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Default – How to Easily Lose (Or Win!) a Lawsuit

[Very rough transcript of video]

Hey everyone this is attorney Brian Russ from Brian Russ Law, Inc.  I’m a California lawyer dealing with California cases. And today’s video is on how to easily lose or win a lawsuit.

And so I’ve been waiting to do this video for a while because you see these examples come up in the news every so often about how people easily win or lose lawsuits, because of what’s called a default judgment or I should say it’s a default, and later it gets entered into a default judgment. So you win or lose by default.

And so today, I read the news there’s an example that came up I think just yesterday, is out in New York it was Joe West v. Paul Lo Duca. If you’re a sports fan, you would recognize Joe’s name. He’s one of the most recognizable umpires in Major League Baseball today. You know, people have lots of opinions on Joe, and, you know I think one of my favorite baseball videos involves Joe. And I’m an avid Giants fan. So, you would know that there’s a history between Joe West and Madison Bumgarner, and it’s just a great, you know, it’s a great thing but anyways.

Apparently the way this case worked. Was that Paul Lo Duca said something about Joe West on a podcast Paul’s a former major league baseball player and so he shared an anecdote, and Joe sued for defamation.

Now before I go further into the video I do have some disclaimers I have to share. So the first disclaimer is that this video is not legal advice. This video is just for informational purposes only. This is not to advise you on any case that may be brought against you or how to bring a case against anybody else. It is literally just informational video only. If you need help with the situation with a legal situation, I encourage you, and I’m telling you, you need to retain an attorney to help you with your situation. All lawsuits all disputes are incredibly fact specific and law specific, and one of the key things I want to say about this video is that the example I’m going to be using occurred in New York, it’s a New York lawsuit.

 I’m a California lawyer and so I’m going to be applying my understanding of California law on an example that happened in New York. So the facts may not even line up against the law, because, in my understanding of the West v. Lo Duca lawsuit was that there was, it wasn’t under California law, it was under New York state law.

So again, don’t rely on YouTube videos for legal advice, this is for informational purposes only. Get an attorney to help you with your situation. Additionally, by this video you are  viewing no attorney client relationship forms. And finally, to the extent that this video can be considered an advertisement, you should consider an advertisement I’m an attorney and I sell my services. Part of the reason I do these videos is for you to learn a little bit more about me learn about how I work, learn about, you know, basically look at me and go “Hey, that guy seems alright I’ll hire him to help me with my case.” So again, this video is an advertisement.

And the example at hand. And the purpose of this video is how to easily lose or win a lawsuit and so right I said that the example is we’re using Joe West v. Paul Lo Duca. Lo Duca, the former MLB player had the podcast, had an anecdote about Joe, I’m not exactly sure what it was but there was an anecdote there that Joe essentially said hey that’s false, not only is it false it is defamatory it has harmed me it’s harmed my reputation. And so Joe has filed a lawsuit against Paul Lo Duca. And my understanding of the cases and again this is just after reading a few stories on it this morning, is that essentially Joe filed a lawsuit, and then LoDuca never responded. There was never an answer there was never a reply there was nothing you know again I don’t know exactly the civil procedure, you know, terminology for New York case, but in California if you file a lawsuit to get somebody if you serve them with a summons a copy of the complaint, then they are required within so many days to file an answer and so it sounds like the the analog of New York law, New York Civil Procedure did not occur. And the court entered the default in favor of Joe.

So essentially the easiest way to lose a lawsuit, and I counseled clients on this all the time, essentially, I may get people that call me and they say, “hey I’ve been served with a lawsuit. I got it two months ago, should I do something about it?”, It’s like well shoot yeah of course you should, by that point two months out, that client or potential client has likely already exceeded the amount of time to respond to file an answer. You know and so if you get served with a lawsuit, like, immediately you need to be contacting an attorney to help you with that suit to give you advice to retain somebody to help you with it because there is a short statutory window, where you have time to file an answer. Now a lot of times I understand, you know, people will file an answer, it’s a very vague, general answer where they deny everything and it just gives them, you know, additional time but you know that’s generally how people start these things.

So people you know they’ll say, you know, what is the default? So sometimes what’ll end up happening is you don’t respond, maybe two or three months later. So say you’ve been served a lawsuit. You know it exists, you do not respond, or maybe you don’t know it exists, maybe you weren’t even served but you get a paper in the mail that says something to the effect of, you know, a request for entry of default. A request for entry of default is essentially the party, the plaintiff,  who’s filed the suit the plaintiff is going to the court and saying, “Hey, this guy the defendant never responded were requesting a default judgment.” And the court, you know can take it under advisement and they can, you know, they usually decide, yeah, hey, like, you know, they might file the default against the other party because the other party failed to respond. And that’s my understanding of what happened in the Joe West v. Paul Lo Duca case that La Duca just never responded. And he got served or allegedly served again I don’t know the facts specifically it’s just what I read in the news but you know sound like, you know, Lo Duca was served and West, you know file for default because because Luca never responded and so in that case what ends up happening is, and in this case, you know, West won automatically – the plaintiff wins automatically – the court says yeah you know you did enough you know you’ve, you’ve presented enough evidence, you know, default, you win.

