Nowadays, trusts, rather than wills, are the predominant way posthumous transfers are made. Trusts offer a number of benefits, but avoiding probate is often at the top of the list. There are pitfalls to living trusts, however. One is that the trust can only control property that it owns, so any assets that have not been transferred to the trust at the time of the grantor’s death may be out of its reach. Pour-over wills can be used as a sort of failsafe on a trust by posthumously transferring the grantor’s remaining assets into the trust. If you are unsure whether your estate plan needs a pour-over will, you should consult with a local attorney.

How Do Pour-Over Wills Work?

Pour-over wills exist to back up a trust. When the grantor of a trust dies, any assets of his that have not made their way into a trust already cannot be governed by the trust. A pour-over will simply exist to gather up and control any assets that were left out of the trust for whatever reason. Using a pour-over will, the testator devises all his remaining non-trust property to the trust.

This can be extraordinarily useful when it is discovered after death that the decedent owned property he had forgotten about, or never became aware of in the first place. It is more common than one might think for assets to be inadvertently omitted from a trust. People may forget about an old bank account or own estate property from a long-dead relative they never found out about. A pour-over will simply offers a bit of extra security in making sure that all the property a grantor wanted to be included in a trust will be included.

Every July 1st, there are usually a handful of new laws that California lawmakers have passed that go into effect. Included in the list this year were several real estate laws. The following is a brief overview of each of these new statutes. If you have questions about how any of these new laws may affect your situation, a California real estate attorney can help.

New Buyer Fire Notice

AB 38 was passed to protect new home buyers from purchasing a property without being aware the home is located in a high fire risk area. It requires a seller to provide a list of all items that are not fire-resistant and that could be at risk in the event of a wildfire. This specific document must now be part of the closing package that a buyer must sign to confirm they have been informed of the risk. The form also provides information on how a buyer can prepare their home for wildfires. This is referred to as fire hardening.

Homeowner Association Rentals

AB 3182 requires homeowner associations (HOAs) to allow a minimum of 25 percent of their property to be rented. Prior to the law’s passage, an association could severely limit the number of rentals or prevent them entirely. This new law also prevents an HOA rule that an owner must live in a property for at least one year before they can rent it out; however, it does not stop an HOA from having a rule blocking short-term rentals.

According to national statistics, approximately 31 million Americans move each year. Some move across town, while others move across the state. However, about four million move to a different state. Out-of-state moves can be stressful to coordinate, especially if you have a family and an entire household to move. There are also all of the things you need to do when you arrive in your new state – including finding out about your children’s new schools, finding new doctors, dentists, hair salons, grocery stores – the list goes on. But what many people never think about is that by moving to a new state, they also need to update their estate plans.    

Estate Laws

If you have had a qualified estate planning attorney help you with your estate plan, it likely contains a variety of documents that stipulate how you want your assets and property to be distributed upon your death. Estate plans can contain a will, living trust, advance directive (living will), and power of attorney, along with other documents, depending on your own personal situation.

Every person’s estate plan is developed based on the laws of the state they live in. And just like many other laws, estate planning laws vary from state to state. This not only includes estate planning laws, but also laws regarding marital property, inheritance tax, income taxes, and state estate taxes.

One of the benefits of creating an estate plan is ensuring that your wishes are honored throughout the rest of your life and after your death. Through your will, trusts, powers of attorney, and other estate planning instruments, you can lay out a clear plan for your assets and your end-of-life care. However, you will need people to help you carry out the terms of your estate plan when you are no longer able to do so on your own. An important part of estate planning is choosing the right people to fill a variety of roles.

Naming Your Chosen Representatives

As you work on your estate plan, here are some of the roles that you may need to appoint:

• Estate executor - After your death, your estate executor will be your representative throughout the probate process and the administration of your will. The executor will be responsible for safeguarding your assets, resolving outstanding obligations to creditors, and distributing your assets to your named beneficiaries. You can designate your executor in your will, and it may be a good idea to name an alternative in case your first choice is unable to perform their duties.
• Guardian for minor children - If you are creating an estate plan while you have children under the age of 18, it is important to nominate a person to serve as their guardian if you unexpectedly die or become incapacitated. This helps to ensure that they will be in the care of someone you trust.
• Trustee - Establishing a trust for some of your assets allows you to distribute them to your chosen beneficiaries outside of the probate process. When you fund a trust, you will need to name a trustee who will be responsible for managing the assets and distributing them according to your wishes.
• Agent or attorney-in-fact - Your estate plan may include powers of attorney, which grant the authority to make decisions on your behalf regarding your assets and healthcare if you become incapacitated. The person to whom you grant authority is known as your attorney-in-fact, or your agent.

While the State of California has certain requirements regarding who may serve in each of these roles, you have significant freedom to choose the people whom you believe are best suited to fill them. You may choose to name your spouse, an adult child, or a sibling in one or more of these roles, especially those of a more personal nature. For roles that have greater financial responsibilities, like a trustee or an estate executor, you may want to choose someone with a special set of financial skills that prepare them for their duties.