Mauriah Conway (00:00)
people don't like a probate process, that court process to transition your individual assets to your beneficiaries is because it's all public record, it's time consuming and it's costly.

probates are often running $10,000 to $15,000 if you have a house that's a million dollars, then you're looking at even more.

Kevin Mathews (00:18)
Unlock the secrets to smart home ownership and financial success with Home & Finance Insights. Whether you're a first-time buyer, seasoned homeowner, or real estate professional, this podcast delivers knowledgeable viewpoints on home financing, insurance, tax strategies, wealth building, and more. Hosted by a mortgage and real estate pro who's been in the game for decades, we interview top industry specialists

to share actionable insights that help you protect, grow, and maximize your home investment.

Kevin Mathews (00:54)
Welcome to another episode of Home and Finance Insights. I'm your host, Kevin Mathews.

I'm a licensed mortgage broker with Empire Home Loans, Inc. I've been involved in real estate sales, investing, property management, and home finance since 1985. Today, we're going to explore a subject that's often overlooked by homeowners and that's estate planning. I'm thrilled that Mauriah Conway is here to share her insights and knowledge. Mauriah is an estate planning attorney with Meisner, Ruggles, Thompson, Inc.

with offices in Sacramento, Roseville, and Davis, We'll get answers to questions about trusts, wills, probate, and the best ways to take title to your home if you don't have a trust. So hello, Mauriah. Welcome to Home and Finance Insights.

Mauriah Conway (01:43)
Hello and thank you so much for having me. I'm excited to be here today and kind of get into some of the stuff and the questions that people have.

Kevin Mathews (01:50)
All right. Sounds great. I'm really glad you're here. most of us know we should have an estate plan, but we tend to procrastinate and put it off until we're older, if at all. So thank you so much for allowing me to have this conversation with you. I'm hoping that this will motivate all of us to set up an estate plan now instead of waiting until it's too late. Okay. So before we dig in,

Mauriah Conway (02:06)
Yeah.

Kevin Mathews (02:17)
Please tell us about yourself. Why did you become an attorney?

Mauriah Conway (02:22)
Sure. So I ended up going to law school and I did an internship at the probate court and I ended up in law school kind of the normal way. had a major, was a religion major, double with political science and this area of law just interested me. So I went to law school and when I was in law school, I wasn't exactly sure what area of law I wanted to practice, but I had an internship at the probate court and luckily,

I kind of found an area of law that I really enjoyed and I've been practicing in this area for 20 plus years. Wouldn't want to say how long exactly. But yeah, I really enjoy it. I'm a certified specialist by the Board of Specialization and estate planning, probate and Trust administration. so that's kind of how I got into it. I fell into it by working as an intern at the probate court in Sacramento.

Kevin Mathews (02:56)
Okay.

So it sounds like you found your calling.

Mauriah Conway (03:14)
I did, I did, I really enjoy it.

Kevin Mathews (03:16)
Good. Good deal. Okay. well let's ask, one of the first questions is what is an estate plan?

Mauriah Conway (03:24)
Yes, so an estate plan has two components and really nobody wants to come and see me. So it's not unusual to not have an estate plan because part of it is talking about the transition of your assets when you pass away and nobody wants to talk about that. But it is a component of estate planning. and those documents would be a trust or a will or beneficiary designations where you're taking your estate and you're identifying who will get it when you pass away.

And the other component of estate planning are sometimes referred to as the living documents. And those are the advanced healthcare directives and the powers of attorney for finance so that you've got somebody that's making decisions for you if you are incapacitated or unable. So two components to estate planning, the living documents that take care of you while you're living, but maybe unable to manage your health or your finances, and then the documents that transition your assets when you pass away.

Kevin Mathews (04:15)
And to do an estate plan, is this something for wealthy people or should anybody that owns a home consider it?

Mauriah Conway (04:23)
Really anyone who is 18 or older should consider it. Now you don't need all the bells and whistles if you're an 18 year old, but I have a student that's in high school, senior graduating and she's going off to college soon and she will be an adult. And so in order for me to speak with the school or if she needs healthcare services and she needs me to be involved, having an advanced healthcare directive and a power of attorney for finance.

so that you can assist your young adult is important and those are estate planning documents. If you own a home or have minor children, estate planning documents are for you as well because you're identifying who you want to be guardians. So it's not just for the super wealthy. There are different components to estate planning that come in depending on where you are in your life. But it is important once you turn 18 to at least get those.

living documents to kind of have someone take care of finances and health. And then as you grow your wealth, purchase homes or investment properties, then certainly there are other components of estate planning that make sense as well.

Kevin Mathews (05:30)
Got it. Okay. So, just to elaborate a little bit about what you're saying about, an 18 year old and why a parent would want to have those things in place. And this, this is the scary part, just like you were talking about. Nobody likes to talk about these things, but events happen. And if, an 18 year old gets in an accident or something and they're incapacitated, hopefully temporarily.

Somebody has to be able to make decisions for them. And that's, what those documents do, right?

Mauriah Conway (05:57)
Yes.

That's exactly what they do. there's the assumption that, it's my child. And of course, the doctors will talk to me and the staff at the hospital. But that's not always the case. And so it's better to have those documents and just keep them. And if you need them, they're there. And then if you don't, well, good. Hopefully, you won't need them at that age. But you do want to have those documents so that you can assist your child.

Although they're considered adults, I don't know if 18 year olds sometimes do need assistance. And know, foreign study. So you've got kids that are in college and they go off and do foreign study. They need someone to help with the banking back here. And so that document will help the finance.

