Welcome to Straight Talk. We at Legacy Legal and Family Legacy Trainings appreciate your enjoyment of our weekly insights on the relationship between estate planning, tax law, financial matters and human dynamics.
Today I want to focus on a simple (not really) question that we get asked many times by people. Do I need a Trust? Here is the thinking.
No. No one needs a Trust. You need to eat. You need to sleep You probably need some type of shelter and most likely you need human companionship to survive. That is what you need. So the better question is do you want a Trust? That question involves a whole range of considerations, choices, desires, and other human driven emotions and thought.
Do you want a car? Do you want a T.V. Do you want a home? Do you want a snowboard. Do you want your wealth protected? Do you want your kids not to blow their inheritance as soon as they receive it which is what happens to most people. Do you want a Legacy? Do you want to have a vision that you can use today as a guide for your family?
Do you want a Trust? Here is a basic consideration. If you own a home in most cases without a Trust your heirs WILL (note the emphasis) through a court process called probate. Now, if you like pain, time and cost, then this might be acceptable, but I don’t know too many people that do. And in San Diego, we used to have a North County and a Downtown San Diego probate court which because of budget cuts has now has been consolidated into one downtown Court. That affects about 2 million people. What this means is that simply to transfer your home to your heirs you will have to wait at least a year, pay a bunch of court costs, and pay attorney’s fees set by the State of California. A Trust avoids all of this, except for a small cost for the attorney’s to make sure the transfer of the home is done correctly.
Do you want a Trust? Without a Trust it is possible that your children could receive all of your money and assets when they are 18. Is that what you want? If not, then a Trust is a great tool to start to specify what you want and don’t want.
Do you want a Trust? If you are a person who owns more than 5 million in property and you don’t want to pay taxes to the government then a Trust is a great tool to help you avoid this result. Please note that the new tax law kept the same 5 million limit which for married couples means you can protect up to 10 million of your hard earned wealth.
Do you want a Trust? If you want to create a framework for your vision of how you know your family will be prepared to handle wealth and this is the best part, you don’t have to die to make this happen, then a Trust is a great tool to create that framework.
Do you need a Trust? No. Do you want a Trust? Maybe. Is a Trust a good thing and should people have Trusts? YES. Most definitely.
Planning, Planning and Planning is how our company is uniquely positioned to guide you and help you relax through these turbulent times. We offer a team of very experienced Estate Planning professionals to put you at ease and give you peace of mind that your plans will work.
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