Estate planning is essential for ensuring that your assets are distributed according to your wishes. One effective tool in this process is a living trust, which can help avoid the lengthy probate court process. By establishing a living trust, you can ensure a smoother transition of your estate without the complications often associated with probate court.
Think of a living trust as being like a safe or your own Fort Knox that houses your personal assets. In that trust or “safe" are instructions that state exactly who is to distribute and receive your assets. The assets move privately and quickly to named heirs on your passing without the involvement of probate court. This is the main reason why most people prefer a living trust to a will—for privacy and non-involvement of the court. There is the "living" part of a living trust. Your trust assigns someone to make medical and financial decisions for you when you are incapacitated. Think of the trust as a written contingency plan for your life. Your trust also helps you when you are alive.
Your trust will name someone to make financial and medical decisions for you until you get better. Because all the instructions are all there on paper, there is no need for probate to get involved. When you get better, you simply take over where you left off before you were sick.
There is no difference at all with your accounts, as far as control is concerned, once you set up a trust. Your accounts will work that same as they did before you set up a trust. Co-trustees of a trust work the same way a joint checking account works. They can act independently or together.
Not hard at all. Most financial institutions have a simple form for you to fill out. You can also bring your trust to your bank(s) and they will do all the work for you. The Trust Pros will make new property deeds that transfer property to your trust.
There are no taxes at all, and transferring real estate into a trust does not affect Proposition 13. Why? You are not changing beneficial interest. You are going from yourself to yourself inside your trust. There are only tax issues if you transfer your real estate to a third party. Again, there are no county, state, or federal taxes for transferring property into a trust.
Revocable living trusts, often referred to as grantor trusts, are established by grantors who are typically the owners of the revocable trust. This ownership allows them to change or amend the trust by adding or adjusting beneficiaries or assets. Although it is uncommon, grantor owners also have the option to revoke the trust if desired. One of the advantages of grantor trusts is that they do not require a new tax ID or special forms for tax purposes. Consequently, the income generated by any accounts placed in the trust is simply reported as earned income.
If you pass away before your spouse, they may choose to remarry and add their new spouse as a joint tenant. This situation could lead to the house ultimately going to their family. However, if you establish a trust, the home will be transferred directly to the individual you designated in the trust to inherit the property, regardless of who dies first.
If you have children, own a home, and wish to avoid the potential pitfalls of probate, establishing a trust is essential. Additionally, if you desire someone to handle medical and financial decisions on your behalf during illness without involving the courts, a living trust is highly recommended.
Once the trustee owner passes away, the trust can no longer be altered. The reason for this is that the original trustee is no longer available to implement any new changes. The trust retains all of its assets and income, which must be distributed according to the instructions specified by the trust owner. The individual designated as the successor trustee during the trust's establishment is responsible for executing these distribution instructions. At this point, it is necessary to establish a separate tax ID for the trust. If the trust generates income, a Form 1041 must be submitted.
The Trust Pros simplify the process for you. There are two meetings held in person or through platforms like Zoom, Skype, FaceTime, or teleconference. Each meeting lasts about an hour. If necessary, your trust can be completed in less than a week.
Many companies out there offer multiple services and dabble with living trusts. This is all we do. Chances are that if you are reading this, you may already be aware that The Trust Pros is an award-winning legal document service with attorney-reviewed* living trusts. Our company is the only one including house calls and an attorney letter with your living trust package. Some banks are now asking for attorney letters to accompany each trust as proof that the trust is valid. This trend is a direct result of thousands of failed trusts set up by people who tried to make theirs on their own or from using online services.
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*Trusts in Atlanta are prepared by a Legal Document Assistant.
