Living Trusts – Why You Need One, Now!

I’ve recently had the good fortune to represent several clients on the sale of their family’s home after a parent passed away.  Of course, the loss of a loved one is a difficult life event to handle, but the mourning process can be made worse when legal and financial matters are complicated on top of everything else a family is dealing with.  Fortunately, there are several things you can do to protect your family in the event of a death of the patriarch or matriarch so that your heirs can focus on spending time with family and remembering the good times, and not embroiled in a stressful probate situation.  We met with Anna Schneider at Stearns Kim & Stearns for some guidance on the topic of a Living Trust

Question: What is a Living Trust?

Answer: A Living Trust is the type of trust created during the Settlor’s lifetime. The Settlor is the person who writes the trust, i.e., you.

Question: Who needs a Living Trust?

Answer: Any person who owns real property or any person whose assets total over $150,000.

Question: What are the advantages to creating a Living Trust?

Answer: 1. Your assets are distributed to the people that you choose.  2. A trust lessens the impact of estate tax.  3. A trust can protect your children from the unexpected.  4. Most importantly, the most common advantage to creating a trust is to avoid a probate proceeding.  The trustee of your trust is able to transfer assets according to your Trust without Court involvement. On the other hand, probate is a costly and lengthy judicial procedure where the decedent’s estate is distributed. The probate fees are set by California law and are determined by the value of the estate.