Kevin Mathews (06:25)
They do sometimes. Yeah. Okay.

Gosh, you you know,

I, just now thought of that. this is a great example. my middle daughter went to, England for some kind of study abroad program and she was gone for six months and we did not set up any of that stuff. Now that I think about it

we should have done that ahead of time. Okay. All right. So, let's get into some definitions. what is a trust?

Mauriah Conway (06:56)
Yeah.

So a trust is really just a vehicle for helping people manage their assets if they're unable to or pass them on. So in California, we have different types of documents for estate planning. So you'll hear of wills, you'll hear of trusts, you'll hear of powers of attorney, and they all have a different function depending on what documents you need for your personal situation.

And previously, most people in California, because they owned a home, did a trust to transition their house outside of the probate court. So without a trust, previously, the only way to transition your assets was typically through the probate court process, where you would identify somebody in your will, an executor to go to court and move everything.

from your individual name when you pass away into your beneficiary's name. So that was a court process with the probate court. That process is cumbersome. It can be very time consuming. It can be expensive. All the documents are public record. And so many people prefer to have a less public process. And so that's often where a trust comes in. So if we think of a trust as a vehicle to transition assets when you pass away,

And the reason it works is because when you have a trust, you're taking everything from your name and you're putting it from your name into your name as trustee. And we call that the funding process. So you move your bank accounts from your individual name into your name as trustee. You take your deed and you transfer your property from yourself individually into your name as trustee. And that gets your trust funded. You'll often hear the term bucket.

get everything into the bucket. So that's the process. And so the reason that works to avoid the probate process with a trust is because when you pass away, nothing's really in your individual name. It's in your name as trustee. And you've named a successor trustee to step up into that role and transition your assets. So it functions kind of like a business if you think about it. When the CEO passes away, they just have another CEO step into the role and continue to do the business.

Kevin Mathews (08:42)
in the bucket.

It's kind of automatic is what you're saying,

the process.

Mauriah Conway (09:10)
Yeah, and so same thing with

the trust. Yeah, you just move from yourself as trustee to your successor and then they can continue to pay the bills, do what needs to be done and then pass the assets. So that's why people prefer trust. It keeps people out of the court system. Information is private so they don't know. In a probate, it's all public. So beneficiaries, addresses, assets, trust keeps it private. There's still an administration process so creditors still get paid.

taxes still get filed, but it happens outside of the timeframe of the court, so it can often be quicker. And it's usually less expensive. Probates are percentage of the size of the estate, and trust administration is just a negotiated contract with the attorney that you retain to help you administer it. One thing I do want to point out is that the law has changed in California as of April 1st.

So we have some new rules around primary residences. So essentially, if your primary residence is under $750,000 when you pass away, we can pass that without having to go through a probate So that may impact some people as to whether they need to do a trust or whether they can deal with just using a will and maybe beneficiary designations, but it's really a conversation to have with your estate planning attorney to kind of look at.

What are you trying to accomplish? Do you have minor kids? Does a trust still make sense for you based on this new rule or are other options?

Kevin Mathews (10:35)
So the, the $750,000, what you mean is the, the home fair market value or the equity in the property. Okay.

Mauriah Conway (10:43)
The fair market value. So if

you were to sell the property today, when you pass away, is it under $750,000? And if it's over, then you would be in a probate. So a trust is still going to be appropriate for you. If you have another piece of property, so it's not your primary residence, you're probably still looking at a trust then to avoid the probate process. And the dollar amounts have increased as well. So roughly, I think it's $208,850 now.

Kevin Mathews (10:50)
Got it.

Mauriah Conway (11:12)
Under that, you can avoid a probate. Over, you're in probate. Mm-hmm. Yeah.

Kevin Mathews (11:12)
That, okay. So that's the minimum that's okay. Got it. Okay.

let's say somebody has a house that's worth $650,000 right now. And they say, well, I don't really need a trust, but then a year later, two years later, it could easily be worth $750,000

Mauriah Conway (11:30)
excellent point because we're talking about the value of the house when you pass away, not when you're creating the plan. So you do have to take into consideration what what's going to the market's going to look like. And so a lot of times, yeah, trust is still going to make sense for most people. But again, that's a conversation and you've got to look at all the different points and how the assets in your life are going to transition.

Kevin Mathews (11:34)
person.

Mauriah Conway (11:52)
The nice thing about a trust is you can amend it, so you can change it. if you have minor children, the trust you've created maybe would be set up for the benefit of the minor children for a period of time. Maybe you're staging distributions to go out when they hit certain ages. Years later, the kids are grown, they have their own kids, we don't need to worry about staging, things like that. And so we can amend a trust and make updates that make sense.

Kevin Mathews (12:15)
Got it. I have, I have a great example of, what not to do we had a trust set up a long time ago when our kids were, little and there was a payout to, from our estate to that guardian, a certain dollar amount for them to take care of our daughters.

Mauriah Conway (12:23)
Mm-hmm.

Kevin Mathews (12:33)
And later on, after they reached adulthood, we forgot to change that. if we had passed away, that money would have gone to that guardian. Regardless of the age of my children, we didn't have it set up correctly. So that's why that's where an amendment would have been a good idea.

Mauriah Conway (12:47)
Mm-hmm.

