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Anyone with assets can benefit from an estate plan. We offer options for people from all walks of life. Estate planning can save your loved ones from making difficult decisions after you pass away or if you become unable to make your own decisions. It can also ensure that your wishes for both your assets and your care will be met.
At The Dayton Law Firm, P.C., our team of San Jose estate planning attorneys is compassionate to families and individuals. We aim to help answer questions about your long-term planning options. We help with a variety of estate needs, including:
- Wills and trusts
- Retirement planning
- Probate
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- Trust administration
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We use our knowledge from planning and administering estates to achieve efficient legal solutions with a process proven to work.
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Our firm is located in San Jose and serves the entire Bay Area. We also serve clients throughout California.
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Out of a desire to simplify inheritance or avoid probate, parents often consider adding their child to the title (or deed) of their home. While it is true that it can help avoid probate, this shortcut can have unforeseen consequences in the form of legal, financial, and even familial relationship problems.
Simply adding your child to your house’s deed isn’t enough to avoid probate or ensure inheritance is directly passed to them, and consulting an attorney can help you avoid costly and complicated pitfalls.
What It Means to Add a Child to a House Title
Deeds in California are typically structured with either joint tenancy with right of survivorship or tenancy in common as the ownership.
Joint tenancy with right of survivorship gives all owners equal shares in the property and makes it so that if one owner passes, the surviving owner(s) automatically inherit the decedent’s share, bypassing probate and inheritance laws. With joint tenancy with right of survivorship, no matter the terms of the decedent’s will or trust regarding the division of their property, the property will pass to the other surviving owners. If there is a specific way you wish your house to be bequeathed to your heirs, joint tenancy with right of survivorship might not be the best option for you, and deciding the best course of action is something The Dayton Law Firm, P.C. can guide you through.
When a child is added to a deed, care must be taken with how the deed is structured. Solely adding them to an existing deed without restructuring it will give them an ownership interest in the house, but will not affect your ownership interest, which would still be subject to either probate or passing along to any surviving owners named as a joint tenant with right of survivorship. A new deed would need to be recorded naming your child as a joint tenant with right of survivorship to avoid probate.
In California, joint tenancy structures give all owners on the deed equal rights and say to the property. For joint tenancy with rights of survivorship, once one owner passes, their share of the property automatically reverts to the other owners. With a deed ownership structure of tenants in common, ownership shares are not always equal, and each co-owner can leave their share to beneficiaries through a will or trust, requiring probate in California.
The Appeal: Why Parents Consider Adding a Child to Title
There are many appealing features of considering adding your children to your house’s title. On the surface, it seems like an excellent way to avoid probate court, as they will already be listed as an owner on the deed.
Adding a child to your title can also be perceived as a simpler way to ensure your wishes for the inheritance of your property are followed and as a way of saving on the costs involved in writing a will or creating a trust. The intention behind adding a child to the title of your house is generally to ensure a smooth property transfer to your beneficiaries upon your death. Consulting an estate attorney at The Dayton Law Firm, P.C. can help you determine whether this is the best course of action for your assets or if other methods are safer and more feasible.
Risks and Downsides of Adding a Child to Title
While adding your child to the title of your house seems straightforward at first glance, there are many factors that must be considered. Once your child is on the title, you no longer have sole control over the property; there are future tax implications to consider, possible liability issues, and potential relationship conflicts to take into account.
Another aspect to consider with adding a child to the title is that it can impact your eligibility for Medicaid, as adding them to the title counts as giving assets away under fair market value, and if that occurs during the 5-year lookback period, wherein Medicaid reviews financial transactions, you will be subject to a penalty period where you are ineligible for benefits.
Loss of Full Control
With the addition of another owner to the title, the full control over the property no longer rests with you. Any decisions regarding the property, including refinancing, selling, or taking out a line of credit to accommodate living expenses or needed repairs, must be cosigned by all parties on the deed. This loss of autonomy and requirement to consult with your child can place strains on familial relationships, especially if there are disagreements on how the property or equity should be managed.
If relationships change, and parties become estranged, having a joint property, for that is what adding your child to your title causes your house to become, can increase tensions and cause conflicts that might require costly legal mediation to resolve.
Tax Consequences
Tax consequences are another aspect to consider when adding a child to the title of your home.
When a beneficiary inherits a property, the cost basis, or initial value, of the property is “stepped-up” to the fair market value of the property at the time of the decedent’s death. This reduces the capital gains tax liability for the inheritor if they choose to later sell the property.
As a basic example, if the house was purchased for $100,000 and was worth $450,000 at the time of the decedent’s passing, the stepped-up value of the house would be $450,000. If the inheritor sells that property for $600,000, their capital gains tax liability would only be on $150,000, not $500,000; in essence, the tax that would have been incurred on the $350,000 difference would be eliminated.
