A “Trust Package” consists of a Living Trust, Pour Over Will, General Durable Power of Attorney, Advance Health Care Directive, HIPAA release, Certification of Trust, Funding Instructions, drafting and recording of one Deed to transfer real property into the trust and few other miscellaneous instructional documents.

 

The fee to draft the Trust Package depends on if the client is single or married, and the complexity of the trust. The size of a person’s estate has little to do with the cost. It takes the attorney the same amount of time to draft a trust that includes a $1 million dollar home as a $50,000 one. However, some attorneys charge more simply because they feel the client can afford it.

 

Most Trust Packages are a flat fee starting from $1,975.00 for a single person to $2,500.00 for a married couple.

Depending on how much is accomplished at the first client meeting, it’s typical that the attorney would meet again with the client in one or two weeks to review the completed documents, and if approved, sign and notarize them that day. The client leaves the office with all of the original documents.

Simply contact my office for a free consultation at (916) 485-2593. Bring with you the worksheet printed from the above link. Please fill it out as best you can. However, you may not be prepared to answer all of the questions in the worksheet. This is perfectly fine because we will go over the worksheet in greater detail at the consultation.

A Will is a legal document that allows you to determine how you want your property to pass. If you do not have a Will, your property will pass to your heirs according to California law. A Will also allows you to nominate an executor to manage the assets of your estate, nominate a legal guardian to care for and provide for minor children, and allocate or apportion estate taxes.

No. In fact, having a Will assures that your estate will pass through probate. Probate is necessary to ensure that a Will is valid so your assets can pass to loved ones named in the Will.

No. Although a Will can pass most of your assets, assets such as life insurance proceeds, retirement benefits, joint accounts, jointly held realty, assets held in a living trust, and your spouse’s one-half community property interest in any assets cannot be passed using a Will.

In California, a deceased person can have a handwritten (Holographic) Will, a Statutory Will or a Will prepared by an attorney. A Holographic Will must be in the maker’s handwriting and must conform to the laws in California recognizing use of handwritten Wills. A Statutory Will is a form Will authorized by California and is created by filling in blanks. A Will prepared by an attorney is a Will that is prepared under the advice of an attorney, who usually oversees the execution.

Yes. Anyone can amend his or her Will by use of a Codicil (an amendment to a Will) or by destroying a previous Will and executing a new one. However, it is advisable to seek the advice of an attorney when changing a Will. A Will that is not correctly amended could cause confusion after death and, often, leads to contests by disgruntled heirs.

Probate is a court-supervised process that oversees the administration of a deceased person’s estate. Its purpose is to assure that a deceased person’s debts are paid, the beneficiaries described in the Will ascertained, the executor’s or administrator’s actions are monitored, income and estate taxes are paid, and the assets of the estate are distributed according to the deceased person’s Will. Court supervision is the biggest advantage to probate. It allows for a measure of accountability when disputes are anticipated. The disadvantages of probate are that the process is public, the costs and expenses are usually greater than if an estate were administered through a living trust, and the process could take a year or more to complete.

Yes. Certain property will not have to pass through probate before it can be distributed. They include jointly held property (joint bank accounts, real estate held as joint tenants, etc.), community property (unless one spouse Wills away his or her one-half interest in the community property), small estates (in California estates valued at less than $150,000 can pass by way of a signed affidavit according to the probate code), life insurance proceeds (as long as they are not payable to the estate of a deceased person), IRA’s, 401K’s, retirement accounts, and property passing to a surviving spouse (California allows property to pass to a surviving spouse through a streamlined process called a spousal property petition), and assets held in a living trust.

A revocable living trust, also known as an revocable inter-vivos trust, is a legal document that allows you to direct how you want your assets to be distributed when you die while allowing you to maintain control of those assets during your lifetime. When a living trust is combined with a comprehensive estate plan, some of the benefits it can provide are the care of disabled and handicapped children (special needs trust), the prevention of taxation of life insurance proceeds (irrevocable life insurance trust), the private administration of a deceased person’s estate after death, the nomination of a successor by the deceased person to manage estate assets in the event the deceased person becomes incapacitated, the benefit of directing how estate assets are to be distributed at death and to whom, the benefit of allowing married couples to take full advantage of their lifetime exemptions to reduce or eliminate Estate Taxes, the option to pass property with limitations established by the deceased person, the option to establish educational funds for children, the option to distribute property to children in trust for the benefit of grandchildren, for the purpose of avoiding the Estate and Gift Tax at the death of the children, to the extent authorized under the generation skipping transfer tax rules, and the benefit of avoiding probate. An estate planning attorney can help you plan and select the appropriate options tailored to your estate planning needs.

In some cases, yes. A living trust is not subject to court supervision. As a result, a trustee may be able to take advantage of the trust to a greater extent than if the court is supervising the actions of the trustee. In addition, a living trust is generally more expensive than a standard Will, although the difference in cost is nominal when compared to the alternatives of probate and Estate Taxes. A living trust may not be extremely helpful if one is a young single individual without kids and little or no assets. However, one must keep in mind that assets accumulate over time and circumstances change for people. A living trust may also still be important in directing how a deceased person is to be cared for in the event of incapacity or disability. Finally, certain individuals (real estate developers) find their dealings with third parties (banks, title companies, etc.) in connection with real estate may be difficult when title to property is owned by a trust.