Yeah, so those specific gifts as life changes and maybe the specific gift isn't appropriate anymore or maybe you don't have the asset anymore, amending your estate plan documents to remove that or update it is important. So not only do you have to come and see me get the ball rolling, but it is something that you do want to keep up on. Usually I say every five years or so.

take a look at it, because there's often life changes and law changes that happen within that time period, or if anything major happens. You acquire a lot of assets, you're downsizing, maybe you're retiring, or maybe you have another child, those kinds of things. Any sort of life situations that happen personally or to your finances, always a good time to revisit your estate planning. And then just as an average rule of thumb, every five years is kind of the general rule of thumb. Take them out.

Kevin Mathews (13:44)
Okay.

Mauriah Conway (13:45)
Take a look. Yeah.

Kevin Mathews (13:46)
Okay. How does a will differ from a trust?

Mauriah Conway (13:52)
Yeah, so a trust, you are able to use it during your lifetime and in capacity. So you've named somebody to manage your assets if you become incapacitated, as well as transition them for the benefit of your beneficiaries. So it is a document that has kind of both the living component, you're alive and it's managing things. And then when you pass away, it is also managing things. A will only handles assets after you've passed away. So

The power of attorney for finance and the advanced healthcare directive become very important if you just have a will-based estate plan because the will only comes into play once you've passed away and then it identifies where you want your estate to go to. And typically most wills we think about going through the probate court, but again, just keep in mind that it's really the value of the estate when you pass away that's gonna end up.

pushing it into probate court, whether you have a will or you don't have a will. And so that's typically the difference between a will and a trust. a will, typically you're going through probate court and it only comes into play after you've passed away, which is why you need the power of attorney for finance because if you become incapacitated, you need somebody to be making financial decisions for you, paying your bills.

whereas a trust avoids the probate process and you have somebody who can step in and handle the bill paying if you are unable to as well as transition the assets when you pass away.

Kevin Mathews (15:14)
I always thought the will was for personal property mainly.

Mauriah Conway (15:18)
a will can handle all kinds of property. So it can handle real property, personal property. Typically, if you have a will with your trust plan, it's considered a pour over will. And so if for some reason, when we talked earlier about getting everything into that trust bucket, retitling everything from your name individually into your name as trustee, if for some reason you

Kevin Mathews (15:23)
Okay.

Mauriah Conway (15:43)
didn't get something into your trust and you passed away and that asset needed to go through the probate court, the will would be used so that at the end of that probate court process, the judge would say, okay, you may now give that asset to the trustee so that it can be distributed under the terms of the trust. It ends up being duplicative. It's very expensive to have to do a probate when you already have a trust. So the key here is,

Kevin Mathews (16:01)
Okay.

Mauriah Conway (16:09)
Fund your assets into your trust. Personal property sometimes can distribute under will simply because it's under that dollar amount. So typically we're not talking about vehicles or household furniture, those kinds of things. So it can distribute those assets outside of a probate proceeding if they're under those dollar amounts, that $208,850, I think we talked about earlier. I gotta look at it, what is it now?

Kevin Mathews (16:30)
Okay. So somebody, okay. So if,

Mauriah Conway (16:36)
Ssshhh

Kevin Mathews (16:36)
if, and for things like jewelry, let's say, and you, and they want to pass, that jewelry to an heir, a specific heir, that's where a will combined with a trust is where the will would come in for that kind of thing.

Mauriah Conway (16:47)
you

It

could, I prefer to do it all through the trust. So, and really if I have a trust, I generally don't like to use the will at all. I think it's confusing to have all these multiple documents for people. And so if you've got a trust, that's generally where I make all my distributions. So there might be a personal property memo where a person identifies personal property, low value, things that you would have more sentimental value than actual value.

Kevin Mathews (17:01)
Okay.

Mauriah Conway (17:16)
where you can identify people that you want to have those personal property items. You can list them in your trust. I want this ring to go to this person and this couch to go to this person. And then again, if we change it, we just do amendments. So if you've got a trust, I typically say just do all of the gifting in your trust.

Kevin Mathews (17:24)
Okay.

Okay. I didn't know that. So, I've heard the term holographic will. What does that, what does that mean?

Mauriah Conway (17:41)
I

love a good holographic will. No, I don't. When I was in law school and I would travel, I would do them all the time. I'd say, mom, I hand wrote this will out and if I die, you're getting everything, including my dogs. But a holographic will is valid in California. It is a handwritten will. So sometimes it's called

Kevin Mathews (17:44)
Ha ha ha.

Mauriah Conway (18:04)
the deathbed will or the will that's on a napkin. And it's basically you identify that this is your intention to create a will to distribute your estate. You leave your assets to somebody, you sign it, and it's considered a valid will in California. So you don't have to have a formal statutory will or typed up will that's witnessed. A holographic can be used. But you can run into problems.

because they do have to have some statutory requirements. And so a lot of people will type up their will and then sign it. And that's not considered a holographic. It's gotta be handwritten. So all of it has to be in your handwriting. ⁓

Kevin Mathews (18:39)
And I, I imagine that

could be challenged more easily too, by someone who thinks they're entitled to something.

Mauriah Conway (18:45)
Yeah, if someone else

produces another will that has all the form requirements and was signed later, or there's questions as to whether the person really hand wrote it. Was it a will or was it just notes? So it depends. When I worked in the probate court as an intern, there was a holographic will that came through. It was on a Norman Rockwell calendar. It was like the month of December and then it

every box there was a different gift for somebody and it was signed and dated and we probated it. was considered a valid will.

Kevin Mathews (19:19)
Okay.

But that's, but again, that's, why you want to have an estate plan so that you don't have these. wills that are floating out there that it just might not meet the standards.

