes up the other sibling’s inheritance.
The Back Story
Income Tax Basis Increase on Death of an Owner
Gifting before death may cause huge capital gains taxes
INCOME TAX “BASIS” CONCEPT
Under our system of federal and state income tax, if the property is sold before death for more than what was pay for it then there is a capital gain. There are special rates which apply to capital gains the penny upon one’s tax bracket. To compute capital gains, you subtract the income tax basis of the property from the net selling price. The income tax “basis” is what was paid for the property in the first place minus any depreciation and adding any expenditures for capital improvements.