And so, you know, people. I get asked all the time like how can I avoid a default. “How can I, you know, make sure this isn’t an automatic loss?” Well, I mean it’s pretty easy you respond you file the answer. The easiest way to lose a lawsuit is by doing nothing. And generally, oh you know when you do nothing and a default entered, you know, I know in California at least a common tactic is that once the default is entered the opposing party will wait 180 days, or even six months to even try to collect on the default because in California, under our Code of Civil Procedure here there’s a, there’s a way that you can make a motion to set aside a default. You can make a motion to set aside a default judgment. And you can say essentially you know I wasn’t served properly or this was, you know I didn’t respond because of a mistake or I didn’t know what was going on, and the courts generally tend to liberally grant those motions to set aside default because essentially there’s this theory that you know is better to settle a dispute on the merits rather than on a procedural tactic, but again there’s a window of time where you get, you know, I think it’s 180  days or six months or something like that, don’t quote me on it but there’s a window of time in California where you can file for this motion to set aside and so a lot of times what happens is you have plaintiffs who, who went on the motion, or just say they went on the default they get the default and they sit there they’re quiet for six months they wait for that statutory window to pass and then they start collection, you know enforcement proceedings wage garnishment etc. And so you have to be really careful about, you know, again, how do we, how do you avoid default, you respond, you actively engaged in a lawsuit you try to get it, you deal with it.

And so again, essentially, you know, like I said before, you know what to do. Default Judgment is entered against you, you know, again, talk to an attorney gets case, in fact specific information for your case. If for your situation. There may be a window where you can file for a motion to set aside the default, you know, the court, you know, in my experience, what I’ve seen is the court will be likely to do that. If you can, you know, establish that when you weren’t served or, you know you had no actual knowledge of the lawsuit or you had a misunderstanding of what’s going on. But you know, in a case, like where it’s, you know, national headlines where you kind of know that the other party knows they’ve been served and they don’t do anything about they just sit on it, you know, put yourself in the court’s situation. They’re probably not going to sit there and say oh yeah well you know we’ll set aside the default. if the other party had full notice and full awareness of the suit, and they didn’t respond well, that’s kind of on them. That’s their fault. So that’s it for today’s video.

If you need help with a situation, or you want to, you know, you know you need help you maybe you got a default against you and you’re learning what you can do feel free, and if you’re in California again I’m a California lawyer and helping people in San Francisco, Los Angeles, San Diego, Sacramento all of the state, but if you have a you know California case where you have a default judgment entered against you, and you’re trying to figure out what to do feel free to give me a call. My number shown on the screen again Brian Russ from Brian Russ Law, Inc. And thanks that’s it for the video today.

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What is A Pet Trust? And Why You Need One.

(Rough) Transcript of Video:

Hey everyone, this is Brian Russ from Brian Russ Law, Inc. I’m an attorney, out in California serving California people so, most times, I referred to myself as an estate planning lawyer, estate planning law generally covers creation of wills and trusts, and you know litigating disputes that have to do with them, you know, I want to say that most of the time it has to do with the administration of estates and trusts. Once we confirm you know somebody passed away, and their assets need to be distributed according to those wills and trusts. So, as an estate planning lawyer, one of the things I come across very often is what to do if somebody has a pet, and they want to know, you know, what should I do with my companion, my pet companion, my animal companion? When I pass away, how do I plan for their care, how do I plan for that pets, you know continued care and so on. So that’s kind of the topic of this video is today’s what is a pet trust, and you know the follow up is how pet trust can help in that situation.

So, before we go further, I have a few disclaimers I have to give you. The first disclaimer is that this video does not constitute legal advice. This video is for general informational purposes only and is not legal advice. I recommend that you retain an attorney to help with your particular situation. Again this video is for informational purposes. It’s not created for any particular set of facts or circumstances and is for general information about pet trusts only. The next disclaimer I have to give you is that no attorney client relationship forms by your viewing of this video. Again no attorney client relationship forms by your viewing of this video. I am not your attorney. You are not my client. Final disclaimer is that this video is an advertisement to the extent it can be considered an advertisement, it should be considered an advertisement. I’m an attorney and I sell my services and part of the reason I do these videos is to show you that I know what I’m talking about, and hopefully, you know, get you to contact my office, so this video is an advertisement.

Now on the topic of the video. Pet trust key points right so that is again what we’re talking about pet trusts, you know, this is all about different types of pet trusts and how you deal with types of pets. What kind of considerations you need to make for helping your pets, whether it’s a canine feline your equine bovine, whatever.

So the first thing I always recommend when people are setting up pet trusts, you know, is to make sure that your pets are named, so people know which pets you’re referring to, and keep it updated. Now, you know, of course you don’t want to just name it and say you know this pet trust is just for my one dog, you know, Fido. And, you know, forget to include Bingo, and Rover, you know you want to make sure that there’s language in there that lets people know, in any event you get additional pets you want them cared for, or if there are pets with different levels of needs, you know you have that clarified as well.

