Frequently Asked Questions:  Living Trusts

 
WHAT EXACTLY IS A LIVING TRUST?
A Living Trust is a legal document that allows you to transfer ownership of your property, such as, real estate, stocks, bank accounts, jewelry, etc., from your individual name to a "trust." This "Living Trust" declares that your assets be held in trust and upon your passing will be distributed to your chosen heirs. A Living Trust can be modified or canceled at any time.
 

HOW DOES A LIVING TRUST DIFFER FROM A WILL?
There are many ways a Living Trust differs from a will. Most importantly, a Living Trust assures that you will avid the agony of probate. Probate is a complex and oftern expensive process to endure and it often takes months or even years to settle an estate. As a rule, the larger the estate and more complicated the estate, the more time-consuming and expensive the process. Thus, value time and money is lost.
 

WILL A LIVING TRUST ADEQUATELY PROVIDE FOR MY HEIRS?
Absolutely. A Living Trust makes sure that your assets are quickly and property distributed to the heirs you named in the trust. Without a will or a Living Trust, your estate would be distributed according to the intestacy provisions of the California Probate Code. Those provisions may or may not divide your assets as you would have seen fit.
 

ARE THE DETAILS OF A LIVING TRUST PUBLIC RECORD?
NO. Your confidentiality is maintained. On the other hand, probate proceedings are part of the public record. Anyone who wishes to see what your assets and debts were, merely has to request the court file.
 

CAN A LIVING TRUST HELP ME MINIMIZE INHERITANCE AND INCOME TAXES?
This is a questions of obvivous concern to many, and the good news is YES. With a Living Trust, each marriage partner can take advantage of the $625,000.00 federal estate tax exemption. What that means is collectively, a couple can pass on as much as $1.25 million to their heirs tax free

In addition, property placed in a Living Trust can benefit from a step-up in basis on the entire property upon the death of the first spouse, rather than merely one-half of the property as is the case with property held in joint tenancy.