San Jose Attorney - Almaden Times Articles

You May Be Able To Leave A List For Passing On Special Items

This week's question:

In case I pass on, I want to leave my wedding rings to my daughter, Rebecca. Shall I put that in my will? However, what if I change my mind? Or what if something happens to Rebecca? Will I have to go to the lawyer's office and change my will? This can get way too expensive, and maybe even cost more than the rings are worth! Is there any way around this?

/s/Dana D.

Almaden Valley

Dear Dana:

This has been a problem for many years. Many of us want to leave certain items to our family but to list them in a will or living trust becomes much too cumbersome. Our wishes change over the years as does the list of items and intended beneficiaries of the gifts.

If all of these items are listed in a trust or will, it often becomes quite expensive for the law office to list them and then when changes to the list are made, a new legal bill is generated for the new legal work. And this does not make for happy clients. And no wonder. But I may have some good news for you, Dana.

Now, there is a good way around this. As of January 1, 2007, a new law went into effect that allows consumers to refer in their will to a list that will be found at their death. The law is California Probate Code §6132.

The following are some of the key provisions of this relatively new law:

A will may refer to a writing [or list] that directs disposition of tangible personal property not otherwise specifically disposed of by the will, except for money that is common coin or currency and property used primarily in a trade or business. A writing [such as a list] directing disposition of a testator's [i.e., will maker's] tangible personal property is effective if all of the following conditions are satisfied:

* An unrevoked will refers to the writing.

* The writing is dated and is either in the handwriting of, or signed by, the testator [i.e., the will maker].

* The writing describes the items and the recipients of the property with reasonable certainty [for example, my wedding rings shall pass to my daughter, Rebecca].

The writing [i.e., the list] may be written or signed before or after the execution of the will and need not have significance apart from its effect upon the dispositions of property made by the will.

A writing that meets the requirements of this section shall be given effect as if it were actually contained in the will itself, except that if any person designated to receive property in the writing or list dies before the testator, the property shall pass as further directed in the writing and, in the absence of any further directions, the disposition shall lapse.

The testator [will maker] may make subsequent handwritten or signed changes to any writing, such as a list of personal property items. If there is an inconsistent disposition of tangible personal property as between writings, the most recent writing controls.

There are special rules covering the situation where a list may not be dated and if the testator [will maker] lacked legal capacity to make a will or the list.There are also limits as to the total value of items on the writing or list. The total value of tangible personal property identified and disposed of in the writing shall not exceed twenty-five thousand dollars ($25,000). Also, if the value of any particular item of tangible personal property described in the writing exceeds five thousand dollars ($5,000), that item shall be disposed of pursuant to the remainder clause of the will and not according to the list.

"Tangible personal property" means articles of personal or household use or ornament, including, but not limited to, furniture, furnishings, automobiles, boats, and jewelry, as well as precious metals in any tangible form, such as bullion or coins and articles held for investment purposes.

The term "tangible personal property" does not mean real property, a mobilehome, intangible property, such as evidences of indebtedness, bank accounts and other monetary deposits, documents of title, or securities.

"Common coin or currency" means the coins and currency of the United States that are legal tender for the payment of public and private debts, but does not include coins or currency kept or acquired of their historical, artistic, collectable, or investment value apart from their normal use as legal tender for payment. In other words, it would not work to have normal money on the list but it would work to have historical and collectable coins.

You can read California Probate Code §6132 for yourself by going online with your favorite search engine. Enter California Probate Code §6132 and it will be on your screen in about a half a second, along with lots of advertising. Or use one direct link: http://law.onecle.com/california/probate/6132.html.

So, there you have it, Dana. I hope this helps in dealing with those wedding rings and anything else that might be placed on a list to be found at your passing. Of course, you will want to consult with your own attorney about your will and living trust for the complete picture of all issues involved, including the list. Please remember that you need to have a will that refers to the list. You cannot just make a list without a will to comply with California Probate Code §6132.

/s/Donald J. DeVries

Almaden Valley

Donald J. DeVries is an attorney practicing law in the Almaden Valley. Past Almaden Times articles since 1986 can be accessed through his web site: www.almadenvalleylawers.com . If you would like him to answer your question in his next Almaden Times column, you can reach him by email at don@almadenvalleylawyers.com, with "Almaden Times" in the subject line, fax at (408)268-6502, telephone at (408)268-9500, or mail at DeVries & Horowtiz, 6475 Camden Avenue, Suite 200, San Jose, CA 95120. Your matters are personal and private, so of course, he will not disclose your identity or any details about your situation. Mr. DeVries writes this column to provide you with general information about important legal matters affecting California residents-not to give you legal advice about your specific matter. No attorney-client relationship is created by these articles. The law is complex and constantly changing and varies from state to state. So you should consult an attorney before taking any action that would affect your personal or business matters.

Form Wills Online May Create Issues Of Misunderstanding

This week's question:

I keep seeing ads on TV and online about LegalZoom.com and Quicken Will Maker. The Legal Zoom ad talks about wills for $69. That sounds like a pretty good deal to me, but I was wondering what you think about it. It seems to me you can't really go wrong with $69.

/s/Lori L.

Almaden Valley

Dear Lori-

In order to make a long story short, Lori, I do not think very much of any $69 will. I will be happy to explain just why I feel that way. Then you make your own decision.

