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5
Apr

Advantages of a Living Trust

A Living Trust (sometimes called an “inter vivos” or “revocable” trust) is a legal document which is created while you are alive detailing your wishes with regard to your property, assets, dependents and heirs upon your death.  It is another way of holding title to your property.  You are the trustee of your own trust, enabling you to keep full control over all your property while you are alive.  You choose the representative or “successor trustee”, who has the same role as an executor of a will, and follows your instructions regarding transfer of ownership to the beneficiaries you name in the trust.

The biggest advantage to holding title in a Living Trust is that property transferred into a living trust does not go through probate, which can be time consuming and expensive. The average uncontested probate takes 10 to 12 months, sometimes more. Other advantages include privacy (probate is a public process), there is no delay in passing assets to heirs, there is no court involvement or probate costs, and it may include the elimination or reduction of estate taxes and capital gains. 

Another huge advantage of holding title in a Living Trust is that it is a protection against Medi-Cal coming after your property.  Effective January 1, 2017 a new law rules out Medi-Cal from seizing a decedent’s assets including their home to recoup money spent on healthcare in the last years of their life, but only if the home is in a Living Trust.  Medi-Cal will only be able to come after those assets in a Medi-Cal recipient’s “probate estate”.  Assets in a Will ends up in probate, and are NOT protected from Medi-Cal recovery.

Transferring a home into a Living trust is now even more important for Medi-Cal recipients in order to protect their homes and enabling them to leave their homes to their children without having to pay the State back upon their death. A word of caution; simply writing up a Living Trust is not enough.  You have to “fund the trust” meaning that you have to put the title of your property into the trust.  You do this by transferring title using a transfer deed. 

For legal advice always consult a professional qualified attorney.  For financial or tax advice always consult a professional financial advisor or professional tax preparer. Article for informational purposes only.

For additional information on probate and trust real estate sales visit: www.ProbateAndTrustRealEstateSales.com or text “Probate” to 79564 on your mobile phone

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