Mauriah Conway (19:29)
Yes, and also a lot of times they're not dealing with the residuary estate. So people are very fixated on I want to give my house to this person and I want to give my credit union account to this person. And they they're not thinking about any of their other assets because they're really just thinking about specific items that may or may not exist when they pass away. And they don't have a residuary clause that says everything that I own I have

want to go to this person. So they can be problematic because they don't fully distribute your estate all the time.

Kevin Mathews (20:03)
Okay. Got it. We you've mentioned probate a few times, so can you explain what probate is, how much it costs and why we're trying to avoid it?

Mauriah Conway (20:14)
Don't do it.

And I worked at the probate court. So generally, if for some reason your estate can't transition under a trust or you don't meet the dollar amounts that keep you outside of the probate court, which is the court that handles the jurisdiction to administer people's estates, other...

Kevin Mathews (20:17)
You

Mauriah Conway (20:36)
Other court matters are heard in the probate court, including guardianship and conservatorship and trust matters as well. But probate basically deals with the will or passing a decedent's estate if they don't have a will or any estate plan. It just goes under the laws of California. So California identifies who your beneficiaries are, who would be in charge of distributing that estate if you don't create your own documents.

And the reason people don't like a probate process, that court process to transition your individual assets to your beneficiaries is because it's all public record, it's time consuming and it's costly. So there are court filing fees that have to be paid out of the estate. The assets get appraised by a probate referee that is appointed by the court and they're paid a percentage of the value of the assets that they appraise.

And then the executor or personal representative and the attorneys also take a fee from the estate and it is a percentage of the size of the estate. So it is a decreasing percentage as the assets increase, but it can be pretty costly. the minimal probates are often running $10,000 to $15,000 ⁓ to probate. And if you have a house that's a million dollars, then you're looking at even more.

Kevin Mathews (21:47)
Wow.

Mauriah Conway (21:53)
That's mostly why people want to avoid the probate court. Everyone's worried that their assets are gonna go to the state or the state's gonna take everything. That's really not the case. It's just the fees that are associated with the probate to have this process are expensive.

Kevin Mathews (22:08)
Okay. That makes sense. Okay. can you take us through an example of let's let an event, guess, let's say, husband and wife don't have a trust. They took title of their house as a joint tenants, which is probably the most, would you agree it's probably the most popular or the most, most people that's, that's what I see mostly is joint tenants. I, if somebody doesn't have a

Mauriah Conway (22:10)
Yeah.

Thank you.

Yes.

Kevin Mathews (22:33)
trust and joint tenants is the right of survivorship so that if one person passes away, the other one automatically gets that. But there's still some problems with that, right? Because they'll get the house, but there's something about basis or tax basis. ⁓

Mauriah Conway (22:51)
Yeah,

so typically in California, if you are married, so when couples take property as joint tenants, if they're married, there's a better way to title it. And that's typically community property with rights of survivorship. Now that's assuming that this is a community asset and they're using community funds to purchase it and there's not other reasons to take it as joint tenancy.

If you're taking it as community property with right of survivorship, it'll pass to your surviving spouse when you pass away, but you will get a full step up in basis. So when joint tenants pass away, the joint tenant that passed away, their half of the property gets a new basis. It gets stepped up as a date of death. Presumably, it costs, the value has increased from purchase to date of death. That's not always the case, depending on how the market goes.

But presumably that's what happens. And so half the property will get a step up in basis. So if the joint tenant goes to sell the property as a whole, their basis is going to be different. So the joint tenant that survived, their basis is what they purchased it at. And the half that the decedent owned has a higher basis typically. And so that might impact capital gains tax. That's kind of where that comes into play.

Kevin Mathews (24:07)
just so everybody understands what basis is, like you said, the, if they took the property as joint tenants, and then one person dies, the basis of the property is what they paid for the property originally. they sell the property later, that difference, minus costs and, and, improvements costs too.

Mauriah Conway (24:17)
Is it?

Kevin Mathews (24:28)
is subject to capital gains tax. when they take title as community property, that basis is stepped up and meaning that at that time that they pass away, someone does an appraisal and figures out, Hey, this is the property's worth this. So if that.

surviving spouse sells it later, they're going to have less exposure to capital gains.

Mauriah Conway (24:51)
Yes, because the whole property, not just the one half that the decedent owned, the whole property gets a new basis. And so it's a little benefit to being married in California and owning property here. So, you know, I love it when I see a deed come in that we're going to be funding to a trust and they take it as community property with the rights of survivorship. always like, yes, it's the right way.

Kevin Mathews (24:58)
Okay.

They did it the right way. Okay. Okay. Yeah, that makes sense. All right.

another scenario for you. I, and this happens all the time. We have a client that makes an offer on a home and we've to close escrow in 30 days and they don't have enough time to, generate a trust.

they can still get a trust after the fact and that that'll take a couple of months or how long does it normally take to get a trust?

Mauriah Conway (25:37)
It just depends. So on average for me, and it can be different, it usually takes about a month to two months to create the trust. And the reason is that for my process, we do usually the consultation and then a first meeting, or sometimes we just do a first meeting and it depends kind of the comfort level and the knowledge of the client. But that first meeting is where I'm collecting all the information.

for what I need to draft the plan. And then thereafter, depending on if there's homework, I still need additional information or the clients still need to kind of decide some things. That might take a little bit of time, maybe a week or so. Once they get the information back, then we draft the plan and then.

