Legal Question in Wills and Trusts in California

Re: Living trust and inheritance upon remarriage

If only the house is in issue, the best way is to deed a remainder interest in the house to your reserving a life estate for himself, and if he wants to, his new wife. It provides all tax benefits of a trust in terms of a stepped up basis in the property on his (and if included, his wife's) death. It avoids probate of the house. It insulates the house from being attached as an asset if your father has to go into nursing home care in the future and qualifies for MediCal. In fact, it will help him qualify. But, you still will want a living trust, durable power of attorney and health care directive, both for yourself and your dad.

So few people know anything about these things. They should really teach it in high school.

I suggest you get and read my book "How You Can Protect Your Loved Ones in the Event of Death or Disability (Without Paying a Legal Fees}" Not only does it explain virtually everything you need to know in plain English, but it contains in the Appendix a copy of the Legacy Living Trust Package. This is a complete trust package for the Middle Class including a Living trust for single or for married people, a durable general power of attorney, an advance healthcare directive, an Abstract of Trust, all necessary transfer documents and instructions. Having taught literally hundreds of seminars to thousand of regular middle class people, I have learned how to answer the most important questions in language understandable to all. Having learned over 30 years that most people that go to an attorney to pay $1200 or more for these documents don't understand the language in the unnecessarily complicated documents, don't understand what they are doing and why, and ofen make common but avoidable mistakes, I created the Legacy Living Trust Package.

You can order the book on-line at Amazon.com, but, it is better to order at www.IWant2CreateMyLegacy.com. If you order there, you will get a free special report entitled "The Seven (7) Most Common Mistakes Made by the Middle Class in Planning For the Inevitability of Death and the Likelihood of Disability, and How to Avoid Them." This report alone could save you and your family hundreds of times the cost of the book.

Again, the book is, to my knowledge, the only one written for regular people in the middle class, and it contains in an appendix the Legacy Living Trust Package, which to my knowledge is the only complete fill-in the blanks trust package written in simple English ("People Ease", not "Legalese") that will be valid in every State in the US.

If you call me I can prepare the deed for you for a nominal fee.

Re: Living trust and inheritance upon remarriage

Mr. Roth gives you an excellent answer. In case you or others do not understand the term, a life estate means that your father has the complete usage of the house and can do anything with it except sell or transfer it and cause any significant physical damage. It is treated by the law and taxing authorities as being his house, but the instance he dies it becomes yours [be sure to file with the assessor's office a notice of death and transfer of property from parent to child so avoid an increase in your taxes, even though for income tax purposes the house basis is reset to its new value at your father's death.

But you also have to deal with the emotional aspects of the matter. Have your father also prepare and file with the life estate documents if possible so it does not become separated and unread, a detailed reasoning as to why he is leaving the house to you and not others. If he is willing to do so, and point out to him the heat you will take after his death if he does not, he should tell his new wife and her family before he marries what his plans are and why [best if life estate already created first]. If he has enough money, he should be sure to make with his separate funds [he should set up a bank account in which he puts only non-joint, non-community funds; all of his assets should be thus separated] all payments on the house, including taxes, mortgage, repairs, water bill, etc., so that there is no commingly of community property assets with the house which might allow his wife to claim a portion as community property. Try to be present when your Dad makes the announcement so that yo know he actually did and what was said; it might also defuse the emotional reactions. And remember that your Dad has gone out on a limb for you and show it by being kind and helpful to him [and try to retain good relations with his new family].

Re: Living trust and inheritance upon remarriage

By the way, commingly means where the parties mix community assets or obligations together with separate/private assets so that it is difficult to tell which part of the money came from where. It is like mixing the can of colored paint in with the base paint.