Do you need a trust?
This is a question many people ask when they begin to plan how to distribute their assets to heirs or pay for long term care expenses.
If you’re considering your financial legacy and have substantial amount in liquid assets, such as cash or money in bank account, assets that can be easily converted to cash or real estate, or if you need your special needs child or you are a disabled or elderly person who is considering qualifying for public benefits we are here for you.
Each situation is different and anyone considering estate planning should discuss it with an attorney.
Reasons to establish a trust
With or without a will upon your passing whoever will inherit your assets MUST go through a lengthy court process called Probate. This process generally applies to estates valued in excess of $100,000, but even much smaller estates have to go through probate when there is no will; or even if there is a will but the distribution is disputed.
How much does probate cost? The answer to that question is easy because the attorney and executor fees are set by statute, i.e. California Probate Code §§ 10800, 10810. At probate’s conclusion, the Superior Court will award compensation as follows:
- Four percent of the first $100,000 of the estate,
- Three percent of the next $100,000,
- Two percent of the next $800,000,
- One percent of the next $9,000,000, and
- One-half percent of the next $15,000,000.
- For estates larger than $25,000,000, the court will determine the fee for the amount that is greater than $25,000,000.
This means that a parent who passes away and leaves their beneficiaries a home valued at $500,000, without a trust, would also be leaving a $13,000 bill for attorneys’ fees, plus the executor fees. A trust, on the other hand, generally runs much less. A small investment now can save your heirs literally thousands in the future.
Time, Time, Time…
If the case has to go through probate it can take months sometimes even years. Whereas with a Trust there are no delays. Even if you are incapacitated your successor Trustee takes control over your trust without having to appoint a conservator
You Continue To Control Your Assets
Depending on what type of Trust you create you continue to control your assets and instruct how to use your funds in case of incapacity or after your passing.
Proper planned trust can reduce or eliminate taxes that your loved once might need to pay after your passing.
Get A Free Consultation
To get started on your estate plan, or for more answers to questions not covered here, call our office at (626) 331-2327 for a free, no-obligation consultation with one of our attorneys.