Revocable Living Trust
Below is a great article on some benefits to establishing a revocable trust. This article has a slightly different take on it than our typical point of view as it is written by an immigration attorney. Our current society really has some different things that we must take into consideration, and your estate plan needs to reflect that. It used to be simple – just pass your real estate and some personal effects and you are done. Take a look and then feel free to call us with your thoughts, comments, etc.
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Five benefits of establishing a revocable living trust
THERE is never the perfect time to think about who you would like to inherit from your estate in case you pass away or at least who among your closest friends (BFFs) and family members are even deserving of inheriting from your estate. In doing so, you should also think about which vehicle you plan to use in implementing your estate plan. One of the best vehicle in implementing your estate plan is a revocable living trust. Five major benefits of establishing a revocable living trust are:
Your estate can avoid the time, cost, and hassle of going through the probate court process.
If you pass away without a will (intestate) in California, one of your close family would have to file a petition in probate court to probate your estate. Your estate will be divided and distributed according to the California probate code rules of intestate succession. Even if you have a will when you pass away, your family would still need to file a petition in probate court if your estate is worth over $150,000 and go through the probate process. This can become a circus if certain beneficiaries contest the validity of the Will or the distribution of the estate. Your estate will pay for attorney’s fees, probate referee fees, appraisers and other experts, CPA fees, etc. If people contest the case, your estate would end up paying legal fees to defend the estate in litigation. The entire process can take anywhere from 9 months to years depending on the contentiousness of the probate case.
With a revocable living trust, your trustee or successor trustee if you were the initial trustee, would administer the trust and distribute the estate according to the trust document without having to open a probate court case. If the trust is funded with all your assets, it is possible to administer and distribute the trust assets without any Court involvement at all. This process is a lot faster than going through probate.
Your estate is not public record
When you file a probate case, the public has access to your probate case file. The public will know the assets of the estate including the values of those assets. If the Will is admitted into probate, the terms of the Will is open to public scrutiny.
Establishing a revocable living trust makes your estate affairs private. Strangers do not have access to the terms of your living trust. Only certain beneficiaries and possible heirs can request a copy of the revocable living trust after you pass away.
You can dictate who will inherit from your estate
If you pass away without a Will, your estate will be divided and distributed in Probate Court following the rules of intestate succession in the California probate code. Certain relatives will be entitled to a share of your estate even if you feel they are not deserving. By establishing a revocable living trust, you can designate who you want to inherit from your estate. You can designate what and how much each one will received from your estate after you pass away. The assets distributed to each beneficiaries does not have to be equal. The people you designate as beneficiaries of your living trust does not even have to be close family members. You can designate anyone as a beneficiary, with certain exceptions, of your estate.
You can structure your estate to minimize estate taxes
If your estate is valued above the estate tax exemption, establishing a trust can allow you to divide up your estate into smaller sub trusts to minimize the overall estate tax effect on your estate. It allows you to set up a vehicle for certain charitable giving which carries tax advantage and asset protection. You can choose who will administer your estate after your death When you establish a revocable trust, you can appoint someone else as trustee or you can appoint a successor trustee if you are the initial trustee. The trustee will be administering (managing) the trust after you pass away without a need to open a probate court case. This allows for continuity in operating the trust and the efficient and cost effective distribution of estate assets. If you are concerned about whether you can trust any family members as your trustee, you can appoint an institution as a professional trustee to carry out the terms of the declaration of trust. These type of trustee services are often offered by banks, financial institutions, wealth management firms, and business management firms for a reasonable fee. This minimizes conflicts within the family and prevents negligence and wrong doing by inexperienced family members.
* * * Attorney Kenneth Ursua Reyes is a Certified Family Law Specialist. He was President of the Philippine American Bar Association. He is a member of both the Family law section and Immigration law section of the Los Angeles County Bar Association. He has extensive CPA experience prior to law practice. LAW OFFICES OF KENNETH REYES, P.C. is located at 3699 Wilshire Blvd., Suite 747, Los Angeles, CA, 90010. Tel. (213) 388-1611 or e-mail email@example.com or visit our website at Kenreyeslaw.com
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