Personal Finance: Ask the Experts

Get advice on money matters from The Bee's Claudia Buck and a panel of local experts

September 1, 2013
When is a trustee required to give heirs notice of a will or trust's existence?

Q: My aunt passed away without any children. My mother was the her last surviving sibling. I have an older cousin who 'took charge' and said that he was trustee of her estate. He also said that my aunt wanted no services of any kind. Since my aunt's passing, my mother has passed away as well. This leaves me wondering about the status of the estate. Does my cousin have a legal obligation to disclose the contents of my aunt's will? At what point must documents be filed with the county (nothing has been filed yet)? If she left a "living trust," must there be a disclosure of the contents to my mother and her heirs? At what point do we give up our rights to any inheritance?

Robert, Sacramento

August 29, 2013
If a parent's will leaves an estate equally to children, can one sibling take all the real property?

Q: When a person states in their will that adult children shall share equally in the estate, does that include real property, or does real property have to be stated specifically? There are only two adult children, myself and a sister. The deed on my father's home listed his name and my sibling. She kept the home and I only shared in the personal items and money from a bank account. Was I also entitled to share in the home?

GB, Sacramento

August 27, 2013
What is reasonable compensation for the trustee of a small trust?

Q: My longtime friend (and attorney) has agreed to become my Trust Trustee.
However, when I inquire how much she should be paid or otherwise compensated, she merely shrugs and says, "Whatever you think is fair," which, of course, doesn't answer my question or help me to stipulate any amount in the Trust that I am now completing. Are there "standard rates" you can inform me of? I'd like to pay her a lump sum per year for each year there are funds remaining in the Trust. My Trust is small (less than $90,000), of which $70,000 will be immediately spent on my charitable beneficiaries listed. The remaining portion is to be my nephew's college fund, of which my friend is to oversee and manage and of course, issue any checks when appropriate. It is not any more complex or involved. I read somewhere that 1% per year of the remaining funds of a trust is fair compensation. Is it?

Stephan, Antelope

August 23, 2013
What steps should one follow to amend estate planning documents?

Q: My wife and I prepared our living trust in June 1990 through an attorney. He sent me a couple of amendments, which I made in the trust. The last amendment was made in 1998 changing the durable power of attorney for health care. There are no changes in the assets or other family changes. My children are now grown, and I want to substitute existing successor trustees, co-executors, agents and conservators with my children. Can I do it myself by making these changes in the living trust? Do I need to make any other changes that may be required in the trust? No changes were made after 1998. Thanks.

Hargopal, Cerritos

August 21, 2013
Sibling questions a brother's changes on promissory note to elderly mother

Q: My brother borrowed $300,000 from my mother to buy an apartment building. He has made interest-only payments for the past three years. He recently brought a new promissory note and deed of trust for our mother to sign, reducing the principal balance of the note by $60,000 and reducing the interest rate from 7 percent to 3 percent. Mother is 94 years old and has been diagnosed with dementia and is under 24-hour care. My brother's wife is a notary and notarized the documents. Does any of this situation seem legal?

Wondering in Folsom

August 19, 2013
Is a trust really necessary for a small estate and, if so, what is a reasonable cost?

Q: My 78-year old father is going in for some heart valve repairs. He is just now getting his information/estate done! He recently informed me that he is being charged $2,500 do draw up papers. He said the attorney was from a list provided by Placer County courts. The fee seems very high to me. All he has is his home, with a large mortgage, $20,000 in a savings account and nick-nacks around his house.
My brother and I will be in charge of clearing/selling the home and then distributing assets among my father's grandchildren. Do we really need to spend $2,500? We have sat down and listed his wishes and agree with them. I will be executor and my brother will be trustee. With so little in his estate, what is the best legal way to handle this? Also, do we even need an attorney involved?

Amber, Roseville

July 22, 2013
Will a bank account with a POD or TOD designation require probate?

Q: I am wondering if POD or TOD accounts -- with assigned beneficiaries -- go directly to beneficiaries after death or do the accounts have to go through probate? No revocable trust is involved. I have read conflicting answers. Sincere thanks.

Ellie, Granite Bay

July 20, 2013
What happens at death when title to real property is held as tenants-in-common?

Q: Several years ago, I signed a Grant Deed naming my daughter and son as Tenants in Common for my house when I pass on. My home is the only asset I have and an attorney said this would be a Life Estate, so I would not need a last will. When I pass, and the house is sold, do both of my children have to share in the proceeds equally, or is there another option for disbursement? Thank you.

Jeanne, Sacramento

June 26, 2013
We changed our mind about our living trust. How do we revoke it?