The drafts go out, we have a review meeting where we review all the documents, make sure they're the way that the client wants it, make any edits or adjustments. And then from there, we will do the signing meeting where we sign all the documents and you formally have now an estate plan. So timing wise, it just depends on whether there's a lot of outstanding information they haven't made decisions on, their schedule for meeting and reviewing the documents.

and then signing it. So it can take anywhere from 30 to 60 days depending on how on it the client is. But usually by the time you get to me, most people are like, okay, we just want to get it done. It's taken us years. We're here. Let's get it done. So it's usually pretty quick. Yes. And then once all the documents are signed, that's when the funding happens. So if they did purchase property prior to getting the trust created, that's when we will take the...

Kevin Mathews (26:55)
Mm-hmm.

Yeah, let's get over with.

Mauriah Conway (27:15)
the property and put it into the trust. We'll update the bank accounts or beneficiary designations depending on the plan that we decided on. so funding the trust can take another 60 to 90 days is usually the timeframe that I like to see that happen in. So it is a process. And of course, everything can happen quicker or slower just depending. So there are times where I'm doing last minute for trusts for people that are terminally ill.

Kevin Mathews (27:41)
Hmm.

Mauriah Conway (27:41)
They

have capacity, but we need to get it done pretty quickly. And so those are not the cases that I love to have because you want people planning ahead of time. But certainly if there needs to be something done quickly, we can do that as well. Yeah.

Kevin Mathews (27:55)
making a priority. Yeah. ⁓

What are the approximate costs for it for a trust? And I know it can range depending on the complexity, what do think for

Mauriah Conway (28:04)
Yeah, it also

depending on the area you're in. So Bay Area versus Elk Grove prices or Rocklin versus Sacramento, all of that can vary. But on average, you're looking at usually for a single person, you're looking at probably about $2,500 to $5,000 for a married couple. You're looking at anywhere from $3,000 to $10,000 Of course.

It can be lower or higher depending on are you just doing a will, are you doing a trust, is there a special needs trust, do we have ongoing trusts, is there a business involved, is it a blended family, so we're planning for different provisions if one spouse dies over the other. So it can vary, but usually that's roughly I think average in the Sacramento, you're probably between the $3,000 and $5,000 range.

Kevin Mathews (29:00)
can you walk us through the process? So client calls or emails your office and schedules the appointment, is there a fee for the initial consultation?

Mauriah Conway (29:11)
So I do charge a fee for my initial consultation. And then if the client decides to move forward, then I just apply that to the remaining fee. So it's not an addition. And typically that first consultation, it usually lasts an hour to an hour and a half. And we go through all the questions. They have unfettered access to answer any of their questions. We look at their plan. We talk about.

the different components of an estate plan. We talk about what features might be appropriate for their needs. And then from there, there's an engagement letter and they want to retain me to do their planning. do, they sign the engagement letter. I start drafting the documents. We send out the drafts. And typically for the drafts, when I send them out, I'll highlight the things that I want the client to specifically focus on.

And some people read the highlights. Some people like reading all the documents, which is why I still like to send out drafts. And then some people don't want to look at anything, highlights or drafts, until they're sitting with me and we go through it. And so I'll go through the whole document. We'll hit the highlights, but we'll hit all of the other pieces of it. So when you've reviewed your drafts, you really understand what you have, what type of trust you have, how all the pieces are going to function.

And then from there, will set a signing meeting where we will sign the documents. And then I'll usually do a 60 day check-in after that because we're working on funding. So I want to see, did they update beneficiary designations or if they haven't, will they send me the forms to update them so we can get that done? Have they touched base with their banks and signed new signature cards, moving it into their trust? And typically for that process, what

the client is using is what's called a certification of trust. So it's the short version of the trust so they don't have to drag that document down to the bank. It gives the bank all the information that they need to put the asset into their names as trustees. And then from there, typically once you've done your estate plan with me and we've funded everything, you'll hear from me about once a year. I'll just check in, see how you're doing. I try to either call or email.

And sometimes people have things that they want to change or sometimes it's just good to say, hey, no, everything's fine. Thanks for checking in. And that's a way just to keep the estate plan on people's minds. They know, you know, every year Mauriah is going to touch base and that may trigger, yes, we bought another piece of property or we sold our residence. And can you pull the deed and check on the title to make sure we got it into our trust? And so, yeah, I do that.

Kevin Mathews (31:36)
Mm.

and change it. And

Mauriah Conway (31:46)
you

Kevin Mathews (31:47)
these meetings, can you do it by Zoom as well? If you have to. Okay.

Mauriah Conway (31:50)
Mm-hmm. So

I offer in Zoom or in person. It depends on preference. So we can do the review meeting on Zoom and I will throw the documents up on the screen or we can come in and review them together. Same thing with the signing meeting. We can sign in my office or I will send you all the documents tabbed and you'll need to go and have a notary execute all the documents with you. But I generally will.

ask the clients, let me know when you're going to do that appointment so if something comes up, I can make sure it's on my calendar so that I'm at least available to answer questions or anything like that.

Kevin Mathews (32:26)
What kind of items would they need for you to review?

Mauriah Conway (32:33)
So for the initial estate plan, when we're setting that up, generally I hand out a questionnaire where they're filling the document out that's identifying kind of who their beneficiaries are, what their assets are, any particular issues. Are they divorced? What does their marital settlement agreement say? Because sometimes that will impact the plan.

