With that said, different estate planning attorneys may use synonyms for the names of the different people within an estate plan. This can make reviewing a simple estate plan feel more complicated that it is. By becoming familiar with these terms and their synonyms, you will be ahead of the curve when creating or reviewing an estate plan.

Below is a summary of some key estate planning terms.

What is the Definition of a Trustor?

The Trustor (also known as a “Settlor” or a “Grantor”, depending on the attorney’s preference) is the person who creates the Trust (i.e. the person who owns assets, like a home, and wishes to transfer those assets to a Trust).  The Trustee is the person in charge of managing and investing Trust assets and making distributions (if the terms of the Trust require it) to the Trust’s beneficiaries.

The term Trustor is synonymous with Settlor and Grantor.

What is the Definition of a Grantor?

A Grantor of a Trust is another way of saying Trustor. Simply put, it is the person who creates a trust, and puts trust assets into their trust, for the benefit of another person.

The term Grantor is synonymous with Settlor and Trustor.

What is the Definition of a Trustee?

A Trustee is a an individual (or corporate fiduciary) who is specifically named in a Trust document to carry out the instructions of the Trust. The Trustee is tasked with collecting all of the assets in the Trust Estate and manage them until the Trust instructs them to distribute them to a beneficiary. The Trustee can also manage the Trust Property full time and pay the beneficiary income from the property. The specific instructions for a Trustee should be clearly drafted in a trust by a qualified estate planning attorney.

While a trustee can administer a trust without the help of an attorney, there are strict laws that should be followed. Thus, many Trustees choose to hire a Trust Administration attorney to make sure that they follow the trust instructions correctly, and do not take on any personal liability.

What is a Beneficiary?

Simply put, a beneficiary is a person, group of people, or organization, to which a gift of an asset is made. The gift or benefit can be made through legal documents such as a trust, a will, life insurance policy, or financial account with a beneficiary designation.

Except for estates that are exempt from probate, the beneficiary of a Will only receives their inheritance after the will is examined and approved by a probate judge.

Beneficiaries of trusts, life insurance, and other financial accounts with beneficiary designations, will receive their benefit based on the terms of the legal document in which they are named.

How do the Trust, Grantor, Trustee and Beneficiary all work together?

By analogy, think of a Trust as a small, single shareholder corporation.  In this imperfect analogy, the Grantor is the sole shareholder of the corporation and the Trustee is the President of the Corporation. 

Like this corporation, where all assets owned by the corporation are indirectly owned by the sole shareholder, all assets owned by the Trust are indirectly owned by the Grantor. 

Similarly, like in a corporation, where all day-to-day decisions of the corporation are made by the President, who has the legal authority to manage, invest, sell, and encumber (to name only a few) corporate assets, the Trustee of the Trust is the person who has these powers with respect to Trust assets.

When a California resident dies without a Will, he/she has died “intestate”.
This is a legal term meaning the person died without documenting his/her wishes for distribution of his/her estate.

When this happens, California law decides who inherits the decedent’s assets. Keep in mind, this excludes assets held 1) by a Trust, 2) in accounts or policies that designate beneficiaries, and 3) jointly with someone else.

The definition of “intestacy” in California?

As stated above, “intestacy” is a legal way of saying someone died without a Will. 

In this case, California’s intestate inheritance laws (California Probate Code 6401 and 6402) dictate who inherits the decedent’s assets.  Again, this excludes assets held by a Trust, in accounts with beneficiaries, and/or jointly owned accounts.

What are California’s intestate laws?

When someone dies without a Will in California, assets owned by the decedent in his/her sole name (as opposed to assets held 1) by a Trust, 2) in accounts or policies that designate beneficiaries, and 3) jointly with someone else) pass to the decedent’s heirs-at-law, as defined in California Probate Code 6401 and 6402. 

What happens to the property of a married person after death when there is no Will, Trust, or Beneficiary in California?

