How can I ensure my property will go to the people I want it to go to when I pass?
What’s the difference between a will and a living trust?
Both a will and living trust indicate who your property should be given to when you pass away. The main difference between the two is the process by which the property is distributed. In order to distribute the property to those indicated in a will, one must go through a long, expensive and public court process known as probate. In probate, the validity of the will is verified, all assets and debts of the decedent are inventoried, the decedent’s debts are paid and the decedent’s property is distributed according to the terms of the will.
With a living trust, a similar process known as “trust administration” occurs where various notifications are made, assets/debts are inventoried, decedent’s debts are paid and the property is distributed according to the terms of the trust. However, the trust administration process is typically much faster, less expensive and quicker than probate.
If I have a living trust, do I need a will?
Furthermore, a will can be drafted in such a way that it can become a testamentary trust, which will include all of the terms of your living trust, in case there are issues with your living trust that cause it to be invalid. This will ensure your property will be distributed according to your wishes in the living trust even if, due to some legal or other error, there are issues with distributing property via the living trust.If you have a living trust, you only need to make a simple will called a pour-over will. Such a will indicates that all of your property not otherwise designated to go to any specific beneficiary will go to the trust, which ensures it will be distributed according to your instructions in the trust.
What’s the difference between a revocable living trust and an irrevocable living trust?
An irrevocable living trust is one which, absent very few exceptions, cannot be modified or revoked. Typically, the grantor/settlor is not the trustee of an irrevocable trust so they have no general control over the property.
Do I have to record my living trust with my County Recorder’s Office?
If I place my property in a revocable living trust, will I be protected from creditors?
Will I have to pay estate taxes when I die?
Will my property taxes increase if I transfer my house to a living trust?
Do I have to pay a tax on property I inherit?
If I leave property to my children in a living trust, will their spouses have any interest in the property?
One example of commingling occurs when the property is mixed with property owned jointly by your child and their spouse (e.g., your child inherited money and places it in the joint bank account owned by your child and their spouse). Upon divorce, if this separate property cannot be identified and separated from the community property (in a process known as tracing), some or all of it may be considered community property. Moreover, your child can convert their separate property to community property (in a process known as transmutation). For example, if they inherit property, they can make a written agreement that the property is community property. For real property ((land and any immovable property on land, including a house), your child can simply transmute the property with specific language in a grant deed when transferring it to themselves and their spouse.
However, you can leave your property to your children in trust, with a third party trustee in charge. In this way, your child will not own the property and their spouse will have no access to it. Of course, when the trustee distributes a portion of the property to your child, you have the same situation as when the property is not held in trust – it remains separate property unless your child takes action that makes it community property.
What do I need to bring to my attorney to have a revocable living trust drafted for me?
You will also need to identify what percentage of your property each beneficiary will receive, or if a specific person or entity will receive a specific property (e.g., a specific sum of money, a specific house, etc.).
You will also need to identify what property you wish to put into the trust. Some attorneys list all of this property in pages of the trust known as Schedules (e.g., Schedule A, etc.), so they will ask you for information that will specifically identify the property (e.g., account numbers, etc.). However, just because the property is listed on a Schedule in the trust does not mean it is owned by the trust. You must take action to ensure property will be owned by the trust. The attorney will typically prepare the Grant Deeds to transfer your house and any land you own into the trust, and will advise you how to transfer other property into the trust if they do not do it themselves.
Towards that end, the attorney will also ask for your Grant Deeds for any real property (land and any immovable property on land, including a house) you want to include in the trust. Your Grant Deed is the document that transferred ownership of your house from the former owner to you, and was recorded in your County Recorder’s Office. The attorney will need this so they can prepare a Grant Deed to transfer your real property to your trust.