If your child was an owner on the deed before your passing, they would not benefit from the step-up cost basis, as they are no longer inheriting the property, just assuming a larger ownership share.
Additionally, adding a child onto a home deed for no payment constitutes a gift when it comes to taxes. While generally there are no immediate tax payment requirements, gift tax forms must be filed to calculate against your lifetime gift and estate tax exemptions. Depending on the value of your home, however, taxes could be due, which does reduce the amount available in the future for sheltering estate assets.
Creditor and Liability Issues
With your child added to your title, your property also becomes vulnerable to their debts, any lawsuits against them, or any potential bankruptcy or legal financial troubles they might experience.
In all these cases, the family home is exposed to outside claims. Creditors can place liens on the home until the debt is settled, an ex-spouse could file a claiming interest in the property in a divorce (especially since California is a community property state, and most property acquired during the marriage is considered community property), and in the case of a lawsuit where the child is found liable, the property could even be seized to satisfy the judgement.
Family Conflict
Nothing sows discord amongst siblings faster than the appearance of unequal treatment, which is a pitfall that needs careful consideration if only one child is added to the title of your home. No matter the reasoning behind the decision, siblings not included on the title are likely to hold resentment that will fester and cause division in the family, creating conflicts that can quickly move from the dinner table to the courtroom.
As an example, if you have Child 1 that lives near you and helps you out and visits you frequently, and Child 2 that lives across the country, and you choose to add Child 1 to the title of your home and not Child 2, Child 2 could make a legal argument that you were unduly influenced by Child 1 into adding them onto the title as a condition of their help. This can result in a long, costly legal battle, precisely the thing you were hoping to avoid by adding a child onto the title in the first place.
The addition of your child to your deed is the only evidence of your intent for property distribution. In California, even if you have a will or trust stating that you want the property divided amongst your children, the ownership on the deed trumps them in the disposition of the house. These considerations are why it is crucial to confer with estate attorneys like those at The Dayton Law Firm, P.C. before making concrete arrangements for your estate.
Alternatives to Adding a Child to Title
Fortunately, there are alternatives to adding a child to your house’s title, and The Dayton Law Firm, P.C. can guide you to the best option for your unique scenario.
Wills, trusts, transfer-on-death deeds, and powers of attorney are just some estate planning tools that can help you ensure your wishes for your property are fulfilled after your passing.
Many of these options fulfill the purpose of avoiding probate, which is behind adding your child to the title, and also protect your intentions and your beneficiaries’ best interests.
Revocable Living Trust
A revocable living trust is one of the best options for maintaining control of your property during your lifetime and ensuring your intentions are followed after your death. With a revocable living trust, you maintain full control over your property during your lifetime – you can sell it, refinance it, take out lines of credit against it, everything you’d be able to do if it weren’t in a trust. An added benefit of a revocable living trust is that you can make changes to it or dismantle it at any time, providing you with additional flexibility should your situation or wishes change.
Property held within the trust is not subject to probate, saving your beneficiaries legal costs and time spent managing your assets after your death. Placing your home in a revocable living trust instead of adding your child to the deed also preserves the step-up basis tax benefits, helping your beneficiaries avoid higher capital gains taxes and stress.
Transfer-on-Death Deed (TOD Deed)
Another option in estate planning is a transfer-on-death deed, which has been available in California since 2016.
Unlike a joint tenancy with right of survivorship, a transfer-on-death deed does not take effect until the death of the owner (transferor). This allows you to remain in sole control over the property until your death, enabling you to sell, rent, refinance, or do anything else you wish without consulting your child.
The TOD does allow your beneficiaries to avoid probate, and can be more cost-effective than other probate-avoidance methods such as a living will or a trust. It also grants the same tax benefits regarding the step-up basis as a trust or a straight inheritance does.
However, while the requirements for creating a TOD are simple, they are very strict, and innocent mistakes can completely void the TOD, landing your beneficiaries back in probate.
Additionally, your beneficiaries will have several steps they must complete for the TOD to properly transfer the property, including notifying any potential heirs you might have, and those heirs will have the chance to challenge the TOD if they desire. Due to the risk of challenge, many title companies will refuse to issue title insurance for up to 3 years post your death, stopping any potential sales or refinancing your heirs may wish to do.
TODs also do not supersede joint tenancy with right of survivorship, so if you create a TOD but your spouse does not, and you pass before your spouse, the TOD is no longer valid. Both you and your spouse would have to sign separate TODs to account for whichever spouse outlives the other.
These considerations are why it is essential to discuss options and draw up documents with experienced estate attorneys.
Other Estate Planning Tools
Other estate planning tools can be effective at ensuring your property is divided amongst your beneficiaries as planned, but can be less effective at avoiding probate if that is the end goal.