And this really goes in on the second thing is that you need to keep it updated. Right, so I mean I always recommend to people that they update their trust or at least read the trust, to see if it needs to be updated, I say do it once a year. And, you know, that’s a great day to do it on, you know, make sure your pets are named correctly updated as needed. The second thing that generally people see in pet trusts, you know, let me back up for a second.

But you’re watching this, and you’re thinking, what the heck is a pet trust when we haven’t explained what a petrest is yet. A pet trust is, is a way that you can set aside assets or cash (cash is assets) but you can say, set aside assets for the benefit of your pets to ensure that they’re cared for after your passing. And so it’s a way that you can set up a trust for that, you know, the, the pet your companion is the beneficiary of the trust, and so it gives somebody, some guidance, so instead of saying, you know, you know, when I pass away my dogs go to my sister and I hope my sister cares for them, you say, “Okay, sister. You’re getting the dogs. I’m giving you $40,000. I’m giving you $40,000 In addition to dogs. And this is how you’re supposed to use that money.” And it allows you to give very specific prescriptions on how that money is to be used, how associated with care of the animals house was used for the disposition of the animals after they passed away, and so on.

What it also provides is it provides is it gives a little bit of, you know cover essentially to the trustee the person who’s responsible for the pet trustee, you know, in general the person who’s the trustee of the pet trust is also the person who’s caring for the animals, but it gives them some, some guidance, you know from you saying this is how I want them cared for and it also gives them some coverage so if somebody, you know, comes around and says hey you got $40,000 or whatever, you know, you owe a debt that person can say “No, that money is not for me, that money is for the pets, you know that money cannot be claimed.” You know in a bankruptcy or so on because it’s a completely, it’s held for a completely separate interest. So again a pet trust is a way that we can set aside assets for the care of our pets, after we pass away, that also, you can provide guidance to the trustees of the pets to show that they are cared for in the way that the pet owner would have wanted him to be cared for.

 Now, going back to topic so you know I recommend that you describe the standard of care, as to what how you want the pets to be cared for. So you know that is saying, essentially, hey, you know, I want my pets to receive this, You know, X Brand of dog food or Y Brand of cat food. It allows you to really describe, you know, they need to be going to the vet once a month, you know they need to be on dialysis, they need to be given their CBD gummies, you know, whatever it is you can describe the standard of care that you want your pets to have. It’s generally the standard care that you provided them you want them to be cared for.

The next thing is I always recommend that you include alternative care providers. So again, say you’re giving your dog to your sister. You know it’s inclusive language and that says you know sisters are unable to take the dog, or whatever your, your second and third in line, I always say you give up to three people, so that way there’s always plenty of cover there so you don’t have to get the quarter mile to say okay well who’s going to get the pets and who gets the money and so on like that. So, always give alternative care providers.

The next key point is I always recommend that you, you, be very clear about what you want for the disposition of the remains of your pet. So whether it is cremation or burial or whatever it is, be very clear, make sure the money you have in the trust should cover that. Right, so it just ends up being a math problem where you say okay like I know my dog probably or my cats have four or five years left you know 5000 bucks a year for food, medical expenses stuff, you know, two or three grand for, you know, disposition remains you know you can call around and get quotes on this, so that what you say, you know at the end of the day you say okay there’s you know, 40,000, or so, you know 10,000 Whatever the number is. Now, don’t quote me on this, I believe California law says that if there’s more than $40,000 in assets in the pet trust, then there is a requirement for an annual accounting by the trustee so if you keep it below that number administratively I think it’s a little bit easier record keeping. Don’t quote me on that. Again it just popped into my head, but I believe there is a threshold, I think it is $40,000 where accounting is required for the pet trust

And final point I have is to make sure there’s some language in there that describes what you wanted to residue of the trust, that means the residue of the pet trust means whatever’s leftover so after the pets been cared for after the pet is, you know, passed away, and everything if there’s remain some money in the account. make sure you clarify who’s going to get that residue the trust, I see a lot of times people just say no if there’s residue the trust to give it to the ASPCA give it to your local animal shelter or something like that, because it’s easier sometimes, you know, you don’t want to commingle it with the rest of the trust, because you know maybe seven or eight beneficiaries on there ends up being an accounting nightmare to say you know everybody gets $12.43 Because you get attorney involved that it costs more to distribute it.

So that’s it for the video today, again I think pet trusts are honestly one of the most common issues that I see with pet owners. It’s always a heavy topic of conversation because they want to make sure their companions are cared for. And I think, you know, the pet trust is generally the way to do it. If you want to reach out, talk to me about this, this is great. Again my name is Brian Russ I’m an estate planning lawyer, my home base is in Sacramento, California but I serve people all throughout California so if you’re looking for an estate planning lawyer in Los Angeles. If you’re looking for an estate planning lawyer, you know, in San Francisco, reach out to me, I’m happy to talk to you about all this, And that’s it. Have a great day everyone.

