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Revocable Living Trust
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What is a Revocable Living Trust?
A living trust is similar to a will but the Living Trust has many more benefits than a Will. The person creating a Living Trust is the Trustor also known as a Grantor or Settlor. The Living Trust is a legal document that is created by the Trustor, Grantor or Settlor for the purpose of avoiding probate. The document that creates a Revocable Living Trust is known as the declaration of trust. The Trustor transfers all of his/her assets to the Living Trust. Property that has beneficiaries is not transferred to the Trust. Some of the items that have beneficiaries are life insurance policies, some bank account (POD-pay on death accounts), government bonds, individual retirement accounts and securities. Revocable Living Trust Can Be Changed Anytime You never lose control of your property. You can change your trust at anytime. You can add property to your Living Trust or take property out of your trust. You can change anything and anybody that is in your trust. Your revocable living trust has three main characters namely: Trustor, Beneficiary and Trustee. You can be all of these characters. When you prepare your Trust you name the Successor Trustees and Beneficiaries. Revocable Living Trust The main difference when you have a Will and a Living Trust is a Will must go through Probate Court and your beneficiaries will have to pay large attorney and probate fees. The Probate process can take from one to three years and sometimes longer. In most cases none of the property cannot be distributed to your beneficiaries (family and or loved ones) until the Probate closes. The Living Trust does not go through probate court and the distribution fees are very low, maybe $100.00 to $200.00 for small and medium estates. The distribution cost can be higher if you have a large estate. All of the property in the trust can be distributed to your beneficiaries forty days after the date of your death in California. Other states may have different time limits, but it will never take as long as the probate process. In California everyone's estate is valued at $150,000.00 of more must go through court when they do not have a living trust. If you do not live in California, You should contact a professional estate planner who has knowledge of estate laws where you live so you can obtain the information you need regarding your Living Trust. Probate Fees In California, Probate Fees can be as much as ten percent (10%) of the value of your estate (that is every thing you own) and sometimes much more than ten percent (10%). Probate fees varies from state to state. The additional fees will depend on extraordinary services performed by either the attorney or personal representative (administrator or executor), they are paid additional fees. California Statutory Probate Fee 4% of first $100,000.00 3% of next $100,000.00 2% of next $800,000.00 1% of next $ 9,000.000.00 The attorney and personal representative (administrator or executor) are paid the same amount of fees. When extraordinary services are performed by either the attorney and personal representative (administrator or executor), they are paid additional fees. Example of probate fees on an estate valued at $300,000.00 Attorney Executor or Total Administrator Probate Fees 4% of first $100,000.00 $4,000.00 $4,000.00 $ 8,000.00 3% on next` $100,000.00 $3,000.00 $3,000.00 $ 6,000.00 2% on next $100,000.00 $2,000.00 $2,000.00 $ 4,000.00 Total Attorney and Executor or Administrator Fees $18,000.00* *This is not the exact probates fees. These are the attorney and executor or administrator fees. Other fees includes court filing fee, appraisal fee, newspaper publication fee and sometimes the judge may require to the personal representative (administrator or executor) to obtain a bond. Multiple Probates If you are a California resident and you own property in other states, depending on those state probate laws, there maybe a probate in each state where you own property. Your family member and/or members will travel to each of those states where you own property to attend the probate court hearing. In most cases they will pay for transportation, lodging and food during the probate process in each state. Inheritance Distributed In Increments When you have minor children or young adults who may not be able to handle large sums of money, your trust can be setup where the beneficiaries will receive their share of their inheritance in installments. Example: The child will receive $10,000.00 at age 18, $10,000.00 at age 21, $10,000.00 at age 24, and the balance at age 27. The funds will remain in the trust and the successor trustee will be instructed as to when to make the distributions. Special Needs Trust When you have a child or other beneficiaries who is mentally of physical disable, you can setup a special needs trust for that person. You will appoint a guardian or trustee to manage the assets that is in the disable person's Trust. These types of Trusts can be setup in such a way that the disable person will not lose any of their benefits if they are receiving government benefits. When you need to setup a special needs trust, you should contact an estate planner who is specialized in preparing this type of trust. If is very different form a Revocable Living Trust. FREE LIVING TRUST CONSULTING
FOR CALIFORNIA RESIDENTS ONLY John S. Milligan Sr. Consultant and Estate Planner Alpha Consultants & Estate Planners 1425 W. Manchester Ave., Suite B, Los Angeles, CA 90047 (323) 753-3276 E-mail: alpha82540@yahoo.com |
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Copyright @ 2018 pending Alpha Consultants & Estate Planners All rights Reserved.
No Contents May Be Used Without Expressed Written Permission.
Site Updated & Maintained by Alpha Enterprises