Month: January 2010

A Living trust is a written document that you can use to partially substitute for a will. In a living trust, your assets will be put into a trust and it will be administered for your benefit during your lifetime. Then when you pass away, the assets will be distributed to your beneficiaries according to the wishes you specify in your trust.

In a living trust, you can name yourself as your own trustee. That way you yourself continue to manage your own assets during your lifetime. Thus, even if all of your assets are transferred to a trust, the assets will remain in your control as you can name yourself as your own trustee. You may also name a successor trustee who will then manage the trust assets in the event of your incapacity or death. In the case of joint living trust between spouses, they normally name one or the other or both as the trustee; and, in the event of death or incapacity of one spouse, the surviving spouse becomes the successor trustee.

If you make a revocable living trust, you may amend or revoke the trust at any time as long as you are still competent. The living trust you create will:

(1)    Give the trustee the legal right to manage and control the assets that you put into the trust.
(2)    Give instructions to the trustee to manage the assets in the trust for your benefit and in accordance with your wishes.
(3)    Name the beneficiaries of your assets in the event of your death. Should you still have minor children, you may also nominate their guardians.
(4)    Give instructions to the trustee on the management and distribution of your assets in the event of your incapacity or death. The successor trustee is a fiduciary who is subject to strict responsibilities. The successor trustee cannot use the trust assets for his or her own benefit but have to use the trust assets for the benefit of the beneficiaries you name in your trust.

Depending on your assets at the time of death, a living trust can be an important part of your estate plan. It can ensure that your assets will be managed according to your wishes even if you become incapacitated later on.

Normally, when you set up a living trust, you initially name yourself as your own trustee. You can likewise name a trusted person as a successor trustee should you ever become incapacitated. In the event of your death, the successor trustee can then gather all your assets, pay all your debts and distribute all your remaining assets to your beneficiaries in accordance with your instructions in the trust. This works very much like a will. The difference, however, is that a living trust takes effect right away while you are still living while a will takes effect only when you die. Furthermore, in a living trust you do not need to undergo probate as your assets will be distributed by the successor trustee to your beneficiaries without having to go to court for permission to do so. On the other hand, a will has to be probated in court and court approval will have to be secured before assets are distributed to your beneficiaries.  

So who needs a living trust? Generally young married couples without significant assets and without children, who merely intend to leave assets to each other when the first one dies do not need a living trust. Other people who do not have significant assets and have only simple estate plans may also not need a living trust.  People who may want the courts to supervise the distribution of their assets to their beneficiaries should not have a living trust. The greater the value of your assets, specially if you own real estate assets, then the greater may be your need for a living trust which may be important in the event of an accident or sudden death.

(DISCLAIMER: material presented above is intended for informational purposes only. It is not intended as professional advice and should not be construed as such. Rey Tancinco is a partner at Tancinco Law Offices, a professional corporation with offices in San Francisco, Vallejo, and Manila. The law office website is at: tancinco.weareph.com/old.  Rey Tancinco can be contacted at (800) 999-9096 or (415) 397-0808 or via email at: attyrey@tancinco.com

With housing foreclosures still at historically high rates, many previous homeowners who have lost homes through foreclosures have been forced to enter the housing rental market as tenants. These previous homeowners have found that the monthly mortgage payments they have been forced to pay for so long just was not affordable. In addition to losing their homes, many have also lost their savings in trying to sustain their unaffordable monthly mortgage payments. Many previous homeowners are now tenants in the rental market.  They have found that losing a home and being a renter is not all doom and gloom as previously thought. As a renter, previous homeowners still have a shelter over their head. The difference is that instead of being left with no savings at the end of the month, the previous homeowners who are now renters, are finding out that they are now able to afford rental payments (which are way below their previous mortgage payments) and still have some money left over for savings at the end of the month.

It might be of interest, therefore, for some of our readers to know the basic tenant rights when you are in the rental market.