Q: In 2008, my husband and I formed a Living Trust. Since then our family dynamics have changed considerably and we wish to revoke it with a Trust Revocation Declaration. There are forms on the internet with instructions to do this personally without the expense of an attorney. When this form is notarized, would it be completely legal and safe, or would hiring an attorney be the better way to obtain our goal? Thank you for your advice.

Sandra, Placerville

June 26, 2013
How often should a living trust be reviewed?

Q: How often should a Living Trust be updated and is it sufficient to renew the notarized page?

Lena, Roseville

June 10, 2013
Will my mom be forced to sell her house if she receives long-term care help from Medi-Cal?

My mom has her home in a revocable trust. My dad is deceased. Her annual income is approximately $30,000 and she has some savings. She is worried that the state will "take her home" if she requires long-term care and exhausts her savings. What would happen? Can she be forced to sell the house or would liens be filed? My aunt who has no trust but a will and is low income, met with an elder care attorney who said he would "fix it" so she would not lose her home and offered to do the same for my mom for a substantial fee. She did not understand how he is able do this. Can you explain the process and how it relates to the trust? Thanks.

June 7, 2013
Can a trustee purchase property that belongs to the trust?

My mom is living in a board and care. Her home is in a revocable trust and I am the Successor Trustee. I am also agent under her Power of Attorney. She can no longer make any financial decisions, as verified by her internist and neurologist. She will be in a board and care from now on. Her only asset is her home. As the Successor Trustee and agent under the Power of Attorney, I have the authority to sell her home without her signature to another buyer and to sign the paperwork. Can I purchase her home? She needs the money to pay for the board-and-care. She can't deed the house to me because I have to wait one year to sell and she will be out of money before then. Is my only option to sell her home to another buyer, or can I purchase the home?

June 3, 2013
How can a trustee be reimbursed for trust expenses paid from the trustee's personal funds?

My mother has a living trust that leaves her house to her two grandchildren and the rest to her four children. Two years ago, she went into a care home and acting as Trustee, I took over all the bills, including a second on the house, taxes, etc., because her income is only enough to cover her care. If she was to die today, how would I settle the trust and be compensated for the thousands of dollars I've paid from my own money when her only real asset, other than a small IRA, is the house? The grandchildren do not want to sell the house. The house is currently being rented by one of the grandchildren but the rent and any sold assets, such as her car, are paying down my mother's old debt and home repairs/ improvements. Thank you for your time.

M., Rio Linda

May 30, 2013
Can a trust remain open for an indefinite period after the death of the settlor?

When my mom died in April, 2012, I, as the Successor Trustee, distributed all the monetary gifts per the Trust. All that's left in her Trust is her house which I inherited. How long can I legally keep her house in her Trust? Is there a maximum time before I must move her house from her Trust to my Family Trust or sell it?

May 28, 2013
How can we use our trust to help our grandchildren pay off their student loans?

We have four grandchildren who are saddled with substantial college loans which they are paying off at the present time. My wife and I want to leave monies for each of them, through our revocable trust, to alleviate their education burdens.

What is the best way to make sure that the funds are used for the specific purpose of making loan payments in full? How do we amend our trust to facilitate this arrangement?

Finally, what are your recommendations to eliminate animosity, which may occur if our married children who don't have kids feel they are being cheated out of a percentage of the monies designated for the college loan payments?

F., Rocklin

May 16, 2013
What if spouses disagree on how they should leave their estate to adult children?

My wife and I each have one son from a prior marriage. They both are college graduates. We own two homes that are not of the same value. My wife wants to get things sorted out so that when she dies her son is well taken care of. She has been talking about a trust. I am not too concerned about my son. I believe that he can take care of himself and that we do not have to save our money for them. I feel she is more concerned about taking care of them from the grave than taking care of us. To make peace, I am about to go see a financial planner. My heart tells me it is not the right thing to do. We have a good relationship. What is your position on this matter?

May 6, 2013
Will simplifying our trust require us to re-do all of our title documents?

In the 1990s we established an A/B family trust and have always placed all assets in the name of the trust with us as trustees. We do not expect to exceed the $5 million estate threshold and wish to convert to a simple family trust.
How will this affect all the documents established as "James and Mary, Trustees Under 1990s Family Trust?" We have invested in several real estate trust deeds. Must these documents be quitclaimed to the simple trust or can the simple trust be stated as just a revision to the A/B trust? Thanks for your help.

James and Mary, Elk Grove

May 2, 2013
Sibling rivalry over a parent's trust: What financial disclosures are required to beneficiaries?

My sister is the trustee of our parents' revocable trust. We will soon be selling their house and property. I feel there is a lot of unnecessary money being spent. Is she accountable for what comes and goes out of the checking account? Do I have a right to know what is financially going on? If so, does she notify me or does the attorney?

