Why people plan?
- To control and protect assets from creditors, death taxes and taxes such as probate taxes
- To prepare in advance for incapacity (80% chance of mental or physical disability)
An estate is comprised of all assets that you own. Probate (tax) is triggered when assets are more than $150k and your house equity is greater than $50k.
Gift taxes occur when gift is greater than $15k per year per giftor.
Capital gains from the sale of real estate depends on tax bracket and can be >15% with step up basis for inherited houses.
Benefits of Revocable Living Trust
- no probate
- no time delay
- estate is private
- hard to contest
- more control and flexibility
Create a trusts, put all assets in a trusts and do not add your children to your house deed when you are still alive.
There should be no co-mingling of assets for inherited assets belong to the beneficiaries.
When husband died first followed by the wife, the family of the wife inherits the estate.
Pitfalls of joint tenancy: potential liability, tax consequences and delays probate.
Probate in California can take a minimum of 2 years.
Probate costs averages between 4-8%
In 2014, there is a $5.34 M death tax exemption (Federal) tied to inflation and there is no state death taxes.
Power of attorneys should include:
- Advance health care directive
- Financial power of attorney
Please share your stories about revocable living trusts and absence of trusts. firstname.lastname@example.org
There is a place where there is no probate and no taxes on your wealth accumulation: Index strategy Universal Life policies