Are they expecting an inheritance? Do they have any children with minor needs? So we kind of, the questionnaire asks a lot of those questions and then it asks you to bring in documents. So if you have copies of deeds to your properties or you have your account statements, those kinds of things. And I also like to get connected with the CPA and the financial advisor just to make sure we're all on the same page. If we're creating plans and we are specifically

identifying the trust as a beneficiary on a retirement account or an insurance policy. There's a reason for that because typically we're going to name beneficiaries on retirements, but sometimes we might want to run that through the trust. And so it's a coordinated plan. So if I want that to go into the trust and the financial planner, which is completely normal, no, you usually list a person. It would be bad if we listed a trust and they change it. Then it can kind of cause.

issues with the plan. So it's important for me to connect with your advisor so we all are on the same page and the plan actually works the way you want it to work when you pass away.

Kevin Mathews (33:53)
I run into this quite often, in my line of work, I'm a mortgage broker and I, you know, arrange loans for purchases and refinances. And when I arrange a home loan for a client that has title into a trust, most lenders will not loan directly to the trust. we will

record a deed out of the trust. and then the lender will make the loan while the property is temporarily out of the trust. And then we'll record another deed back into the trust. and record that after the lender has put their new loan on the property. there any problems with that?

Mauriah Conway (34:28)
Yeah, so sometimes what will happen is that second deed, getting it back into the trust doesn't happen always. Typically it will, but sometimes for whatever reasons it gets missed and it doesn't get put back into the trust. And so sometimes we are doing either a probate or we're using an 850 petition, sometimes referred to as a Heggstad petition. That was the case that was.

that termed this process that we can use to avoid the probate to get that house back in saying there was intent and it was codified under probate code 850. So that's why you'll hear that code section used as well. But it essentially says, hey, clients refinanced their house. It was in their trust. They took it out for refinancing purposes and it just didn't get put back in. It wasn't that they didn't want the trust to be in control of that asset. It's just that it was a mistake and can we

just get that house back in without having to go through a probate process. And sometimes the court will find that there's enough evidence to indicate that yes, the decedent intended that house to be part of the trust and it was only moved out for that refinance purposes and should have been put back in. Sometimes the court will say, no, we don't think that that's the case and we're gonna make you do a probate. But now if it's a primary residence and we hit that dollar amount, we might not even have to do the 850 petition. So we'll see.

Kevin Mathews (35:45)
Yes. And, and I,

you know, I, I make sure that it's put back in the trust, but if it was a refinance from, you know, who knows how long ago, if that was missed, or a homeowner can look this up is to call either you or me, I guess, cause we, we have access to the property data at our fingertips and we can see how they're titled the last deed that's recorded and we can pull it up and email it to them.

Mauriah Conway (35:54)
Thank

Yes,

yeah. And that's one of the things I do when I'm reviewing trusts after people have already done their plan. I always just pull the deeds just to make sure that they're still in the trust

Kevin Mathews (36:10)
That's probably the best way. Okay.

we know that, there are ways to complete a trust online without the help of an attorney. And the main reason is the cost is it is cheaper, but what are the risks of not going through an attorney to personalize your plan.

Mauriah Conway (36:37)
I think the risks are essentially the plan or the product that you're buying might not be specific to California. So there might be some rules that are not in compliance with California law. Just understanding how all the documents work together. Without that, there can be clauses that are competing in different documents.

You may say in your trust that your agent has the ability to amend your trust, but your power of attorney doesn't also authorize that power. So now it's ineffective. Or I've seen where people create a trust and they create a will and they have different competing clauses where assets are left one way under the will and left another way under the trust. So.

And then of course that residuary clause where we talked about previously, a lot of times you're just focused on, I only have two bank accounts in a house and they don't consider some of the other assets and they leave it out. Another thing is people sometimes leave out family members. so they forget to mention their husband because they're thinking about when I die, not that my spouse will be alive, but it's just me. And so they're not thinking about that or the laws, the community property laws.

There are certain rules around a spouse's interest in the assets. You can't necessarily give away their interest. And I've seen that where a spouse has given away all of the assets, including their spouse's assets. So it's important to have an attorney kind of assist, think, so that those mistakes don't happen. Because if they do happen, you end up in court. And the purpose of doing these plans is to stay out of court, because it is expensive.

And so I say do it once and do it right. So come see me.

Kevin Mathews (38:13)
Do it, do it right. And,

I'm assuming that, if you don't do it right, it's going to be easier for someone else to challenge that too.

Mauriah Conway (38:23)
disinheriting somebody and you just don't mention them or maybe you only disinherit them, but you meant to also disinherit their children and you didn't use the language to include those children. So yeah, it can result in contests. Absolutely.

Kevin Mathews (38:38)
Okay.

All right. And if you set up the estate plan with the trust and such, this, this can cover things like vacation homes, investment properties, out of state properties.

Mauriah Conway (38:50)
Yeah, you can do all kinds of things with your trust. And it really depends on the size of the assets, the type of the assets, and the level of protection you want. So your simple family revocable trust can hold everything and can distribute everything. So property in other states is fine. Vacation homes, those kinds of things. You can handle it with a simple trust that says, these are all my assets. I'm putting them in my trust.

and here's where I want them to go when I pass away. But there are other types of trusts, other types of entity, depending on whether we're wanting to take advantage of the tax laws or depending if we want to take advantage of some of the protections that maybe an LLC provides or corporation, depending on how you're using these properties, if you have multiple properties that you're renting, those kinds of things.

And so we might just have the family revocable trust and then we might assign the interest in an LLC or the stock in the corporation to the trust. Or we might do other things. It just depends. And there's a variety of types of trusts, irrevocable trusts that you can use, charitable trusts that we can set up, insurance trusts, trusts that handle just pieces of property. And it really is gonna depend on

what you want to do, what kind of taxes are we trying to hedge against, what's your charitable intention. So it just depends, beyond just the simple family trust, there's a variety of options out there.

