Fong Law Group

Why Everyone Needs a Living Trust in Estate Planning

The New Year is a perfect time to review and strengthen your estate plan. A critical aspect of this is understanding why a living trust is often a better choice than relying solely on a will.

Why Not a Will Alone?

A will requires probate—a court-supervised process to handle a decedent’s estate. In California, probate is complex, lengthy (1-2 years), and expensive. Probate fees are calculated on the gross value of your estate—not the net value. For example, if you own a $1 million home with $800,000 in mortgage debt, fees are based on $1 million, not the $200,000 equity. This can result in probate fees of $50,000 or more.

Additionally, a will is a public document, meaning anyone—including creditors—can view it. Probate court notifies creditors, giving them first claim on your estate. This transparency can diminish what’s left for your beneficiaries.

The Advantages of a Living Trust

A trust bypasses probate, offering several benefits:

Privacy: Trusts are not public, so creditors and others cannot access your asset details.

Efficiency: A trustee can distribute assets without court approval, avoiding delays and reducing costs.

Minimized Disputes: Unlike wills, trusts are less prone to legal challenges, as they don’t require court approval.

Proper Funding is Key

A living trust only works if it’s properly funded. This means transferring ownership of assets—like real estate, bank accounts, business interests, and valuable personal property—into the trust. Without this step, assets remain subject to probate, rendering the trust ineffective.

Common Pitfalls

Many people use online tools or non-lawyers to set up trusts, only to discover later that assets weren’t transferred properly. This oversight leads to unnecessary probate, increased costs, and potential family disputes. An experienced estate planning attorney can ensure your trust is correctly funded.

Additional Estate Planning Considerations

Tax Planning: With federal and state laws impacting estates, proper planning can mitigate tax burdens. For 2025, the federal estate tax exemption increases to $13.99 million. However, this could drop to $3.5 million in 2026 unless Congress acts, which may affect many Californians given high property values.

Beneficiary Updates: Regularly update beneficiary designations on accounts and policies to prevent unintended inheritances, such as assets going to an ex-spouse.

Guardianship for Minors: Ensure trusted individuals are designated as guardians for your children.

Incapacity Planning: Include a Durable Power of Attorney and Advance Healthcare Directive in your estate plan to avoid costly and time-consuming court proceedings if you become incapacitated.

Protecting Your Family’s Future

A well-structured estate plan is about more than wealth transfer; it’s about ensuring your family’s security and reducing stress during difficult times. Start the New Year by reviewing your plan with an experienced attorney to ensure it reflects your current circumstances and protects what matters most. 

Will My Advance Directive Work in Another State?

Making sure your end-of-life wishes are followed no matter where you happen to be is important. If you move to a different state or split your time between one or more states, you should make sure your advance directive is valid in all the states you frequent.

An advance directive gives instructions on the kind of medical care you would like to receive should you become unable to express your wishes yourself, and it often designates someone to make medical decisions for you. Each state has its own laws setting forth requirements for valid advance directives and health care proxies. For example, some states require two witnesses, other states require one witness, and some states do not require a witness at all.

Most states have provisions accepting an advance care directive that was created in another state. But some states only accept advance care directives from states that have similar requirements and other states do not say anything about out-of-state directives. States can also differ on what the terms in an advance directive mean. For example, some states may require specific authorization for certain life-sustaining procedures such as feeding tubes while other states may allow blanket authorization for all procedures.

To find out if your document will work in all the states where you live, consult with an elder law attorney in the state. 

Beverly Hills 90210 Star Luke Perry Did Have an Estate Plan

“Fortunately, Perry's foresight to do proper estate planning, meant that the tragedy was not made worse for his family.”

Luke Perry’s death at age 52 from a condition that we think of as something that happens to older people, has made many people thinks differently about strokes. As reported in the Forbes article “Luke Perry Protected His Family With Estate Planning” Perry was savvy enough to do the proper estate planning, which made a difficult situation easier for his family.

Perry was heavily sedated following the first stroke and five days later, his family made the difficult decision to remove life support. It had become obvious that he was not going to recover, following a second stroke. He was surrounded by his children, 18-year-old Sophie, 21-year-old Jack, Perry’s fiancé, ex-wife, mother, siblings and others.

The decision to allow Luke Perry to die, when only a week earlier he had been alive and vibrant, could not have been easy. It appears that he had the correct legal documents in place, since the hospital allowed his family to make the decision to end life support. In California, those wishes are made in writing, using an Advance Directive or Power of Attorney. Without those documents, his family would have needed to obtain an order from a probate court to permit the hospital to terminate life support, especially if there was any disagreement about this decision from family members.

That would have been a public and painful experience, making things harder for his family.

