A living Trust will avoid probate for all of the assets that have been transferred to the trusts. A Trust can also avoid a conservator, which can be expensive, time- consuming and restrictive.
A properly prepared Trust can provide a successor trustee who will manage the trust for the benefit of the trust, sometimes avoiding the need for a conservator.
For married couples with more than $2 million in net worth, a living trust can reduce or eliminate federal estate taxes by setting up an Exemption Trust.
How is a Living Trust set
up and funded?
A Trust document is perpared that usully names the trustors (the persons who are setting up the trust) as the trustees are responsible fir managing the trust and its assets. The trust usually nominates other persons, banks, or trusts companies as successor trustees. The successor trustee(s) will take over management of the trust after the death, resignation, or incompentency of the original trustee(s).
The Trust also provides for the distribution of he estates of the trustors after the deaths of both trustors. These provisions can be the same as those found in a will and might include trusts for younger beneficiaries, gifts, to charities, etc.
Depending on the size of the estate, the trust might also include provisions that will reduce or elimintate federal estate taxes. After the trust is signed, the trustors transfer their assets to the trust. If this is not done, additional legal work, possibly including a probate of these assets, will be required after the deaths of the trustors.
Advantages of a Living Trust
Assets held by the trust do not need to be probated.
If a Trustor becomes mentally incompetent, the successor trustee can take control of the trust and avoid the cost of a conservatorship in most cases.
Federal estate taxes can be reduced or avoided.
The trust is revocable during the lifetime of the trustors.
Disadvantages of living trusts
A living trust costs more than having a will.
Transferring assets to the trust involves costs and paperwork not required for less elaborate estate plans.
Administration of an Exemption Trust can involve additional effort for the surviving spouse.
Refinance real property that is owned through a trust may require transferring the property from the trust before the refinance, and then putting it back into the trust. A few lenders do not require that proper be taken out of the trust when it is refinance.
Fishel & Fishel, Attorneys at Law is a Law firm serving the Contra Costa County are including the Northern California East Bay communities of Alameda, Albany, Antioch, Benicia, Berkeley, Brentwood, Byron, Castro valley, Claremont, Concord, Danville, Dublin, El Cerrito, El Sobrante, Emeryville, Fairfield, Fremont, Hayward, Hercules, Lafayette, Livermore, Martinez, Montclair, Moraga, Oakland, Oakley, Orinda, Piedmont, Pinole, Pittsburg, Pleasant Hill, Pleasanton, Point Richmond, San Leandro, San Pablo, San Ramon, Union City, Vacaville, Vallejo, Walnut Creek. We have over 18 years experience in the practice of Family Law covering Child Custody, Juvenile Law, Divorce, Dissolution, Personal Injury, Criminal Defense.