Wills are good documents for stating how your property is to be allocated, but they still require a probate process, typically handled by the executor of your estate. The probate process can be quite lengthy in California, with the quickest turnaround timeframe being approximately 9 months. There are other, better estate planning options for a quicker resolution for your beneficiaries that The Dayton Law Firm, P.C. can discuss with you.
Powers of attorney are useful in enacting your wishes during your lifetime should you become incapacitated; however, they expire upon your death. Should you wish for that individual to continue overseeing your desires regarding the dispersal of your property, they must also be named the executor of your estate. Once again, this option does not enable your beneficiaries to avoid probate.
Coordinated beneficiary designations do help avoid probate, but they are specific to accounts and property types. Naming an individual as the beneficiary of a life insurance policy or a retirement plan allows the funds to transfer directly to the named person upon your death, per the terms of the contract with the providers. TODs are considered beneficiary-designated assets, provided there is no joint tenancy with right of survivorship that can supersede them.
These designations are also considered nontestamentary and thereby outside of the purview of a will and will control the distribution of assets over any conflicting designations in a will.
How an Estate Planning Attorney Can Help
An experienced estate attorney at The Dayton Law Firm, P.C. will help you review your family goals and the values of the property in your estate to devise a comprehensive plan that takes care of your interests and your intentions towards your beneficiaries.
There are many California-specific tax laws and probate rules that are tricky to navigate, but an estate attorney will cut through the legalese and explain them and how they apply to your estate and situation.
Meeting with one of The Dayton Law Firm, P.C.’s estate attorneys will allow them to draft a customized estate plan that meets your needs and intentions for the distribution of your assets while avoiding unintended risks and complications, saving your heirs from costly and time-consuming legal troubles.
Talk to the Professionals About Adding a Child to Your Real Estate Title
While it seems a straightforward approach to avoiding probate, adding your child to the title of your house is often not the best choice in estate planning.
There are safer, simpler alternative options that protect you, your property, and your child from complicated legal, tax, and liability concerns.To determine the best course of action and get customized, experienced estate planning and real estate transfer advice for Californian properties, contact The Dayton Law Firm, P.C. today and make sure your assets and heirs are safe.
Low costs and enhanced convenience have led to a surge in popularity for online estate planning tools and services. They typically charge a double-digit fee for preparing items such as wills, estate documents, or trusts, which is a greatly reduced rate compared to that charged by an attorney.
Unfortunately, there are hidden costs and challenges to DIY estate planning. If your estate has any complicated assets or special circumstances needing clarification or additional provisions, expect to pay more than the advertised price. Once all the documents are in for a married couple that needs provisions for durable power of attorney, healthcare proxies, and living wills, the double-digit estate planning expense quickly moves to mid or high triple-digits.
Without consulting with an experienced estate attorney, you also aren’t likely to know exactly what documents you need for a complete estate plan. Missing or incomplete estate documentation can generate increased time and monetary expenses in probate court, and can create hostilities during litigation that could have otherwise been avoided. Something as simple as a missing witness signature could invalidate your will, landing your family in a probate court fight over your estate.
What DIY Estate Planning Usually Involves
There are many online estate planning platforms, such as LegalZoom, RocketLawyer, Nolo, and others, each with click-and-choose online processing and downloadable templates. These platforms can provide generic estate planning documents, including wills, trusts, powers of attorney, advance health care directives, and beneficiary designations. While completing a DIY estate planning process, you will typically answer questions from a drop-down menu, enter in a few general pieces of information about your scenario, and the platform will generate your document. These documents, however, are typically very basic, suitable for those individuals with simple estate needs and small asset holdings, and can come short for those with more complicated estates.
When creating estate planning documents, these platforms are typically not state-specific, and in California, that can create costly legal headaches. Intestate succession laws in California are complicated, and especially when marital or business property with assets to be administered comes into play, careful diligence must be observed to remain in compliance with California law.
Most DIY options for estate planning lack California-specific customization, leaving documents that were created through them invalid, causing expensive problems for your beneficiaries or complicated litigation to determine your wishes in the event of a situation requiring a power of attorney or an advance health directive.
Common Problems with DIY Wills and Trusts
DIY wills and trusts often have unclear language or language that contradicts other estate documents, leading to disputes and litigation among your beneficiaries. These DIY documents also don’t provide provisions to ensure the spirit and intention of your wishes are carried out, while documents drafted by an experienced estate attorney can make those distinctions.
In one such case in New Jersey, Cf. Matter of Estate of Tateo, 338 N.J. Super. 121 (App. Div. 2001), an elderly woman attempted to DIY a will to leave her estate divided between her children – a house to her son and a bank account to her daughter. Due to spending through the bank account funds to provide for her living expenses, there were no funds left to disperse to her daughter at the time of her passing, leaving her daughter without an inheritance.
