Let’s begin by reviewing some statistics: “Ten out of ten people will die.”
REVOCABLE LIVING TRUSTS 101:
It is the responsibility of every person to direct the distribution of their estate after they die, if they don’t, the state takes over your estate and charges your loved ones a fee to do the job for you, it’s called probate. Be responsible to you family and loved ones, creating an estate plan provides a solid foundation for your loved ones when you die. Don’t leave a financial mess for your grieving family to clean up.
A Trust: The Basics
If you hear the word “trust” and think it is an estate planning tool used only by the rich, you should know that over the past few decades, individuals and families in all income brackets are using trusts to plan their estates and to avoid the costs and delays of probate. In fact, the smaller your estate, the reason to get a trust in place is even more important because you don’t want to squander even one cent of your assets.
Trusts have become an even more important estate planning tool in San Diego and throughout Southern California because of the value of real estate. With the average cost of a home typically in the $500,000 range, a trust can save your heirs thousands of dollars by avoiding the probate process where court costs, executor fees, and attorney fees are based on a percentage of the value of the estate. The cost of probate if you have a home with a market value of $500,000 home not including your financial accounts and other assets in your estate will easily cost your heirs upwards of $24,000, and a couple of years tangled up in the court system. You can avoid these fees and unnecessary waste of your loved ones time, by creating a revocable living trust and the supplemental documents that go with the Trust.
What is a Trust?
A trust is simply a written contract executed by the Settlor (the person who creates the trust) and delivered to the Trustee (the person who is in charge of the trust, usually the same person as the Settlor), which is made for the benefit of a group of people (your “beneficiaries”). A living trust is called “living” because it is created while you are alive, it is also referred to an Inter-vivos Trust. Some people create “testamentary trusts” which only take effect upon death.
The beginning of any good estate plan includes a “revocable living trust” which allows you to revoke or change it any time, and as often as you like. Revocable trusts are very flexible, and can “own” all or some of your property. You can even have more than one revocable living trust to own different types of property, such as your separate property and your community property. There are many benefits of having a trust.
The Difference between Trusts and Wills
Remember, there really is nothing complicated about a revocable living trust – it is just like a Will, but is merely administered differently upon your death. While you are alive, you will still own all of your property, and may do whatever you want with it. The most important difference between a Will and a living trust is that your trust must be “funded” with all of your property in order to avoid probate. If an asset is not properly titled, it may have to be probated by your heirs, thereby defeating the very reason for making a trust. Not all of your assets should be in the trust due to taxes and other reasons.
The Estate Planning Legal Center, APC
When you begin planning your trust, it is important that you speak with an estate planning attorney, and obtain proper advice on how the entire process works. At the Estate Planning Legal Center, APC, we will help you identify the right type of trust for you and your family.
There are many different types of trusts, including:
- Marital A-B Trusts
- Marital Revocable Living Trusts
- Marital Disclaimer Trusts
- Special Needs Trusts for Disabled Beneficiaries (See Special Needs Trusts-under estate planning tab on right)
- Generation-Skipping Trusts: To avoid taxation in the beneficiaries estates
- Honorary Trusts for the Care of your Pet
- Personal Residence Trusts: Allows your beneficiary the use and enjoyment of your home for their lifetime.
- Marital Q-Tip Trusts
- Individual Revocable Living Trusts
- Combination Marital and Individual Living Trusts for Second or Third marriages or for blended families.
The Estate Planning Legal Center, APC will review your trust funding options, and help you accomplish this funding so it is done correctly. With your basic estate plan, you will receive one real property trust transfer deed prepared as part of your estate plan along with the preliminary change of ownership agreement, recording service and recording fee included. For more than one parcel of real estate, the fee will increase slightly per parcel. Our Law Firm will then direct you how to properly fund your trust. We will provide you with the proper funding letters and documentation to take to your financial institutions – and we will assist you with the funding of the remainder of your assets.
Contact Our Law Firm
Call Estate Planning Legal Center, APC today at (858) 560-0776 or send an e-mail to email@example.com and we will contact you to set up your first appointment. You may also go to our website: eplegalcenter.com and fill out the contact information page.