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Top 5 Tips & Tricks for California Small Claims Success

Transcript of Video

Good morning everyone. This is attorney Brian Russ from Brian Russ Law, Inc.. Today’s video is on the small claims court and small claims process in California. And this is just some tips and tricks that I’ve picked up along the way. One of the areas of law that I used to practice more heavily but not so much anymore was providing assistance to small claims litigants in California. As you may know, in California and attorney can not represent you in small claims court at your initial trial. However, an attorney can represent you in small claims court on an appeal. So to the extent that an attorney can help you, you know, it’s really at the appeal level, a lot of it, I should say an attorney can help you at any stage of the process because they can coach you. It’s one of the services I provide a small claims coaching and advice services.

So before I go any further though, I have to give you a few disclaimers. First disclaimer is that this video does not constitute legal advice. This video is only for informational purposes only. This video is not updated as changes in the law occur. This video should be considered a static informational video only. To the extent you need an attorney to help you with your situation whether you want to sue someone or you are being sued by someone you should retain an attorney to help you with your situation. Again, this video is for informational purposes, and is not for any particular person or particular situation. No attorney client relationship forms by your viewing of this video, I am not your attorney. I am not your attorney, but you’re viewing this video, and if you’d like to retain me, you may be able to. Going on that you should consider this video and advertisement. This video is advertising, I sell my services and I may be able to help you.

Now, on to the bulk of the video, the Small Claims tips and tricks, these are just a list of some of the tips and tricks I’ve picked up as I’ve advised people, so I just want to kind of share them. Again, this is general information, hire an attorney to help you with your particular situation.

But the first tip that I have, is that you need to name the right party. So if you are suing someone, if you are suing someone or an entity in small claims court, you need to make sure you name the correct party that you are suing, I see this problem come up a lot. If somebody wants to sue a business, you know, usually businesses, you know they have a “doing business as” a DBA. And then there may be an actual corporation behind the business. So you need to make sure to sue the correct corporate entity. You can find this information generally online at the Secretary of State’s website. Sometimes the business’s website will tell you who the corporation is. A lot of times what I see happening is people you know, especially comes up with contractors or construction, they sue the person actually swinging the hammer, instead of going after the business, you can usually go after both, I always recommend going after as many potential liable parties as possible, you don’t want to leave money on the table, so to speak.

Now, the next step, so say you’ve you figured out the right parties, and you filed in court correctly, the next step is to serve the other party or parties correctly, the law is very clear on what constitutes appropriate service. And one of the key things is that you cannot serve the other party. You as a party as a party litigant cannot sue the other party. So whether you’re the plaintiff, or you’re the defendant, you cannot serve somebody, serve them, court papers, serve in the summons, serve them notices, memos, etc, I should say, declarations, etc. So you need to follow the rules. When it comes to serving either party, I recommend honestly just hiring a process server, they know what to do. These people are professionals, you can tell them what you need to ask them to file the proof of service with the court and don’t even try to figure it out. Just let the process server do it for you.

The next tip I have is really just you know, you need to prepare your evidence cleanly for the judge. You know, one of the issues that I see come up a lot in small claims court is that people think they can just take a stack of papers and give it to the judge and the judge will kind of figure out what’s going on. And that’s really not the case. You know, you judges are smart, they’re great people, and I have nothing against judges, but they have a lot of work to do and the more compelling your argument can be because you put forward your best case, that’s what you should focus on. I recommend, you know, maybe Google or look up how to prepare a small claims trial brief, you know, where you outline the issues, you outline the law, you outline the evidence, you prepare a nice package for the judge to look at. The judge may look at it, and I’m not saying that, you know, it’s going to be perfect, but you know, it’s something that would be helpful for you.

The next thing is, you know, when you get to the Small Claims trial, you should be polite. Be polite in court. You know, the judge will tell you when you can speak, the judge will ask you questions, you know, the Small Claims Tribunal In California, they are not like these TV shows and videos where people get up and start screaming, or, I should, say they can be like that. What I found is that most time the judges do not appreciate that and they want an orderly proceeding where everybody can stay calm and discuss the situation, discuss the situation, discuss the facts, you know, in a calm, collected manner.

And finally, you know, one of the things I recommend is that you understand your appeal rights. In California, in small claims court, the party bringing the case the plaintiff, if they lose on the first trial, they’re done, they have no appeal rights, the case is over. Now, the defendant, so the party who did not bring the case, the party who is defending the case, if they lose, they do have the opportunity to appeal. So before, if you’re the plaintiff, before you start with this, before we start the case, you have to understand that you take one shot. And it may be worth, you know, it having a discussion with an attorney about the different possibilities, different ways to resolve the matter outside of small claims court, you know, it’s one of those trade-offs in small claims court, you get a faster, quicker turnaround time by the court, but you trade off, you know, certain rules of discovery, you know, discovering evidence, you trade off certain rules of that, you know, appeal rights and so on.

So, you know, I recommend you speak with a legal professional to understand your appeal rights in case that’s of concern to you. Okay, that’s it for the video today. You know, my websites on the screen on my phone number if you would like to, you know, talk more about retaining my services to help you with a small claims court. I’d be happy to chat with you about that. All right. Thanks, everyone. Have a good day.