Her daughter proceeded to sue the estate over the division of assets, litigation that went through several courts and appeals before being decided. Had she drafted a will with the necessary provisions, should the accounts not have enough funds to pay a beneficiary through the assistance of an estate attorney, the litigation between her children could have been avoided.
Other problems may include:
Missing or Incorrect Legal Formalities
In California, for a will to be legally valid, specific rules must be followed. For a formal will, it must be signed by the testator and witnessed by two individuals who ideally will not benefit from the testator’s estate. These rules are in place to help avoid the appearance of undue influence, conflicts of interest, or manipulation.
An informal will can also be drafted and signed by the testator, but this can cause issues in probate court, as handwriting analysis to determine whether the signature and writing match previous written works by the testator, and any informal or unclear language will have to be litigated to determine the intentions of the testator.
Trusts are common instruments in estate planning, and need careful handling to avoid probate issues and delays. DIY estate planning platforms make establishing a trust seem straightforward, but funding a trust correctly can be difficult to navigate.
All assets, including business properties, real estate, and financial accounts, must be formally transferred into the trust to allow the trust to administer them. Real estate will have to be deeded into the name of the trust, financial accounts will have to be retitled into the trust, and life insurance policies will either have to be specifically listed as trust assets or have the trust listed as their primary beneficiary. Knowing exactly how assets need to be listed in the trust can be tricky, so let the attorneys at The Dayton Law Firm, P.C. arrange matters for you.
Outdated or Incomplete Provisions
Wills, trusts, and other estate planning documents frequently need to be updated as property ownership, tax and estate laws, or family status, including the addition of new family members through descendants or marriage changes. With an estate attorney assisting you, you can express your wishes and be assured that they will be enacted while staying in accordance with applicable changes to laws.
Provisions are often incomplete in DIY estate planning, failing to administer digital assets such as cryptocurrency, business interests (even minute interests), or beneficiaries who need additional care due to minor status or special needs. Estate planning with an attorney will walk you through all special circumstances, help you recall all items in your estate and assets, and assist you in developing plans to look out for the best interests of all your beneficiaries.
Conflicts with California Community Property Laws
California has stringent community property laws for married couples that can make generic templates ill-advised. Under California law, all property (with a few exceptions) acquired while married, regardless of whose name is on the deed, account, or title, is jointly owned in a 50/50 split. When it comes to wills and estates, each spouse can only leave instructions related to their half of the assets. Without estate planning, a living spouse will likely inherit the full estate of the deceased spouse and then be able to manage the estate as they wish, regardless of the decedent’s wishes.
One exception to this rule is for inherited property, provided it is not commingled into a joint marital account or used to purchase joint property. Consulting with an estate attorney to set up provisions for inherited property to have it remain in your sole control is essential in California estate planning.
Probate and Litigation Risks from DIY Estate Planning
Unclear DIY estate documents, where the provisions for assets and intentions of the testator could be ambiguously construed, often trigger probate instead of avoiding it. Something as simple as stating “my children” instead of directly naming beneficiaries can create legal quicksand that will be costly and time-consuming to navigate.
When beneficiary terms and asset distribution provisions are not clearly stated, your heirs can argue for different interpretations of your intent. This can bring disinherited heirs back into consideration, change how assets are distributed and who receives them, and create contentious relationships among your beneficiaries.
In the Estate of Duke, 61 Cal.4th 871 (2015), Irving Duke created a holographic (DIY) will that left provisions for the management of his estate and the transfer of assets to two charities if he passed either before or simultaneously with his wife, but neglected to include directions for if he survived her. He also did not update his will with new instructions in the 5 years between his wife’s death and his own.
Due to the lack of provisions for the specifics of his passing, his heirs at law filed a petition with the probate court, arguing for intestate succession. The courts agreed and passed a summary judgment in favor of Duke’s heirs at law. This case highlights some of the many pitfalls of DIY estate planning, as Irving did not make allowance for all scenarios, and it could be argued that his failure to do so resulted in his intentions for his estate not being
Why California Estate Laws Make DIY Especially Risky
California has strict statutory rules to govern the validity of wills and trusts. For a formal will, it must be signed in the presence of a notary or two witnesses without involvement in your estate (i.e., they will not benefit from your estate or execute your estate). You must also be at least 18 and of sound mind in order to draft a will in the state of California.
A will in California must also be a physical document; it cannot be an electronic document such as a PDF or a video of an oral declaration.
For individuals moving into California from a non-community property state, it is important to be aware that Californian laws will proceed to oversee the trust, and it would be prudent to have a Californian estate attorney, such as those at The Dayton Law Firm, P.C., review your trust to adjust it to comply with California laws while still ensuring your wishes regarding your assets are followed.
