Don’t Be Like Uncle Jim

Uncle Jim thought he had his affairs in order. He had a living trust prepared, and the attorney properly prepared and recorded a new deed changing the house title to Uncle Jim, Trustee of his trust. Uncle Jim also made sure his brother was the beneficiary of his trust, with two favorite charities each receiving $10,000.00 upon his death. He and the lawyer talked about a “contingency plan”– if his brother was deceased, then the trust assets went to his two nephews. Even though Uncle Jim had a living trust, he still left a mess when he died.
First, Uncle Jim decided to reduce the amount the charities would receive AFTER his trust was signed and notarized. He didn’t call his attorney to make the change. Instead, he wrote on the original trust document not realizing he needed to sign a notarized trust amendment. A handwritten change on the document does not properly amend a trust.
Second, Uncle Jim made his brother the 100% beneficiary of his life insurance, IRA, and bank account. His brother died shortly before Uncle Jim, so there was no living beneficiary designated on these assets when Uncle Jim died. Since the total amount exceeded $184,500.00, a full California probate proceeding was required using Uncle Jim’s “pour over will”, to ultimately fund the proceeds into his trust. The probate process takes approximately one year, and is very expensive. Probate…exactly what Uncle Jim wanted to AVOID.
Getting affairs in order is a legal matter, with many details and formalities. It is important to have proper legal advice, and when there are changes or questions, consult with your attorney. Otherwise, you may end up like Uncle Jim.
For more information, please contact the McNamara Law Firm at (661) 287-3260 or visit www.theMcNamaraLawFirm.com.