A will is obviously an important legal document, one of the most important legal documents most consumers have during their lifetime. And if things are not done properly, disastrous results can happen to the consumer.

I guess it comes down to whether you are buying a product or a service when you are talking about wills. You actually need much more that a packet of papers that you fill out and then hope that it works. You as a consumer need general advice from a qualified legal representative and only your own attorney can help you with this.

For example, let's say you buy that will packet for $69. You fill it out exactly as the instructions say to do, with two witnesses and the whole thing. You read all the disclaimers. It even says that it's a good will for California residents. You sign it and the witnesses sign it and you think you are all set to pass on. You, like all of us, eventually do in fact pass on.

Your son then comes in to see me with the form will and explains the situation. The first question is about the house you had in joint tenancy. You were totally unaware that joint tenancy passes by operation of law to the surviving joint tenant and that surviving joint tenant is your daughter and not your son. Your will said one-half of everything to your son and the other half to your daughter. There is nothing I can do about joint tenancy. So, I have to say to your son, sorry, the house goes to your sister. There is nothing I can do.

Or let's say that you sign that $69 dollar will and think that everything will be fine. You die and everything in your name must go through probate court at 191 North First Street, San Jose, Department 15 at present. That is if you live in San Jose. The probate procedure will take 1-2 years in all probability to finish and along the way your family will have thousands of dollars in probate attorney's fees, administrator fees, bond fees, and related items. Does that $69 will still sound like a good deal?

Now, had you invested in a living trust you would have avoided all of the probate fees, lost time, stress, and other problems. In the short run you may have thought that $69 will was a good deal but in the long run I'm not so sure.

And if that is not enough, talk with your CPA or tax advisor about the dangers of capital gains tax with joint tenancy property that is not covered by the will. Don't take my word for it. Your $69 will that you thought was such a bargain may cost you big time in capital gains tax. Perhaps thousands of dollars.

These are just a few examples of why it is so much better for the consumer to invest a little more money in competent legal service. When you are thinking about your will or trust, you are not buying a product but investing in a service for your own best interests. If you think that I am just trying to drum up business for the legal profession, I am sorry you feel that way. But I do need to be honest and tell it like it is. I would of course say the same thing for my family and friends everywhere.

I am not saying that all will or trust packages are bad. Some may be OK, I am not sure. I just know that what is best for you is good legal service. Try to resist the temptation to do it the cheapest way. Strive for excellence in your will or trust planning.

I hope it all works out well for you, Lori. Best wishes in your decision-making.

/s/Donald J. DeVries

Almaden Valley

Donald J. DeVries is an attorney practicing law in the Almaden Valley. Past Almaden Times articles since 1986 can be accessed through his web site: www.almadenvalleylawers.com . If you would like him to answer your question in his next Almaden Times column, you can reach him by email at don@almadenvalleylawyers.com, with "Almaden Times" in the subject line, fax at (408)268-6502, telephone at (408)268-9500, or mail at DeVries & Horowtiz, 6475 Camden Avenue, Suite 200, San Jose, CA 95120. Your matters are personal and private, so of course, he will not disclose your identity or any details about your situation. Mr. DeVries writes this column to provide you with general information about important legal matters affecting California residents-not to give you legal advice about your specific matter. No attorney-client relationship is created by these articles. The law is complex and constantly changing and varies from state to state. So you should consult an attorney before taking any action that would affect your personal or business matters.

What kind of trust is best for you depends

This week's question:

I was reading online the other evening about revocable and irrevocable trusts. It got me to thinking, what kind of trust is best for me?

/s/Juan J.

Almaden Valley

Dear Juan-

That's a pretty broad question, Juan, but I will try my best to answer it.

There are many different types of trusts, probably more than most people realize. There are inter vivos or living trusts. An inter vivos trust is now often called a living trust. This is one that is created during the settlor's lifetime. The creator of the trust is often called the settlor or trustor.

A testamentary trust is a trust that is created in a decedent's will. It is typically funded by a distribution of probate assets, i.e., money or other property. The disadvantage there is that the money or property needs to go through a court process first which often adds considerably to the expense and time involved to set up the trust. I think we are seeing fewer and fewer testamentary trusts as the years go by.

There is also a revocable trust, one that can be amended or revoked, usually by the settlor during his or her lifetime, but sometimes by a designated third person.

An irrevocable trust is one that may not or may no longer be amended or revoked. For example, you may have an extra sum of money or life insurance policy that you do not need and will never need, so you place it in an irrevocable trust. The money is essentially gone, out of your control, since the trust cannot be amended or changed. And most commonly, a revocable living trust becomes irrevocable on the settlor's death as in the typical husband-wife living trust when the first spouse dies.

Another type of trust is a marital deduction trust. This kind of trust is designed to qualify for a decedent's federal estate tax marital deduction.

Speaking of federal estate tax, there is also a bypass, credit shelter, applicable credit, or exemption equivalent trust. This type of trust is designed to qualify for a decedent's federal estate tax applicable credit amount.

You may want to look into a special needs trust to preserve government benefits for an elderly or disabled beneficiary. We may see more and more of special needs trusts as we see more and more older Americans.

If a person is of modest means, he or she may want to give a certain sum of money upon their passing to a certain individual or institution. For example, a person wants to give $1,000 upon his or her passing to a friend, Jack, but the giver of the gift wants to retain control of the money just in case it is needed and can't afford large legal fees to set up a formal trust. You might want to set up a "pay on death" account at the bank. It would be in your name, but "pay on death" to Jack. That is a type of a "Totten" trust account, named after an old New York case, "Matter of Totten".

