Reasons for removal of a personal representative include statutory grounds of wrongdoing, neglect, or incapacity, as well as removal in favor of a person with higher priority. California Probate Code Section 8500-8505 cover this topic.

What happens if the personal representative fails to perform his or her duty?

The court may lower or deny compensation and can replace the personal representative with someone else. The personal representative may even have to pay for any damages he or she caused.

Currently, on account of the enactment of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the “2010 Tax Act”), the Federal estate tax exemption is $5.12 million, or twice that for a married couple.

It was and is common practice for a married person to provide if his or her surviving spouse survives to have his or her estate to be divided into two broad portions. One part is made equal to the estate tax exemption. That part is exempted from estate tax when that spouse dies on account of the so-called unified or applicable estate tax credit (which may be translated into a dollar exemption of $5.12 million). That part may be placed into a trust of which the surviving spouse is a beneficiary but need not be included in the gross estate of the survivor. Typically, that trust is called the “credit shelter trust” (because it is protected from type by reason of the unified credit), “estate tax exemption trust” or a “bypass trust” (because it “passes by” the estate of the surviving spouse for estate tax purposes).

The second part of the estate of the surviving spouse usually passes to or in a marital deduction trust for the surviving spouse and avoids estate tax when the first spouse dies by reason of the estate tax marital deduction. The property that passes to or in trust for the surviving spouse under the protection of the estate tax marital deduction is included in the gross estate of the survivor (unless consumed, given away or dissipated before the survivor dies). (In some cases, this second part of the estate is also divided by directing an amount equal to the otherwise unused generation skipping transfer tax (GST) exemption of the first spouse to die to pass into a separate qualified terminable interest property (QTIP) trust described in Section 2056(b)(7) of the Internal Revenue Code (Code). A QTIP trust qualifies for the estate tax marital deduction only by affirmative election.

Ethical Wills are documents designed to pass ethical values from one generation to the next. It is not a legal document and typically it is in the form of a letter written by parents to children or grandchildren. It is drafted by you, not me or any other attorney. Today it does not need to be in the form of a letter but could be an audio or video recording.

Ethical wills often contain meaningful family stories, personal values and beliefs, statements of faith, blessings, advice, and expressions of love. They may even share regrets, apologies, and final requests. There are no rules or laws about the length or content of an ethical will. It can be a few lines, or paragraphs or many pages in length.

Every ethical will is unique. And, while there is no standard format for writing one, samples of ethical wills can be found at this link.

Rights of publicity pass to the heirs of celebrities who are residents of California when they die. A hologram performance by Tupac Shakur (who died in 1996) at this year’s Coachella Valley Music and Arts Festival is a right which passed to his mother when he was shot.

Proper estate planning in California can help direct where revenue from those rights will go long after the person died.

California Civil Code section 3344 is for the publicity rights of living persons, while Civil Code section 3344.1, known as the “Astaire Celebrity Image Protection Act,” grants statutory post-mortem rights which prohibit the unsanctioned use of the “name, voice, signature, photograph or likeness on or in products, merchandise or goods” of any person.

Tax specialists are paying attention to how half a dozen of Facebook’s top names, including founder Mark Zuckerberg, appear to be using a perfectly legal maneuver called a grantor-retained annuity trust, or GRAT, to avoid at least $200 million of estate and gift taxes on their own Facebook shares.

A grantor retained annuity trust may be an effective means for a wealthy client who wants or needs to retain all or most of the income from a high-yielding and rapidly-appreciating property to transfer the property to a child or other person with minimal gift or estate tax. GRATs are particularly indicated where the client has one or more significant income-producing assets that he or she is willing to part with at some specified date in the future to save federal and state death taxes and probate costs, to obtain privacy on the transfer, and to protect the asset against the claims of creditors.

A GRAT is created by transferring one or more high-yield assets into an irrevocable trust and retaining the right to an annuity interest for a fixed term of years or for the shorter of fixed term or life. When the retention period ends, assets in the trust (including all appreciation) go to the named “remainder” beneficiary (ies). In some cases other interests, such as the right to have assets revert back to the transferor’s estate in the event of the transferor’s premature death, may be included.

Of the many steps required when beginning to probate a California estate, publishing the notice of death remains a top priority. The California Probate Code provides the statutory basis for publication in section 8121 which says:

(a) The first publication date of the notice shall be at least 15 days before the hearing. Three publications in a newspaper published once a week or more often, with at least five days intervening between the first and last publication dates, not counting the publication dates, are sufficient.

(b) Notice shall be published in a newspaper of general circulation in the city where the decedent resided at the time of death, or where the decedent’s property is located if the court has jurisdiction under Section 7052. If there is no such newspaper, or if the decedent did not reside in a city, or if the property is not located in a city, then notice shall be published in a newspaper of general circulation in the county which is circulated within the area of the county in which the decedent resided or the property is located. If there is no such newspaper, notice shall be published in a newspaper of general circulation published in this state nearest to the county seat of the county in which the decedent resided or the property is located, and which is circulated within the area of the county in which the decedent resided or the property is located.

Although this blog is focused primarily on matters of interest involving California probate, there are related topics worthy of discussion.

For example, while probate is the California court’s supervision over the transfer of property from the deceased person’s estate to the rightful heirs or beneficiaries, when that person is still alive he or she may not have the ability to make decisions about the property belonging to him or her. When we are alive but incapacitated (by a stroke, heart attack, auto accident, debilitating disease or some other reason), someone ought to be given the power to make decisions regarding our property when we are not able to make those decisions ourselves.

In those instances, a durable power of attorney for property management and financial affairs is useful. That type of California document “endures” our incapacity and continues to remain in effect. The person named in the durable power of attorney – the attorney in fact – steps into our shoes and is empowered to make decisions regarding our property.

The Judicial Branch of California provides free access to forms to handle your own probate.

To start a new probate case or to challenge a new probate case, you’ll need to file a Petition for Probate by using the form at this link.

In many cases, when you file a Petition such as the Petition for Probate, you have to provide notice of the hearing date, location of the hearing and time for the hearing. You give notice by using the form at this link.

Approximately 70% of Americans don’t have a will. A will is a fairly simple document to create so why do so many people avoid it? Some might say: I don’t have anything to leave to my heirs; I’ll let them sort it out when I’m dead; I’m dead so it’s not my problem; I’ve got plenty of time to write my will; I can’t afford it, etc. Read about how to write your own will here.

Families today tend to be blended, containing spouses, ex-spouses, children, step-children, and adopted children. Parents of blended families-or any family, really-should take the time to draft a will to ensure their wishes are followed after they die. You certainly are capable of writing your own will, but most attorneys and financial advisors recommend getting the help of an attorney to draft a will to ensure all required details are covered. Individuals should also consider preparing a durable power of attorney for health and financial reasons.

Naming a guardian for your minor children and naming an executor are two important components of your will. What happens if neither parent is able to take care of the children? Without a will, the court appoints a guardian for your children.

Whether you own stamps, coins, art or other collectibles, remember to include them in your California Will or living trust so your executor or trustee knows what you intend to have happen to those items when you die.

A New York Times article offered advice about what to do with this kind of stuff.

Selling the property is one option. You can sell the items during your lifetime or direct in your Will or living trust that the items be sold after your death. Auctions, outright sales and ebay sales are some of the ways to address your property.