It has been almost a year since our parents died and I have no idea where we are financially. I have been involved in preparing the property and house for sale. Do I have a say in accepting an offer or not? My sister feels it is her responsibility as trustee to handle everything without including me. Thank you for your time.

Linda, Rocklin

April 29, 2013
Is an attorney required to change the beneficiary to our trust?

We need to change the beneficiary in our revocable living trust. Must that be handled through an attorney or can we make that change ourselves? If on our own, must the change be witnessed and notarized? Thank you!

Susana, Folsom

April 26, 2013
What are the advantages of holding title to real property as community property with right of survivorship?

Regarding the recent question in the Bee on changing title of your home to community property with right of survivorship, what is the overall benefit of making the change? We paid off our house about a year ago and wonder if changing the title is something recommended.

Barbara, Sacramento

April 25, 2013
Am I required to report a gift that is within the annual exclusion amount?

I am selling my house and wish to gift my sons from some of the proceeds. I understand they can each receive $14,000 from myself and $14,000 from my husband. This will be a one time event, so will not trigger gift tax. My question is, is there any paperwork involved and do we need to file special forms when we file our taxes? My husband and I use turbo tax and used the standard deductions last year. Thank you!

Linda, Orangevale

April 24, 2013
Should a spouse be named as beneficiary of a Health Savings Account (HSA)?

I just opened an online Health Savings Account (HSA). On the Designation of Beneficiaries Form, it asks for the name and address of the individual, or a trust that I would like the money to go to if I die. My husband and I have a trust together. Should I designate the trust, instead of my husband directly, as the beneficiary?
This leads to my second question. Our regular checking and savings account are titled under our trust. Should I have done the same for this HSA savings account? It is in my name only, not my husband's. Thank you.

Julie, Granite Bay

April 21, 2013
How can my cousin and I agree on a fee for her services as trustee?

I am the single beneficiary of an irrevocable trust and my cousin is the trustee. The trust does not state how much the trustee can/must charge for services. She is hesitant to take any pay, but I would like to pay her. Is it possible to pay her out of the trust? She is the only one who can write checks for the trust but feels uncomfortable writing a check to herself, even though I approve.
What is the common practice? How can we handle this comfortably?

Anne, Sacramento

April 16, 2013
Is it necessary to file an estate tax return after a spouse dies?

Q: I have a living trust and am getting different opinions from friends about whether or not I needed to file an estate tax or death tax return after my husband passed 6 years ago. I am very confused. Thanks for any help you can give me. Some say it is not necessary if you have a trust.
Betty, Elk Grove

April 15, 2013
Will changing title from joint tenancy to community property, with right of survivorship, cause increase in property taxes?

Q: My wife and I own our home free and clear as community property. How do we change title to "community property with rights of survivorship" without causing the property to be reassessed for property tax purposes?

Patrick, Auburn

April 9, 2013
What are tax implications in gifting funds from the sale of my home?

Q: As an unmarried trustee for a small (approximately $1 million) family revocable trust, I am considering a long-term relationship with a widowed friend, who also possesses a family trust. We wish to maintain separate trusts. Predictably, my home is the major asset in my trust -- with the remainder being CD's, annuities and cash.
What are the tax implications if I wish to sell my house and distribute the proceeds among my five children as part of their inheritance? I understand that the IRS has a $14,000 per year gift consideration, but what if I choose a larger amount, say $100,000 per child? Help.

Bill, Lincoln

March 30, 2013
Is a will or living trust necessary if my only asset is my house?

I am a 71-year-old widow. All I have is my house. Do I have to spend a lot of money making a will or a trust? I have two grown children and have said it will be up to them to do what they want with the house. I have called attorneys but they want $700 and up to make out a living trust or will. I cannot afford that amount. What advice can you give me? Thank you very much.
Kathy, Sacramento

March 16, 2013
Help: How do we correct a botched trust?

Q: We hired a lawyer to make our trust. Ever since, we've been living a nightmare. The trust has so many mistakes. We asked the lawyer to correct the problems. Eventually we were "fired" by our lawyer, saying we should find another attorney to help us.

We have tried to find someone but nobody wants to revoke our trust as we asked or correct the mistakes. Where do we go from here? We have an unusable trust. We are in our senior years and can't afford to throw money away, one lawyer at a time. (Of course, the attorney cashed our $1,000 check.) Help!

Trusting, Sacramento

March 10, 2013
Does the IRS impose a tax on a foreign inheritance?

