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Wills & Trusts

Understanding Wills & Trusts

Below are some common Wills & Trusts terms. If you have specific questions about your case, please use our Quick Trust Review form, and we will personally review.

Wills

Traditionally the most common method of transferring property upon death is a will. In a will the decedent states who will be in charge of his or her estate upon death (the executor) and who will receive his or her property (the beneficiaries). The will can also include language stating: (1) the decedent's wishes regarding burial or funeral arrangements; (2) who will be the guardian of any minor children; (3) who will receive specific gifts; (4) who will care for the family pet; and (5) identify individuals who are intentionally omitted from the will.

If the decedent owned a home or other real property which is not held in joint tenancy, and the beneficiary is not the decedent's surviving spouse, then the will must be probated in order for title to the property to pass to the beneficiaries. The cost to probate a $500,000 estate (gross value without mortgage deduction) including attorney fees, executor fees, and court costs is approximately $27,000. If the surviving spouse is the beneficiary under the will then there is a simplified probate procedure called a Spousal Property Petition.

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Revocable Trust

A Revocable Trust sometimes referred to as a Living Trust or A-B Trust is an estate planning tool designed to avoid probate. Similar to a will, a trust states who will be in charge of a decedent's estate upon death (the trustee) and who will receive that property (the beneficiaries). The person making the trust (the trustor) transfers title to their home and other real property to the trust by means of a quitclaim deed. A "pour-over will" is also prepared at the time the trust is created. This specific type of will insures that any assets acquired after the creation of the trust, but not transferred to the trust, will be distributed in the same manner as those assets in the trust. In other words, the assets are poured over into the trust.

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No Will or Trust

If a person dies without a will or a trust (the decedent dies intestate) then the decedent's property will pass to the decedent's closest relatives (heirs) in the following order: surviving spouse, children, parents, siblings, and more distant relatives (Probate Code §6400). If the decedent owned a home or other real property which is not held in joint tenancy, and the heir is not the surviving spouse, then the decedent's estate must be probated in order for the property to pass to the heirs. If the surviving spouse is the heir, then there is a simplified probate procedure called a "Spousal Property Petition". The cost and the procedure to probate the estate of someone who dies without a will is the same as for someone who dies with a will.

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Advance Health Care Directive

An Advance Health Care Directive specifies who can make health care decisions in the event an individual is unable to make his or her own decisions. It also includes language regarding organ donation if any, and end of life care choices such as the use or non-use of artificial life support systems. It often includes a directive to administer pain medication to keep a terminally ill patient comfortable and allow the individual to die without the use of extraordinary medical procedures.

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Power of Attorney

A Power of Attorney allows an individual to authorize someone else to handle his or her financial affairs. The power of attorney automatically terminates when the individual who created the power of attorney dies. There are different types of power of attorney. A power of attorney can become effective immediately upon signing, or may only become effective when an individual is unable to make his or her own financial decisions. A power of attorney can be revoked at any time by giving proper notice.

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