Estate Planning Basics

San Diego Estate Planning Attorney Gary Quackenbush answers your questions:

Estate Planning Basics


What is Estate Planning?

Do I need an Estate Plan?

This is the #1 question of Estate Planning Basics- YES! Estate planning is for everyone, if you have possessions or children then you need an Estate Plan and Estate Planning Attorney Gary Quackenbush can help!

Whether it be a simple California Will or a more comprehensive living trust portfolio, proper estate planning could make a substantial difference in almost any family setting. Not sure what all of those things are, come in for your FREE consultation and let Gary help you find a plan that fits your needs.

Estate Planning – Do I need it now?

Catastrophe can strike at any time, and because of this, most of us have life insurance, car insurance, home insurance, and medical insurance. Still, relatively few people have even a simple will, the most basic part of an “Estate Plan.” As with insurance, it is risky to be unprepared. Estate planning can help you provide for the future by taking care of your assets (things you own) and offspring (your kids, grandkids, pets, etc.)

What are my options for Wills and Trusts?

There are a variety of Wills and Trusts to fit your needs. A few of the more common estate planning documents are listed below. Additional trusts may be used for current income tax savings or to remove life insurance from the taxable estate.

  1. Simple Will

    Generally gives everything outright to surviving spouse, children, or other heirs.

  2. Will With Testamentary Trust

    Married couples with minor children will can pass everything to their spouse, if living, and if not, to a Testamentary Trust their minor children until they become more mature.

  3. Pour-over Will

    Generally used in conjunction with a Living Trust. It picks up any assets which were not transferred to the Trust during the person’s lifetime and “pours” them into the Trust upon death. The assets may be subject to probate administration.

  4. “Straight Through” Living Trust (without Tax Planning)

    The surviving spouse retains or gets full control of the assets and income. Its main purpose is to avoid probate and perhaps manage the assets for beneficiaries who are not yet ready to inherit the assets outright.

  5. “A-B” or “A-B-C” Trust

    This type of Trust avoids probate and also makes certain that both spouses can use their Unified Credit. Large estates can be passed to children or other heirs without probate expense or death tax. This law is changing in 2010 and in 2011. Talk to an attorney about it.

  6. Qualified Terminable Interest Property Trust or “QTIP” Trust.

    By adding another Trust to the “A-B” or “A-B-C” Trust (above), the first spouse to die can determine the beneficiaries of his or her estate after the surviving spouse dies. For example, the income earned on assets in the Qualified Terminable Interest Property (QTIP) Trust must be given to the surviving spouse for his or her lifetime, but can then pass to the children of a prior marriage of the first spouse to die. Even if there are no children of a prior marriage, some estate owners use this Trust to prevent a subsequent spouse of the survivor from diverting the assets to themselves. Additionally the QTIP permits deferral of death taxes on the assets until the surviving spouse dies.

  7. Qualified Domestic Trust or “QDOT”

    Asset transfers at death to a non-citizen spouse do not qualify for the Marital Deduction unless the assets pass to a Qualified Domestic Trust (QDOT). The QDOT rules require that the trustee be a U.S. citizen, and have other measures which help ensure that death taxes will be collected when the surviving spouse dies.

How can I avoid Probate?

The probating of a Will permits a court of law to supervise the transfer of assets from the decedent to his heirs. A typical probate lasts about one year, with six months generally being a minimum time if everything proceeds according to schedule.

Because of the expense of attorney’s fees, executor’s commissions, court costs and the time delay, many people attempt to avoid probate administration. Some of the methods used to avoid probate are described here:

  1. Joint Tenancy

    The title of the property passes automatically to the surviving tenant. The joint tenancy automatically dissolves after one tenant dies. Creditors of either joint tenant can attach the asset.

  2. Totten Trust

    Is a way to pass savings accounts to heirs. Accounts are held “in trust” for another. (ex: “Ron Eiger, in Trust for Sammy Eiger.”)

  3. Life Insurance

    The proceeds of life insurance are rarely subject to administration unless the insured’s estate is the beneficiary or all of the named beneficiaries pre-decease the insured.

  4. Lifetime Gifts

    Gifts made shortly prior to death will avoid probate. They may be brought back into the estate for death tax purposes. Note: Gifts carry the donor’s basis to the donee, whereas appreciated assets in the decedent’s estate will generally get a new or stepped-up basis.

  5. Revocable Living Trust

    An effective method of avoiding probate. It has the additional advantages of providing management of the funds for the heirs for some time after the decedent’s death. In the event the person setting up the Living Trust becomes mentally incompetent or otherwise incapacitated, the Successor Trustee can take over management of the estate.

What is the difference between a Revocable Living Trust and an Inter-Vivos Trust?

A Trust is created when one person (the Trustor or Grantor) transfers to another person or corporation (the Trustee) a property interest to be held for the benefit of himself or others (the beneficiaries).

If the Trust is created during the Trustor’s lifetime, rather than in his or her Will, it is an Inter-Vivos or Living Trust. When the Trustor retains the right to dissolve the Trust arrangement, it is a Revocable Living Trust.

NOTE: Assets in a Revocable Living Trust are included in your gross estate for Federal Estate Tax purposes.

What are the advantages of having a Living Trust?

  1. Assets in the Trust are not subject to probate administration. This saves executors’ and attorneys’ fees. It also grants more privacy as to who gets the estate, how they get it, and how much they get.
  2. Professional management is available if the Trustor becomes incompetent, disabled, or wants to be free the worries of management.
  3. Should the Trustor (also usually the original Trustee) die, the Successor Trustee can step in and manage the estate without delay or red-tape.
  4. Trustee can collect life insurance proceeds immediately after the Trustor dies and can use the proceeds to care for family members without any need for court approval.
  5. Successor Trustee can be in another state.

What are the disadvantages of having a Living Trust?

  1. Creditors may not be cut off as quickly as they are in probated estates.
  2. A little more effort is required to transfer assets into the Trust and records should be kept for transactions by the Trustee.
  3. An attorney usually charges a higher fee to establish a Living Trust than to establish a Testamentary or Will Trust.
  4. Annual tax returns may be required if the Trustee is someone other than the Trustor.

Confused? Need help?

Our estate planning basics page is designed to give some information about estate planning but we know that the process and paperwork can be confusing.

Come get your questions answered and your Estate Plan started with experienced San Diego Estate Planning Attorney Gary Quackenbush. He’ll walk you through your options and help you set us a great plan to fit the needs of you and your family. Don’t forget- EVERYONE needs an estate plan!

Call our office today 858-549-8600

Be sure to also check out Gary’s e-book “Living Trust Basics” to learn some of the ins and outs of a Living Trust. Click on the book cover below to request your free copy.


This article provides general information about California law. The laws are constantly changing and this article is not intended to provide legal advice about your specific situation. Seek competent legal counsel. Let me advise you about your particular situation.

Gary A. Quackenbush, Esq.