estate planning

Clark's Random Notes on California Estate Planning

Estate planning insights from Clark Allison on trust fund babies, decision making, property tax reassessment, ADU planning, dogs, and Charles Dickens.


Georges Hautecourt. Old school estate planning attorney. Sometimes, old school is not good. All to the cat. Butler mad. Chaos.

George Hartecourt

A client asked me this week if he should worry about his son becoming a trust fund baby when he inherits from his living trust. I asked him about his son. He said his son works hard, has a great job, built his own home, and is very frugal. I told him that in my experience as an estate planning attorney for 25+ years, he shouldn't worry about his son. Kids don't become trust fund babies because they inherit money. They become trust fund babies during their childhood. Kids with character and a work ethic don't become trust fund babies - even after an inheritance.

Death bed amendments to estate plans don't usually end well.

Sometimes, the right choice suddenly becomes obvious, but it requires a refresh of perspective to see it. Core, permanent values win over transitory fashionable values if you have eyes to see, ears to hear, and patience to watch it play out.

Why do estate planning attorneys write multiple amendments for living trusts that create a living trust puzzle? It would be much cleaner and easier to read if the estate planning attorney created a restatement: same trust, but a whole new comprehensive document. All the revisions are in one document. With a complete restatement of your living trust, you eliminate the need to read how article six of the third amendment replaces article six of the second amendment, while section 7.8 of the fourth amendment replaces section 7.7 of the third amendment, and don't forget that subpart (b)(1) of section 4.2 of the fifth amendment replaces subpart (b)(1)-(3) of the second amendment.

You have two options to avoid Proposition 19 property tax reassessment when you inherit your parent's California home. 1) Move in and make it your home, or 2) Sell it and let the new buyer pay the increased property tax. Most people choose to sell. This is why the California Association of Realtors wanted Prop 19: more sales.

Estate planning for your ADU is tricky. To whom will you gift the home, and to whom will you give the ADU? If different people, you need a contract with the homeowner to allow the other person to live in the ADU. You could draft your living trust to create a sub-trust when you pass away to own the home. The sub-trust would state the terms for the beneficiary of the home and for the beneficiary of the ADU.

If you feel compelled to leave something in your living trust to your distant nieces and nephews, consider making cash gifts to them while you are alive instead of naming them as beneficiaries in your living trust. The fewer the beneficiaries you name in your living trust, the fewer the beneficiaries who can make trouble for your successor trustee.

Don't use your living trust to scatter your assets to the wind. Your successor trustee will have to deal with the whirlwind. 

Talk to your grandparents and aunts and uncles. They are storehouses of knowledge and wisdom because they are old and have seen and experienced things you haven’t. They lived in a different world. More entertaining than Netflix.

God gave us dogs to teach us unconditional love. 

Why yes, it was about a Will when it was about anything. A certain Jarndyce, in an evil hour, made a great fortune and made a great Will. In the question of how the trusts under the Will are to be administered, the fortune left by the Will is squandered away; the beneficiaries under the Will are reduced to such a miserable condition that they would be sufficiently punished if they had committed an enormous crime in having money left them; and the Will itself is made a dead letter. Charles Dickens, Bleak House

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