Q. My father moved to Australia in 1987 and became a citizen there (I am a born and raised American citizen). He is setting up my inheritance (bank, home, stocks). Australia does not have inheritance tax, but I heard the IRS will tax the heck out of me. I suggested he put me on his house, bank and stocks to reduce or eliminate taxes. Is this correct? Do I have any other options? The total of the above will be just under $500,000. Thanks. Sparky, Florida

February 28, 2013
What documents do I need to close a bank account in my living trust?

Q: I had an account with Capital One. My account was put in a trust. When I went to close the account, the bank wanted to see my entire trust. We finally agreed on certain documents. What document do I need to close my account after it is in my trust? Also if I add or delete accounts in my trust, do I need to have the documents notarized by a Notary Public?

Marie, Sacramento

February 28, 2013
How do I transfer title of my residence to my living trust?

What documents do I need (other than the County's "Preliminary Change of Ownership Report") to transfer our home in Gold River into our family trust? Can I do this without an attorney? Also, what is the best way to do the same for a rental home and 1.2-acre lot in Asheville, North Carolina?
Don, Gold River

February 27, 2013
Will there be a property tax increase if my children inherit my house?

My assets, including my house, are in a revocable trust, with my three children as heirs. My current property taxes are based on Prop.13. When I die, will the Prop.13 rate roll over to my heirs or will their property taxes be based on the value of the house at my death?
Donna, Citrus Heights

February 27, 2013
When siblings disagree, can one force a sale of their parents' home?

My parents both passed away in 2011. My brother and myself are co-trustees of their trust. We had their home listed for $925,000, but then my brother decided to move into the house (which I discovered after the fact). He is "renting" the house and paying me 1/2 of the rent, which is below average for rental homes in that area. He now expects me to pay 1/2 of the maintenance, fix-ups and improvements. I would like to put the house back on the market, or have my brother buy it. Can my brother continue to live there, even though I never agreed to it? It is a great deal for him and a lousy deal for me.

Diane, Folsom

February 25, 2013
Do I go through probate for a modest estate?

Q: Father dies leaving a small estate consisting of a house valued at around $80,000 and a pickup truck valued at $4,000. His will designates son and daughter to get everything split equally. Is probate required? Is it complex enough to require lawyers or can an individual file the required papers? And what might those be?
Rick, Quincy

February 25, 2013
How do I replace the current executor of my trust?

I would like to remove my present executor and set up a new one for my trust, but prefer not to have another individual person. What are sources for finding some kind of institutional rather than a personal executor? How do I show the installation of a new one?
My will and trust are properly set up; no changes required. However, I may want to drop one or two recipients. Does this need to go through my lawyer or can I simply write and attach new instructions to the will?

Allen, Sacramento

February 11, 2013
My siblings don't agree about the property we inherited-what now?

Q: My parents have owned a summer cottage in Stonington, CT since the 1960s. When my father died 10 years ago, my mother had the names of my 2 siblings and myself added to the deed. Mom passed a few months ago. I live 2,000 miles away. My brother has no real interest in the cottage. We were always told since childhood that the cottage was the only thing my parents had to leave us. My brother and I always assumed that my sister would buy out our share. She and her family enjoy the use of the summer cottage.

Now that Mom is gone my sister feels we should just give her the cottage. She feels that entitlement because she is the only one that appreciates it and that she spent more time with our mother. My brother and I are not wanting to sell it to a stranger but on the other hand we don't feel we should just "hand it over". The cottage itself doesn't have much value, it is the property near the ocean. Total value is about $300,000. Should something happen to my sister (we are all 3 approaching 60), I am sure that her children would sell it immediately. Since last May when Mom passed we have just let my sister use it and all 3 of us have paid the property taxes. Any advice? Is this something a court has to settle? Mom really left us in a bind. Any suggestions would be welcomed. Thank you in advance. -- Cynthia, Sacramento, CA

January 22, 2013
Are my assets available to my son's creditors?

Q: I have a revocable trust with my wife and son (adult) as trustees (house, cars, savings, etc.). My son is on one of my checking accounts, which is not in the trust. If my son is sued, can my monies be attached in the lawsuit? And if so, how can I stop it? -- Gary, Carmichael, CA

January 7, 2013
Can you put a joint tenancy asset into your trust?

Q: My father, brother, sister and I are joint tenants on shares of stock that he has put in his living trust. My question, is it possible to put something in your trust that is in joint tenancy? --Tony, Roseville, CA

December 27, 2012
Can my daughter in Sweden be successor trustee of my trust?

Q: Can my daughter, who is an American citizen but lives in Sweden, be administrator of my revocable trust (which is small and mostly insurance proceeds)? --Wanda, Rocklin, CA

December 9, 2012
Who gets burial plots left out of divorce settlement?

