Frequently Asked Questions

Craig J. Bauman Attorney at Law – California
email cjb@californialawpractice.com or call (858) 488-1497

What is the” Revocable” part of a Revocable Living Trust?

To say that something is “revocable” simply means that it is not permanent (irrevocable). As applied to a Revocable Living Trust, it means several things: (1) After you initially set up your trust and place your assets in the name of the trust, you can always, at any time and for any reason, remove assets from the trust; (2) It also means that placing assets in the name of your trust is a non-taxable transfer, thus real property is not re-appraised and the transfer of other investments does not create a taxable transfer; (3) In addition to removing assets from your trust, you can also, at any time and for any reason, change the terms of your trust, including changing beneficiaries and/or the persons you have left in charge of settling your estate at your death.

How do I fund (put assets in) my trust?

Part of setting up a trust is providing a list of assets, including account names and numbers and a copy of the current deed to your home. At the appointment at which you sign all your estate planning documents, a deed will be ready for your signature, transferring the real property from your name(s) to the name of the Trust. It is then sent in to the County Recorders Office for recording. Also, funding letters are provided that (following the Funding Instructions that are provided) are either taken in or mailed in to each bank or institution where you have accounts, directing that your account be changed to the name of your Trust.

What is the prupose of placing assets in the name of my Trust?

Let us say, for example, you currently have $150,000.00 in a checking and savings account at a bank and own your own home. If you died and the Executor of your Will went to the bank to get the money and called a Realtor to sell the home, both the bank and the Realtor would tell your Executor to come back and see them after the court has provided you with court documents, giving you permission to get the money and sell the home. Instead, your bank account and your home are held in the name of your Trust. Your Successor Trustee (person named to settle your estate at your death), would go to the bank and call up the realtor and with your death certificate, the original trust document and their identification, the money would be turned over to them and the Realtor would list the property for sale. This is all because the Trust document gives them the legal right to do so – they do not have to apply for and wait for a court order.

What tax ID number do I use for my assets in my Trust and is there a change in how I pay my income taxes?

Because your Trust is a Revocable Living Trust, you have given nothing away permanently. You are only holding your assets as Trustee of your Trust instead of as an individual (or couple) so that you have the protections from probate or a conservatorship that a Trust provides. Therefore, you continue to use your SSN and you pay your income taxes you same way you always have.

What is this about saving taxes with a Trust?

Not only do Revocable Living Trusts save you and your family from the delays and costs of probate but you can create a trust with an estate tax savings feature for married couples. By establishing your Trust as an A/B or an A/B/C Trust, you can basically double the amout of assets you may pass on at the death of the second spouse, before any estate taxes are due. This is a feature you may add to your Trust for a small charge, if you have an estate that is in excess of $2,000.000.00 and are married. Click on Saving Taxes for more information on this and other ways to save taxes.

How does having a Trust avoid the need for a Conservatorship?

Instead of having to go through the demeaning public process of having a person declared incompetent, in order to manage their financial affairs for them, a Trust provides a simplified, no-cost short cut. The well spouse second Trustee or the successor Trustee obtains two sworn statements by two attending physicians attesting to the fact that the person is, “so mentally or physcially incapacitated so that they are unable to manage their own financial affairs in their best interest” (provisions included in a Trust) and with those two statements, a copy of the Trust and their identification, the Trustee can manage the assets held in the Trust, on behalf of the incapacitated Trustee.

What is the difference between a “living will” and a living trust?

The term, “living will” can be very confusing. It is a term that is usually used to describe what is more commonly called a Health Care Power of Attorney or Advance Health Care Directive. A Will is a document that explains what a person wants to have happen to their assets after they die. So the term, “living will”, is sometimes used to describe a health care document that explains what a person wants to have happen while they are alive and need someone to make health care decisions for them, if the cannot themself. Therefore, a living will, has nothing to do with a Will at all (or a Trust, for that matter. Thus the confusion.

Under what circumstances is just having a Will OK?

If your estate is under $100,000.00 and includes no real property, then at your death, your estate can be transferred to your heirs through an Affidavit process. Unfortunately, although probate is avoided at death, if you become incapacitated or incompetent during your lifetime, thousands of dollars would have to be spent setting up a conservatorship, whereas with a Trust, no conservatorship is needed.

Living Trusts in:

Alpine, San Diego Oceanside, San Diego
Bonita, San Diego Pacific Beach, San Diego
Bonsall, San Diego Point Loma, San Diego
Bostonia, San Diego Poway, San Diego
Boulevard, San Diego Rancho Bernardo, San Diego
Campo, San Diego Rancho Santa Fe, San Diego
Cardiff, San Diego San Marcos, San Diego
Carlsbad, San Diego Santee, San Diego
Clairemont, San Diego Solana Beach, San Diego
Chula Vista, San Diego Spring Valley, San Diego
Coronado, San Diego University City, San Diego
Del Mar, San Diego Vista, San Diego
El Cajon, San Diego
Encinitas, San Diego
Escondido, San Diego
Fallbrook, San Diego
Hillcrest, San Diego
Imperial Beach, San Diego
Jamul, San Diego
Julian, San Diego
Kearney Mesa, San Diego
Kensington, San Diego
La Jolla, San Diego
La Mesa, San Diego
Lake San Marcos, San Diego
Lakeside, San Diego
Lemon Grove, San Diego
Leucadia, San Diego
Mira Mesa, San Diego
National City, San Diego
North Park, San Diego
Ocean Beach, San Diego

For more information, please contact:
Craig J. Bauman Attorney at Law – Local to San Diego, California
email cjb@californialawpractice.com or call (858) 488-1497

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