Perry reportedly had a will created in 2015 leaving everything to his two children. Earlier that year, he had become a spokesperson for screening for colorectal cancer. He had undergone a colonoscopy and learned that he had precancerous growths, which led him to advise others to do the same testing. According to friends, it was after this experience that Perry had a will created to protect his children.

It is thought (but not yet verified) that Perry had a reported net worth of around $10 million, so it’s likely that he created a revocable living trust, in addition to a simple will. If he had only a will, then his estate would have to go through probate court. It’s more likely that he had a trust, and if it was properly funded, then his assets could pass onto his children without any court involvement.

The only question at this time, is whether he made any provisions for his fiancé, Wendy Madison Bauer. Since the will was done in 2015, it’s unlikely that he included her in his estate plan. If they had married, she would have received rights that would not have been automatic but would have depended upon the wording of his will or trust, as well as whether the couple had signed any prenuptial agreements. If they had married and documents did not include an intent to exclude Bauer, she would have been entitled to one-third of his estate.

Luke Perry’s tragic death provides an important lesson for all of us. No one should wait until they are old enough to do estate planning. Perry’s cancer scare, in 2015, gave him the understanding of how quickly life can change, and by having an estate plan in place, he helped his family through a difficult time.  

Reference: Forbes (March 8, 2019) “Luke Perry Protected His Family With Estate Planning”

The Right Documents for Estate Planning

“Make sure that you have the right documents in place to protect your family and yourself.”

Having a properly prepared estate plan, that includes all the important documents, including a will and power of attorney, is one of the most important ways to protect your family and yourself. Despite this fact, many adults still neglect to take care of this important task, reports Consumer Reports in its article “8 Essential Steps for Estate Planning.”

A survey from Caring.com showed that as many as 60% of adults don’t have estate planning documents. When they asked families with young children, fewer than one in ten have even designated a guardian to take care of their children, if both parents should die.

What happens when there’s no planning in place? Even the simplest things become more complicated, and complicated things become financial and legal nightmares. When there’s an emergency and decisions need to be made, the entire family is subjected to more stress and costs than would otherwise be necessary.

Here are the eight steps you need to take, right now, to protect your family:

1. Get the professional help you need. The change to the tax law may or may not impact your family and your estate plan, but you won’t know until you sit down with an estate planning attorney. Trying to do this online, may seem like a simpler way, but you will not have the same peace of mind as when you sit down with an experienced attorney—and one who knows your state’s laws.
2. Create a will. This is a legal document that explains how you want your assets to be distributed after you die. It names an executor to carry out your instructions. If you have minor children, this is an especially important document, since it is used to name their guardian. If you have no will when you die (called dying “intestate”), then the laws of your state determine how your assets are distributed and who rears your children. Depending on where you live, your spouse might not automatically inherit everything.
3. Discuss whether you need a Revocable Living Trust. In most states, when you pass away, your estate goes through a process called “probate.” The courts basically review your estate plan and determine whether everything looks right. The problem is that your will becomes a public document—and so does information about your assets. Some people prefer to keep their lives private by transferring assets to a revocable living trust, which distributes assets according to your instructions at your death. Titles to the assets must be changed, so they are “owned” by the trust. This is known as “funding” the trust. You still retain complete control of your assets, since you are the trustee. However, if you fail to retitle assets, the estate goes through probate. You will also still need a will to protect your minor children.
4. Review your beneficiaries. Whether you remember it or not, when you open many different kinds of accounts—banking, investment—you assign a beneficiary to receive the assets upon your death. Your will does not override the beneficiary designation. Therefore, if you haven’t changed your life insurance beneficiary, for instance, and your ex-wife is still named on the document, she’ll get the entire proceeds of the life insurance policy when you die. This is a very important task.
5. Have a Durable Power of Attorney (DPOA) created. This is something that protects you, while you are living. If you should become incapacitated, having a durable power of attorney in place will allow that person to manage your financial affairs. Make sure the institutions that have your accounts accept your attorneys’ POA form; you may need to get the one that the institution uses.
6. Don’t forget the Advance Directive. This is also known as a Living Will. It explains your wishes for medical procedures, if you are unable to communicate and explains what you want for end-of-life care. Make sure that your family members know that you have such a document and keep it accessible in case of an emergency.
7. Pick a Healthcare Proxy. The Healthcare Proxy, also known as the Durable Power of Attorney for Healthcare, names someone to convey your healthcare wishes. It should include a HIPAA release clause. This allows medical personnel to release your medical records and speak with the named person about your care.
8. Get it all organized. Think of this step as creating a user’s manual for yourself. All these plans won’t do any good, unless your loved ones know they exist and know where to locate them. Don’t put your estate planning documents and records in a bank safe deposit box, in case it is sealed on death. Your attorney will likely have an original, and you should have your original in a fire-proof safe in a secure location in your home.

