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Celebrating the Dog Days of Summer in the Bay Area
The dog days of summer.
We are in them, or just out of them?

A Boy and Julia's Dog
What are they exactly?


They're the hot sultry days which may fall in early October in the Bay Area.   


The dog days of summer are often a period of stagnation, but fortunately won't be for you because you are going to have a resolution and I am going to help you achieve your goal.


Many people think of this time of year as the beginning.  


It is the beginning of the school year; this was imprinted on our psyches at such an early age, we may still think of early fall as the beginning of the year.

One thing I do at the beginning of the calendar year is make
Well, if, to you, this feels like the beginning of the year, you could make a resolution right now.  

Baseball Diamond
I am going to make it easy for you.  I am going to tell you what your "new" year's resolution is. Ready?

I am not about to write what you think I am going to write: 

You think I am going to tell you to your root for the Giants for as long as they last in the play-offs.  No, that is a resolution you have to make on your own, though it would be a very good resolution.

AT&T Park Sign

Here is your resolution: 


Learn the difference between a will and a trust and why the heck you should have a trust (if, indeed, you should).


I mean what is the big deal, anyway?

Here is the information you need:

Two Boys
Loved Ones

A WILL is a document which expresses the wishes of the person who signs it as to what happens to his/her assets after he/she dies. That person in legalese is referred to as the "TESTATOR".  


To sign a Will you have to have minimal competency: you have to realize who your loved ones are, namely the ones whom you would naturally want to benefit and you have to realize that you have some wealth and generally what it is and you have to connect your wealth to your loved ones.  If you can do that you are competent enough to sign a Will.

Some Wealth

In your Will typically you name the Executor, the person who will be appointed by the probate court to execute your plan as expressed in your Will. There is no Executor until the Will has been taken to court, found to be valid, and the court appoints someone to be Executor.  The point is that no one is an executor just by being named in a Will.  You have to be appointed in the Probate court.


A TRUST AGREEMENT creates a trust.  The trust can be a living trust (taking effect while you are alive) or a testamentary trust (one created in your Will and made to go into effect in an order in the probate process for your Will).  The trust can be revocable or irrevocable.

And you still ask, "But, what is a trust?"

Non-Imaginary Box

A trust is, of course, not a tangible thing, though the Trust AGREEMENT that creates it, being a legal document, is tangible. And in case you want more confusion, the word "trust" is often used to mean both the trust and the trust agreement,  though I don't like confused thinking so I try to use the two separate terms.


Think of a trust as being like a box, an imaginary box.   It is a box with compartments and a list of instructions on how to use and manage the things in the box.  You who signed the Trust Agreement which created the box, decide on the instructions.  As the creator you are the TRUSTOR.


You now have two words: the TESTATOR is the one who signed the Will.  The TRUSTOR is the one who signed the Trust Agreement.  Note the word Trust inside the word Trustor.  That way you can remember the it is a Trustor who creates a trust and as the creator, the Trustor decides on the terms written into the Trust Agreement.


The box holds all your assets, this means that title to your assets is held in the trust.  They are actually held by your TRUSTEE. 


You the Trustor can also be the Trustee, the Trustor creates the Trust and decides what will happen to the assets in the Trust which is written up in a Trust Agreement.  The Trustee follows the instructions.  Analogous words are "employer" and "employee", the employER says what is to be done and the employEE does it.  If you were a sole proprietor you could be both employer and employee, sort of, just as you can actually be the Trustor and the Trustee.


Egyptian Artwork
Art is an Asset

While you are alive and sharp of mind, you can continue to put your newly acquired assets into your own name as Trustee and make sure that no assets are held by you personally outside the Trust because the Trust Agreement cannot tell the Trustee to do something with an asset that is not in the trust, e.g.,in 2015 sell the painting by Stuart Davis, unless the painting is owned by the Trustee.


Note that this means that the Trust Agreement, unlike a Will, takes effect while you are alive.

Having a document that gives directions for the care and use of your assets while you are alive is enormously useful and it is because of this usefulness that I am such an advocate of having a Trust funded with all your assets.  
Suppose you lose that sharpness of mind.  It happens to young and old.  It won't happen to you but it might happen to your neighbors so read this with one of them in mind.  

Suppose he loses his mind.  Suppose he does not have a trust agreement?  Now someone will have to go to the probate court and ask the court to appoint someone to be the CONSERVATOR of your neighbor's assets (conservator of the estate).  

A Conservator takes charge, under court supervision, of his assets and decides how to spend them and how to invest them.  Then the Conservator reports what she has done to the court and the court decides whether the Conservator has done the right thing.  Then your neighbor's whole life and  whole wealth is laid out in front of the court in court records most of which anyone can read whenever they chose.  Because everything is laid out in front of the court, there are lawyers involved, there have to be. 

One lawyer for the neighbor who has lost his mind, one lawyer for the person who asks the court to appoint a conservator and one lawyer for the conservator.  And whose money is used to pay all these lawyers?  The person who needs the conservator, your neighbor.  

It can cost many many dollars to establish the conservatorship of the estate and then more dollars which are paid out over every year for the rest of his life as court reports are made. 

If your neighbor loses his mind when he has a trust, then the instructions in the Trust Agreement come into play. The Trust Agreement's instructions says who becomes Trustee if the Trustor can no longer be Trustee; the Trust Agreement says what the money should be spent on while the neighbor is alive, including such things as making charitable contributions and paying for college; the Trust Agreement says how the money can be invested.  Now the court is not involved, now the court is not making choices that the neighbor would wish he had had the foresight to make (e.g., the court will tell the Conservator,  no, you cannot pay for the grandson's trip to Europe that the neighbor had promised since the child was 10, all the money has to be spent on the neighbor (the Conservatee).

The Trust is in operation during your life.  It also has instructions for what the Trustee is to do on your death.  If there are any taxes due, the Trustee must pay them.  If you have debts, and the alleged creditors can prove the debt within a certain time limit, then the Trustee pays the debts.  Then the Trustee gives out your assets to the people and organizations specified in the instructions.  Just as the Trustee can operate during your lifetime without consulting the court, so at your death, the Trustee does not have to go to court for permission nor does the Trustee need to report to the court.

The Trust Agreement says what is to happen while you are alive (unlike a Will) AND what happens after your death (like a Will).  

You have done what you resolved to do. 
You know about trusts agreements and wills; trusts and probate estates. 

Okay, you get it. Once again I am encouraging you to do estate planning.  


Do it!  Please! We will both sleep better.


Give me a call and we can discuss it. I'll give you my wisdom and my time (up to half an hour), and it won't cost you anything. 





Julia Wald
Law Offices of Julia P. Wald
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Law Offices of Julia Wald | 1108 Fifth Avenue | Suite 202 | San Rafael | CA | 94901