Wed, March 11th, 2009
Reimbursement of a Down Payment on a Home
Just settled a case involving many real estate and trust issues. Settlors of the trust were quite possibly tenants in common if the trust was properly revoked. Settlors split up and one left the house before the possible revocation. Years before, the mother of one of the settlors allegedly loaned the couple some money to buy the home, but did not ask to have a lien on the property. So does she have a right to get her down payment back?
One argument is that she has what is called a “resulting trust”, which means that the couple holds her interest in trust for her, to be paid back when the property is sold or refinanced. The counter to that is since there never was an agreement to hold the property in trust, no such “lien” exists.
We never tried the case, and there were many more facts which would have complicated the outcome, but you should be aware that there is a common law remedy known as a “resulting trust”, which is there to protect someone who loans money to another to buy property. It is essentially an “intention-enforcing trust”. I’ll write later about a “constructive trust”, which is a “fraud rectifying” trust. Similar to a resulting trust.
Posted by Nick Yonano at 04:30
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Labels: constructive trust, land, revocable trust, 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
Wed, November 19th, 2008
Probate Contests over Real Estate
I’ve always said that for some reason real estate brings out the best, and worst in people. This is especially true with families, where a home or ranch can provide the greatest memories, or the most bitter of feuds. When a family member dies holding real estate that is not clearly delegated to a trustee to administer, the risk of problems becomes all too real. Just visit the probate department of any courthouse and listen to some of the war stories in the hallway.
The best, and sometimes only, solution, is to make sure the property is funded in a trust, and your successor trustee is someone you “trust” to make sure the property, and its income, goes where you would like it to go. Then make sure the trust document, or declaration as some call it, is drafted well. If the trustee’s directions are clear and enforceable, your family will always have good memories of that home.
Posted by Nick Yonano at 04:38
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Labels: real estate, revocable trust, trust
Wed, October 15th, 2008
Spendthrift Living Trusts–For the Spender in Your Family
In today’s tough economic times,— actually, in any economic times, it’s important to make sure your funds are safely managed and spent. If you have a spender or a potential spender in your family, and you would like him or her to receive some sort of inheritance, there are ways to make sure that he or she still gets the benefit of your gift to him or her, without blowing it all at once. This type of trust is called a spendthrift trust, and it’s a “mini-trust” that is inserted into the language of your revocable, living trust. Essentially, this language provides that the beneficiary gets only so much money as is needed for his or her needs, usually at the sole discretion of the trustee. At any time you designate, the beneficiary can then have full access to the assets. Or never, if that’s the way you want it.
The important factor here is your designated trustee. Who you put in charge of deciding how much is doled out from time to time to the beneficiary. In putting your revocable trust together, you should discuss this issue with your attorney or financial advisor.
Posted by Nick Yonano at 04:15
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Labels: revocable trust
Wed, September 24th, 2008
Is Your Living Trust Up to Date?
It’s a nice feeling to finally have your living trust completed, and funded. But most of us are so busy with work, kids, and everything else, that we forget to occasionally make sure it’s updated. Not only do you need to make sure that all of your assets, including that vacation home or timeshare in Lake Tahoe, or near the beach, whichever you prefer, you also need to make sure that the current naming of trustees is correct. Is the person you named to succeed you still who you would want to succeed you?
If you have a power of attorney or health care directive, has that changed? What about a guardian named in your will? That may have changed, especially as your kids grow up and it becomes more clear who is a better fit for them if ever that time came.
It doesn’t take long to update your trust or your will. But it’s well worth your time.
Posted by Nick Yonano at 08:33
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Labels: revocable trust, wills
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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