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:

  1. Advance health care directive
  2. Financial power of attorney

Please share your stories about revocable living trusts and absence of trusts. motherhealth@gmail.com

There is a place where there is no probate and no taxes on your wealth accumulation: Index strategy Universal Life policies