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Do I need Living Trust?

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ulnv4ever

Junior Member
What is the name of your state (only U.S. law)? California

hi,
I live in California, and I am the only Son. My parents own a house. Do they need to set up a living trust, or will for me to inherit the property after they pass away? I think it's a waste of money to set it up since i am the only son. but I can be wrong. please help...thank you...
 


TrustUser

Senior Member
it will cost you tens of thousands in probate fees if you dont put it in trust. not to count the aggravations, time delays, etc.

the number of beneficiaries has nothing to do with it.
 

anteater

Senior Member
it will cost you tens of thousands in probate fees if you dont put it in trust. not to count the aggravations, time delays, etc.

the number of beneficiaries has nothing to do with it.
Aw, man... and you were being so reasionable of late....

Show the OP the math to arrive at "tens of thousands." And be sure to point out that the estatte's personal rep can serve without taking a fee. And that an attorney is not required by law and, even if an attorney is retained, the attorney can be paid on an hourly basis. And...

Well, you get the idea. Don't stack the deck.
 
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TrustUser

Senior Member
hi anteater,

if a personal rep can serve without fees, so can a trustee. no deck to stack on either side.

i am somewhat familiar with california, as that is my state.

i dont try to keep up to date on every limit, but not too long ago you could skip probate if the estate was worth less than 100,000 and did not include any real property. if you had real property, then the limit was 20,000. i always wondered what that rule was for. i think the local outhouse costs more than that. lol.

the bottom line is you need to go thru the probate process, which includes courts, judges, hearings, etc. etc.

if you want to debate trust versus will here in california, you are gonna come in such a distant second, that i wont be able to see you as i cross the finish line. LOL.

trusts are always better. the only question is how much. i did agree with you in the past, and still do, that it is more important in some states than in others. california being pretty high up on that list.
 

curb1

Senior Member
No, you don't need a living trust. If you want to sell their house immediately after death, then you might consider a trust. The house would transfer to you almost immediately. Do parents have any debt? But, your costs will not be "tens of thousands in probate costs".

It is good that you ask. You have a chance to do some research on California probate costs. Do parents have other accounts (bank, brokerage, insurance)? These should be set up for you to inherit outside of probate, so that only the house will be probated. They should have a will. If it as simple as you say, even a DIY will might work for you. We don't know how comfortable/capable you are about doing the legwork.
 

anteater

Senior Member
hi anteater,

if a personal rep can serve without fees, so can a trustee. no deck to stack on either side.
.
But then it's difficult to come up with "tens of thousands in probate fees." Don't get slippery on me here. :cool:

if you want to debate trust versus will here in california, you are gonna come in such a distant second, that i wont be able to see you as i cross the finish line. LOL.

trusts are always better. the only question is how much. i did agree with you in the past, and still do, that it is more important in some states than in others. california being pretty high up on that list
Nah, we had that debate before. Not going to go for the chum in the water again. And I previously agreed with you that a trust makes a lot more sense in some states.

But you just keep trying to place your thumb on the probate side of the scale.

;) ;) ;)
 
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tecate

Member
You don't need one to inherit, but my guess is in most situations you would want your parents to create one so that you won't need to probate the estate of the second to die. If your parents don't want to do it, offer to foot the bill.
 

garrula lingua

Senior Member
OP, Nolo Press and other publishers have a "How to Probate an Estate" for about 25 dollars. Read it and decide for yourself.
Probate is fairly easy, just has to done correctly.
 

tecate

Member
I disagree with my learned colleague about probate being easy in this state.

It looks like Nolo has a California specific book on probate. Look at Amazon for others.
 
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garrula lingua

Senior Member
tecate, you are right.
But I think it's more cumbersome and technical than difficult.

Maybe if OP read through the process in layman's language, s/he could more intelligently decide what is best (depending on OP's ability to handle paperwork/requirements).

OP, in some states, homewowners lose their homestead (and other) exemption when the residence in put in a trust (a new entity owns the house - the trust must be crafted correctly).

Read a few books on the subject.
While you're at it, also read about Medicaid in your state and home ownership by the recipient..
In some states, a special type of trust is used to retain the home for heirs.

Personally, I prefer a will.
Many people forget to fund the trust, or obtain assets afterward which are never correctly placed in the trust.



But it can be a quicker transition of assets.
 

ulnv4ever

Junior Member
thanks for all this excellent information. my parents currently have a mortgage on the house, along with some 401k, and bank accounts. the trust at the local law office cost about 800 bucks to set up. do you think it's worth the money?
 

curb1

Senior Member
Be careful and get an accurate cost from the attorney. The $800 could be just to get you in the door and then they start adding on. If you can get the total package for $800, then go for it. It will be a boilerplate trust, but from the sound of your situation that is all that will be necessary. The assets will need to be retitled in the name of the trust and that is not difficult. Make sure the attorney gives you instructions, but you can DIY. You will get an "Employer Identification Number" (Form SS-4 from IRS) for the Trust that won't be used until you become Trustee.
 

TrustUser

Senior Member
well, 800 is peanuts compared to probate costs.

i think even anteater will agree to that - LOL.

but there are all sorts of lawyers advertising living trusts for the 300-500 range.

any of them are probably good enough.

i have examined nolo trusts, as well as other packages. i have also seen many done by lawyers. there is not one of them that i consider complete, in that they are missing important clauses.

however, the completeness of the trust is really only important when the assets remain in the trust after the death of the grantor/trustor.

if the assets are to be immediately distributed, most any trust package that i have seen does that - in the sense that probate is avoided, and privacy kept intact.

good luck with your choice. if you go the will route, perhaps you can come back and tell us what your actual cost was.

one other point - probate costs are based upon value of the asset, not equity in the asset. so the house will be just as expensive with or without the mortgage.
 

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