$699 (Single person), $799 (Couple)
A Revocable Living Trust will avoid probate, thereby saving the average family substantial probate fees and costs.
Living trusts are an important estate planning tool for individuals, married couples, domestic partners, couples who choose not to get married, and those couples who cannot legally marry. A living trust is a written legal document that is created to hold and manage your assets during life and then distribute those assets to your designated beneficiaries upon your death.
A living trust allows you to avoid probate. At death, your named trustee (similar to the executor of a will) would gather your assets, pay any debts, claims and taxes, and then distribute your assets according to your instructions. Unlike a will, however, this can all be done without court supervision or approval. The probate process is incredibly time consuming and expensive. Fees are statutorily set and are based on the size of your probate estate.
A living trust affords a great deal of flexibility in planning for distributions, especially when dealing with beneficiaries who are minor children and/or individuals with special needs. Living trusts allow you to manage property in trust for the benefit of the minor child until an age specified by you.
FUNDING THE TRUST
Although signed, a trust is not valid until all of your assets have been transferred to the trustee of your living trust. This is known as funding the trust. Deeds to your real estate must be prepared and recorded. Bank accounts and stock and bond accounts or certificates must be transferred as well.
Depending on the type of trust created, assets may be distributed outright to named beneficiaries or they may continue to be held in trust for the benefit of the named beneficiaries. Trust administration is the process that occurs upon death. At this time trust assets are collected, debts are paid off, and the remaining assets are distributed to the named trust beneficiaries. Title of the trust assets may need to be changed where a named beneficiary acquires outright ownership or under a continuing trust.
A will is a legal document that allows you to name an executor to manage your estate at death and to distribute your assets to named beneficiaries who are either individuals or charitable organizations. A will also allows you to nominate guardians for your minor children. If you die without a will, your assets will be distributed according to the laws of intestacy and not to the beneficiaries of your choosing.
Most assets titled solely in your name will be subject to your will at death. Some exceptions include securities accounts that have designated beneficiaries, life insurance policies, IRAs, other tax-deferred retirement plans, and some annuities. Such assets will pass directly to the beneficiaries and will not be included in your will. Additionally, certain co-owned assets will pass directly to the surviving co-owner regardless of any instructions in your will. Assets that have been transferred to a revocable living trust will be distributed through the trust.
A valid will does not help you to avoid the costly and time-consuming probate process. An estate that goes through the probate process is subject to steep statutory probate fees for both attorneys and executors. These fees are based on the fair market value of the probate estate and can add up quickly, especially for homeowners. Unless your estate is under $150,000 or is being left in its entirety to your surviving spouse, the only way to avoid probate is with a living trust. Any estate with real estate valued over $20,000.00 (gross) will also need to be probated, unless you have a living trust.
ADVANCE HEALTH CARE DIRECTIVE
An advance health care directive is a legal document that allows you to state in advance the end-of-life decisions you would want made on your behalf should you ever become unable to make these decisions yourself. Specifically, you would decide whether you would like to remain on life support in the event of a terminal illness should you become incapacitated.
The advance health care directive allows you to appoint someone of your choosing, an agent, to make health care decisions for you when you can no longer make them for yourself. The authorized agent is allowed to access your medical information.
FINANCIAL DURABLE POWER OF ATTORNEY
A financial durable power of attorney is a legal document that allows you to name an agent who is authorized to act on your behalf with respect to financial decisions in the event you become incapacitated. The person would have authority to deal with third parties, such as banks, on your behalf.
Probate is a time consuming and expensive process. A typical probate can take at least 9 months to one year to complete. A complicated estate can take more than a year to complete. Probate fees are statutorily set and are based on the fair market value of the probate estate.
California Probate Code section 10810 sets out the following fees:
Four percent on the first $100,000.
Three percent on the next $100,000.
Two percent on the next $800,000.
One percent on the next $9,000,000.
One-half of one percent on the next $15,000,000.
For all amounts above $25,000,000, a reasonable amount to be determined by the court.
Thus, a probate estate consisting of one personal residence valued at $500,000 would result in attorney fees of $13,000. The executor would also be entitled to $13,000. In addition to statutory attorney and executor fees, a probate estate must also pay probate filing fees.
The only way to avoid the time and expense of probate, and to keep your financial affairs private, is to create a living trust.
ESTATE PLANNING PACKAGES
We offer the following comprehensive estate planning packages. Please call for a complimentary meeting.