Scott N. Carter, Trust Attorney, discusses Trusts vs Conservatorship and the need to create estate plan documents to avoid probate and conservatorship.
Proper estate planning documents allow families to manage the estate and trust without judges telling them what to do.
California Trusts vs Conservatorship
What happens with a trust is let’s say I have a married couple and they want to avoid the conservatorship as well as the probate. By setting up a trust we actually have you sign both as a trustor and as a trustee. When you are a husband and wife we make you co-trustees. By making you co-trustees, is what we say in the document, should either one of us become incapacitated or pass away, that we make the other person the sole trustee.
We go further and say if something happens to the survivor we have a backup, and typically a backup to the backup. By going through this process in the document, we now have made it so that we don’t have to go through the court process. All the court wants to know is that while you were healthy you drafted a document that said you don’t need our help.
By going through that trust document and naming ourselves as trustees and naming the survivor as the sole trustee we have now wiped out the need to have court supervision.
That’s why Trusts are very important and that’s how a Trust is typically set up.
Does a Single Person Need a Trust?
Even with a single person, it is still very important. If I am a single person and I become incapacitated I have the same conservatorship issues. To avoid that as a single person we have that person say, okay I’m going to set up the trust so initially I am going to be both the trustor, the person who creates the document and I am also going to be the trustee, the person who runs it. And, I am going to be the beneficiary, so I am everything! At the point I become incapacitated or pass away, I’ve named a person who is going to become my successor trustee and a successor to that successor. By going through that process in writing I no longer have to go through the court process of a conservatorship.
Avoidance of Conservatorship
When I say estate plan, it is not just the trust. Each person is going to have what we call a pour-over will. It pours into the trust. The reason that is there is – what if they forget something?
We’ve had a lot of times where someone might own a mineral or oil interest in Oklahoma or somewhere that they don’t even know they own but we find it. There is only one way to get it into that trust and that is the will that pours over into the trust. That is why we have that will – it is very important.
We also draft what is called a durable power of attorney for financial management to allow an agent or a spouse to file tax returns, make gifts, or do whatever they wish to do financially.
We also draft what is called an advanced health care directive. This is very important because it allows you to name someone to make health care decisions for you should you not be capable. A perfect example of this is what we call the advanced directive, the so-called, pulling the plug document. It allows you to have a DNR and to make sure no one is kept alive and turned into a vegetable if that is not what you want to be.
We also do another document called an Authorization to Release Medical Records to make sure we do not have to go through the court process to get those.
Doing those documents, and there are typically some other ones we will do depending on the circumstances, to keep us, again, out of the system. My goal is to let everyone run the estate, run the trust, run their family without lawyers and judges telling them what to do.
Scott N. Carter is a partner in a boutique San Jose law firm, Carter, Dougherty & McGuire. The firm’s business principles are driven by the needs of its clients. They are certified specialists in taxation, probate, estate planning, and trust law. Scott can be reached at 408-241-2121 or http://www.cdbatlaw.com.
Trusts vs conservatorship? As you’ve learned from the video, with proper estate planning documents, which include more than a trust, we can avoid probate and conservatorship and manage an estate and our lives without court supervision and judges telling us what to do.
If you need to sell real property under a conservatorship or held in a Trust give us a call at 408-972-1822. We specialized in probate, trust, and conservatorship real property sales.