A real life estate planning story and quick hits about estate planning a related matters.
Lisa’s dad had a $3 million estate. He was a widower with two 40-something children, Lisa and her brother. He had a living trust that left everything to them.
He asked me if we could amend his trust so Lisa's share could be protected from her husband. Lisa had shared some disturbing things about her husband, which led him to believe the marriage would not last. And he did not want Lisa's husband to ever get control of her inheritance.
We amended his trust to include an asset protection trust for Lisa. In the old version, Lisa would have received her inheritance outright: a check written to her. In all likelihood, she would deposit the check into her joint account, and her husband would get half. An inheritance is separate property in California, but only if you keep it separate. If you deposit an inheritance check into a joint account, you commingle it into community property.
But under the amended trust, when Lisa's dad died, her inheritance check was deposited into a trust she controlled. When the divorce happened a few years later, Lisa’s husband was mad that he had no right to her inheritance, but Lisa was happy and thankful that her dad had protected her.
For more on how to protect your children's inheritance.
There are no bonus points for showing your estate planning attorney your 20-page estate planning conversation with ChatGPT.
Common sense, clear thinking, and experience will rise to the top in the AI world.
Rule #1 of estate planning: You have to do it before you die.
Once a year, someone asks me if they should wait until they are older to do their estate planning. Great idea I tell them, let me know when you plan to die so we can schedule our initial estate planning meeting. See Rule #1 above.
Think carefully about who you name as your successor trustee. Choose someone who can do the job: someone who is responsible, gets things done, and is a good communicator.
The more time you spend with your kids, the simpler your estate plan can be. If you all get along and your kids like and trust each other, there is a high probability that the trust administration will go smoothly.
California has its problems. But weather is not one of them. Enjoy your summer.
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