TRUST ME: You Might Need a Trust?

Yesterday I attended a local Law Bar event about taxation (no, I was not intending to punish myself, but it felt like it at times). Before yesterday I had already intended to write something about how anyone with substantial assets should consider a Trust (even if you have a Will), but after yesterday’s tax session it became even more apparent. If you don’t understand the difference between a Will and a Trust, then Google “Will vs. Trust” or call an Estate Attorney to explain it to you. Bottom line, if you care about the people that will receive your assets after you’re dead, then it’s likely that you will want to get a Trust.

Few people understand that even if you have a Will, probate court will still get involved with settling your estate.

Probate means that it could take 1-2 years to settle your affairs, all your assets become part of a public record that anyone can look up, it could potentially cost tens of thousands of dollars more to settle your estate than if you had a Trust, and there could be hundreds of thousands to millions more to be paid in estate taxes if you have a substantial estate.

If you’re convinced that you need a Trust, do NOT do it yourself!

I know that there are many DIY websites, forms, etc. out there, but I’ve been involved in probate sales where very intelligent people took on doing their own Trust, made fatal mistakes resulting in the Trust being invalid, and their estate had to be probated in the end. Not fun for the heirs!

Furthermore, there are many variations of Trusts with pour over Wills and other exotic variations, each created to accommodate the unique needs of either the Settlor (the person who puts the assets into the Trust) or their beneficiaries. A good Estate attorney is going to offer you options that you likely never even realized existed and you probably could never validly create for yourself.

Finally, once you have a Trust or even if you have had one for years, consult an Estate attorney about it every few years.

Tax laws are always changing, court cases often change the way existing laws are interpreted, and your circumstances may change. Your marital status may be different later, you may intend to move to another state (yes, this could impact your Trust), the needs of your beneficiaries may need some adjustments, etc.

Nothing written here is intend to be legal advice other then to seek legal advice regarding what’s in your best interest. I’m not an attorney, I’m a real estate broker that often deals with selling homes either through a Trust or Probate process in California.