You can read more about Totten trust accounts by going online to your favorite search engine and entering "Matter of Totten." A Wikipedia article about Totten trusts should be on your screen in about a tenth of a second. Your own local bank can probably help you with this kind of trust account.

The term "trust" includes express trusts, whether private or charitable, and constructive trusts that are to be administered in the manner of express trusts under a judgment or decree. There are also resulting trusts that may apply to a particular situation.

There is a whole body of law generally described as "trust law" that is actually quite interesting. There is a relatively large number of situations that give rise to trust relationships in the broad sense as compared with strict trusts. For example, guardianships and conservatorships are generally speaking fiduciary relationships that are governed by the law of trusts, as well as many other types of situations.

If you have been reading this column for any length of time, you can probably predict what words will come next. Just what is best for you in your particular situation is something that you need to discuss with your own particular attorney. You can see quickly that every type of trust is a little different and different rules apply to different situations. That's why it is best to have a visit with your own counsel. He or she is best suited to guide you in the right direction.

/s/Donald J. DeVries

Almaden Valley

Donald J. DeVries is an attorney practicing law in the Almaden Valley. Past Almaden Times articles since 1986 can be accessed through his web site: www.almadenvalleylawers.com . If you would like him to answer your question in his next Almaden Times column, you can reach him by email at don@almadenvalleylawyers.com, with "Almaden Times" in the subject line, fax at (408)268-6502, telephone at (408)268-9500, or mail at DeVries & Horowtiz, 6475 Camden Avenue, Suite 200, San Jose, CA 95120. Your matters are personal and private, so of course, he will not disclose your identity or any details about your situation. Mr. DeVries writes this column to provide you with general information about important legal matters affecting California residents-not to give you legal advice about your specific matter. No attorney-client relationship is created by these articles. The law is complex and constantly changing and varies from state to state. So you should consult an attorney before taking any action that would affect your personal or business matters.

You May Be Able To Transfer A Life Estate And Pass On The Low County Tax Rate

THIS WEEK'S QUESTION:

We have been in our home here in Almaden for many years. We were fortunate to buy the home when values were much less than they are now, a "pre-proposition 13 house". Can we transfer a life estate in the house through our living trust and pass on the low county real property tax?

/s/Valerie V.

Almaden Valley

Dear Valerie:

The short answer is just maybe, Valerie, but you will want to check with your own attorney before you make any final decision, since every case is different and these issues become quite tricky in a hurry.

Under Proposition 13, passed by the California voters in the June 1978 primary election, certain transfers of ownership are exempt from reassessment and in subsequent years can not be increased by more than 2 percent per year due to inflation.

In one case, just decided by the California Court of Appeal for the Second District, the Court held that it may be possible to escape reassessment upon the transfer of a life estate. The case is entitled "Lorraine Steinhart v. County of Los Angeles," and it was decided September 28, 2007. It interpreted §60 of the California Revenue and Taxation Code, previously known as Proposition 13.

§60 states: "A 'change in ownership' means a transfer of a present interest in real property, including the beneficial use thereof, the value of which is substantially equal to the value of the fee interest." (Italics added.)

Proposition 13 changed the system of assessing real property from one based on current value to one based on value at the time of acquisition.

In the Steinhart case, Esther created a revocable living trust into which she transferred her house in Sherman Oaks. Esther's living trust provided that upon her passing, a life estate would pass to her sister, Lorraine. Esther died in 2001 and Lorraine, then 73 years of age, became the life tenant in the house. Lorraine had a statistical life expectancy of 13.4 years at the time, although, of course, she could live a shorter or longer time. Esther's revocable living trust became irrevocable upon her passing.

Prior to Esther's death, the property's assessed value was $96,638 with total yearly county real estate tax of $1,106. After Esther's death, the County increased the valuation by $402,362, to a new assessed value of $499,000. That increased the yearly county real property tax in subsequent years to over $5,500, $5,764, and $6,245. Lorraine, as the life estate tenant, paid those bills.

In July, 2004, Lorraine filed a claim of refund of property taxes with the County Auditor-Controller and sought a refund of $18,587. She claimed a "change in ownership" for purposes of Proposition 13 did not occur upon sister Esther's death since she obtained only a life interest in the residence.

The County of Los Angeles, however, ruled that that when Lorraine acquired the life estate from her sister, Esther, that it was in fact a "Change in Ownership" and its 100% reappraisal of the property would stand.

Within six months of the denial of the refund, Lorraine filed suit against the County for recovery of the taxes paid during the pertinent years.

The Court of Appeal, after describing the procedural history of the case and legislative history of Proposition 13, held for Lorraine. It held that the transfer of a life estate in real property did not constitute a change in ownership, since it was not the same as a transfer of full beneficial "fee" ownership. Thus, Lorraine was entitled to the refund claimed. [Just what "fee" ownership is may be a good question for another day.]

Earlier, the California Supreme Court in Pacific Southwest Realty Co. v. County of Los Angeles "recognized the obvious-a life estate is an estate of questionable value because [a life estate is] subject to complete defeasance at an unknown time. Therefore, by definition, the value of [Lorraine] Steinhart's life estate was not substantially equal to the value of the fee interest for purposes of a statutory change in ownership."