Leases can be for a specific time period, generally for a year or so. Terms of such lease agreements cannot be changed unless agreed to by both parties. A lease can also be on a “month-to-month” basis. A month-to-month lease agreement continues indefinitely until you or the owner asks you to leave. If you pay a monthly rent, you must give the owner 30 days written notice that you are moving. An owner who wants to raise your rent must inform you in writing 30 days ahead of time if the increase is 10 percent or less, and 60 days ahead of time if the increase is more than10 percent. An owner who wants you to move must give you a written 30-day notice if you have lived in the rental property for one year or less; but if you have lived in the rental property for more than year, you must receive a 60-day notice to vacate.

Aside from the rent, you may possibly owe a number of fees and deposits. The owner, for example, can ask you to pay the last month’s rent before you move in. Then, if you give proper notice before moving out, you will not have to pay the rent during the last month.  Likewise, a security deposit can be used for damage you caused on the property as a tenant. The owner is obligated to return your security deposit no later than three weeks after you move, or tell you in writing why you will not get it back.  California law puts a limit on the total amount of deposits that can be required. The total cannot exceed the cost of two months rent for an unfurnished apartment or three months rent for a furnished place.

The owner has the right to expect you to follow the rules of your rental agreement, like for example: paying rent on time, keeping the apartment or house clean and avoiding nuisances like noisy parties or loud televisions which may bother other tenants. It should also be noted that although no one can refuse to rent to people with children, the owner can limit the number of people living in the apartment.

You as the tenant may rent your apartment to someone else unless you agreement states otherwise. This is called subleasing. If the agreement forbids subleasing, then you need to get the approval of the owner in writing to do so. If there is a subtenant and he causes damage or does not pay the rent, you will still be liable to the owner for the full amount.

Some communities have “rent control” laws that may give certain additional protections against rent increases or evictions. Such laws usually say when or how much rent can be raised; or, limit the grounds for an eviction.

As a tenant, you also have the right to a decent place to live. The law says that your rental place must be livable. If the place is not livable, through no fault of your own, you can move. You may not have to pay rent after you move, even though you still have a lease. You may also sue the landlord for any rent that you overpaid while living in untenantable conditions.

By law, for a place to be unlivable or “untenantable” the problem must be substantial and may include: a lack of waterproofing and weatherproofing (broken windows, for example); poor plumbing; insufficient hot and cold running water for bathing and cleaning; a lack of heat; electrical lighting that is not in good working order; unclean grounds and building; roaches and rodents; too few trash cans for your garbage; or, floors, stairs and railings that are in disrepair.   Should any of these occur and the owner refuses to fix it then you can report the condition to the housing or building inspection department of the city or county. The government department may then call or give the owner a written notice to correct the problem.  

It is also important for tenants to know that by law, an owner who wants you to move out cannot lock you out of your apartment or house. Neither can the owner remove your belongings or any doors or windows. Nor can the owner legally turn off the gas, electricity, heat or water. If any of these things happen, you can take the owner to court. If you win the case, the owner will have to pay for any damages.        

On the other hand, if you lose, you will have to move out and you may have to pay the owner’s costs of going to court, including attorney fees and back due rent. If you move out but leave your belongings behind, the owner must give you 15 days (18 days if by mail) to retrieve them. If you fail to claim your things during that time, the landlord may treat them as abandoned property. If your possessions are worth less than $300 the landlord may keep them or throw them out. If they are worth more than $300, the landlord must have a public sale.
 
Tenants, as well as landlords, have rights and obligations. It runs both ways. The bottom line is you just need to know what your rights and obligations are whether you are a landlord or a tenant.

(DISCLAIMER: material presented above is intended for informational purposes only. It is not intended as professional advice and should not be construed as such. Rey Tancinco is a partner at Tancinco Law Offices, a professional corporation with offices in San Francisco, Vallejo, and Manila. The law office website is at: tancinco.weareph.com/old.  Rey Tancinco can be contacted at (800) 999-9096 or (415) 397-0808 or via email at: attyrey@tancinco.com