Why Do You Need a Living Trust?

So you can stay in control of the most important things in life.  A living trust allows you to protect your family because you control who gets your assets as well as the way they are distributed.  A living trust is the only way to pass on your assets with critical protections in place while allowing this information to be kept out of the state court system. The reason why you want to avoid going through probate is because it’s expensive, slow and all on public record. It is slow because it takes anywhere from 1-2 years or more to complete the process and in addition all of this information about your assets and who is receiving them is part of the state court system and thus free to the public.

Please Note: If you do not have a trust or will then the state determines who inherits your assets.

On top of all this probate can cost up to 5% of the fair market value of your estate.  It is even more important for those with minimal equity in their homes to avoid probate than those whose real property has no remaining mortgage. You will see from the following example that if you own a home, not having a living trust can cost your family tens of thousands of dollars when you pass on:

John Smith dies on January 1, 2011 without a trust and the following assets:

(1) Home in Carlsbad, fair market value: $500,000.  Mortgage balance owed: $450,000.

(2) 401k plan:  $200,000.

(3) Stocks/bonds:  $50,000.

(4) Checking & Savings Accounts:  $50,000.

Total Net Value: $350,000

Total FMV value: $800,000

Probate Attorneys Fees*$19,000!!! (Calculated from $800,000. See Probate Code § 10810)

*Does not include costs for appraisals of all property, court costs, filing fees, etc.

Don’t put this burden on your family. The only way to avoid probate is with a fully funded living trust. When you set up a living trust, you transfer assets from your name to the name of your trust, which you control yourself or jointly if married — such as from “John and Jane Smith, husband and wife” to “John and Jane Smith, trustees of The Smith Living Trust dated February 1, 2011.” 
 With a diligent financial advisor the funding of your living trust will be much simpler because we can determine what assets you own and how they will need to be re-titled for your living trust.

If you have any questions please do not hesitate to contact us at (858) 461-8987.


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