Fri, February 19th, 2010
Lease of Real Property is Permitted in Probate, But Creditors Can Have a Say
Of the many things an administrator of a probate can do without court approval, I find that the leasing of real property held by the estate, for up to one year, to be the most questionable. Yes, it can be done, and no, it does not require court approval if the lease, including options, is no more than one year. However, where there are creditors with claims pending, I believe the adminstrator should ignore this convenience and instead seek court approval so that they could not be surcharged later. There may be beneficiaries who would not be happy with this arrangement either (there is a generally-accepted ten year maximum on leases that need court approval, so that beneficiaries are protected).
Why a one-year maximum? Because in my opinion even one year may work to strip creditors of their right to get paid. Anything beyond that would make it even more difficult for the creditor or the creditor’s attorney to manage the claim and make sure it’s paid.
In reality, most leases will probably carry an option to extend, or even an option to purchase, which takes it out of this rule and requires the administrator to seek approval. In those cases, the court will often hear from the creditor, who of course is given notice, and determine if the approval of the proposed lease arrangement would be of benefit to the estate and would still be fair to the creditor.
The Probate Code section where approval is not required is 9942. Section 9942 is the section which imposes a requirement of approval. Section 9960 et seq. govern an additional procedure where an option to purchase is included in the proposed lease agreement.
Posted by Nick Yonano at 10:08
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Labels: claim, estate planning, probate, real estate
Wed, April 15th, 2009
Estate Plan for Your Parents-Looking Out for Your (Older) Loved Ones
So much focus on the importance of getting your immediate family’s future in order with your own estate plan. And rightfully so. What is often neglected is the need for the older parents, who never got around to putting a plan together. There are many questions, as this reader brings up, that need to be answered so that everyone in your family can be comfortable with the plan in place. The company, Elder Options, Inc., is a local business, out of the Sacramento and El Dorado County area, that helps families get their finances and real estate options in order when an older family member is in need. Check out this article in today’s Village Life (an El Dorado Hills weekly newspaper). It may answer a couple of questions you have. Important ones, such as “when is a child responsible for his/her parents’ liabilities for health care?”. Still have questions about this subject? Please call a trusted attorney or adviser.
Posted by Nick Yonano at 09:11
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Labels: el dorado hills, estate planning, trust
Thu, December 18th, 2008
Own a Partial Interest in Property? A Trust is Still Your Best Option
Some people ask me if a living trust (revocable trust) works for them if they share ownership in real estate. My answer is always the same: Sure it does, and you can hold your interest in your own trust just as if you owned the entire interest (fee simple) in the property.
Most situations where someone owns a partial interest, at least in residential property, is where the parents share title with the children. There are also many cases where business partners own the property together, usually as tenants-in-common (I’ll write later about why a joint tenancy is usually not recommended here).
If someone owns a partial interest in property, they can form their trust, just as they would in a conventional ownership, and deed their interest to the trust. The co-owners are not permitted to interfere with this transfer, provided their interest is not affected.
Why would a co-owner’s interest be affected by a transfer? In most cases where this is a concern, it’s because the transfer accompanies a change in the financing of the property, such as a refinance.
If you own ANY interest in real estate, your best option is usually to let this interest be held in a living trust.
Posted by Nick Yonano at 02:25
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Labels: Uncategorized, estate planning, real estate, revocable trust, trust
Sun, December 7th, 2008
A Financial Advisor That Knows the Importance of Estate Planning is Essential
I wrote the other day about the importance of funding a revocable trust with your real estate and securities. Much of the focus is often on putting one’s home in a a trust to take advantage of the ease of transferring it to your family. Same goes for your stocks and your mutual funds. If you have an attorney that properly structures your trust and a financial advisor that understands the importance of managing the funds while they are safely held in your trust, you’re way ahead of the game.
In the Sacramento area, including Folsom and El Dorado Hills, one company which I would highly recommend is Hanson McClain. They are a trusted firm that looks out for your financial well-being but also understand the importance of the transfer of your assets to your family when you’re not around, essentially your family’s financial well-being. Check them out when you get a chance. They also host a weekly radio call-in show and write some interesting columns.
A couple of advisors I recommend, among the many at Hanson McClain who are highly-qualified, are David Cox and Eric Henry.
Posted by Nick Yonano at 05:25
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Labels: estate planning, revocable trust, securities, stocks, trust
Fri, December 5th, 2008
A No-Brainer: Real Estate and Securities Holdings Should Be Held by a Trust
There are many reasons why a person would not want to have a trust. Most of them are not very good when compared to the benefit, but yes, they do exist. For example, the small amount of paperwork or the need to set up a separate bank account for the insurance and mortgage payments may be a bit too much for some. If you own real estate, your reasons to avoid this estate planning tool become very unpersuasive.
Real estate in just about any form: a single-family home, a strip mall, an orchard, whatever. If it’s in your name when you pass away, you’ve likely given up a good chance to ease the transfer of it to those you intend it to go. And, you’ve probably made the tax ramifications of a transfer a little more complicated.
Compared to many assets a person holds, such as furniture, cars, boats, and other personal property, real estate and securities can be worth a significant amount of money and will usually increase in value as your life goes on. The ease of transferring these assets to your revocable trust in comparison to transferring other assets makes it highly beneficial to place these assets in your trust. It’s easy to do, it’s easy to manage after you do it, and most importantly, it’s easy for your family to administer after you’re gone.
Posted by Nick Yonano at 04:14
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Labels: estate planning, real estate, revocable trust, securities, stocks
Mon, September 15th, 2008
Post-Script: El Dorado Hills Community Family Fair
The weather cooperated. The food was great. And yes, we all had a good time at this year’s community family fair, sponsored by the El Dorado Hills Chamber of Commerce. Lots of moms and dads out with the little ones, seeing what’s new, and old, in the community. Our firm is on the new side, since we’ve only had our Folsom office for about a year, but it’s great to be part of this new community as well as our community in Turlock.
I talked with some interesting people, about some interesting family arrangements. One gentlemen I spoke with married his long-lost high school love, and wanted to know how to make sure everyone was taken care of properly. There were lots of families wanting to make sure their children were in good shape if something ever happened to the parents. It doesn’t matter what the size of your estate is, if you want to avoid the hassles of probate, you need to make sure a trust is in place and properly funded. I hope more and more people find an estate planning attorney and take care of this. Even if you don’t find one at a family fair or you don’t know one personally, ask around. Find out who is reliable and listens to your needs. And go see him or her now!
Posted by Nick Yonano at 09:44
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Labels: estate planning, revocable trust
Sat, September 13th, 2008
Estate Planning Info at El Dorado Hills Community Fair
Instead of kids’ soccer games, which is my most favorite way to spend Saturdays, I will have a booth at the El Dorado Hills Community Family Fair. I’m mostly going to promote my firm’s estate planning services. Trusts, wills, advanced health care directives, etc. So if you’re in the area stop by.
Oh, and I am also holding a raffle for 2 tickets to the 49ers vs. Patriots game next month. I’ll announce the winner here soon. Drawing is today at 4:00 p.m. Go Niners!
Posted by Nick Yonano at 03:41
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Labels: el dorado hills, estate planning, revocable trust, trust, wills
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