Community Property vs. Separate Property
Community property laws in California can be difficult to navigate, especially when assets from pre-marriage, post-separation, inheritances, retirement or pension plans, or pre- or post-nuptial agreements are involved. Online templates and estate planning platforms often cannot manage the nuances involved in community property laws and exceptions to those laws that result in the property being considered separate property in the eyes of California courts.
As an example, retirement and pension fund income can be considered community property income, partially community property, or separate property, and complicated calculations for the Qualified Domestic Relations Orders are required to determine the breakdown for community property allocation.
Local Court Procedures and Filing Rules
Different localities in California have their own requirements for properly filing estate documents in addition to state requirements. An online DIY template typically only includes instructions for state-level requirements, which could create trouble for your executor when they go to lodge your will.
Within 30 days of the testator’s death, the will must be lodged with the superior court in the county where the deceased lived. Each county’s superior court will have its own filing process, and working with an estate attorney will enable you to include specific instructions with your will to reduce the stress and responsibilities of your executor or personal representative.
Lodging the will with the superior court begins the probate process, which will include a probate petition, hearing, and finally division and allocation of assets in California. Any delays in lodging the will can create delays in the probate process, which can have logistic and litigious ramifications for the executor.
When DIY Estate Plans Might Work (and When They Won’t)
DIY estate plans can work, but in very narrow circumstances. For extremely simple estates with minimal assets, such as a single family home and a few bank accounts, DIY estate planning can be a valid option. If there are no conflicts among beneficiaries, or the testator is a single individual with a sole heir or a married individual with a surviving spouse and no children, a generic DIY template could serve well.
However, if there are any complications to the estate, such as a disinherited heir, potentially litigious beneficiaries, complicated assets including trusts, multiple real estate properties, business assets, powers of attorney, advance health care directives, or separate property that needs special consideration, enlisting professional legal help is essential in avoiding future problems.
The Dayton Law Firm, P.C.’s Approach to Estate Planning
The Dayton Law Firm, P.C. has estate planning specialists to draft California-specific wills and trusts to ensure your intentions are fulfilled through your estate planning documents.
The holistic estate planning principles held by The Dayton Law Firm, P.C., put a focus on protecting families from future disputes, litigation, and hostile relationships.
The many years of probate and litigation experience of our estate attorneys inform every step of document preparation to account for any scenario and contingency while staying compliant with all legal formalities. If your estate does end up in probate court, we will represent your estate and fulfill the intentions of your estate planning.
Practical Next Steps for California Families
DIY documents should be reviewed regularly, as should all estate planning documents, but they should be replaced when your estate gains complexity. Once multiple beneficiaries and asset types are involved, DIY documents should be set aside in favor of professionally prepared estate documentation.
As part of selecting an estate planning attorney, you should have questions prepared to screen through candidates.
Questions should include:
- Length of time spent practicing estate law
- Whether estate planning is a focus or the focus of the law firm
- What a review of your assets and intentions looks like, and how it will inform their estate planning recommendations
- How often are reviews of estate documents conducted
- Whether the firm is named the trustee or executor of your estate or will
- What costs and timeline should you expect in having your estate documents prepared
Armed with these questions, contact The Dayton Law Firm, P.C. today to begin planning your estate.
Protecting Your Legacy with Confidence
Estate planning encompasses more than reducing upfront costs; it also includes reducing costs, litigation, and antimony for your beneficiaries.
Professional guidance in planning your estate will provide you peace of mind while reducing the amount of effort you need to expend to ensure your assets are allocated and your beneficiaries are planned for once you pass.Reaching out to The Dayton Law Firm, P.C. will get your estate plan secured so you can spend less time worrying about the future and more time enjoying the present.
When an adult over the age of 18 cannot care for themself or their finances, a judge can appoint a conservator to be responsible for their (the conservatee’s) matters. In California, a probate conservator can be assigned to a person to protect their interests or to the estate to manage the conservatee’s financial matters, including paying bills, collecting and allocating their income, and dispersing funds appropriately. A probate conservator is generally a relative of the conservatee. However, the judge can appoint a Public Guardian to the position if they determine that there are no other responsible or appropriate options.
Probate conservatorship comes into play for families and friends of disabled individuals, or those caring for elderly or aging loved ones. When a person becomes unable to competently care for their needs and financial concerns, a probate conservatorship allows someone to step in and manage those for them.
Advance planning to determine the circumstances in which you would need to apply for a probate conservatorship for your loved ones, or could create protections that would help you avoid the need to petition the courts to be appointed as a conservator. Discussing your options and concerns with an estate attorney at The Dayton Law Firm, P.C. can give you peace of mind and a clear plan of action.
What Is a Probate Conservatorship in California?