Under these Probate Code provisions, if the decedent was married, his/her community property (broadly defined as any property owned jointly by a married couple) passes to the decedent’s spouse; and his/her separate property passes to a combination of his/her spouse and other relatives (e.g. children, parents, brothers/sisters, etc.).

What happens to the property of a single person after death when there is no Will in California?

If the decedent was not married, his/her assets pass to cascading list of relatives under Probate Code 6402 starting with his/her children (and their “issue”), then parents, then brothers/sisters, etc.

The headings listed below are used to give the reader a general idea of how assets will be transferred, and should not be relied on without speaking with a qualified estate planning attorney. We have referenced the actual text of the probate code below which is current as of February of 2019.

Who inherits property if there is no Will in California and the deceased is not married?

Except for assets that would not be a part of a probate estate (as defined below), if an unmarried decedent passes away without a Will, his/her assets will likely be distributed as follows:

The headings listed below are used to give the reader a general idea of how assets will be transferred, and should not be relied on without speaking with a qualified estate planning attorney. The actual text of the probate code

1. First to the Children of the Deceased (or their children’s children, or children’s children children*)

“(a)      To the issue of the decedent, the issue taking equally if they are all of the same degree of kinship to the decedent, but if of unequal degree those of more remote degree take in the manner provided in Section 240.”

CA Probate Code 6402 (a)

  Definition of Issue: “Issue” of the decedent is all of his or her lineal descendants, of all generations, with the relationship of parent and child at each generation being determined by the definitions of child and parent.

2. Second to the parents of the deceased

“(b)      If there is no surviving issue, to the decedent’s parent or parents equally.”

CA Probate Code 6402 (b)

3. Third to the children of the deceased parents (aka the decedent’s brothers and sisters)

“(c)      If there is no surviving issue or parent, to the issue of the parents or either of them, the issue taking equally if they are all of the same degree of kinship to the decedent, but if of unequal degree those of more remote degree take in the manner provided in Section 240.”

CA Probate Code 6402 (c)

4. Fourth to the decedent’s grandparents:

“(d)      If there is no surviving issue, parent or issue of a parent, but the decedent is survived by one or more grandparents or issue of grandparents, to the grandparent or grandparents equally, or to the issue of those grandparents if there is no surviving grandparent, the issue taking equally if they are all of the same degree of kinship to the decedent, but if of unequal degree those of more remote degree take in the manner provided in Section 240.”

CA Probate Code 6402 (d)

5. Fifth to the other children of the Grandparents (aka the decedent’s aunts and uncles):

“(e)      If there is no surviving issue, parent or issue of a parent, grandparent or issue of a grandparent, but the decedent is survived by the issue of a predeceased spouse, to that issue, the issue taking equally if they are all of the same degree of kinship to the predeceased spouse, but if of unequal degree those of more remote degree take in the manner provided in Section 240.”

CA Probate Code 6402 (e)

6. Sixth to the children of a predeceased spouse:

“(f)      If there is no surviving issue, parent or issue of a parent, grandparent or issue of a grandparent, or issue of a predeceased spouse, but the decedent is survived by next of kin, to the next of kin in equal degree, but where there are two or more collateral kindred in equal degree who claim through different ancestors, those who claim through the nearest ancestor are preferred to those claiming through an ancestor more remote.”

CA Probate Code 6402 (f)

7. Seventh to the decedents Next of Kin

“(g)      If there is no surviving next of kin of the decedent and no surviving issue of a predeceased spouse of the decedent, but the decedent is survived by the parents of a predeceased spouse or the issue of those parents, to the parent or parents equally, or to the issue of those parents if both are deceased, the issue taking equally if they are all of the same degree of kinship to the predeceased spouse, but if of unequal degree those of more remote degree take in the manner provided in Section 240.”

CA Probate Code 6402 (g)

Will a Probate be Required on my Death in California?

If a decedent dies owning more than $166,250 of assets (excluding certain assets, as set forth below), someone (usually known as an “Executor” or “Administrator”) will be required to petition the Probate Court to:

• get a judge’s approval to collect the decedent’s assets;
• pay the decedent’s debts and taxes, and
• thereafter distribute all remaining assets to the decedent’s beneficiaries.

