Our Office

Home Our Attorneys Contact Us        

Services

Wills Trusts Tax Planning Corporate Formation Business Transactions

Trusts

What is a living trust?

A legal entity that you create and manage, which is capable of owning property.

• What are the two main reasons that I should have a living trust?
  
  1. Avoid probate
  2. Potentially reduce estate taxes
• What is probate?
  
  Probate is the legal process that takes inventory of the deceased person’s property, appraises the property, pays the estate’s debts, validates the will, and distributes the property according to the will.
•  Is probate expensive?
  
  Yes.  While estates in California under $100,000 need not be probated, the probate fee on a $200,000 estate would be $14,000. Therefore, if you own a home you will save money by establishing a living trust.
• Is probate time consuming?
  
  Yes. A typical probate can last to 1 1/2 to 2 years, and possibly longer. This means that your beneficiaries will have to wait a long time before receiving the property you left for them.
• What is the current estate tax exemption?
  
  $2 million. This means that the first $2 million of your estate will pass to your beneficiaries free of federal estate taxes.
• How can married couples use an AB Living Trust to save on estate taxes?
  
  An AB Living Trust will allow each spouse to take full advantage of the exemption. Under this trust, if the first spouse dies in 2007, $2 million would pass to the surviving spouse free of estate taxes. If the surviving spouse dies in 2007, $4 million would pass from the estate free of estate taxes.
• How much will I pay for a living trust?
  
  $1,500 to $2,000. This amount includes a living trust, a backup will, a durable power of attorney for finances, an advance health care directive, and new grant deed.  Therefore, a living trust will provide significant savings when compared to probate and estate taxes.