Under the California Probate Code, a conservatorship occurs when the court system appoints a conservator to oversee the financial interests and/or care of an adult individual (the conservatee) who is unable to manage them on their own. During the conservatorship, a court investigator will meet annually with the conservator, the conservatee, and any person or agency providing services to the conservatee to ensure that the conservatee’s needs and interests are being managed appropriately.
A probate conservatorship covers an adult over the age of 18 who cannot care for their own personal or financial needs due to a physical injury, disease such as dementia or Alzheimer’s, or a situation that makes them vulnerable to undue influence. In the case of a developmentally disabled conservatee, a type of probate conservatorship known as a limited conservatorship would be applicable.
Suppose the conservatee has a severe mental illness such as schizophrenia, bipolar disorder, or another severe biological brain disorder that requires care in a locked facility or prevents them from managing their personal or financial affairs. In that case, the courts can grant an LPS conservatorship, which is specifically for adults with mental illnesses.
Types of Probate Conservatorships
Probate conservatorships can be for the person, the estate, or both.
If the conservatorship is being put into place to oversee provisions for the health care or other personal decisions of the conservatee, it is a Conservatorship of the Person.
When the conservatorship involves managing property, money, assets, and financial decisions for the conservatee, it is referred to as a Conservatorship of the Estate.
In some cases, such as with conservatees diagnosed with a cognitive disease, such as dementia, that limits their ability to manage both personal and financial responsibilities, a court will grant a conservatorship for both the person and the estate.
General conservatorships are for adults over the age of 18 who have physical injuries or diseases or who are in situations that leave them unable to make their own personal or financial decisions. Limited conservatorships are for adults over the age of 18 who have a developmental disability that limits their ability to manage their personal or financial affairs independently.
When Is Conservatorship Required?
Without advance planning documents, such as a springing power of attorney, if a person becomes incapacitated due to an accident, injury, disability, or cognitive disease, a conservatorship may be required.
Incapacity can happen at any time, and common triggers that might require a conservatorship are dementia, Alzheimer’s, stroke, an accident causing a traumatic brain injury, or the onset of a severe disability.
After a petitioner files for a probate conservatorship, the court is the deciding force on whether a conservatorship is needed. The court will appoint an investigator to interview the prospective conservatee, review medical records, speak with caregivers and family, and determine whether intervention in the form of a conservatorship is needed.
The Probate Conservatorship Process in California
Under the California Probate Code, anyone who wants to assume the role of conservator can file for the conservatorship. However, the petitioner is typically a relative, like a spouse or child, a friend, or a state or local government agency.
At least 15 days before the conservatorship hearing, the petitioner must provide notice of filing the petition to the proposed conservatee and their relatives, including grandparents, parents, siblings, spouse, children, and grandchildren. This notice must be delivered by an adult over the age of 18 who is not the petitioner. When delivering the notice, both the Notice of Hearing and the Petition for Appointment of Conservator forms must be provided.
Court Investigation and Evaluation
During the court’s investigation, they will interview both the petitioner and the proposed conservatee to determine whether the proposed conservatee lacks the capacity to make their own personal or financial decisions. They will also review medical records, make assessments, and interview agencies or other family and friends that are providing care to the proposed conservatee to make their determination.
While evaluating the proposed conservatee, the court investigator will also assess the proposed conservator’s qualifications and review any objections the proposed conservatee or their family might have. This evaluation will determine whether the court finds the proposed conservator suitable and ensures they have no history of financial abuse, fraud, or general misconduct that might exclude them as a conservator.
As part of the evaluation, the court investigator will provide the judge with an impartial analysis of the proposed conservatee and conservator, allowing the judge to make an informed decision and determine whether taking the path of a less restrictive option, such as a power of attorney, would be a better decision for the interests of the proposed conservatee.
The Court Hearing
During the hearing, the judge will review all evidence, the court investigator’s report, analyze any objections raised by the proposed conservatee or their family, and determine whether a conservatorship is needed.
After reviewing all the information, if the court approves the conservatorship petition, it will issue Letters of Conservatorship that grant the conservator legal authority to make decisions on behalf of the conservatee. The court can also enact limitations to restrict the powers of the conservator, depending on the needs and best interests of the conservatee. The petition can also be denied, with the judge recommending less restrictive options such as a power of attorney or supported decision-making in place of a conservatorship.
If the proposed conservatee is in immediate need of assistance, the court can appoint a temporary, usually governmental, conservator to arrange for temporary care, support, and protection of the conservatee and their property until the process to appoint a permanent conservator can be finalized. The powers of a temporary conservator are greatly limited from those granted to a permanent conservator, as they are not intended to create long-term solutions and decisions for the conservatee.