You can read the entire Steinhart case by yourself quite easily if you are interested. You can either log onto the Court of Appeal web site for the State of California or go to a search engine, like Google. In the search box, enter "Lorraine Steinhart v. County of Los Angeles" and then "go". The case should be on your monitor in about a half a second. You can then print out a copy of you wish.

As with any recent case in the Court of Appeal, there may be a chance that the case would be reviewed by the California Supreme Court. If that should occur, I will try to be on the lookout for any developments in that regard for the readers of this column.

As always, you need to discuss this case with your own attorney for a complete picture of how this case may or may not be related to your situation. As stated above, every case is different, and there may be significant differences in your situation that would require a different result.

/s/Donald J. DeVries

Almaden Valley

Donald J. DeVries is an attorney practicing law in the Almaden Valley. Past Almaden Times articles since 1986 can be accessed through his web site: www.almadenvalleylawers.com . If you would like him to answer your question in his next Almaden Times column, you can reach him by email at don@almadenvalleylawyers.com, fax at (408)268-6502, telephone at (408)268-9500, or mail at DeVries & Horowtiz, 6475 Camden Avenue, Suite 200, San Jose, CA 95120. Your matters are personal and private, so of course, he will not disclose your identity or any details about your situation. Mr. DeVries writes this column to provide you with general information about important legal matters affecting California residents-not to give you legal advice about your specific matter. No attorney-client relationship is created by these articles. The law is complex and constantly changing and varies from state to state. So you should consult an attorney before taking any action that would affect your personal or business matters.

Spouses Can Possibly Change The Character Of Their Property

THIS WEEK'S QUESTION:

I thought when we got married that I would change title on my house to joint names with my new husband. And I did just that. Now I am not so sure that I did the right thing. Can we agree to change it back to my own name or must I go through a divorce to get it back in my name? I really do not want to go through a divorce just to do this.

/s/Sarah S.

Almaden Valley

Dear Sarah-

It may be possible, Sarah, but it depends on a lot of circumstances. This is one area where it really makes sense to see your own attorney for advice.

You often hear about "prenuptial agreements" or "prenups" for short. They are also called "antenuptial" agreements. That type of agreement is one signed before spouses get married to each other. The agreements are often made between prospective spouses in contemplation of marriage and are typically to be effective only on marriage.

Generally speaking, spouses may also sign agreements after they get married. These agreements are typically called "marital agreements".

Not to confuse you more, but there is another important term and that is marital settlement agreements. These agreements are made during marriage, but they are made in contemplation of marital dissolution, legal separation, or nullity, rather than an intact marriage.

Now, back to marital agreements during an intact marriage and not in contemplation of divorce.

Marital agreements can be signed during an intact marriage without going through a divorce, now called dissolution of marriage. The classic definition of a marital agreement is an interspousal agreement executed during an intact marriage, that affects marital rights and obligations.

Sometimes you hear the word "transmutation agreement". That term is a legal term essentially meaning a change in character of property or certain rights. The California Family Code governs transmutation agreements.

§850 of the California Family Code states that married couples may transmute or change community property to separate property, separate property of either spouse to community property, or separate property of one spouse to separate property of the other spouse.

If a married couple is thinking about an agreement changing the character of their property, they need to remember that they must follow the general rules governing fiduciary relationships. California Family Code §721 is entitled "Transactions With Each Other and Third parties; Fiduciary Relationship of Husband and Wife."

§721 states that in transactions between themselves, a husband and wife are subject to the general rules governing fiduciary relationships which control the actions of persons occupying confidential relations with each other. This confidential relationship imposes a duty of the highest good faith and fair dealing on each souse, and neither shall take any unfair advantage of the other. This confidential relationship is a fiduciary relationship subject to the same rights and duties of nonmarital business partners.

Marital agreements during an intact marriage enable spouses to structure their marital relationship not only during marriage but on dissolution and on death, in ways different from those otherwise provided by law. But the validity of various provisions depends on all of the facts and circumstances, including the topics covered.

For example, I don't think I would try to waive or give up basic child support by signing a marital agreement that states no child support or that provides for a bad custody or visitation plan that is against the children's best interests. Also, I would not try to insert any other provision that is against public policy. It just will not work.

On the other hand, if a marital agreement is fair and all the rules are followed, it may change or transmute a community interest in separate property to a separate interest. For example a marital agreement may provide that a residence owned by one spouse before marriage will remain entirely the separate property of that spouse despite the use of community funds for the pay down of a loan during marriage or improvements to the property. This then may avoid the typical Moore/Marsden apportionment of separate and community interests.

If you are interested in some general reading in this area, log on to your favorite search engine and enter any of the California Family Code sections mention above. You may find them interesting for general information purposes.

However, a note of caution. You can see how this can get rather tricky quite quickly. So, the best thing you can do is to see your own attorney for advice. As you have seen many times in this column, there is no substitute for your own attorney who can take all of the key facts and circumstances into account and guide you in the right direction.

Good luck with the house issue, Sarah. I hope it all works out fine. With a little give and take, I'm sure it will.

