The Law offices of Anthony J. Montisano, Jr ., Esq



Most Frequently Asked Estate Planning Questions

1. If I die with a will, do I still have to probate my estate?
Yes. A Will is instructions for the distribution of your property upon your demise, and only the court can carry out those instructions.
A petition for probate must be filed with the court in order for your personal representative, or Executor, to obtain control over the assets and eventually make distribution.

2. What is probate anyway?
Probate is the court process by which a decedent's personal representative is given the appropriate power over the decedent's assets, pays his or her last debts, and makes distribution of the assets, pursuant to the decedent's Last Will (testate) or by statute (intestate). The process can take anywhere from four months to several years, depending on the circumstances. Such court proceedings are public.

3. If I die and don't have a will, will my estate all go to the State?
No. However, the State will determine where your assets do get distributed. You will have no control over how and to whom those assets get distributed. This is called "intestate succession". The State has a pre-determined "Will" for everyone who dies without a Will. In most cases, the property will basically be distributed to your "heirs" or "next-of-kin."

4. If I keep my property in joint tenancy with my children, will I avoid probate?
In most cases, yes you will avoid probate. However, joint tenancy creates more problems than it solves. If you transfer property to your children, you have made a taxable gift. Also, you will have given a present interest in the property, which means that you cannot sell the property, or borrow against it, without the signature of the remaining joint tenants. Overall, you no longer are the sole owner of the property. Also, your surviving joint tenant(s) loses the full "step-up" in basis which would otherwise be afforded an heir. Since the survivor already owns an undivided interest in the property, the step-up only applies to the decedent's portion of the property.

5. If I die in California or Nevada, do my heirs have to pay inheritance taxes?
No. The inheritance tax, per se, no longer exists. However, the State of California and the State of Nevada do receive a portion of the estate taxes that are otherwise payable to the federal government, or a "pick-up" tax. Under the new federal tax legislation that was passed on June 7, 2001, called the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA2001), however, because the federal tax exemption will eventually be increased to $2,000,000.00, states will lose a considerable amount of tax revenues that they were receiving when a person died. It would not be surprising to see states like California and Nevada once again institute some type of inheritance tax system.

6. If I set up a living trust do I lose control of my assets?
No. You will only change the manner in which title is held to your assets. You now own property as an individual; after you execute a living trust, you will own the property as Trustee of your trust. You still have complete control. In fact, with a living trust, you can control the distributions long after you die.

7. What is a living trust?
A living trust is a document which creates an entity to hold title to any and all asset which would otherwise be the subject of a probate proceeding. The document sets forth the powers and duties of your "Trustee" (during your lifetime, the Trustee is you) and the manner in which you desire your property to be distributed upon your death. Since the entity cannot die, there is no probate proceeding required. The successor Trustee named in the document simply takes control of your assets after you die and distributes them pursuant to your wishes.

8. Isn't it expensive to set up a living trust?
No. Under most circumstances, the Trust is significantly less money than the cost of administering a probate after your death. The outlay of costs now will save your heirs thousands of dollars, and time, after your death.

9. If I enter a hospital for an operation, can't I just tell someone what type of medical treatment I should receive in the event something goes wrong?
No. It is necessary for you to appoint someone to make medical decisions for you in the event that you cannot do so. This will avoid any delays in treatment, as well as court proceedings to determine whether doctors can withhold treatment, or stop/withhold life sustaining measures.

10. If I should need to enter a nursing home, can't I give all of my property to my children in order to qualify for Medicaid/MediCal?
No. There are very specific rules regarding your ability to transfer assets prior to qualifying for assistance. It is critical that you consult with an attorney prior to any Medicaid or MediCal planning.

11. Why should I plan my estate anyway?
You need to plan your estate to avoid having either California or Nevada plan it for you. You need to plan your estate in order to save your children, or other heirs, thousands of extra dollars in legal fees, court costs and other expenses in administering your estate after you die. You need to plan your estate so that your hard earned dollars are distributed the way YOU want them distributed. We must all face the fact that someday we are going to die. Knowing this fact makes proper planning extremely critical. The best advice to follow is DON'T PROCRASTINATE!!!




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