Ongoing Court Supervision
Under California Probate Code section 2401, a conservator must prudently manage the assets and finances of the conservatee, avoiding dealing with companies or investments in which the conservator has a self-interest, and avoiding speculative investments. An Inventory and Appraisal form listing all assets under the control of the conservator must be submitted within 90 days of being appointed, and it must be reviewed by a court-appointed probate referee.
Depending on the structure of the conservatorship, California Probate Code section 2620, the conservator must submit either annual or biennial accounts of income, expenditures, and all financial transactions for review by the courts.
The petitioner filing for conservatorship must pay all the court fees required for filing, which is usually in excess of $400 in California. Depending on the value of the conservatee’s assets, the court might also need the conservator to post a bond to show good faith and intentions towards the conservatee’s best interests. The courts retain oversight of the conservatorship and require regular accountings of the financial transactions performed by the conservator on behalf of the conservatee. Large financial transactions, such as real estate deals, also require court approval before they can be performed.
Downsides of Probate Conservatorship
Probate conservatorship can be a useful way of handling a loved one’s affairs for them, but it does have drawbacks. When determining whether a probate conservatorship is the best strategy, estate planning attorneys such as the ones at The Dayton Law Firm, P.C. can help you weigh options to make an informed decision.
Emotional and Financial Costs
Petitioning for conservatorship is a long and public process that can add to the stress of seeing to a loved one’s needs. After filing for a conservatorship hearing, it can take 45 to 60 days before the hearing occurs. During this time, all relatives of the conservatee and the conservatee themselves must be informed at least 15 days in advance of the hearing so they can file objections if needed.
There is no guarantee that the process will be resolved quickly, as there are often court delays, and the investigation process done by the court could take longer than planned, depending on the complexity of the proposed conservatee’s needs.
Over time, court and legal fees accumulated by the conservatorship process, with the annual filings and reviews, and the court oversight over significant financial or medical decisions will add up, and can be quite costly and taxing. These fees are typically paid by the conservatee’s estate, but if the funds are not available to cover the costs and maintain the health and interests of the conservatee, the conservator will have to assume the financial obligation.
Loss of Autonomy for the Conservatee
The conservatee, once the conservatorship is in effect, will lose their decision-making rights in line with the specifications of the conservatorship. For individuals who have lost their capabilities to make their decisions due to injury, age, or disease, this can be an immense blow to their dignity and sense of self. This can lead to breakdowns in familial relationships, especially when a child has to assume control of a parent’s decisions.
Family Conflict
Whenever finances are involved, there is always a risk of disputes between involved parties, and a conservatorship is no different. If the conservator makes a decision that other family members or friends of the conservatee disagree with, arguments over control and the decisions can erupt, causing strife and contention amongst individuals. In some cases, a disagreeing party might contest the decisions in court and request a conservatorship modification under Probate Code section 1861. This will increase legal costs and court fees, as the conservator will have to argue against the claims and provide evidence to justify why the conservatorship should remain unchanged.
How to Avoid Probate Conservatorship Through Estate Planning
Estate planning while in a state of sound mind can help individuals avoid probate conservatorships in the event they are incapacitated and unable to make their own decisions.
An estate attorney at The Dayton Law Firm, P.C. can walk you through your options in estate planning that will ensure that your wishes are carried out.
Durable Power of Attorney for Finances
Drafting a Durable Power of Attorney to allow a trusted person to handle your financial decisions in the event you are incapacitated can protect your financial interests and ensure your wishes are followed. The Durable Power of Attorney must be drafted while you still have the capacity to make sound decisions, so it won’t be contested in court, and your wishes are made clear. In California, you determine the scope of the Durable Power of Attorney. It can be as broad or specific as you wish, and an estate attorney will walk you through the best options for your situation.
Advance Health Care Directive (Medical Power of Attorney)
A Medical Power of Attorney protects your wishes for your healthcare and end-of-life care should you be unable to express them when the time comes. Ensure that the agent you name is trustworthy and willing to set emotion aside to fulfill your wishes as they are laid out in your advance health care directive. Your Medical Power of Attorney can specify what actions your agent is authorized to make for you, including end-of-life care, surgical procedures, diagnostic tests, or choosing a medical facility for your care.
Revocable Living Trusts
A revocable living trust allows you to specify your wishes for how you want your assets managed in the event of incapacity or your death. It allows you to remain in control of your assets until you can no longer, at which point management will pass along to your named alternate trustees.
Once an individual passes, the successor trustee(s) named in the revocable living trust will assume management of the trust’s assets and ensure they are managed according to the terms of the trust and are dispersed as you wished to subsequent beneficiaries.
Creating a revocable living trust allows you to avoid both probate and conservatorship. The trust stipulates how your assets are to be managed and dispersed at the time of your death, eliminating the need for a probate process to determine the correct allocations. It also states how your assets are to be handled in the event you are incapacitated, avoiding conservatorship to manage those decisions, as they’ve already been made and recorded in the trust.
