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Drafting Living Trusts in California

With Our Pasadena Estate Planning Attorneys

Living trusts offer many benefits and do not require a lot of time or effort to create. With the help of experienced legal professionals at Lee, Green, Stewart & Paul Attorneys at Law, you can have a versatile living trust to effectively protect your estate. Contact our estate planning attorneys in Pasadena today at (626) 325-0770 to set up a case evaluation.

What is a Living Trust?

Also known as revocable trusts, living trusts allow a home or any property to pass to one’s descendants while avoiding costly and public probate proceedings. Like a will, a properly drawn living trust allows individuals to choose what will happen to their property after death.

What Are the Benefits of a Living Trust?

A living trust allows a settlor (creator of the trust) to maintain control of the property during their lifetime. The trust is revocable, so the settlor may decide to revoke or change the terms of the trust at their choosing. Changes could include the addition of new assets, or changing beneficiaries.

Using a living trust, the settlor has the peace of mind of knowing exactly how their property will be distributed. Upon their death, the living or revocable trust will become “irrevocable,” meaning that the terms of the trust cannot be changed.

For modest families with limited liquid assets, living trusts also avoid the costly, lengthy, and draining probate process. Living trust probate fees in California are dictated by statute, and can easily turn into tens of thousands of dollars. Creating a living trust bypasses this process and the property will already have predetermined beneficiaries which can be handled outside of probate court.

For married individuals, a living trust can help the couple get the most benefits from the Federal Estate Tax exemption, which allows individuals a lifetime exemption which can vary from year to year. There is a 40 percent tax on the estate of a deceased individual for every dollar beyond the Federal Exemption limit, which is a huge amount of money to take away from a deceased individual’s family.

What Types of Assets Cannot Be Transferred to a Living /Revocable Trust?

Nearly all assets can be placed in a living trust.

One of the few examples that cannot be transferred is an Individual Retirement Account (IRA). It is not advisable to place other types of accounts into living trusts due to tax ramifications of the transfer. During a consultation, we will be able to advise you as to the best route for protecting your assets, while incurring minimal tax consequences.

Will I Have to Pay a Sale or Transfer Tax on My Home if I Transfer Title of the Property to a Living or Revocable Trust?

As per Cal. Rev. & Tax Code §11930, a property can be transferred without any transfer tax consequence, as long as the recipient of the property is a revocable trust.

Before transferring title of the property to the living trust, your estate planning attorney in Pasadena should always contact the mortgage-holding institution. This will avoid triggering any due on transfer clauses that may be listed in the loan agreement.

The property can safely be transferred into the revocable trust upon receipt of approval from the lending institution, and the deed can then be properly recorded within the county of residence.

What is the Process for Setting Up a Living or Revocable Trust?

  1. Get a consultation from Lee, Green, Stewart & Paul Attorneys at Law. At this initial stage, it is critical to not jump to any legal conclusions. Once your goals and ambitions are laid out for your estate, we will begin exploring the most efficient instruments to help you achieve your goals.
  2. We will request a series of documents and, especially for parents of minor children, ask some more questions. Once all of the information is received, we will begin to draft a custom living trust. Unlike firms that use boilerplate trusts, our firm tailors each and every trust to the needs of our clients, regardless of the time it takes to complete the task.
  3. You (and your spouse, if applicable) will need to come to our offices to sign your completed trust. A notary must be present for the signing to ensure that the individual(s) are signing the instrument voluntarily and really are who they purport to be.
  4. Last Step! After signing the living trust, we will keep one copy and give you two copies for your records. We will then complete the transfer deed and record it with the county. When the time comes, your grieving loved ones will have to deal with as little governmental red tape as possible.

To learn more about living trusts and how we can help you, feel free to contact us today at (626) 325-0770. Call now and speak with a knowledgeable estate planning lawyer in Pasadena.

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