This will happen either according to the instructions the decedent set forth in his/her Will or as determined by California’s intestacy laws as provided above if the decedent died without a Will.

What Assets Are Not Included in Probate in California?

In calculating the $166,250 probate number referenced above, certain assets are excluded, including but not limited to:

1. Assets owned by a living trust;
2. Assets (e.g. 401(k)s, IRAs, life insurance policies, bank accounts with “payable on death” designations, etc.) that have beneficiaries properly designated;
3. Assets owned in “joint tenancy” with someone else; and
4. Mobile homes and automobiles.

What will happen to my home if I die without a Will or Trust?

If you own a home in California, you likely need a Trust.  The reason being, most (just about all) homes in California are worth more than $166,250, and if you’ve read this far, you know that probate may be required if you have more than $166,250 of assets in your name on your death.

If, however, you have a Trust, and your home is owned by your Trust on your death, your home would not be subject to the costly and time-consuming Probate process. 

In this event, the Trustee of your Trust would distribute your home (or the proceeds from the home if it is sold by your Trustee after your death) to the beneficiaries named in your Trust without involvement of the Probate Court.

Who will take care of my Children on my Death if I die without a Will or Trust?

Hopefully you and your children will be lucky enough to have a relative or friend willing and able to take care of your children on your death. 

Sadly, this is not always the case.  In the event such a relative or friend is willing and able to care for your children, a Probate Guardianship proceeding may be necessary.  In this case, such a person would file a Petition for Guardianship with the local Probate Court.

In the event more than one (1) individual is interested, willing and able to care for your children, your nomination of a Guardian for your children may carry weight with the Probate Court in determining which such individual is ultimately appointed. 

For this reason, it is common practice to nominate your choice for Guardian(s) of your Children in your Will.

Who to Contact if Someone you know dies without a will or trust in San Diego?

If you have any questions about how to avoid probate or how to set up an estate plan please feel free to reach out to attorney T. Owen Rassman. Attorney Rassman can help you with Estate Planning, assist in the probate process, or help a trustee administer an estate. The first consult is always free, so please call Rassman Law today (760) 933-8254.

On incapacity or death, however, the initial Trustee will be replaced by a Successor Trustee(s).  As such, it is critically important that you choose not only someone you “trust” (pardon the pun), but someone who has a sufficient level of maturity, integrity and financial acumen.  Remember, your Successor Trustee will have legal authority to manage, invest, sell, and encumber (to name only a few Trustee powers) the Trust’s assets.  More often than not, clients choose family members and/or friends as their Successor Trustee(s).

Wills are potentially subject to Probate, whereas well-drafted and fully funded Trusts generally are not. In other words, if you die with only a Will, and have more than $166,250 in assets (excluding those assets identified elsewhere on this website), a Probate will be required. Whereas if you die with a Trust, assets transferred to the Trust before death are generally not subject to Probate. In a comprehensive estate plan, you will likely need both a Will and a Trust. See Estate Planning page.

What are the reasons to create a Trust?

Avoiding a Probate on your death (as discussed above) is just one reason to create a Trust.  There are at least two (2) other common and important reasons why one may need / want a Trust.  First, if it is important for you to control how and when your beneficiaries (for example, children) inherit your assets on your death.  Common Trust provisions include restrictions on the age at which beneficiaries inherit their share of Trust assets and how those assets can be used until they reach that specified age.  For example, by creating a Trust, you can ensure that until your children reach age 25 (or any other age you may choose), they cannot have direct access to their inheritance; rather, they can only access their inheritance for their health, education and support, as determined by the person you name as their “Trustee”, like a responsible and trustworthy family member or friend.

