Top 5 Myths about Living Trusts
Estate Planning is essential for everybody, including the young and healthy. Estate Planning plans for the inevitable and gives our loved ones the knowledge of our wishes if we aren't able to communicate them ourselves.
A good Estate Plan will include a Durable Power of Attorney for Finances, Advance Healthcare Directive for healthcare decisions and Final Disposition Instructions to instruct what is to happen to your body once you pass away. Of course it will also include a Living Trust or possibly a Will if you decide a Living Trust isn't appropriate for you.
Here is a list of the Top 5 Misconceptions about Living Trusts:
#1 I ALREADY HAVE A WILL SO I DON'T NEED A TRUST
There is a lot of confusion about Wills and Trusts. A Will may be a perfect estate planning tool for your estate, as long as you do not have assets that exceed $150,000.00. In California, if your estate is valued at more than $150,000.00 it will have to go through Probate. This means that if you live in California and own real estate, it's very likely that you have an estate that is valued at more than $150,000.00. It is important to note that the value of your estate does not take into consideration what you owe on the property. So if you have a home that is worth $600,000.00 and owe $550,000.00, the court will consider your property to be value at $600,000.00. In situations where real estate is owned, it is typically better to have a Living Trust so that property can pass to heirs without the need for court intervention.
#2 IF I HAVE A WILL MY ASSETS ARE PROTECTED AND PASS TO WHOMEVER IS NAMED
This is mostly true. If you have a will you can name who you would like to inherit your property, this may include personal or real property. The caveat is, that if your property is worth more than $150,000.00, it will have to go through probate.
#3 ONLY WEALTHY PEOPLE NEED A LIVING TRUST
If you live in California, there is a good chance that if you own property your estate is going to be worth more than $150,000.00, which puts you over the thresshold for probate. If you own property a Living Trust would help you protect your home and keep it out of probate.
#4 IF I HAVE A LIVING TRUST I WILL NO LONGER HAVE CONTROL OVER MY ASSETS
When you create a Revocable Living Trust, you retain all control over your property. Living Trusts are there for when you pass away, but while you are still living you will continue to control all of your assets. You can take your property out of a Trust by recording a Trust Transfer Deed and you will continue to have full control to sell property that is in the Trust. You will just need to remember that if you take something out of your Trust then it will no longer be protected and avoid probate if something should happen to you.
#5 CREATING A LIVING TRUST IS EXPENSIVE AND COMPLICATED
Living Trusts sound overwhelming, complicated and expensive. The truth of the matter is that a Living Trust can be set up for under $1,000.00, which includes the transfer of your assets into the Trust. Diablo LDA & Attorney Services can prepare your Living Trust, record your deed and notarize all of your documents for less than $1,000.00. The best part is that many of our clients tell us that it was not as intimidating as they thought, and it was much easier than anticipated. All that is required is that you fill out a questionnaire and from that we prepare the documents for your review and execution.
Contact our office today to see how we can help you with your Estate Planning needs. Even if you aren't ready for a Living Trust, there are still other very important documents that everybody needs to have completed so that your loved ones understand your wishes.
*Diablo LDA & Attorney Services is not a law firm. Jessica Ward is not an attorney, cannot give legal advice, represent you in court or select legal forms for you. Diablo LDA & Attorney Services/Jessica Ward can provide self-help services at your specific direction.