What is the advantage of a revocable trust in San Diego for those who own a home or wish to pass assets to the next generation with minimal tax impact? A revocable trust is basically an entity like a company based upon a contract. The trust is an estate planning tool created to legally hold title to assets, money and real property owned by you and (if applicable) your spouse. The revocable trust acts much like a traditional will in that it provides specific directions on how you would like those assets to be distributed to your heirs and those you love – called the “beneficiaries” – upon your passing. The term “revocable” means you are able to make changes to your trust and the directions it contains at any time. You are able to revoke it entirely for any reason, usually if laws or your situation substantially change or it is no longer needed.
However, a will must be “probated” through California’s Probate Court. This is quite an expensive and time consuming process. There are several layers of fees associated with probate and your money and assets will be tied up for an extended period of time, usually more than a year. The fees are based on the “appraised” value of the assets, not the actual value or equity. So if you own a $500,000 home with $100,000 in equity, the probate fees will be based upon $500,000 meaning $27,000 or more – just for the house. It will take your heirs more than a year to gain the legal rights to the home you intend for them to have, and it will cost them more than $27,000 to do so. The advantage of a revocable trust in San Diego is you avoid the expense, hassle and time wasted in probate.
With a revocable trust your assets, money and real property pass directly to your heirs without the cost or expense of probate court and without tax (up to the limits of federal and California law – presently more than $5,000,000 per person). Federal taxes can be as high as 45% for high value assets. Probate court is a public process and anyone can access the documents and see your private personal affairs. A revocable trust is completely private and no one will learn of your own business let alone the newly acquired business of your beneficiaries.
What is the advantage of a revocable trust in San Diego for most homeowners and those approaching retirement? Time, money, reduced taxation and privacy.We invite you to contact Allen Barron for a free consultation to learn more at 866-631-3470. Our experienced estate planning, trust and tax attorneys and accounting staff provide integrated services which make the process much easier and smoother, combined with the experience and sensitivity which helps you to craft a trust to meet the unique requirements of your family.