A second important reason to create a Trust, though less common than the two (2) provided above, is to implement a plan to save on and/or defer estate taxes that may, depending on the size of your estate, be due on your death.   Under current federal estate tax laws, estate taxes are not an issue for the vast majority of us (i.e. persons who have less than $12,060,000) in assets.  But for those who have more than this amount, Trusts provide a way to plan in advance for expected estate taxes.  See Tax Planning page

More often than not, the action items below should be undertaken by the Decedent’s Executor (if the Decedent died with a Will) and/or Heirs-at-Law (i.e. those persons who are entitled to inherit from the Decedent if he/she died without a Will – i.e. died intestate). Most importantly, if in doubt, or if there is conflict among any Executor, Trustee, Beneficiary or Heir-at-Law, be sure to contact an attorney to avoid the risk of becoming personally liable for actions you have taken or are about to take.

Immediately:

• Arrange for organ donation, after reviewing Decedent’s driver’s license, Advance Health Care Directive, Living Will and/or other documented wishes;
• Notify family members, close friends and Decedent’s attorney;
• Arrange care for minor family members and dependents;
• Arrange for pets;
• Arrange for funeral and memorial, after discussing the same with immediate family members and after reviewing Decedent’s Advance Health Care Directive, Living Will and/or other documented wishes;
• If the Decedent was a Veteran, visit the U.S. Department of Veteran’s Affairs website, and their Burial Benefits page;
• Contact extended family and friends to spread the word about the funeral;
• Arrange for a headstone;
• Prepare an obituary;
• Arrange for security at Decedent’s home and/or request policy to routinely check on Decedent’s home if left vacant; and
• Dispose of perishable food in Decedent’s home and water plants;

As Soon as You are Able:

• Contact the Decedent’s estate planning attorney, or if none, a Trust and Estates attorney;
• Locate and secure Decedent’s estate planning documents (if any);
• Locate and secure Decedent’s financial documents (e.g. bank statements, retirement statements, life insurance statements, veteran statements, credit card statements, health insurance statements, list of creditors and debts, etc.);
• Notify Social Security (usually this is done by the funeral director, but if not, visit the U.S. Social Security Administration’s website);
• Notify Medi-Cal if the Decedent was receiving Medi-Cal benefits (visit California Department of Health Care Services website);
• Notify utility companies if services need to be stopped;
• Notify health insurance company to cease coverage (do not, however, cease benefits for the Decedent’s dependents);
• Notify Decedent’s employer;
• Notify credit reporting agencies;
• Notify mortgage company on Decedent’s home, if any;
• Notify Decedent’s bank(s);
• Obtain original Certificates of Death (an attorney can advise as the number of originals needed), which will be needed in the up-coming estate and/or Trust Administration (usually the funeral director can assist with this);
• Re-direct mail to person named as Executor in Decedent’s Will (if any) or to one of Decedent’s Heirs-at-Law (i.e. those persons who are entitled to inherit from the Decedent if he/she died without a Will – i.e. died intestate)
• Make a list of those who attended the funeral and/or sent well-wishes and send thank-you cards;
• Make a list of Decedent’s debts and creditors (do not, however, pay any of Decedent’s debts without speaking with an attorney);
• Close Decedent’s credit card accounts; and
• Maintain records of all expenses incurred on behalf of Decedent (e.g. funeral and memorial expenses).

To Finish:

• If a probate is necessary, file a Petition for Probate;
• If Decedent died with a Trust, the Trustee must begin the Trust Administration;
• Lodge Decedent’s original Will (if any) with the Probate Court;
• File appropriate documents with the County Assessor (e.g. Preliminary Change of Ownership Report, Change of Ownership Statement, Parent-Child Exclusion, etc.) and/or Recorder (Affidavit Death of Trustee, Affidavit Death of Joint Tenant, Quitclaim Deed, etc.) with respect to Decedent’s home, if any;
• File Form 56 with the IRS and California Franchise Tax Board;
• Determine whether an Estate Tax Return is necessary;
• Determine whether income tax and/or trust tax returns need to be filed;
• Pay Decedent’s rightful creditors (not barred by statutes of limitations periods) and taxes;
• Distribute assets remaining to Decedent’s beneficiaries; and
• Get a release of liability from beneficiaries.