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How Homeowners Benefit from a Revocable Living Trust

Hey everyone, this is attorney Brian Russ at Brian Russ Law, Inc. You can find me online at BrianRussLaw.com and ProbateProbateProbate.com. My phone number is (888) 632-6623. And so today’s video is about how California homeowners benefit from a revocable living trust.

I’m sure you’ve heard a lot of things about setting up a trust and why they’re good or have questions about what’s a living trust versus revocable trust versus an irrevocable trust. And so today’s topic, really, this video is intended to cover about 95% of homeowners in California. For people that generally own one home that they live in. It’s a personal residence. And, you know, the topic of this video is why setting up a revocable living trust, you know, benefits those people.

And so, before we get into further detail, right, I have to give you the disclaimers, the State Bar says I have to tell you these things and I’m happy to tell you them so the first one is that this video does not constitute legal advice. This is for informational and advertisement purposes only. This is not legal advice. If you need help with your particular situation, or if you have particular questions about what type of trust would be best for you, or how to best set up a trust for you and your loved ones and your family, you need to retain an attorney. Furthermore, by viewing this video or reading this post, you have to know that no attorney client relationship forms. I don’t know who’s watching this, anybody could be watching anywhere in the world. No attorney client relationship forms by your watching this video. And as mentioned before, this video and this post is an advertisement, it should be considered an advertisement. I’m an attorney, I sell my services, I most likely would like to work with you if you want to set up a revocable living trust in California, for California property, and you’re a California resident, so feel free to reach out to me.

Now to get to the topic of the video. Right, the whole thing is the benefits of revocable living trust. And really, this video is focused on how it benefits homeowners, there’s lots of other benefits to a revocable living trust, especially to people who maybe have a child or loved one with special needs. There’s benefits to a revocable living trust if you have children who are very young, or maybe they are, you know, adults, and but maybe they’re not so good with money or they have other questionable spending habits. There’s lots of benefits to a revocable living trust. But again, this video is focused on, you know why it is beneficial for a homeowner to establish revocable living trust, and then to put that property into the trust.

So the major, the major benefit of establishing revocable living trust for a homeowner, is that basically, by putting a property in the name of a trust – by putting your real property, so your real estate, into the name of the trust is that it avoids necessary probate proceedings triggered by virtue of it being real property that needs to pass on to your heirs. So you know, I know a lot of attorneys will tell people, they try to use this whole thing about avoiding probate these as a scare tactic. I will tell you that I do not think probate court is scary. I do not think it is bad. I do not think it is unfair.

I do think going through probate court is expensive, there’s unnecessary expense, it is delayed. There’s unnecessary delays in the process. There’s just unnecessary requirements. That I mean, if you want your family to go through it, that’s fine. But most people, nearly every single client I’ve ever talked to, every single potential client I’ve ever talked to one of their main goals of setting up a state plan is to have the most efficient administration of their estate, so that their heirs inherit as much money in property as possible. They want as little as possible to go to the government. Right. And so the court is a branch of the government.

So that’s why we you know, we set up these revocable living trusts. So in California, there are specific statutes that say, you know, an estate has to go through probate proceedings for their full probate or simplified probate, if there’s real property involved. And if that real property is worth certain dollar amounts, I think it’s something like, you know, there’s there’s a threshold at around 60,000, there’s a threshold around 160,000. I mean, these things are generally pegged for inflation, or they increase with statute.

Don’t quote me on the exact numbers. But essentially, if you own real property in California, or an interest in real property, so you own a quarter, quarter of a house or you own half of a property or whatever, you probably have to go through probate unless that interest is transferred into a trust. And so again, you’d have to go through probate proceedings, your family have to go through there just takes extra time, unnecessary time because there’s other ways that we can deal with these things.

And there’s other ways that are more efficient. The other benefit of setting for revocable living trust and avoiding going to probate court is that it allows for private administration of your estate. If you go through the probate process, or as you say, if your family has to take your estate through the probate process in probate court, that becomes public record. Anybody can go see who’s inheriting what, what happened, and a lot people just want their affairs to be private. They don’t want it to be public record. And that’s, that’s totally fair.

If you set up a revocable living trust, it allows the property to pass outside of the probate court just passes through trust administration. And there are some, you know, there’s always the possibility that a trust administration can go sideways, there can be dispute, and we end up in court, that’s always possibility. But most cases that I’ve seen is that you can do this private trust administration without having to go to court, you have a couple of brothers and sisters, everybody agrees to the distribution array. Now, as we get into third or half or quarter, whatever it is, and you avoid having to go to court, you avoid having to put this out in public record for people to see in the future.

Because one, it’s public record for both the estate, you know, for the decedent, it’s public record for the beneficiaries, their names are on there. So if you have creditors and so on, you know, and they’re running a search, they can see that you are inheriting, you know, potentially large sums of money. And so again, there’s a benefit of the revocable living trust in that it allows for private administration of the estate.

