Bringing California Real Property Owners an affordable and painless method to protect their home or investment property with a Revocable Living Trust or real property doc is OUR MISSION. We know the average home owner may have questions or my need more answers before getting started. Here are some of the most common questions asked by our users.
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An “inter vivos” or “Revocable” Living Trust is the most common legal document for someone with assets over $100,000 to avoid probate.
When you, the “Grantor” create this legal document and have become incapacitated or there is an untimely death, assets such as your home, vacation or commercial property (real property), jewelry, business interests, stocks, bonds and bank accounts (personal property) are properly transferred into the “trust”. The grantor can be assured that all of these assets are properly distributed to the “Beneficiary(s)” of their choice by a “Successor Trustee” at time of distribution.
If you should die without a Living Trust or Joint Tenant on title, “Probate” is a public, lengthy and most times, extremely costly court process to validate a “will” of the deceased. If you die without a will, the court will appoint an executor of the court to assist in the process of holding and distributing the assets of the deceased. This process can not only take months or years to finish, but can cost tens of thousands of dollars in attorney & executor of the court fees.
Benefits for estate taxes should always be advised by a certified public accountant or attorney, but a Living Trust legal document has been available for the public for centuries and in most cases, encouraged to be used to avoid the legal process of probate court.
A will can be contested by heirs and other scrupulous persons looking for a ‘pay day” from the true heirs of a will through months or even years of lawsuits, hoping for a “settlement” from the heirs. A Living Trust can not only avoid this entire public and costly process, but can also properly distribute assets to beneficiaries without in-fighting from family or persons without valid rights to the “property”.
During your lifetime and while you are “sound of mind”, you will always have the control and use of your assets that are placed into the Living Trust. Remember, any assets not placed into your “Living Trust” may be subject to probate. It is imperative that during your lifetime, you continue to always amend your trust and include newly acquired property and properly assign Beneficiary(s) you would like the property to be distributed.
Again, at any time during your lifetime and while you are “sound of mind” and have not become incapacitated or unresponsive for health reasons, you can revoke, change and amend any portion of your Living Trust. Remember if you revoke your “Revocable Living Trust”, any real or personal property that is transferred to the trust must be properly transferred back out. For the protection of the “Grantor(s)” and post mortem wishes, any amendments made to the Revocable Living Trust during their lifetime and sound mind must be done so in writing and signed in front of a licensed notary.
Proper transfer documents such as “Trust Transfer Deed”, ”P.C.O.R. (provided by Real Property Docs RLT package) for your real property and ”Specific Assignment” or “Transfer Documents”, accompanied by a “Certification of Trust” for your personal property assets are examples of additional documents you may need to transfer your property to your Living Trust. Always contact the corporate or legal office of the institution to where the account is held for all proper details for correct assignment of personal property. .
Your Living Trust is valid in all 50 of the United States of America. Remember, if you own property in multiple states, real and personal property must properly be transferred in that state to your Living Trust to avoid probate of an asset, held in that state.
Not only can you name both Successor Trustees and Beneficiaries out of state, but anywhere in the world. Remember, in case of death or incapacitation, parties named in your trust must be notified in order for your trust to be properly administered or disbursed. Make sure you provide contact information for all successor trustee(s) and beneficiary(s) named in your trust.
The primary reason for having a “Revocable Living Trust” is to avoid the public, costly and lengthy process of probate. Other advantages are assuring all of your assets are placed into the Living Trust and are properly distributed at your death, insuring no in-fighting of “he said-she said” scenarios regarding “who gets what”. If you ever become incapacitated due to health reasons, your additional “trustee” or “successor trustee “can assure your wishes are carried out with your financial affairs and health condition being handled properly.
When choosing a “Trustee” it is especially important to choose someone you trust with your “Life Requests” and “Life Assets”. There are many scenarios to consider, a trusted friend or even a family member. In some cases, a “Grantor” of a trust may even name their “Beneficiary(s)” as Trustee of they are proper age and experience to handle the special tasks and powers of the trust. Beneficiaries named in a trust tend to be children of the Grantor(s), family members or even non-profit organizations for some individuals with limited close or extended family.
When choosing a “Successor Trustee” it is especially important to choose someone you trust with your “Life Requests” and “Life Assets”. There are many scenarios to consider, a trusted friend or family member can be common. In some cases, a “Grantor” (creator of the trust) may name their “Beneficiary(s)” as Successor Trustee if they are of proper age and experience to handle the special tasks and powers of the trust. Beneficiaries named in a trust tend to be children of the Grantor(s), family members or non-profit organizations for some individuals with limited close or extended family.
One main disadvantage of setting up a Revocable Living Trust is the use of a costly attorney when you, the “Grantor” are deemed a “complex case” or have various assets over $1,000,000 that would need multiple assignments or transfers to complete the trust.
A Revocable Living Trust has no outstanding tax benefits, unless specifically provisioned by the Internal Revenue Service or Franchise Tax Board. Always remember, when establishing a “Revocable Living Trust” the most important advice to receive regarding “inheritance tax”, “estate tax”, or any other “tax advantage” should be from a licensed and experienced certified public accountant.
Even though you transfer all of your real & personal property to your Revocable Living Trust, you will use your tax ID number (social security number) and file all income on your personal tax return, form 1040. Again, any and all tax advice for tax return filing should always be followed by a certified public accountant.
There are many different types of “Trusts” used for various individuals, married persons or entity scenarios that vary from the simple to complex. The advice of an estate or tax attorney should always be considered when exploring the use of a “Trust” for a specific or complex asset or tax scenario when transferring assets to a living trust.