Living Trusts Are Popular… Why?
There are two (2) reasons why Living Trusts are so popular:
1. The majority of people do not want the government (i.e., the court, or attorneys) to get involved with their wishes or their property.
2. The majority of people prefer managing the distribution of their assets to their loved ones after death.
Living Trusts work during incapacity and at death. Wills are only useful at death. Unlike a Will, Living Trusts are traditionally administered in an informal manner. This means no interference from the court system.
1. Living Trusts make it easier to resolve issues between beneficiaries; typically without any court proceedings.
2. Assets are distributed to beneficiaries faster through a Living Trust, than through probate.
a. This is because there are no hearing dates set by the court.
b. Assuming there are no estate taxes due, the average living trust is terminated approximately 4-5 months after death.
Living Trusts are less expensive to administer than probate cases.
1. The cost of administering a trust is less than half the cost of probate administration.
a. However, if there is a dispute (or, “contest”), the courts must get involved, which costs money.
b. The good news is, if someone brings a contest, they must pay for the contest out of their own money; not the estate’s money.
How much does it cost to administer a Living Trust?
1. If a Living Trust manages property valued at $500,000, and there are no lawsuits against the Trust, then:
a. Attorney’s Fees are between 1% and 1.5% of the gross value of the trust assets;
b. and sometimes, the Trustee can charge an hourly rate on certain task-based items (if any).
How much does it cost to administer a Probate?
1. In Los Angeles County, if you own real estate valued at $500,000, and do not have a Will at the time of your death:
a. The filing fee for Court is : $435 (as of 2015)
b. The publication fee is approximately : $200
c. The “premium” on the Bond is approximately : $1,500 per year; or $3 X $500
d. The Probate Referee’s fee is approximately : $500
e. The Administrator’s fee is approximately : $15,000
f. The statutory fees payable to an Attorney are approximately : $15,000
g. Thus, your estate will pay an approximate TOTAL of : $32,635 before your loved ones receive a dime!
What steps do I take to get a Living Trust?
1. Call us to either set one (1) appointment or two (2). For one (1) appointment:
a. Simply fill out a short Living Trust Questionnaire.
b. Appear at one (1) appointment to finalize and discuss all necessary provisions of the Living Trust.
2. For two (2) appointments:
a. Arrange a date for your first appointment to discuss the provisions of your Living Trust.
b. Return approximately one (1) week later to cover your finished Living Trust.