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Elderlaw: 04/15/2017

Elderlaw Advocates

Dear Len & Rosie,

We are having our trust updated and have had two different opinions on checking accounts and CDs. Should we have our regular checking account in the trust? Should we have the money market account in the trust? Should we have the CD in the trust?


Dear Frank,

As a general rule, you should retitle all of your assets into your trust, but there are exceptions. Donít bother going to the DMV to transfer your vehicles into the trust. If you die owning an automobile, your heirs can retitle it in their names at the DMV 40 days or more after your death. All they need is your death certificate, the vehicleís title, and DMV Form REG-5.

Unless your lawyer advises you to do otherwise, do not transfer any retirement account into your trust or name your trust as a retirement account beneficiary. Transferring a retirement account into a trust means youíre cashing in the account, and youíll have to pay income tax on all of that money all at once. And in many cases, IRAs, 401Ks and other retirement accounts paying into a trust must be cashed out within five years of your death.

It is possible for a trust to roll over a retirement account into an Inherited IRA, but most of the time it isnít worthwhile. The only time you should seriously consider doing so is if you have a minor or disabled child, or a spendthrift child who will spend a buck fifty for every dollar you leave them.

If you and your wife name one another as primary beneficiary of each of your retirement accounts, and you name your children or other chosen heirs as contingent beneficiaries, then they will be able to roll over the accounts into Inherited IRAs, allowing them to cash in your retirement accounts over their own lives.

As for your checking account, it is usually a good idea to keep the account outside of your trust. Instead, title the account in you and your wifeís names. Then, when one of you starts slowing down, add someone you trust to the account so he or she may write checks in the event of a death or incapacity.

When you and your wife die or become incapacitated, your successor trustee will take over, but that cannot happen overnight. It takes a couple of weeks to round up certificates of death or doctor letters to allow for your removal as trustee. If you add someone to your checking account now, it will make that personís job easier when the time comes.

Len & Rosie

Dear Len & Rosie,

My partner and I are thinking about registering for a domestic partnership. I am female and age 64. I plan to draw my full Social Security benefit at age 66. If I die will he be able to collect half of my benefits? Also, my partnerís father has let us live in a home owned by him and his late mother.

He is keeping the house in his name for tax purposes under Prop 13 and says it is ďall in his willĒ so my partner will get the house when he passes away. I am nervous that if my partner passes away before his father, I may not have a place to live. Canít my partner have his name put on the deed now? That way if we are domestic partners I would be entitled to claim his part of the property? Thank you so much.


Dear Nora,

Californiaís domestic partnership law was enacted in 1999, but initially it did not provide for much more than a guarantee of hospital visitation rights for registered partners. Same-sex couples may register at any age. Heterosexual couples may register only if either or both partners are age 62 or older. Over the years, the Legislature has expanded the benefits of domestic partnership to the extent that itís the same as marriage under California law.

But a domestic partnership isnít marriage and has no status under federal law. If you register as domestic partners, you canít collect off of one anotherís Social Security wage and earning history. If you want Social Security benefits from your partner, the two of you will have to get married.

As far as the home goes, itís not owned by your partner. Itís up to his father to deal with it within his own estate plan. He could give the home to your partner, if he wants to, but you canít force him to do so. If he does transfer the property, you shouldnít be added to the deed unless you and your partner are married or have registered as domestic partners with the California Secretary of State. This is important, because putting you on the deed before marriage or registration may result in a property tax reassessment under Proposition 13.

So why hasnít he given the home to your partner? Itís hard to say. He may not trust his son. He may not want you to get it. He may be a man with Depression Era Syndrome who isnít willing to give up anything before his death. What we can tell you is that once your partner gets the property, it will still be his sole and separate property that he doesnít have to leave to you.

You have good reason for concern. We have spoken to many people who face a bleak financial future because they naively stuck with spouses, domestic partners, or friends who were not willing to provide for them. It is perfectly acceptable for you to stand up and ask for what you need, and cut your losses if you donít get it. What you need to do is to have a frank discussion with your partner. Let him know that you are willing to enter into a permanent relationship, but only if heís willing to provide for your future.

Len & Rosie

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