Yes. A Will directs how a deceased person’s assets are to be distributed. When a living trust is created, it must be funded. Funding occurs when assets are transferred into the trust at the time of creation. What could happen is that future assets acquired by an individual or couple are left out of the trust. Having a “pour over Will” directs that any assets held in your name be transferred at your death to your living trust. These assets will have to pass through probate, but distribution will be according to the terms of the trust. A Will also permits a deceased person to nominate a guardian to care for and provide for minor children.

Merely having a living trust does not mean that you will not be subjected to Estate Taxes. A living trust is a tool that can allow married couples, by effectively planning their estates, to prevent wasting one of their lifetime exemptions to reduce or eliminate Estate Taxes. Each spouse can leave an unlimited amount tax-free to a surviving spouse who is a U.S. Citizen. This is called the marital deduction. Use of the marital deduction will merely defer Estate Taxes.

The Estate Tax is a Federal Transfer Tax. Congress allows each of us to pass a certain amount of assets tax-free during our lifetime. This is known as the lifetime exemption. Currently, each individual can pass over $11,000,000 tax-free in the form of lifetime gifts or at death. Any amount transferred in excess of this amount is subject to either a Gift or Estate Tax. This exemption is always subject to change. Each individual can give away $15,000 annually to anyone, without having the gift reduce the lifetime exemption.

Almost everything you own will be included in your estate to determine Estate Taxes. This includes one’s home, business interests, bank accounts, investments, personal property, IRAs, retirement plans and death benefits from life insurance policies payable to or owned by the estate. These items are reduced by one’s debts at death, expenses of administration of the estate (such as executor, legal, and accounting fees), certain medical expenses, funeral expenses, marital and charitable deductions and certain losses. The value of the estate after deductions is subject to the Estate Tax to the extent it exceeds the exemption amount established by Congress at the time of death.

You can give up to $15,000 annually to anyone you want tax-free. So, if you and your spouse each give $15,000 to your three children and two grandchildren, you can give away $150,000 annually. This is a great way to reduce the size of your estate. Other ways to reduce your estate include use of the Irrevocable Life Insurance Trust, the Qualified Personal Residence Trust, the Grantor Retained Annuity Trust and Grantor Retained Unitrust, the Family Limited Partnership, and the Charitable Remainder Trust.

You can also establish an irrevocable life insurance trust to remove your life insurance from your estate. The irrevocable life insurance trust becomes the owner of your life insurance policy. However, you must live at least three years after the transfer. At death, the life insurance proceeds will not be in your estate. You can name the irrevocable life insurance trust as the beneficiary of the policy. When you pass away, the life insurance proceeds will be paid according to the instructions of the irrevocable life insurance trust (i.e. to your spouse, children, etc).

Special needs trusts (also known as “supplemental needs” trusts) allow a disabled beneficiary to receive gifts, lawsuit settlements, or other funds and yet not lose his or her eligibility for certain government programs. Such trusts are drafted so that the funds will not be considered to belong to the beneficiary in determining eligibility for public benefits.

 

As their name implies, special needs trusts are designed not to provide basic support, but instead to pay for comforts and luxuries that could not be paid for by public assistance funds. These trusts typically pay for things like education, recreation, counseling, and medical attention beyond the simple necessities of life. (However, the trustee can use trust funds for food, clothing, and shelter if the trustee decides doing so is in the beneficiary’s best interest despite a possible loss or reduction in public assistance.) Special needs can include medical and dental expenses, annual independent check-ups, necessary or desirable equipment (such a specially equipped vans), training and education, insurance, transportation, and essential dietary needs. If the trust is sufficiently funded, the disabled person can also receive spending money, electronic equipment and appliances, computers, vacations, movies, payments for a companion, and other self-esteem and quality-of-life enhancing expenses.

 

Often, special needs trusts are created by a parent or other family member for a child with special needs (even though the child may be an adult by the time the trust is created or funded). Such trusts also may be set up in a will as a way for an individual to leave assets to a disabled relative. In addition, the disabled individual can often create the trust himself, depending on the program for which he or she seeks benefits. These “self-settled” trusts are frequently established by individuals who become disabled as the result of an accident or medical malpractice and later receive the proceeds of a personal injury award or settlement.

You can reduce your estate by transferring establishing a Charitable Remainder Trust. By doing so, you can reduce your estate and while donating to a charity of your choice. The Charitable Remainder Trust is useful for appreciated assets (stocks, real estate, etc). The asset is transferred to an irrevocable trust, removing it from your estate and providing you with a charitable income tax deduction. The trust then sells the asset at the fair market value, but is not required to pay capital gains tax. You retain a lifetime income stream from the trust that is higher than you would otherwise receive since the principal is not reduced by capital gains tax. At your death, your favorite charity receives the assets.