/s/Donald J. DeVries

Almaden Valley

Donald J. DeVries is an attorney practicing law in Almaden Valley. If you would like him to answer your question in his next Almaden Times column, you can reach him by email at don@almadenvalleylawyers.com (with "Almaden Times Article" in the subject line), fax at (408) 268-6502, telephone at (408) 268-9500, or mail at 6475 Camden Avenue, Suite 200, San Jose, CA 95120. Your matters are personal and private, so of course, he will not disclose your identity or any details about your situation.

Mr. DeVries writes this column to provide you with general information about important legal matters affecting California residents-not to give you legal advice about your specific matter. No attorney-client relationship is created by these articles. The law is complex and constantly changing and varies from state to state. So you should consult an attorney before taking any action that would affect your personal or business matters.

So-Called "Living Wills" Not Generally Utilized In California

This week's question:

I read your column quite regularly but I have yet to see you write about living wills.  I saw on TV last week that they can be quite effective, inexpensive, and easy to use to express one's desires about end-of-life measures.  I would like to know what you think about living wills.

/s/ Anne A.

Almaden Valley

Dear Anne:

The short answer, Anne, is that I do not think much of so-called "living wills".  Perhaps in other states they are used more frequently, but I do not believe they are very useful for us Californians.  We do not use them in our office.

The reason why living wills are not used very much in California is because we have other documents and I believe are much more effective, authoritative, and useful.  And better for you, the consumer.

You may have read this column a few weeks ago when I wrote about a "Request to forgo resuscitative measures" that can be quite useful in providing for a person's wishes to forgo resuscitative measures.  Sometimes this is referred to as a "DNR" request, often identified by a bracelet the person wears.  The DNR request is a legal document that is authorized by Probate Code §4780.  A so-called "living will" may try to go further than this type of document.

And in prior columns in this space, I have written about the benefits of an Advance Health Care Directive.

In a living will, a person may state his or wish to die a natural death, free of intervention by anyone who would keep him or her alive with the help of machines or other artificial means.

A living will may contain a detailed list of things to do and to not do in certain situations.  Sometimes older adults and seriously ill individuals may sign a living will paper in the hope that others will follow their wishes if they cannot speak themselves about their health care.

In California, we residents can much better sign an Advance Health Care Directive, or "Advance Directive" for short.  In this document, an agent is named to work with your doctor when the person cannot act by himself or herself.  Your wishes for end-of-life decisions are stated clearly.  For example, you may not want heroic measures taken to keep you alive when there is absolutely no hope for survival.

In the living will, there is no agent to enforce its provisions and to work with your own doctor in dealing with a multitude of factual situations that may arise. 

One of the estate planning authoritative sources that I use in my law practice states that:

"The estate planner may encounter numerous forms of living wills prepared by various agencies throughout the country and should be extremely cautious in advising a client to use such forms."

So, Anne, it seems to me that you want to stay with better California documents that may help in that situation, such as the "Advance Directive" and possibly the "Request to Forgo Resuscitative Measures" provided in the California Probate Code.  Your local senior center and your own attorney can probably help you with these documents.  I would stay away from the living will.

/s/Donald J. DeVries

Almaden Valley

Donald J. DeVries is an attorney practicing law in Almaden Valley. If you would like him to answer your question in his next Almaden Times column, you can reach him by email at don@almadenvalleylawyers.com <mailto:don@almadenvalleylawyers.com> (with "Almaden Times Article" in the subject line), fax at (408) 268-6502, telephone at (408) 268-9500, or mail at 6475 Camden Avenue, Suite 200, San Jose, CA 95120. Your matters are personal and private, so of course, he will not disclose your identity or any details about your situation.

Mr. DeVries writes this column to provide you with general information about important legal matters affecting California residents-not to give you legal advice about your specific matter. No attorney-client relationship is created by these articles. The law is complex and constantly changing and varies from state to state. So you should consult an attorney before taking any action that would affect your personal or business matters.

What You May Need To Know For Your Nomination Of Guardian

This week's question:

My wife and I have three children under eighteen.  She and I are thinking about a wedding anniversary trip to Europe this summer without the children, who will be staying with relatives.  Just in case that airplane should go down, how can we provide for our wishes ahead of time in case a guardianship is ever needed?

/s/  David D.
Almaden Valley

Dear David--

Sounds like a great trip.  And you and your wife are very smart to think about a guardianship just in case something happens.  Many people do not do that and it often creates a lot of anxiety and confusion, not to mention cost and hard feelings on both sides of the family if the children are left without clear direction and supervision.  And, of course, our children are our most important possessions.

What you may need is a "Nomination of Guardian" for your minor children.  This document would be very important in a later court proceeding that would be needed to establish the guardianship for the children.  Your own attorney would help you draft this document.

The "Nomination of Guardian" would be a legal document in which you would confirm the names and dates of birth of the children and that you are the parents of those children.

You would also list the name of the Guardian who would serve in your place as custodians of the children.  Ideally, an alternate Guardian would also be named in case an alternate would be needed.  (But do not delay with this project just because an alternate does not come to mind.)

The person named would typically be a close family member, like a brother or sister of one of you.  After Court approval, the Guardian would usually have physical and legal custody of your minor children, and would also have the right and responsibility to make all decisions relating to the health, education, maintenance, support, and welfare of the children.  Periodic reports would need to be filed with the Court.

Your named Guardian would typically be the manager of the children from a living point of view as well as manager or trustee of their money.  Sometimes a person might be good with raising children but not with managing money, so you might want a different Guardian over the children's "person" as compared with their "estate".  Usually, the Guardian would be one and the same person.