And third, this is really, why I hammer home just setting up a revocable living trust, moving your property into the name of the trust allows for a more efficient administration of the estate, right? I keep harping on this, the court is fair, you know, it’s legal. All this is just not as efficient as doing it privately. And so, again, that’s one of the major benefits. Additionally, as I said, there’s the private administration of it as well. So, if you have any questions about setting up a revocable living trust, so you have property in California, you own, you know, your home, you know, feel free to reach out to me, you know, my contact information is here, BrianRussLaw.com, you can go ahead and call (888) 632-6623 and set up at a time to talk with me. I serve clients all throughout California. So even though I’m based in Sacramento, that’s my home base. I serve clients in San Diego County, Los Angeles County, up North, Bay Area, all over the state. So feel free reach out and we can set up your living trust.

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Fund Your Trust & Name Your Beneficiaries! (Part 1 of 2)

There’s no point to having a living trust if you don’t fund the dang thing! The trust operates for the benefit of your loved ones and heirs, but it’s useless unless your assets are moved into the trust.

The primary goal of the living trust for most folks is to avoid probate. And to avoid probate, you need to have the bulk of your assets either in the trust or titled with a named beneficiary. So I’m going to outline here the major things that should either be named in the trust or have designated beneficiaries.

Your Home and Other Real Property.

Retitling your home and real property in the name of your trust is always recommended to help avoid probate. Retitling your home is a fairly straightforward process: establish your trust, complete a trust transfer deed, and record the deed with the county (along with the PCOR form). And that’s it!

Of course, complications can arise with the recording of the trust transfer deed if the deed isn’t completed correctly or if there’s an obvious problem with the chain of title. You can also avoid probate on real property by using a transfer on death deed, but I generally recommend against transfer on death deeds.

Bank Accounts.

With bank accounts, I’m referring to general bank accounts (e.g., Checking, Savings, Money Market, CDs). I’m not referring to brokerage accounts or qualified retirement plans – see the next post for more on those topics. There are three ways to set up a bank account to avoid probate. The first two deal with the living trust and the third doesn’t involve it at all.

So, for putting bank accounts into a living trust, there’s generally two schools of thought. Neither are wrong. First, some folks believe that all bank accounts should be in the name of the living trust. This allows the trustee to access the bank account. The upshot here is that if you’re the original trustee and you become incapacitated, then the successor trustee can access the account. This circumstance would block whomever is your designated agent via the durable power of attorney from accessing the account.

Second, other folks believe that the living trust should be named as the beneficiary of the bank account. This means that the account would automatically move into the name of the trust upon the death of the account holder. The only caveat here is that if the account holder becomes incapacitated, then the designated agent via the durable power of attorney is the one who can access the account, not the trustee.

Finally, the third option is to just not include the living trust as the account holder or the beneficiary and to name beneficiaries outright. Although naming beneficiaries outright might allow the account to avoid the probate process, it might also lead to inequitable distributions of your estate assets if you have multiple folks you want leave inheritance to and you don’t keep on top of your accounts. Additionally, problems arise if your beneficiaries predecease you.

Tangible Goods.

Tangible goods without title are by far the easiest property to add to a living trust. Your trust should have a schedule of trust assets, likely named “Attachment A” or something similar. List on that schedule a description of all of the tangible goods which you’d like to include in the trust. That’s it!

There are two keys points here. First, you can’t include anything that has a title. So your prized collector’s Harley Davidson will need to be moved into the trust by way of a title transfer coordinated through the DMV. Second, you don’t need to include everything in the schedule, but you shouldn’t neglect this task either. As a rule of thumb, I recommend including anything with a fair market value of over $1,000 in the trust. This is generally furniture, art, jewelry, substantial electronic equipment, and tools.

In the next blog post, I’ll wrap up this topic and discuss how brokerage accounts, business interests, and insurance policies should be established in relation to your living trust and beneficiaries.

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Assets Trusts

Influencing Beneficiary Behavior Through Trust Incentives

Trusts are an important estate planning tool. Trusts allow one to ensure their assets are protected from unnecessary taxation and government interference and, almost just as important, permit intentional asset distribution at defined points.

Unlike a will, where you just say who gets your stuff once you pass away, a trust allows you to establish parameters for how and when your assets are distributed. This flexibility allows the settlor (the person who established the trust) to influence the behavior of their beneficiaries. The settlor can incentivize the beneficiaries by establishing benchmarks that the beneficiary must meet to reach asset distribution. The three most common incentive goals I see are related to education, productivity, and charitable endeavors.

Educational Goals

Asset distribution tied to educational goals is a common tool I see in trusts for young beneficiaries. It is typical for parents to note in their trust that the assets may be used for “college” for their children.  However, it’s important to provide objective boundaries for what constitutes “college” expenses might be allowable under the trust.

First, define what “college” type of school are you referring to when you say “college”? Is a community college acceptable? A four-year state university? A private, unaccredited school in a remote forest? What about graduate school for advanced degrees? It’s important to define what would constitute “college”, but also take into consideration the beneficiary and what path they might pursue. Don’t rule out trade schools or college alternatives.

Second, define what “college” expenses would be payable under the trust. Is it just tuition? Tuition and living expenses? What about books, computers, student activity fees? Be clear about your intentions and what is and is not an allowable expense under the trust.

Third, provide benchmarks for the circumstances that would trigger “college” expenses to be paid. Would you want the beneficiary to receive a lump sum payout after they’ve earned the degree? Or maybe provide a payout after each successful semester or quarter? What about GPA? Should they have to maintain a 3.0 or higher?

