Legal Question in Wills and Trusts in California
Living Trust
My father and mother have a living trust in which they are the trustees as well as a will. My father is now in hospice care and it is unknown when he will pass on.
I have two questions. Some of the assets listed in the living trust are no longer in existence. For example savings bonds that are now rolled into a CD. Is it necessary at this stage to have my mother list the CD in the living trust to avoid probate.
The second question is that my father's life insurance policy is also listed as a trust asset, but I have been unable to determine if this is now reflected in his insurance policy. How would I determine if the insurance company has recorded or recognized if his policy as an asset of the living trust?
Thank you
3 Answers from Attorneys
Re: Living Trust
First of all, you probably should have the CD and any other similar property listed in the trusts schedule as assets, and depending on its size you might want to have the CD be put in the trusts name (certainly when making new CDs). While there is an exception within State statute that allows small amounts of probatable property (such as the CDs) to pass without probate, it is always better to be safe and secure.
The insurance policy is easily figured out, you should have your Mom (if capable) call the insurance company/agent and find out who is listed as the owner and beneficiary. Most estate planners prefer to have life insurance held outside of the trust (such as your Mom owning your Father's insurance, and vice versa), for estate tax reasons. It is possible to get around these issues, but it is more common to just avoid them all together.
Re: Living Trust
The question is not whether the CD or insurance policy is listed as an asset in the Trust Agreement. The questions is whether the named owner, in the case of the CD, and the named beneficiary, in the case of the insurance policy, is the trust or not. If not, the CD will have to be probated. The insurance will pay off the death benefit to the named beneficiary without probate.
Your questions are fine, but more questions might be asked. But, in order to ask the right questions one needs a little knowledge. It's amazing how little the general public knows about these things when death is inevitable and a significant period of incompetence is likely. I suggest you read my 64 page book, Create Your Legacy & Save the American Middle Class" It will tell you everything every lay person should know about this stuff in simple, understandable and direct prose. You can find it at www.YourLivingLegacy.info or through my website at www.mwroth.com.
Re: Living Trust
you should retain an attorney to assist with these issues, provide guidance for ongoing administration of the trurst AND to review the trust to ensure that it still meets the requirements of the trustors.
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