Q: We bought 2 burial plots when we were married. The plot is listed in both our names. We got divorced and he remarried. It did not come to my mind about the burial plots in our settlement. He died 2 yrs ago and was cremated and is not using the plot. Am I entitled to the other plot or does the new wife get it? The plot is listed in our names. --hungsen77, Sacramento, CA

December 6, 2012
Can a QPRT be used for residential rental property?

Q: Can a Qualified Personal Residence Trust or "QPRT" be used for a residential rental property? I do not live at this residence which has a value of about one million. I would like to protect this property from as much taxation as possible and give it to someone who is unrelated to me. --Margaret, Santa Barbara, CA

November 28, 2012
Can my stepmother's trust pay for her rest home costs?

Q: My father remarried after my mom died. His new wife has a trust set up with the investments from her prior husband. She and her 3 children are on this trust. She receives dividends, about 2k a month to live on, which she and my dad use for house expenses, etc. He just has Social Security. If she goes into a rest home (advanced dementia), can this trust help out with these costs so my dad does not have to sell his home? Thank you. --Dede, Sacramento, CA

November 27, 2012
Can one sibling re-fi a house co-owned by other siblings?

Q: Several years before my mother passed away in 2010, she added the names of all her six kids to the deed. The oldest sibling is executor and I am secondary. The first loan is in (Mom's) name only. She is on the second deed as well as myself. One sibling lives in the house and would like to refinance both loans but her name is on neither loan. Does she need permission from all the others to refinance, or can either the other sibling or myself give permission if needed? The bank can't seem to give the same answer. Also, what is the difference between a "trustee" and "executor"? And is being the executor the same as having power of attorney for someone? Thank you. --Cora, El Dorado Hills

November 21, 2012
Why was 50% of house bought from mother's trust reassessed?

Q: Before my mother died she set up a special needs trust for my sister and I, we are both on social security. In her Will she said that she wanted the house to go into the Estate and for it to be sold and that would help to fund the trusts accounts since the proceeds would be divided between the two of us. She also left a great deal of stocks that her broker had set up and she would usually show a gain (no matter how small) on her quarterly reports. What I did, after she died, was sell my house (that I had already paid off) and buy her house but I am being told now that since my sister is also a beneficiary (there is just the 2 of us), that I will only be allowed to get 50% of her Prop.13 instead of 100%. Why is that, my sister did not buy the house I did. And if that be the case than maybe I should have only had to pay one half of the asking price of the house, since the other half was left to me in mom's Will. So I have a couple of questions:
#1 Did I get a bad deal having to pay full market value for the house, when 1/2 of it was left to me?
#2 Why would the County only give me 50% of mom's Prop 13, The name on the new deed is my name not my sisters.
God Bless my MOM, she had her heart in the right place and I love and think of her everyday.
Thank you for your time, Ellen
P.S Since we have Special Needs Trust, we are required to have a trustee to manage the trust accounts. If you are not happy with that person, can we just fire her? Can we ask for an outside audit, if so HOW?
Thank you again.
--Ellen, Sacramento, CA

November 21, 2012
Should my fifth-wheel trailer go into my trust?

Q: I just created a living trust and put my house and investments into it. Should I also put my 5th wheel trailer into the trust? I did not add my cars. -- jstpeg, Grass Valley, CA

November 5, 2012
Do I need a revocable trust?

Q: When is it best to have a trust set up? My assets are 4 cars, household goods (no house), under $100,000 in savings, and a FERS retirement account. What type of trust would you recommend, and how does one select a firm to set one up? Thank you. -- Scott, Ione, CA

November 1, 2012
Who should we name as our trust executor?

Q: We need to find a reputable executor for our trust. We don't have any relatives nearby that we would like to name. We have friends we trust but they are older like us and may find the chore too difficult. Who might we hire and what are the usual costs involved? Thank you. -- Marlene, Elk Grove, CA

November 1, 2012
Can a house remain in trust indefinitely?

Q: Is there any harm in leaving a house titled in a trust name after a person is deceased? All other assets have been disbursed, the house is a rental and the rent is split evenly (after expenses) among the siblings, each claim the income and expenses on our individual tax returns, is that okay? --Denise, Elk Grove, CA

October 30, 2012
Any problem with leaving our home to one beneficiary?

Q: This concerns leaving our home to a relative. My wife and I have a revocable trust and our home will be part of our distributed assets. In order to simplify the executor's task, can we designate the house and belongings to a single beneficiary rather than selling the property? The home is paid for, but would it be prudent to discuss this action with the beneficiary in question? Thank you. --Rob, Elk Grove, CA

October 30, 2012
Have I made a gift to my great-grandchildren too difficult?