In your Nomination of Guardian, you may want to waive or excuse the requirement of a bond.  A guardianship bond is like an insurance policy to protect the children's assets and with a trusted family member as a Guardian, you may feel the cost of the bond would be a nice savings with a waiver of bond.

Ideally, the money from your estate (real estate, savings, checking, IRAs, 401k(s), life insurance, etc.) would be sufficient for the children's care.  You could then specify in your Nomination of Guardian that the guardian shall not be under any duty or obligation to provide funds for the health, education, or support of the children from the Guardian's own funds or property.  Your own living trust or wills would spell that out also, not just the Nomination of Guardian.

You would probably want to specify that the Guardian or Trustee of the Trust provide for adequate health insurance for the children.  Of course, the cost of such insurance could come from the children's funds.

Where the children would live is sometimes a difficult question.  You may want to state that your preference is that they live together with the Guardian's family as a family unit, and that they may live in your home here in California.  Of course, you might want to state that they could move to any place of residence within or outside of California.  You could even specify that while living with the children in the children's residence that the Guardian and his or her family need not pay rent or any other expenses related to the maintenance of the residence.

Another idea is to express your desires that the education of your minor children shall include religious study and observance.  So, in order to enhance their moral and spiritual development, you may want to state that your minor children may participate in the observance of the Guardian's religion.

In your Nomination of Guardian, you may want to express your desire that the Guardian consult with both of your respective families, i.e., Dad's family and Mom's family, in matters of importance, and that frequent contact and communication with both families shall be encouraged and maintained at all times.  The Guardian needs to know that he or she does not own the children.

Situations where such consultation with both families may be appropriate are undergoing non-emergency medical treatment for serious illness or injury, obtaining orthodontic care, obtaining psychological counseling or treatment, becoming involved in court actions, obtaining a driver's license, entering into legal contracts, and changing schools, quitting school, or obtaining special education.

The best way for you to proceed, David, is to consult with your own attorney about the Nomination of Guardian while the topic is fresh on your mind.  Perhaps the ideas mentioned above may be of some help.  Good luck!!

/s/Donald J. DeVries
Almaden Valley

Donald J. DeVries is an attorney practicing law in Almaden Valley. If you would like him to answer your question in his next Almaden Times column, you can reach him by email at don@almadenvalleylawyers.com <mailto:don@almadenvalleylawyers.com> (with "Almaden Times Article" in the subject line), fax at (408) 268-6502, telephone at (408) 268-9500, or mail at 6475 Camden Avenue, Suite 200, San Jose, CA 95120. Your matters are personal and private, so of course, he will not disclose your identity or any details about your situation.

Mr. DeVries writes this column to provide you with general information about important legal matters affecting California residents-not to give you legal advice about your specific matter. No attorney-client relationship is created by these articles. The law is complex and constantly changing and varies from state to state. So you should consult an attorney before taking any action that would affect your personal or business matters.

Terminally Ill Patient In Late Stages May Want To Consider "DNR" Order

THIS WEEK'S QUESTION:

My mother is getting up there in years and suffers from untreatable cancer.  She is definitely terminal in the opinion of her doctors.  I have read where it is possible for her to obtain a "do not resuscitate" kind of form and bracelet.  Is this legally binding?  Should she sign such a directive? Can she change her mind?

/s/Ashleigh A.
Almaden Valley

Dear Ashleigh:

This is a very difficult situation to deal with, Ashleigh, and obviously a very personal one as well.  And no two situations are the same, so you want to consider all of your and your mother's options for her best interests, in consultation with her doctors.

Yes, such a document can be legally binding.  California Probate Code §4780(a)(1) authorizes a "Request to forgo resuscitative measures".  This means a written document, signed by (A) an individual, or a legally recognized surrogate health care decision maker, and (B) a physician, that directs a health care provider to forgo resuscitative measures for the individual.

The "Request to forgo resuscitative measures" includes a prehospital "do not resuscitate" form as developed by the Emergency Medical Services Authority or other substantially similar form.

A request to forgo resuscitative measures may also be evidenced by a medallion engraved with the words "do not resuscitate" or the letters "DNR," a patient identification number, and a 24-hour toll-free telephone number, issued by a person pursuant to an agreement with the Emergency Medical Services Authority.

A DNR bracelet or medallion may be obtained from the MedicAlert Foundation at 1-800-432-5378.  You can also log on to the following website for other related services, products, and information: www.medicalert.org <http://www.medicalert.org>.

What does "DNR" mean?  Simply put, it means "do not resuscitate, or do not attempt to restart a heart or breathing once they have stopped.  Generally, "DNR" means a great deal to paramedics and EMT's to honor a patient's wishes not to have CPR (cardiopulmonary resuscitation), including chest compressions and mouth-to-mouth breathing or other resuscitative efforts utilized.

If paramedics or EMT's respond to a person with a DNR order, paramedics and EMTs will not try to restart the heart or breathing.

The types of treatments that a patient with a DNR order WOULD NOT receive include CPR, electric shocks to the heart, assisted breathing with mechanical devices, or the use of medications which are intended to artificially start the heart again.  And a person with a DNR order will NOT be placed on life support, such as a ventilator or a breathing machine.

A DNR order only applies when the heart or breathing has stopped.  It does not affect other care, for example before the heart has stopped.