Kevin Mathews (40:28)
Okay, great. Besides a will or a trust, what other documents should a homeowner have as part of their estate plan? You touched on this a little bit earlier, but you mentioned, can we go through them? The power of attorney.

Mauriah Conway (40:36)
Yeah.

Sure.

You need a power of attorney for finance. And that is just identifying who can handle financial things if you can't. And sometimes, if you have a trust, it's more of a backup document. If you have a will, it becomes more of a primary document. But even if you have a trust, it's important because this would be the person that would sign your tax returns if you were unable to sign them.

If for some reason there were assets outside the trust, your agent under your power of attorney could transition them to your trustee. So even though you have a trust, it's still important to have a power of attorney for finance. And if you have a will, then it becomes a very primary document. And then the other documents that you would need would be an advanced healthcare directive. And there's often a HIPAA release that Health Insurance Portability and Accountability

Act that allows access to medical records, be they mental health or physical. And then the Advanced Healthcare Directive really allows your agent, the person that you've named to make healthcare decisions for you if you can't. And it also, not only does it deal with end of life decisions in terms of what kind of life support you will receive, whether or not your agent can enter into a DNR if you are admitted to the hospital.

It goes through all of those things, whether or not you authorize your agent to do those things on your behalf, including organ donation and whether you want to be buried or cremated, whether you want an autopsy. So the Advanced Healthcare Directive is also an important document so that you've got someone who's making healthcare decisions for you. And I think the last document would probably be the...

guardianship document where you're naming somebody to be guardian of your minor children. And that document would cover both their estate, so your children have their own estate, as well as their person. So, or they're going to go to school, that kind of thing. And so that would be the guardianship document. So that is kind of all the documents that are created for an estate plan, but there's some additional things that should be done. So you want to make sure you've got all your beneficiaries.

designated on retirement accounts and insurance policies and make sure there's a primary and a contingent. And so that kind of completes the estate plan. If you've got all those pieces in play, you should be pretty well protected if something crops up.

Kevin Mathews (42:57)
I just recently went through this with the power of attorney or finding out more about it. some of those can kick in after someone's deemed incapacitated, while others can be set up so that, let's say a spouse has that power of attorney at any time to make financial decisions for the other one. ⁓

Mauriah Conway (43:07)
Mm-hmm.

Yes.

Yeah, so we refer

to him either as an immediate power of attorney or a springing power of attorney. Yeah, it's like a spring. It springs into action. So for that one, typically, and it doesn't have to, but typically it springs into action and you'll see a paragraph that says when two doctors say I'm incapacitated, those letters get attached to that power of attorney and then the agent's authority springs into action because they have the two letters saying that the

Kevin Mathews (43:25)
Okay.

Mauriah Conway (43:47)
the person has no longer has capacity. An immediate power of attorney is as soon as you sign it in my office, if your agent has a copy of that power of attorney, they could act on your behalf that day, regardless of whether there's been an incapacity determination. So you can have capacity and you've got someone making decisions for you. Typically you will see springing powers of attorney in young people.

and you'll see immediate powers of attorney for older people. Maybe family members are kind of already helping with bills or those kinds of things. They've got capacity, but it's just easier to have someone assisting them. And so often we'll do an immediate. But for any of the estate planning documents, you have to have capacity to create them. If you don't have the capacity to sign the documents, then it's too late. And there's varying capacity levels. So,

A will has a much lower capacity level than a trust. So it just depends on where you are in the capacity spectrum. But it's always a good idea to get these done before there's capacity issue. I have children calling me all the time saying, my mom or dad can't handle their finances anymore. They don't have capacity, so I need to get a power of attorney for them so that I can do it for them.

well, it's too late. As soon as you tell me they don't have capacity, I know they can't execute those documents. in that case, you would be in a conservatorship. And if we think courts are difficult to get through in a probate process, conservatorships are much more expensive, much more time consuming, and just really emotionally draining. And so any way to avoid a conservatorship is in the best interest of everybody involved.

Kevin Mathews (45:23)
And that's where you have to actually have doctors testify that you're not, you don't have capacity.

Mauriah Conway (45:28)
Yeah, so there's a capacity declaration

that happens and gets submitted to the court where a doctor identifies a lot of components about the person's incapacity. The person being conserved gets an attorney. The conservator who's asking to be appointed gets an attorney. It's a long process, multiple court hearings that happen.

and then it stays in under the court's jurisdiction for the life of that person or the length of the conservatorship. So there are counties that are due back to the court every year or two years. Sometimes bond has to be established and all of this gets paid out of the conservatee or the person that's being conserved's estate. So it's depleting their assets significantly because all of these pieces have to be paid for.

Kevin Mathews (46:13)
What are, what are some of the most common estate planning mistakes you see?

Mauriah Conway (46:19)
not doing estate planning would be, one, I think doing estate planning and then never looking at it again. you did it when you had minor children and now they're grown and all of the people that you have listed to manage your assets, your finances, act as trustee. It doesn't make sense for them to act anymore. maybe you've given gifts out that don't exist. funding.

I see a lot of funding issues. People get that beautiful estate planning binder and they're so proud and they never put anything into the trust. So it's just very expensive paper at that point. that's a

Kevin Mathews (46:53)
Cause there is followup. have, they have to get these things recorded or

like you said, the bank accounts, have to be titled in the name of the trust or they're not valid. Okay.

