jkern
Full time employment: Posting here.
Has anyone created their own Living trust in California? If so, did you use services like LegalZoom? Is it relatively easy or too complex?
Living Trust
- Thread starter jkern
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Dash man
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I’m not in California, but I would never recommend LegalZoom for any kind of trust. Perhaps a very simple will, but never a trust. The money you spend on a good estate attorney will be worth every penny.
My father did have a living trust in California, and things went smoothly. It was set up by an attorney and the trustee was a private Christian university who was also a beneficiary.
OldShooter
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Trying to do your own trust and estate work is like trying to do your own appendectomy. Hey, it might turn out OK!
Hire an expert, look at the fees as a percentage of the assets and estate you are trying to manage and protect and realize that the expense is trivial.
Souschef
Thinks s/he gets paid by the post
I set up a living trust for my late wife and myself through an estate attorney. The cost was about $1K or less. Nowadays a lot of the boilerplate is digitized.
BUT I made a big mistake. at the time, the Estate tax started at $1 Mil, so we set up an AB trust. When the estate tax floor was raised, I lazily did not go back to change the trust. When my wife passed away, I had to set up a QTIP trust for half the assets. It took 9 years for the trust to become depleted so I could dissolve it. In the mean time, I had to file 1041, 541and K-1 returns for the trust annually.
My bad
BUT I made a big mistake. at the time, the Estate tax started at $1 Mil, so we set up an AB trust. When the estate tax floor was raised, I lazily did not go back to change the trust. When my wife passed away, I had to set up a QTIP trust for half the assets. It took 9 years for the trust to become depleted so I could dissolve it. In the mean time, I had to file 1041, 541and K-1 returns for the trust annually.
My bad
jkern
Full time employment: Posting here.
Is it really that complex? There have been several legal items that I didn't think were too difficult and I completed them successfully.
* Create Wills
* Create Health Directives
* Create POA
* Complete entire Probate without a lawyer
* Write an appeal for SS Disability case
I did most of these for friends and they were used successfully each time. If it truly requires an expert, I will hire an attorney. I'm just skeptical.
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Dash man
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
A lot depends on your specific situation and the state laws of California. That is where an attorney comes in, to ask the questions you might not realize need to be answered. And to structure the trust accordingly.
OldShooter
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
It obviously depends on the estate but if you are thinking about a trust now, that may indicate that you need expert help. As far as "completed successfully" that will not be known until after you are dead. My wife was an SVP and business unit manager in a major bank Trusts & Estates division and it was not uncommon for her to come home bemoaning the errors in documents that they were given. Often these were not home-made but from nonspecialist attorneys. Sometimes they even had to go to court to get things straightened out, all paid for by the estate, of course.
You pays your money and you takes your choice.
We just met with an attorney yesterday as part of our process of updating our legal docs - including our trust.
The attorney brought up ideas we didn't see addressed in our previous (boilerplate) trust. Language that lets you decide if it's going to be a-b or a-qtip at the time of the first trustee's death, depending on the current tax laws, estate, etc at the time of the death. (No crystal ball needed). Also sub trusts to protect the kids from having inheritance claimed in a law suit... and specific stuff for determining disability (senility) of a trustee. Not just get a doctor's note or have a friend decide.
If it's a single person, no kids, estate going to charity..... it's fairly straightforward. But we chose to pay the ticket.... and will again when we need to update it.
The attorney brought up ideas we didn't see addressed in our previous (boilerplate) trust. Language that lets you decide if it's going to be a-b or a-qtip at the time of the first trustee's death, depending on the current tax laws, estate, etc at the time of the death. (No crystal ball needed). Also sub trusts to protect the kids from having inheritance claimed in a law suit... and specific stuff for determining disability (senility) of a trustee. Not just get a doctor's note or have a friend decide.
If it's a single person, no kids, estate going to charity..... it's fairly straightforward. But we chose to pay the ticket.... and will again when we need to update it.
Are you sure you even need a trust? I spent months studying up on trusts before going to see an estate attorney. We were only interested in having a trust in order to avoid probate. After consulting the attorney, we were able to accomplish our no probate goals with a Will and TOD Deeds on our houses. No trust needed.
Having said that, there are a lot of valid reasons to set up a trust and what we did might not be possible in your state.
Having said that, there are a lot of valid reasons to set up a trust and what we did might not be possible in your state.
jkern
Full time employment: Posting here.
The only purpose for a trust for me is to avoid probate (mainly real estate). What are TOD Deeds on houses?
ncbill
Thinks s/he gets paid by the post
the primary benefit of a trust is privacy, not probate avoidance.
especially when the deceased is known to have a substantial estate.
did it go to relatives or the charities the deceased was known to support?
ExFlyBoy5
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Exactly what is sounds like...the ownership of property transfers on death, no will and/or probate required. However, they aren't recognized legally in many states.
OldShooter
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With respect, @jkern, you really should get some professional help to help develop and implement your plans.
jkern
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TOD Deeds just became legal in California on 1/1/2016. My goal was to transfer four houses to my daughter without probate. This looks like it will do the trick. Thanks everyone.
OldShooter
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Does your daughter still get the basis step-up if the assets are transferred this way?
jkern
Full time employment: Posting here.
I will be looking into that. If not, the trust is probably the way to go.
Yes. A TOD Deed on a house is really not much different than a TOD on a brokerage account.
In my state, all you have to do is file a TOD affidavit along with the death certificate with the county records office. At that point, the survivors named on the TOD own the house. Worked great with my dads house earlier this year and should work on my two houses when the time comes.
Since you mentioned California - you know she will be able to take a one time transfer on the prop 13 tax rate... Not sure if she can do it on 4 houses - but can for sure on 1 house. She'll have to file paperwork with the county assessor to 'inherit' your property tax rate. I purchased our house from my father when he downsized - and this was a *big* deal in deciding to purchase this house....
Brat
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
As you approach the end of your life ask your daughter to assume responsibility for managing your rentals so that she knows about repairs, managing tenants, taxes.. just as if she were the owner.
Let me share a story about a friend of mine, a widow who inherited a commercial building. Her husband had taken out a mortgage, it was on leased land, the neighborhood it was located was no longer attractive and it needed repairs. Basically its cash flow was not sustainable. Her husband had managed their finances and intended that the income from the building sustain her in her old age, she trusted his judgement. She didn't know of the problems until it was too late to renounce the inheritance.
Let me share a story about a friend of mine, a widow who inherited a commercial building. Her husband had taken out a mortgage, it was on leased land, the neighborhood it was located was no longer attractive and it needed repairs. Basically its cash flow was not sustainable. Her husband had managed their finances and intended that the income from the building sustain her in her old age, she trusted his judgement. She didn't know of the problems until it was too late to renounce the inheritance.
jkern
Full time employment: Posting here.
That's a good question. I was just assuming the prop 13 tax rate would transfer on all the real estate.
There is no "transfer" for prop 13 purposes when you transfer to your own revocable trust.
After death (or during life) you can do a parent to child transfer which covers the personal residence plus $1m in other assets. The valuation, for the $1m, is taken from the assessed value which is typically less than actual value in California.