If a patient has a valid DNR order, he or she will still receive full treatment for other conditions, such as pain, shortness of breath, and bleeding.  This is called "comfort care".  The paramedic or EMT will always provide patient comfort.

Can you change your mind about the DNR order?  Yes, you can.  At any time if you decide that you want to receive full treatment then the DNR order will be disregarded, if you just say so.  If you change your mind when the fire department or ambulance arrive, simply tell the paramedics or EMTs that you DO wish resuscitative efforts and that they should ignore the DNR order.

If you change your mind and do not want the DNR order, it is also important to tell your doctor and family about your specific wishes and to request that all copies of the DNR order are destroyed.  If you have a Medic-Alert "Do Not Resuscitate-EMS" bracelet, you will need to take it off and contact MedicAlert to update your records.

You can obtain the paperwork to complete from your doctor.  If you are a resident in a skilled nursing facility or convalescent home, special rules apply, and you can contact a staff person about the paperwork to complete.  If you wish, you can obtain a pendant or bracelet from the MedicAlert group at 1-800-432-5378, or contact them through their web site mentioned above.

You can read California Probate Code §4780 and following by logging on to www.google.com <http://www.google.com>. Then just enter: California Probate Code 4780 and the Probate Code Index will be on your monitor in about one second.  Scroll down to 4780 and click.  As always, consult your own attorney to see how this area of the law may apply to your own particular situation.

Best wishes in dealing with these issues with your mother, Ashleigh.  A good conversation or two with her and her doctor will be most essential.

/s/Donald J. DeVries
Almaden Valley

Donald J. DeVries is an attorney practicing law in Almaden Valley. If you would like him to answer your question in his next Almaden Times column, you can reach him by email at don@almadenvalleylawyers.com <mailto:don@almadenvalleylawyers.com> (with "Almaden Times Article" in the subject line), fax at (408) 268-6502, telephone at (408) 268-9500, or mail at 6475 Camden Avenue, Suite 200, San Jose, CA 95120. Your matters are personal and private, so of course, he will not disclose your identity or any details about your situation.

Mr. DeVries writes this column to provide you with general information about important legal matters affecting California residents-not to give you legal advice about your specific matter. No attorney-client relationship is created by these articles. The law is complex and constantly changing and varies from state to state. So you should consult an attorney before taking any action that would affect your personal or business matters.

Maintaining A List Of Your Living Trust Property Is Very Important

This week's question:

I went to see an attorney a few weeks ago about a living trust for my wife and I and she said that all of our property needs to be listed on an attachment to the trust.  I really don't want to do this because it's no one else's business.  Is this list important?  Isn't it enough for us to say in writing that all of our property is in our trust?

/s/Mitch M.
Almaden Valley

Dear Mitch:

It is very important that all trust property be identified properly so that the court, if it comes to that, can tell that the property is owned by the trust.

In our office, we always stress with our clients that there are two important things to consider in this area-listing of the asset and ownership, or title, of the asset.  And in the case of some assets, beneficiary designations are very important, if not crucial.

Typically, all trust property is shown on a list attached to the trust.  We call this Schedule "A" in our office.  If a piece of real estate is inadvertently not deeded to the trustees of the trust, you may have a situation like the problem discussed in the 1993 Heggstad case.

In the Heggstad case, Halvard Heggstad signed his will and trust documents in May, 1989.  He listed all of his property on Schedule "A" attached to the trust.  Other real estate was transferred by deed to himself as trustee of his trust but not a 34.78 interest in 100 Independence Drive, Menlo Park.

Halvard married Nancy in June, 1989.  Halvard died in October, 1990.  Nancy was not provided for in the trust or will documents.  Halvard's two children from a previous marriage survived him, Glen Heggstad and Susan, as well as a granddaughter.  Glen was named Successor Trustee to Halvard.

Nancy, not too happy about being left out, fought the petition of Glen, Successor Trustee, to have the Independence Drive property included in the trust, in view of no trust transfer deed to the trust.

The San Mateo County Probate Division of the Superior Court held that the written list, Schedule "A", was sufficient to deem the property part of the living trust estate, and this was affirmed on appeal.  (You can see why Glen's Petition is now nicknamed a "Heggstad" Petition.)

Thus, you can see that a list of all trust property is crucial when it comes to identifying assets of the living trust.  And you can also see that it is clearly better to have a trust transfer deed showing trust ownership.  If Halvard had signed and recorded such a trust transfer deed, chances are the whole case could have been avoided. 

You will also need to keep the list of assets current as time goes on.  For example, if you get upset with Wells Fargo Bank and transfer your accounts to Bank of America, title on the accounts need to be correct and the accounts need to be listed properly on Schedule "A" or whatever you call your list.

As of the preparation of this article, the Heggstad case is still good law.  You can read the case for yourself by going to the following California Court of Appeal link:

<http://www.lexisnexis.com/clients/CACourts/> and enter "go".

Then check the box to indicate you agree with the terms and conditions.  Then click on the red "view opinions" button.  After that look for "Get Opinion by Cite" and enter: Vol. 16 and select Cal. App.4^th.  The page number is 943.

This is a bit cumbersome, but at least it's free of advertising and you won't be placed on multiple junk email lists (as far as I know.)  Of course, you can print out a copy of the case if you wish.  And you will want to consult your own attorney about how this case may (or may not) apply to your situation.