Reference: Consumer Reports (Oct. 24, 2018) “8 Essential Steps for Estate Planning”

Keep it All in the Family For Estate Plan Success

“Not only does creating an estate plan force you to confront your own mortality, but it also forces you to decide who gets your assets, whether all heirs should be treated equally and who will play the key roles in settling your estate.”

If estate planning were just about some basic math tasks, people would not put off going to their estate planning attorneys every few years to make sure their estate plan is in order. However,, as accurately described in the article “Estate Planning: A Family Affair” from Kiplinger, this is a highly emotional process.

If it helps to get you to move on this, consider that if you don’t have a will, the decisions about what will happen to your property–and if you are a parent of minor children, what will happen to your kids—will be decided by the laws of your state and the courts. That should be enough to get you to overcome the fear of mortality, that often keeps people from moving their estate planning forward.

Don’t have a will yet? You need to do that right away. If you have an estate plan, but haven’t reviewed it in a while, and your life has become more complex, it’s time for a review. By the way, just because you review your plan, does not necessitate an overhaul. However, laws and lives do change and the same goals your will and estate plan addressed four years or 14 years ago, may not be the same as they are now.

Every five or six years or whenever there is a major change in your life, such as a divorce, inheritance, financial loss, birth or a change in estate laws, it’s time for a review. Reviews should take place more often, when you are in your 50s or 60s. At that time, your assets may have grown, your children may have children of their own and your goals may have changed.

Your focus may have switched from protecting your children in the event of a premature death of a parent, to transferring wealth from one generation to the next.

The large changes to the tax law may mean that you no longer need some of the tax planning strategies you put into place prior to 2017. Several states have made major changes to their own estate tax laws. New Jersey eliminated its estate tax in 2018 and New York boosted its state estate tax exemption to $5.25 million that same year. Delaware eliminated its estate tax at the end of 2017.

One couple looked at their estate plans from almost 20 years ago, before two of their children were even born. They realized that the plan was out of date, their estate had become much larger, more complicated and they wanted to build in significant charitable giving.

The first task: updating their wills, health care proxies and advance directives for end-of-life care. They created a trust that will donate 11% of their estate to a charity that matters to them. Trusts were set up that will pay out a certain percentage to their children at ages 30, 35 and 40, rather than giving their kids lump sums. They set up a plan whereby a trustee has the discretionary ability to make payments for education, health care, emergencies and even a down payment on a house, which will be subtracted from the child’s future distribution.

An additional benefit: Because of their use of trusts, their distribution of assets will be private.

Trusts are considered the “work horses” of estate planning, because they can be used to accomplish so many different tasks within an estate. However, it is important to note that there is no one-size-fits-all trust. An estate planning attorney should review your situation and then will be able to recommend what trusts, if any, will be most useful for you and your family.

Don’t forget to have the talk. Sit down with your family members and tell them, to the extent you are comfortable, what you have decided. You don’t have to discuss numbers. However, your family will appreciate being part of the conversation, so they understand the reasoning behind your decisions.

Make sure the information shared is keyed to your child(s) maturity. Some 18-year-olds are mature enough to understand the impact that an inheritance can have, while some 30-year-olds see a future inheritance as a license to slack off. You know your children best—make thoughtful decisions about how much to tell them and when.

Reference: Kiplinger (Nov. 1, 2018) “Estate Planning: A Family Affair,”

Preparing for the Inevitable: End of Life Decisions

“Are you ready for the end of life? Many of us can resolutely answer “no.” I am not implying preparation for life after death, salvation or eternal darkness—I simply mean forethought in the medical care that you wish to receive in a life-threatening illness or injury.”

When most people think of preparing for the end of their lives, it’s accompanied by an image of an elderly person surrounded by loved ones. Not everyone is lucky enough to have what we call a “good death.” Preparing for end of life, as described in an article from The Herald-Mail titled “It’s never too early to prepare for the end of life,” needs to include emergency situations, where decisions about life-saving measures must be made, usually by family members who are often not prepared.

Spare your loved ones from the agony of making decisions, based on what they think you might have wanted by planning in advance for what is, without question, unpleasant to consider. Nevertheless, in today’s era of medical technologies, such scenarios are quite possible. Let’s start with the advance directive.

Advance directives are legal documents that include both a living will and medical power of attorney. The living will allows you to document your specific preferences for medical care at the end of life. These range from aggressive intervention that saves your life, to palliative comfort care that gives medication to alleviate pain and suffering. There is a wide range between the two, so the more specific you can be, the better your loved ones will know what you want.

A medical power of attorney lets you designate a trusted person—spouse, friend or adult child—to make decisions for medical care, if you cannot do so. This is also known as a health care surrogate or proxy.

Here’s what happens when no advance planning has occurred. A critical medical situation arises, and family members are contacted. Without having had a discussion about the person’s wishes, typically an aging parent, siblings don’t know what to do. If they do know what to do, but there is no legal document attesting to their parent’s wishes or if the legal document is not physically present, the medical provider is bound by their own determination of the situation and their professional code of ethics.