Mauriah Conway (47:02)
They have to, yeah, exactly,

exactly. And then the other piece is kind of the flip side of that. I think I see a lot of mistakes. Once somebody passes away, there is an assumption that if it's in a trust, there's no administration that has to happen. And so assets just start getting distributed. And that's actually not true. Even if it's a simple trust or the first spouse has passed away, there's always pieces that have to be completed, even if they're minimal.

And so that's kind of one of the bigger things I see now with a lot of people getting trusts. They don't realize that once somebody passes away, there's still an administration that has to happen. Certain boxes have to be checked, statutes have to run, but that administration just doesn't happen in the court. It happens in the attorney's office. It's usually quicker, but they need to make sure those things happen because I will see assets being distributed and the federal tax was never paid.

or the Franchise Tax Board is owed money and the person who distributed everything is now on the hook because they were supposed to pay those bills before they sent the money out and they didn't understand that those things had to be done or that certain notices had to go out and now they didn't tell somebody about the trust and that person had a right to know and now they've just extended the timeframe that that person can contest.

Kevin Mathews (48:02)
Right.

Mauriah Conway (48:16)
Things do have to happen and I think that's really, I'm seeing more of that now as people become familiar with trusts, they're comfortable with using attorneys and funding. Now what I'm seeing is really more mistakes on the back end when a trustee is administering the trust.

Kevin Mathews (48:31)
what they should do is call the attorney that prepared the trust and let them know that, Hey, this person passed away. What do we do? Yeah, it's okay. All right.

Mauriah Conway (48:35)
Yes. Yes.

Exactly.

Or any estate planning attorney. They can go back to the attorney that prepared the trust, but if it's a well-prepared trust, any estate planning attorney can handle administering it as long as they're familiar with trust administration processes. So if you want to use your estate planning attorney to help you administer your parent's trust, then yes, do that as well. I always say you want to go with the person you feel most comfortable with. So you don't have to use the attorney that did the trust.

Sometimes it's easier, but go with the person that you're comfortable with.

Kevin Mathews (49:10)
Okay. That's good to know. What about non-married couples? they are, do they still need to get a trust and, are there other agreements that they need to prepare if they're buying property together?

Mauriah Conway (49:21)
Yes, so non-married couples is a whole separate show. But yes, you should get your own estate plan because you still need an advanced health care directive. You still need a power of attorney. And if you own property, you may need a trust or you may need a will. And depending on how you own that property, there may need to be more agreements between the parties.

Kevin Mathews (49:25)
Okay. Maybe just a summary then.

Mauriah Conway (49:44)
What happens if one of them passes away? Maybe they don't want to own it as joint tenants. Maybe they want to own it as tenants in common, or maybe they each want to put their half into their own trust and have it distributed. Is someone allowed to continue to live in the house if one of the parties is now deceased? Can the deceased party's beneficiary force the partner to sell the house so that they can get their share?

All of those things need to be outlined in a separate agreement or contract so that it's very clear what happens when the first party passes away if you're co-owning property together.

Kevin Mathews (50:17)
Okay. And that's something you would prepare as well any piece of advice you wish every homeowner had followed? okay. So pull the, pull the deed is one of the most important things. Make sure, it's in the trust. Okay. most surprising thing that you've,

Mauriah Conway (50:23)
Pull your need and make sure it's in your trust.

Yeah.

Kevin Mathews (50:35)
about estate planning.

Mauriah Conway (50:39)
You know, I think the most surprising thing for people, I've been doing this long enough, it's hard to surprise me anymore. I think that the most surprising thing for people when they come in is that I will always get asked, well, what do most people do? And there really is, there is no what do most people do. Every plan is different. Every reason people are doing different things is unique to their situation.

Kevin Mathews (50:46)
you

Mauriah Conway (51:04)
One of the questions I always get asked when I say, what if your children pass away? Do you want their share to go down to their children or do you want it to go to the siblings? And a lot of times this just stumps people. I don't know. What do most people do? And most people do all kinds of things.

Kevin Mathews (51:19)
Yeah, there's, there's no, there's no set

way that you should do it. It all depends on your situation.

Mauriah Conway (51:24)
There's

no set way and I always tell my clients, if you can think it up, I can figure out how to write it so that it'll function. I just need you to tell me in your words what you want to happen and then I can figure out how to get that onto paper.

Kevin Mathews (51:38)
Okay.

All right. well, this has been incredible. We all learned a lot about trust, wills, probate Best way to reach you is email conway@lawofficeinc.com. Phone number is 916-920-5983. Website is www.lawofficeinc.com. And I'm also going to add this to the show description.

And, uh, did you want to add your disclaimer and your own words,

Mauriah Conway (52:06)
Well, I think this is, know, the legalese just, I'm not providing legal advice. You should contact your own attorney to go over your own specific scenario. And this does not create an attorney client relationship. So the general legalese that's after every, anytime an attorney talks.

Kevin Mathews (52:20)
Okay.

Kevin Mathews (52:24)
Thank you for listening to another episode of Home and Finance Insights. If you found this information beneficial, please like, comment, share, and subscribe so that you won't miss future episodes. Kevin Mathews NMLS number is 234253. California DRE license number is 00884691. Kevin can be reached at www.kevinmathews.com or email

kevinmathews@empirehomeloans.com. Empire Home Loans, Inc. NMLS number is 1839243. California DRE license number is 02086593. Refer to NMLSConsumerAccess.org to see additional licensing information. The corporate office address is 4401 Hazel Avenue, Suite 135, Fair Oaks, California 95628.

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