Q: I think that I made a mistake on my second amendment to declaration of living trust. I wrote that both my antique vehicle & car would be sold & the proceeds shall be divided equally among my then living great-grandchildren & be held in trust until each attains age 25. I am 84, have 9 great-grandchildren at this time. Ages 14, 11, 5, 4, 3, 2, 2, 6 months, and 6 months. I feel that with the small amount of funds, the work involved would not be worth it. Do you have any suggestions? Many thanks! --Bill, Elk Grove, CA

October 9, 2012
Should I sell Grandma's vacant house now or after her death?

Q: I have power of attorney for my 96-year-old great grandma who is suffering from dementia and is no longer able to live in her home. She has a vacant home in Bakersfield. I am wondering if I should leave the home vacant until she passes or would there be benefits to selling it while she is still alive? -- Linda, Fair Oaks, CA

October 9, 2012
Can we buy out our sister's share of Mom and Dad's house?

Q: My parents passed away recently, in December 2011 and July 29, 2012. There are three daughters; my two sisters and I are to divide everything equally, according to the living trust. Our middle sister is the trustee.

Much to our surprise she wants to make all the decisions without our consent. She insists that we sell the house on 2 1/2 acres. The attorneys had us have the house assessed and it is well below what we thought it was worth. My other sister and I would like to rent it out until the market is up. I know we can buy her out, but what determines the price?

Does the house then come out of the trust? Does that involve a lot of legal problems? My parents also owned property in Nevada. Would we be better off just liquidating everything as opposed to waiting for a better market?

It has been two months to the day that my dad died. Do we get a grace period before we have to decide? My sister, the trustee, says we have to decide by November 1, which seems too soon, as we are still grieving our parents. Thank you for any consideration you can give. -- Linda, Rocklin, CA

October 9, 2012
Will a probate be required for this estate?

Q: We have started to look after my husband's elderly aunt, who is not a family favorite. She is not in the best of health and has no children or husband. She has a handwritten will and has given her sister (my husband's mother) 50 percent and us the other 50 percent (probably due to the fact that we've been helping her).

We didn't really think too much about it because we suspected there really wasn't much money involved - probably just enough to pay her bills. But we've learned recently that the amount is more like $150,000 with at least half in a CD and the rest in stock funds. There is no real estate.

The will does not name someone to execute the will. We plan on dividing our half with my husband's brothers and sisters who can use the money, no matter how small.
Will there be probate required or can we handle this ourselves? -- Kris, Folsom, CA

September 27, 2012
Should Mom gift now, or wait for Congress to act on estate tax?

Q: I'm concerned with the possibility that Congress may fail to act to put in place a rational 2013 estate tax law, instead letting the estate tax exclusion return to $1M per individual ($2M per couple). I'm responsible for managing my mother's estate plan. Her estate consists of $3.3M cash and $1.6M real estate. Her deceased husband's irrevocable trust will shelter $900K from estate tax. My plan is to gift assets such that her remaining assets total $1M cash with (hopefully!) no estate tax due at estate settlement.

Is it possible to gift her home ($1.5M) into an irrevocable trust, sheltered from estate tax? If so, what are the other consequence of this action?

How long would you wait on Congress to act before you went ahead with the proposed asset reallocation plan? -- Charles, Sacramento, CA

September 14, 2012
Can you help clarify confusion over online savings account?

Q: My husband and I have an online savings account which does not allow titling in the name of a Trust. However they do allow naming the Trust as the beneficiary. If we were to name the Trust as the beneficiary, what happens when the first one passes? Does the surviving spouse become the owner of the account with complete access to its monies or is the account frozen until the surviving spouse passes? --Confused, Sacramento, CA

September 12, 2012
How should trust be updated after one spouse dies?

Q: My wife and I have a spousal trust. When one spouse dies, is it required to change the name of the trust to the surviving spouse and also the names on property and accounts held in the trust? -- Jack, CA

September 12, 2012
How does my son protect SSI benefits after lawsuit award?

Q: My son is on SSI for a mental illness. He is going to have settlement on a lawsuit soon. I understand that in order for him to protect his SSI this settlement must go into a first party trust. Is there any alternative and, if not, can you recommend how I go about setting this up? Thank you. --Lisa, Sacramento, CA

September 7, 2012
Should a parent be gifting in 2012 to avoid estate tax in 2013?