       
So, I think it's safe to say, Mitch, that your attorney was right on in advising you about the need for a list of assets to attach to your trust.  Sometimes an issue could go either way, but this topic is quite clear. 

And as far as privacy is concerned, just keep the list attached to your trust private.  Privacy is one of the many advantages of a living trust.

/s/Donald J. DeVries
Almaden Valley

Donald J. DeVries is an attorney practicing law in Almaden Valley. If you would like him to answer your question in his next Almaden Times column, you can reach him by email at don@almadenvalleylawyers.com <mailto:don@almadenvalleylawyers.com> (with "Almaden Times Article" in the subject line), fax at (408) 268-6502, telephone at (408) 268-9500, or mail at 6475 Camden Avenue, Suite 200, San Jose,

You Probably Need A Will As Well

This week's question:

I read your column quite regularly and I see that you discuss living trusts on occasion, but you don't mention Wills very often.  Is this because a Will is not needed if you have a living trust?  Would my husband and I save some money by not having a Will?  If you have a Will, what are some of the points you need to cover?

/s/ Jenna J.
Almaden Valley

Dear Jenna:

Well, those are excellent questions, Jenna.  Let me see if I can address each one of them.

Just what is Will, anyway?  A Will provides for the administration and disposition of your property upon your death.  If you have a living trust (and most Almaden Valley residents should have one), the Will is called a "pour over Will" because it provides that all of your property remaining after payment of your liabilities, expenses of estate administration, and estate taxes (if any) will pass to the Trustee of your revocable "living" trust.

Your will governs only your property subject to probate, commonly referred to as your probate estate.  Your probate estate does not include property transferred to your revocable "living" trust during your lifetime, or assets that will pass under the terms of other agreements, such as retirement benefits and life insurance proceeds, except where you have designated your probate estate as your beneficiary under those agreements.

Your probate estate also will not include joint tenancy property, which passes to the co-owners by operation of law.

If, during your lifetime, all of your property has been transferred to your revocable trust, then it likely would not be necessary to submit your Will for probate.  The Will is nonetheless needed because some of your property may not have been transferred to your living trust, or new property may be discovered.

For example, we had a case in our office recently where we did a living trust and Will series of documents for a single woman several years ago.  We transferred her house at that time to her as trustee of her new living trust. 

She later moved to another county and purchased a new house.  Unfortunately, she simply forgot to put title of the new house in her name as trustee of the trust.  She later died with the house in her own name, but not as trustee of her trust.  Now, her two daughters, Executors of her estate, need to go through a probate estate of the house, costing the estate (the daughters) several thousands of dollars in needless attorney's fees, probate costs, stress, and lack of privacy.  Rather regrettable, but a true story.  (And, for my attorney friends, a "Heggstad" petition wouldn't work.)

As to the main points to cover in a Will, you will want to name an Executor and possibly an alternate just in case.  You may want to waive bond for the Executor since a trusted family member may not need to be insured, if you will.

If you have a revocable "living trust", you will want to say that all property passing through the Will passes on or "pours over" into your revocable trust to be administered under the terms of the Trust Agreement.

You will want to specify in your Will for the payment of estate taxes, if any, and whether they will be apportioned.  If apportioned, the persons receiving your property pay their own fair share of estate taxes.

The powers of your Executor will also be stated in your Will, and presumably that your Executor is authorized to administer the probate estate under the California Independent Administration of Estates Act.  This means that the Executor only needs court approval to perform a limited number of specified acts, such as making distributions.

Of course, if you want to specifically disinherit anyone, that should be covered, such as all persons not named in your Will, or a specifically named individual.  A good "no contest" clause is also necessary.

When the Will is ready to sign, you need to sign it in the presence of at least two witnesses.  The witnesses need to sign in your presence and in the presence of each other, all staying and signing in the same room at the same time until everyone has signed.  As witnesses, we sign a declaration under penalty of perjury that this is true and we tend to take that oath rather seriously-for obvious reasons.

Witnesses to your Will need to be adults and have no potential interest in your estate or living trust.  After the will is fully signed and properly witnessed, you will want to keep the original Will in a very safe place, such as a bank deposit box.

You would probably not save very much money at all if you would not have Will to compliment your living trust.  In fact, I would have a client of mine sign a letter to the effect that I am not responsible for adverse consequences of this decision.

As always, talk these issues over with your own attorney.  He or she is in the best position to cover each and every one of them for you.

I hope that answers your questions, Jenna.  And thanks for reading this column quite regularly!  It is appreciated.

/s/Donald J. DeVries
Almaden Valley

Donald J. DeVries is an attorney practicing law in Almaden Valley. If you would like him to answer your question in his next Almaden Times column, you can reach him by email at don@almadenvalleylawyers.com <mailto:don@almadenvalleylawyers.com> (with "Almaden Times Article" in the subject line), fax at (408) 268-6502, telephone at (408) 268-9500, or mail at 6475 Camden Avenue, Suite 200, San Jose, CA 95120. Your matters are personal and private, so of course, he will not disclose your identity or any details about your situation.

Mr. DeVries writes this column to provide you with general information about important legal matters affecting California residents-not to give you legal advice about your specific matter. No attorney-client relationship is created by these articles. The law is complex and constantly changing and varies from state to state. So you should consult an attorney before taking any action that would affect your personal or business matters.