That action may not be what you would have wanted. However, your family or trusted friends do not have the right to make decisions, if legal documents are not in place. The solution is relatively simple: plan in advance.

First, give serious thought to what you would want to occur. Make a list of questions to discuss with your primary health care physician.

Second, have a conversation with family members and friends about your wishes, and discuss with them their role in such situations. Are they willing to carry out your wishes and to take on this responsibility?

Third, meet with your estate planning attorney and prepare the necessary documents. While you’re doing that, review your estate plan to ensure that your end-of-life wishes, and overall estate plan are aligned.

Reference: The Herald-Mail (Oct. 8, 2018) “It’s never too early to prepare for the end of life”

Why You Should Have an Advance Directive 為什麼你應該有一個預先指示 (中英對照)

“Advance directives come up frequently in conversations about health care decision-making, as people age. Their purpose is to provide written instructions for medical care, in instances where a patient is unable to communicate them herself.

An advance directive is a legal document that states a person’s preferences for medical treatment and medical decision-making, reports Valley News in an informative article titled “Advance Directives Provide Clear Guidance for Care.”

There are two components that make up an advance directive: a durable power of attorney and a treatment preferences section.

The durable power of attorney for health care allows you to appoint someone to make medical decisions, if you lack the capacity to make those decisions for yourself.

The treatment preference, which is sometimes referred to as a living will, lets you specify what kind of treatment you would want in a difficult circumstance. Treatment and care preferences usually focus on what you would want at the end of life or if you were in a permanently unconscious state. There are other preferences that can be expressed, including pain control, blood transfusions, mental health care and spiritual care. Another preference: who should—and should not—be involved in discussions about treatment.

Most people want to express their wishes to avoid aggressive measures being taken to extend their lives, when the end result will be suffering and a delay of their passing. Others chose to avoid the financial burdens that may or may not result in any kind of change in their health or the quality of their life.

Some have these documents prepared to make it clear that they want to spend their final months, weeks or days at home with loved ones with care only to relieve pain or care, so they can be conscious and able to speak with those around them.

Advance directives are a blessing to loved ones since they do not have to make hard choices in a crisis situation. They know what their aging parent or spouses wishes.

It’s important to choose the person you want to be responsible for your care well in advance. Make sure it’s someone you trust, who knows you well and will be able to make hard decisions in a highly emotional time. They’ll also have to be able to communicate with your doctors and family members.

These documents are bound by the laws of your state, so speak with an estate planning attorney who practices law in your state of residence. They’ll be able to prepare these documents on your behalf, along with a will and other estate planning documents.

Reference: Valley News (Sep. 1, 2018) “Advance Directives Provide Clear Guidance for Care”

“隨著人們年齡的增長，他們會經常談到有關醫療決定的問題。目的是在患者無法自行溝通的情況下提供醫療護理的書面說明。”

預先指示 (Advance Directives) 是一份法律文件，說明一個人對醫療護理和醫療決定的意願，谷新聞在一篇題為信息的文章中報導“Advance Directives Provide Clear Guidance for Care.”(預先指示提供明確的護理指導)

預先指示是由兩個組成部分構成：持久的授權書和治療意願的部分。

如果您缺乏為自己做出決定的能力，那麼持久的醫療授權書允許您指定某人為您做出醫療決定。

治療意願有時被稱為生前意願，可讓您指定在困難環境中您想要的治療方式。治療和護理意願通常重於在您生命結束時想要什麼，或者您處於永久性無意識狀態。還有其他意願，包括疼痛控制，輸血，精神保健和精神護理。另一個意願：誰應該以及不應該參與有關治療的討論。

大多數人都希望表達他們的願望，避免採取過激措施來延長他們的生命，導致最終結果是痛苦和延遲他們的死亡。其他人則選擇避免經濟負擔, 這可能會或不會導致他們的健康或生活品質發生改變。

有些人準備好這些文件，用來表示他們希望在家中與親人一起度過最後幾個月，幾週或幾天，主要是為了緩解疼痛和免除不必要的護理，使他們會有意識並能與周圍的人交談。

預先指示是對親人的祝福，因為他們不必在危機情況下做出艱難的選擇。他們知道他們年邁的父母或配偶的意願。

重要的是要提前選擇您想要護理負責人。確保這是你信任的人，誰能夠很好地了解你，並且能夠在情緒激動的時刻做出艱難的決定。他們還必須能夠與您的醫生和家人溝通。

這些文件受到您所在州法律的約束，因此請諮詢在您居住的州的執業資產規劃律師。他們將能夠代表您準備這些文件，以及遺囑和其他資產規劃文件。

參考: Valley News (Sep. 1, 2018) “Advance Directives Provide Clear Guidance for Care”