Q: My 94-year-old Dad now lives with my sister, his home sits empty and his total estate is over $1M by a few hundred thousand. The trust divides his assets equally between four children. My question is: if Congress does not make a move to keep the amount at $5M, would the estate tax be on the entire amount, or the amount over $1M? Second question: Is there any way to reduce this amount below the $1M if they don't? Third question: Can my sister (Trustee) gift each of us the maximum $13,000 annually without paying gift taxes? Since Mom is deceased, can he gift to husband and wife separately or just one gift of $13,000? Please help. -- Sherry, Rancho Murieta, CA

September 7, 2012
How do we keep an estate out of probate?

Q: What is the very basic information needed in a Trust and Will so they won't go into probate court? We have a will and a trust (a large binder full of extraneous legalese that was done for us 15 years ago for $1,750). I don't want to throw away anything until I know exactly what I should keep. I just want to simplify everything for our two sons. Our lawyer was of no help. Thanks. -- June, Cameron Park, CA

September 6, 2012
Reader's feedback: Is a lawyer needed to handle a trust?

Here's feedback that I received from a reader, a community bank official in New York, who was responding to an Aug. 30 Q&A that I posted. The question asked how a successor trustee knows what to do in a trust administration, and whether hiring an attorney was the only option. In my answer, I discussed my view that working with an experienced lawyer makes the process go much more smoothly for the trustee. Tim offers another approach, below.

August 30, 2012
Does a trustee need a lawyer for a trust administration?

Q: I have a revocable trust but do not know how to advise my trustees how to handle my trust after I am gone. Is there a list of where to start? The only option I know is to hire an attorney, which a trust is supposed to eliminate or at least reduce. --Gaylord, Placerville, CA

August 30, 2012
How to hold title to co-owned real property after divorce?

Q: I am recently divorced. My ex and I still own a house together, listed on the grant deed as community property with rights of survivorship. Is it necessary to change the deed and if so, how should we be listed? Thank you. -- Jim, Lincoln, CA

August 30, 2012
What to do if a Trustee has not taken action?

Q: I am writing for my Aunt A. My grandmother died in the 90's. She had a living trust that gave her house to her two daughters, Aunt A and Aunt B. Aunt A took care of my grandmother towards the end of her life, and the trust was changed to give her 3/4 interest in the house. Grandmother died in a nursing home, paid for by the county. Aunt A has lived in the house all these years, taking no action to close the trust or anything. She was afraid she couldn't afford to pay the attorney to do the administrative work required, afraid that the county would want some money for grandmother's care, and afraid Aunt B would find out she got more interest in the house. So she's done nothing at all. Aunt A is having health problems and needs to refinance the house for money to take care of her health and because the house is in disrepair.

My question is this: what is her legal liability at this point? She is afraid to take any action, because she doesn't know what the ramifications will be.

Any information or advice you can give us would be greatly appreciated! --Joy, Sacramento, CA

August 17, 2012
What does a probate cost?

Q: I read the article about trusts, which are used to avoid probate. How much would a simple probate real estate, just cash and IRA? My son processed his divorce papers through court with all the online resources, so I'm inclined to think that person with a duplex doesn't need a trust. How many of us die in our residences? -- Linda, Folsom, CA

August 16, 2012
What should I do regarding my trust when my spouse dies?

Q: My wife and I are trustees on our Revocable Trust. My wife died recently. My question: What do I do now regarding the trust? I've received different advice such as do nothing to I must file a tax return. What about time frames for acting? Also, I understand that any shares of stock gets a step-up in basis, either a 100% or 1/2 step-up. How do I accomplish this step-up? -- Lewis, Rio Linda, CA

August 15, 2012
How do we find a good estate planning attorney?

Q: We have an older Trust which was written when our children were minors. We need to update and make some changes since the children are now in their 40s. We need recommendation for a trust attorney in our area, we are elderly and driving into the city is a problem for us. It is important to make changes in our trust before we are gone from this earth. Recommendations for a good and reasonable priced attorney in our area would be appreciated. --Gloria, Gold River, CA

July 24, 2012
How best to handle loans between family members

Q: I have a rental property valued at $265,000, the mortgage balance is $151,000 at 5.75%. I'm considering a loan to pay off this balance from my father's living trust account, which is in excess of $400,000. I am the sole heir and these funds are just sitting in money market accounts making .25%! I would set up documents for the loan for tax purposes pay the monthly interest to my father's account at 2.00% with a 5-year payback schedule. If my father passed, how would these funds $151,000 which would be outside the trust be viewed by the IRS? Is there an amount of money that can be outside the trust without being subject to probate or tax? - Walt, Sacramento, CA

July 19, 2012
Boyfriend wants to leave half of vacation home to his son

Q: My boyfriend and I recently purchased a vacation home. For now, the title is held in joint tenancy because we could not come to an agreement as to what would be the fairest thing to do if one of us should die. We both have living trusts set up where each of our assets are transferred into upon death. The problem is that my boyfriend wants his son to inherit his half of the property after he dies.

