Living Trust: Trust Us, It Matters.

Statistics indicate that 9 out of 10 people do not have a will nor a trust. One of our goals is to see that every one of our clients has a will and if necessary a Living Trust.

Estate planning, including the use of trusts, has often been viewed as something only “rich” people need to do. But in California, if a person dies with assets worth $150,000 or more, their heirs may be required to get the probate court’s permission in order to transfer or sell the assets (which can take 1-2 years). In addition, there are fees that must be paid to professionals to prepare the legal paperwork for the court. The mandated rate starts at 4% of the first $100,000 of gross value of the assets and the rate decreases as the asset value increases. As an example, let’s say an unmarried person died owning a house worth $500,000, with a mortgage of $460,000. The probate fees could be $11,000, leaving little for the heirs.

The easiest way to avoid having to go through probate court is by setting up a Living Trust. The trust document, customized to your personal wishes, describes how the assets will be transferred without probate. For example, property owned by a couple with children from prior marriages can be held in the trust to benefit the surviving spouse, then transferred to the deceased’s children upon the survivor’s death. Assets left for minors can be held in trust until any age you choose. Perpetual trusts can be used to protect assets from the heirs’ judgements/creditors and divorces of your adult children. Another benefit of trusts is that the successor or co-trustees can control the assets if the owner is incapacitated. Also, a Living Trust is not subject to public exposure through the court system which is what will happen during probate. 

Living Trusts are formal legal documents which Stanislawski & Company, Inc. do not prepare. We recommend to meet with us to explain all of the nuances and then meet with an experienced estate-planning attorney to draft the document. The attorney fees are much less expensive than the probate costs. Call us and we can recommend attorneys in your area.

Doug Forbes