Naming Agents and Trustees Wisely
It is paramount that you choose responsible individuals or a professional agency or law firm to act as your trustees or agents in the case of incapacity. They will make financial and personal decisions on your behalf, and you need to be able to trust they will act in your best interest.
In the case that one of your named trustees or agents might become unavailable, have a list of successor or alternate trustees listed in your estate planning documents so there is no confusion or uncertainty, and conservatorship can be avoided.
Joint Bank Accounts and Beneficiary Designations
A joint bank account inherently gives another person equal control over the finances in the account, which is beneficial when your goals and interests are aligned. Still, it can be detrimental if your decisions are in opposition.
You must also be careful when designating a beneficiary on an account, as a trust does not supersede a pay-on-death beneficiary designation on an account. If the intended purpose of appointing someone as a POD beneficiary is to avoid probate, ensure they can be trusted to fulfill your wishes when it comes to allocating estate assets, including on the POD account, once you pass.
Setting Up a Caregiving Plan
As part of your estate planning, ensure that caregiving plans are detailed in the form of written instructions. Review them with an estate attorney so all housing arrangements, emergency contacts, and care wishes are documented and clear for your agents to follow.
Long-Term Care Insurance and Benefits Planning
Including long-term care insurance and benefits in your estate planning is a prudent decision. Having insurance as a financial support for your long-term care needs will reduce your vulnerability, which can help you avoid court intervention in the form of a conservatorship.
When Conservatorship Might Still Be Necessary
There are instances where, even with proper estate planning, the court may still decide that a conservatorship is necessary. These instances can include elder abuse, undue influence, familial disputes, or not finalizing your planning.
Lack of Planning Before Incapacity
Suppose no estate documents exist to express your wishes. In that case, a conservator might need to be appointed to manage your affairs, assets, and look out for your best interests. When urgent action is needed, families can petition the court to appoint a temporary conservator to oversee a person or estate until a formal conservatorship can be established.
Suspected Financial Elder Abuse or Undue Influence
If a family member or friend suspects financial elder abuse or undue outside influence affecting an incapacitated individual, they might petition for a conservatorship. One of the purposes of a conservatorship is to protect a vulnerable adult from exploitation, neglect, or financial mismanagement by family or acquaintances who are seeking to abuse their relationship for selfish purposes.
Disputes Among Family Members
In cases of severe family conflict, a petitioner outside the conflict might reach out to the courts for assistance. Conservatorships can be administered by a public guardian, who will serve as a neutral supervisor appointed by the court to manage assets and avoid familial conflict.
How a San Jose Estate Planning Lawyer Can Help
The Dayton Law Firm, P.C., specializes in estate planning and will provide comprehensive guidance on POAs, how to draft advance directives, and establish a trust that will protect your assets and enforce your wishes. Estate planning is complicated, but you don’t need to navigate it alone. The attorneys at The Dayton Law Firm, P.C. will guide you through every step, ensuring you feel confident and secure.
Neither laws nor life are static, and as circumstances and the legal code change, it is essential to have a trusted attorney review your estate documents to ensure your wishes are accurately expressed and your documents remain current with the law.
Conservatorship petitions can be costly, stressful, and arduous. Should intervention become unavoidable, The Dayton Law Firm, P.C. can represent you during the process to make it a little easier. Our estate planning attorneys will guide you through each step to avoid delays and issues that might result in further disagreements or troubles.
Frequently Asked Questions (FAQs)
Is conservatorship the same as guardianship in California?
No, conservatorships are for adults over the age of 18 who have been incapacitated; guardianships are for minor children who have parents unable or unwilling to take care of them.
Can I avoid conservatorship just by having a will?
No, having a will on its own will not help you avoid conservatorship. Full estate planning, including POAs, trusts, and advance health care directives, can help you avoid conservatorship.
What if my parent already has dementia—can they still sign a power of attorney?
They might be able to, it depends on the degree of dementia and their legal capacity. Consult with an attorney and medical provider to determine the answer for your specific case.
Who monitors the actions of a conservator?
The court system monitors the actions of a conservator and regularly reviews the actions of the conservator and whether the conservatorship is still required.
Can a conservatorship be challenged or terminated?
Yes, they can be challenged or terminated.
Plan Now to Protect Your Future
Proactive estate planning now will help you avoid unnecessary and costly court involvement. Using the legal guidance of the experienced estate attorneys at The Dayton Law Firm, P.C., will help you navigate comprehensive estate planning to protect your assets and enforce your financial and personal care wishes. Contact The Dayton Law Firm, P.C. today to utilize their elder care and estate planning services and take the stress out of future care needs.