With educational goals it’s important to remember that you are trying to incentivize certain behavior. It might seem callous to out a GPA requirement on the payout, but you’re trying to get the beneficiary to work toward a goal. You probably don’t want to be stuck in a situation where you’ve paid for 6-7 years of college expenses for the beneficiary to dropout without a degree. Be clear about your goals.

Productivity Goals

You want your beneficiary to learn a work ethic, but you also want to leave them your assets. Those goals are not mutually exclusive. Productivity goals are a good tool to incentivize the beneficiary to work to earn an income before receiving your assets.

For example, you could set up a trust to provide dollar-for-dollar matching distribution. The match would be based on whatever income is reported on W-2s for the previous year. If they earned $36,000 working a menagerie of part-time jobs, then the trustee would be authorized to distribute $36,000.

You could also add other requirements, like the work must be full-time or they must work a certain number of hours a week to earn the trust distribution. Again, you’re trying to incentivize them to work.

The key with productivity goals is to ensure that the beneficiary will engage meaningful employment based on their abilities. The difficulty though is that you can’t predict the future as to what meaningful employment might look like for the beneficiary. If the beneficiary suffers a horrible accident and has trouble holding down part-time work, would you want them to be cutoff from your trust? It’s advisable to allow trustee discretion for productivity goals in the event the beneficiary is legitimately limited from reaching the productivity goals.

Charitable Goals

Charitable goals are the final common goal for incentive trusts. Charitable goals arise when you want to ensure that your beneficiaries do good in the world. This usually arises by requiring the beneficiary to volunteer for a certain number of hours or donate a percentage of their income to defined charitable causes to receive payment under the trust.

Charitable goals also arise in the context of directing ecclesiastical work. Trusts can hold clauses that allow for payout in the event of missionary trips or seminary courses. The key with charitable goals is ensuring that the beneficiary’s charitable work is work that the trustee would support. This is where it’s important to set clear definitions of what charitable work would and would not trigger payment under the trust.

In conclusion, as I mention all the time, it’s critical that you Make Your Plan. Don’t do just what somebody else tells you to do. And don’t use one of those fill-in-the-blank forms you can find online or at an office supply store. I want to work with you to Make Your Plan to ensure your loved ones receive exactly what you want them to receive.

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Problems with the Transfer on Death Deed

A transfer on death deed is a mechanism that can keep a home or other real property out of probate upon the property owner’s passing. The transfer on death deed effectively says, “When I pass away, I want this piece of property to go to so-and-so.” Transfer on death deeds are a completely legal way to transfer real property, but I generally caution against using the deeds. I caution against transfer on death deeds because they are not as dynamic as a living trust and can lead to unintended disputes after passing.

No Efficient Remedy for Predeceased Beneficiaries

To me, the most significant shortcoming of the transfer on death deed is that there’s no way to offer alternative beneficiaries if one of the beneficiaries predeceases the transferor. (see PROB § 5652(a)(4)). This is a major departure from other estate planning tools like a will or a living trust. Wills and living trusts allow you to name alternative beneficiaries in the event the intended beneficiary passes away before you.

For example, say you have two children who each have their own children and you want to leave your family’s cabin to both of your children and their families to enjoy. So you set up a transfer on death deed naming your two children as beneficiaries. Unfortunately, one of your children predeceases you and you don’t change the transfer on death deed. When you pass away, the family cabin would be left entirely to the child who survived you. Your other child would not receive any interest in the property under the transfer on death deed, leaving that child’s family with no legal interest in the family cabin. Under a will or trust, you likely would have said that your child’s family would take an interest in the family cabin if the child predeceased you.

Not Effective for Properties Held in Joint Tenancy

Transfer on death deeds are void and ineffective if a property is titled as joint tenancy or community property with right of survivorship. (see PROB § 5664) An interest in a property held in joint tenancy immediately passes to the other surviving tenants upon one of the tenants’ passing, so it makes sense that a transfer on death deed would not effect a joint tenancy.

A transfer on death deed is similarly ineffective if spouses who own a property together try to establish a transfer on death deed. When one of the spouse’s passes away, the remaining interest would automatically go to the other spouse, making the transfer on death deed void. Finally, the surviving would have to create a new transfer on death deed since they are the only remaining interest holder in the property. Establishing a living trust would solve the joint tenancy problems with transfer on death deeds.

No Way to Designate Shares

A transfer on death deed transfers the property to the beneficiaries as tenants in common in equal shares. (see PROB § 5652(a)(3)). This means that if there are two beneficiaries, each would receive a ½ interest in the property – you’re not allowed to split an interest ¾ for one person and ¼ for another person. This becomes problematic if there is reason to provide unequal distribution.

Difficult to Revoke

Finally, transfer on death deeds have statutory requirements for revocation. Unlike a will or trust that could be revoked immediately by a simple amendment, a transfer on death deed must be signed, notarized, and recorded with the county within sixty days of notarization (see PROB § 5632). Adding extra steps to the process increases the likelihood that the revocation won’t be effective because of delays, missed steps, etc.