I see potential problems in having to share ownership with his son. What if something happens to him and he needs money? Can he force me to sell the house or buy him out? I don't think it's fair to me that the son would be entitled to assets from the property just because he is kin. I would be the one paying the mortgage and keeping up with the maintenance. I am fine with leaving my half to my boyfriend, but he wants to revisit the lawyer in a few years and change the trusts so that his son has a stake in the house.

Can you offer any solutions so that both parties are satisfied? I should mention that the son is currently 17 years old and my boyfriend is 20 years my senior. Thank you for your time.

July 18, 2012
What about legal fees that are lower than typical fees?

Q. I noticed that an earlier Bee column stated that $1,500 - $4,500 is the going rate for a will and trust; however, I have family members that claim that they have attorneys that can do it for as little as $750. Why the huge difference? - Bryan, Sacramento, CA

July 2, 2012
How do I leave overseas property to heirs?

Q: I have a common situation, but with an interesting twist. I am 87, have enough money to live on but am not rich (about $300,000 or so), and get Social Security. I live in California with my granddaughter, but I also have a house in Croatia where I visit part of each year. I have a Totten trust on most of my funds and so if not for the house in Croatia I don't think I'd even need a probate. How do I pass on my house in Croatia? Do I need a will here or a will in Croatia? Can I set up a trust in California? Is this something that I need a lawyer for in California, in Croatia, or both? Thanks for your help. - Tom; Sacramento, CA

July 2, 2012
Beware possible penalty for cashing out CD after a death

Q: My father passed away in October, 2011. All of his assets, including CDs, are held in a trust and I am the executor. Prior to his death, he invested over $200,000 in a CD with Wells Fargo that is due to mature in 2016. I went to the bank to try and break the CD and was told in order to cash it out, I would have to forfeit over $5,000 in interest.

Is this accurate? My siblings will need the money before 2016, but a $5,000 penalty seems excessive. What do you think? - Elaine; Sacramento, CA

June 29, 2012
How much should I expect to pay for a living trust?

Q. Approximately how much would I pay for a living trust if my only asset is my duplex? - Sharon; Carmichael, CA

June 29, 2012
How do we ensure all siblings receive their inheritance?

Q. My 80-year-old mother had a living will done many years ago specifying that all assets, including her house, be divided equally among her five children. My sister and a deceased brother got my mother to take out several loans of more than $100,000 for their children's college and to buy a house. My sister has power of attorney and moved her adult son and his family into my mother's house. (Mom still lives there.) My brother's widow lives in the home my mother loaned them money to buy. My other two siblings and I have been ostracized from my mother and sister for raising ethical questions and reporting possible fiduciary abuse to authorities.

My mother is in extremely poor health. When she dies, what will happen to the house that was supposed to be sold and divided equally, if my mother still owes money for loans she made using the house as collateral? Mother is on Social Security and has no other assets of value. What can be done to ensure we all receive our inheritance?

June 29, 2012
How to ensure access to safe-deposit box after a death

Q. My wife and I have a safe-deposit box. After we are gone, will our kids have any problem getting into the box? I've heard that banks refuse to give children access until certain requirements are met.

Meet Our Financial Experts

Claudia Buck

Claudia Buck is The Sacramento Bee's personal finance columnist. Read all her columns here. Contact her at

Terri Carpenter

Terri Carpenter offers advice on job hunting, retraining and career counseling. Carpenter works at Sacramento Works Inc., the career and job training arm of the Sacramento Employment and Training Agency (SETA). With 15 years in the field, she has hands-on experience with everyone from first-time job seekers to career professionals seeking advice after a layoff or looking for a mid-career change. Ask her a question.

Carlena Tapella

Carlena Tapella is a partner in the law firm of Webb & Tapella Law Corp. in Sacramento. The firm specializes in estate planning and probate, such as estates, trusts, conservatorships and litigation. She is a past president of the Sacramento County Bar Association's Estate Planning & Probate Section. Ask her a question.

Kimberly Foss

Kimberly Foss, certified financial planner, is the founder of Empyrion Wealth Management in Roseville. With nearly 30 years in the financial industry, her clients include women in transition, small business owners, retirees and "pre-retirees." Ask her a question.

Jesse Weller

Gregory Burke, a CPA and tax expert with John Waddell & Co. in Sacramento since 1984, worked as an IRS tax auditor for six years. He’s a past chairman of the California Society of CPAs. Ask him a question.

Daniel Tahara

Daniel Tahara takes your questions about California taxes. Tahara, a spokesman for the state Franchise Tax Board, has 10 years of experience as a tax auditor. Ask him a question.

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