Anastasi & Nielsen

84 West Santa Clara Street, Suite 540 

San Jose, CA 95113

 
Phone: (408) 294-9700
Fax: (408) 294-9948
Email: info@aandnlaw.com

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Wills   •   How a Living Trust Can Help You   •   FAQs About Wills and Trusts   •   Advanced Health Care Directives

How A Living Trust Can Help You
The estate planning attorneys at Anastasi & Nielsen have over 40 years of experience helping California families with their estate planning needs. One of the most common parts of many estate plans is a living trust. A living trust can help you and your family pass along assets without having to go through the probate process.
What Is A Living Trust?
A living trust is a legal document among three parties:
  • The settlor is the person who creates the trust.

  • The trustee is the person who manages and controls the property transferred to the trust by the settlor.

  • The beneficiary is the person who receives the benefit of the trust. In a typical estate plan, the settlor, trustee and beneficiary may all be the same person.

A living trust usually is revocable, which means that the settlor may amend, change or terminate the living trust at any time. Therefore, the settlor has full control of the trust and its assets. When the settlor dies, the trust usually becomes irrevocable so that no one can change the settlor's plan for distributing the assets after the death of the settlor.

Advantages Of A Living Trust
There are three principal advantages to a living trust:
  • A properly funded trust will avoid probate at the death of the settlor. This will save considerable costs and hassle for the beneficiaries. For example, on an estate worth $600,000, the statutory executor fee is $15,000. The attorney for the executor receives the same statutory fee, and the fees are calculated on the fair market value of the property, without deducting any liens or encumbrances. So, the cost of probating a $600,000 estate where the executor and the attorney receive statutory fees would be $30,000. All of these fees are avoided with a living trust. Although there are some fees involved in administering a living trust after the death of the settlor, they are usually considerably less than the statutory probate fees.

  • If the settlor becomes unable to manage his affairs, a court-appointed conservator of the settlor's assets would not be necessary. The successor trustee named in the living trust would take over and manage the settlor's assets and pay the settlor's bills.

  • Privacy: With a living trust, there is no one, single document listing all of the decedent's assets and their value at the date of death, which is a matter of public record in a probate estate. Also, there is no single public record of how or who receives those assets after the decedent's death.

Tax Savings With A Living Trust
Tax savings may be realized with a living trust. With the proper use of tax-savings trusts established in a living trust, in 2013 a husband and wife can transfer up to $10.5 million to their children, or other beneficiaries, without incurring any federal estate tax (the personal exemption is $5.25 million). This amounts to a tax savings of approximately $2.1 million ($5.25 million x 40 percent).
Need For A Will
A will is still needed if you have a living trust, to ensure that any assets that are not transferred to the living trust will still be distributed according to the provisions of the living trust. Thus, the will serves as a back-up to the living trust.
Funding The Living Trust
To ensure that probate will be avoided with a living trust, assets must be transferred to the living trust. This is accomplished by transferring title to the assets to the trustee. For example, John Doe would transfer his assets to John Doe, Trustee of The John Doe Trust. John Doe, as Settlor, still has full control and management of the assets, but the assets inside the living trust will not have to be probated at his death.
Schedule Your Free Consultation
To discuss creating a living trust with one of our lawyers, please contact us at our San Jose office by calling 408-294-9700 or by sending us an email. We will walk you through the options that are available to you, and help you do what is best for your family.
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