In conclusion, I rarely recommend transfer on death deeds due to their rigid requirements and ack of flexibility. You will not find a transfer on death deed as part of BDR’s Four-Part Plan because they are not the most effective method to Make Your Plan.

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Have Minor Children? Here’s Your Estate Plan.

Planning your estate if you have minor children is very different than if you have grown children or no children. You need to make sure your children will be cared for while they’re still minors and that they have financial stability when they each adulthood. The three necessary elements for your estate are a will, a living trust, and life insurance.

A Will.

Everyone needs a will. I’ve been over this before. It’s a simple two-part test: (1) Do you own stuff?, and (2) Are you going to die?. If you answered “Yes” to both questions, you need a will.

For parents of minors, the will’s function goes beyond disposing of your assets. A will also allows a parent to designate guardian(s) for their child. The guardians are the ones who will be responsible for raising the child in the event the child’s parents pass away.

Designating a guardian is an important detail that many people overlook because they think their loved ones will just figure it out. “Well, shouldn’t the kids just go to my [parents/sibling/friend]?” is a question I get all the time. The problem with not designating a guardian is that your loved ones might have disagreements about who you would’ve wanted to serve as the guardian. Then they’re going to get involved in custody dispute simply because you didn’t write down your wishes.

Of course, when determining legal guardianship after a parent passes away, the child’s other parent will be first in line to raise the child regardless of what your will says. And the courts still retain some authority to overrule your will (e.g., the guardian you proposed has developed Alzheimer’s disease and can’t care for themselves).

A Living Trust.

A living trust is an essential tool to protect your children’s future interests because it allows you to designate the ages or stages when your child can receive your assets. Imagine this scenario: Your child is 17 years old when you pass away unexpectedly. Your will designates your child as the sole recipient of your assets, which includes a house, a 401K, a car, and your bank accounts. The assets are managed by a fiduciary for a few months until your child 18, then your child receives all of your assets. Does your child have the tools and temper to handle those assets?

Do you remember when you turned 18? If you had received several hundred thousand dollars, what would you have done with it? For me, I would have stopped working, bought a new Mustang, and probably would’ve blown the rest of the money.

That’s why I recommend parents of minor children establish a living trust to control the distribution of assets to their children. The living trust can include provisions like restricting the use of the trust’s assets for college or necessary medical expenses until the child turns a certain age. Or you can designate that a child receives lump sum payments from the trust at certain ages (e.g., ¼ at age 18, ½ at age 25, and the remainder at 30).

Life Insurance.

The purpose of life insurance is to protect your loved ones’ financial interests in the event you pass away. If you pass away and leave several young children, life insurance is a critical tool to ensure there is money available to meet the children’s needs.

It’s important to ensure you name your living trust as the beneficiary of your life insurance policies. The trust will hold the proceeds from the policy and the distribution of the proceeds will occur according to the trust. If you simply name your children as the beneficiaries, then they will receive a lump sum payout when they turn 18.

A will and living trust are parts of my recommended BDR’s Four-Part Plan, which also includes an Advance Health Care Directive and a Durable Power of Attorney. Reach out today to Make Your Plan.

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Debt at Death

A common estate planning goal I hear is that folks want to ensure their children and grandchildren receive as much inheritance as possible. The folks want to make sure their assets are not consumed by taxes, probate fees, and other miscellaneous costs.

But what most folks don’t want to talk about is debt and how debt is handled at death. It’s an icky subject – discussions about debt can get wrapped up in embarrassment and guilt. But debt occurs, and a plan needs to be in place to deal with it.

To be clear, this post is being written as general information only and is not legal advice for any particular situation.

Foremost, I always recommend planning to eliminate debt. The best way to protect your family from dealing with your debts is to ensure you don’t have any debts! Most folks think estate planning is only concerned with distributing assets at death, but it’s really about ensuring that your affairs are in order in case you pass away (which you will!).

I understand that folks regularly pass away carrying debt. I receive regular inquiries about how to discharge debt at death. And I regularly tell folks that most debt doesn’t just disappear at death.

It’s rare that debt is discharged at death. Some federal student loans can get discharged at death (but not private student loans), and some unsecured debt can get discharged at death. Unsecured debt is generally only potentially dischargeable if the estate has not other assets to pay off the debt.

So the worst thing you can do is hope that your heirs won’t inherit your debt. They will! So Make Your Plan!

If the debt is secured by an asset, like a mortgage is secured by a property, or an auto loan secured by a vehicle, then the loan must be satisfied or else the lender may force the sale of the asset to satisfy the debt.

If you don’t clean up the debt, or at least make a plan for it to be dealt with, then your heirs will be forced to deal with it. And your assets, that you wanted to make sure to pass on to your children and grandchildren, will get tied up cleaning up debt instead of being passed on to your heirs.

In conclusion, the key takeaway is to avoid debt so you’re heirs don’t have to deal with it at death. The debt won’t go away. The lenders will always want their money back. And unless there are no other assets to satisfy the debt, then it’s exceptionally unlikely your debt will be discharged upon death.