Navigate Probate with Living Trusts – A Guide by Goldberg & Goldberg

Understanding Living Trusts and Avoiding Probate

At Goldberg & Goldberg, we understand the importance of preserving your legacy and ensuring that your hard-earned assets are inherited by those you hold dear, with minimal loss to legal fees and probate costs. Living trusts are a valuable tool in achieving these goals, as they are specifically designed to bypass the probate process.

Probate can be a lengthy and costly process, involving the inventory and appraisal of your property, settling debts and taxes, and distributing what remains as per your will. By establishing a living trust, however, we can help your loved ones transfer your property swiftly and directly, without the need for probate – ensuring that the full value of your estate is passed on according to your wishes.

A fundamental living trust can facilitate the avoidance of probate and streamline the transfer of assets to the beneficiaries you designate, all the while skipping the complexities and expenses associated with probate court. A living trust is equally advantageous for individuals and for married couples managing both jointly-held and individual properties.

Establishing Your Trust

Creating a basic living trust starts with drafting a declaration of trust, somewhat akin to a will. Within this document, you appoint yourself as the trustee – the person responsible for managing the trust’s assets. If you establish a trust alongside your spouse, both of you will act as co-trustees.

You will then transfer property into the trust – this may include real estate, bank accounts, or other assets. For example, you might execute a deed that passes your home from yourself to “as trustee of the John Doe Revocable Living Trust dated January 1, 2023.” Being the trustee, you retain full control over the property within the trust.

Within the declaration of trust, you’ll also stipulate your chosen beneficiaries and how the trust assets should be distributed upon your passing. This selection can be updated at any time, and the trust itself can be rescinded should you choose.

Additionally, it’s wise to draft a will to act as a safety net for any assets not placed into the trust, ensuring they reach your intended beneficiaries. Failing to prepare a will means those untransferred assets would be distributed according to state law, which may not reflect your personal wishes.

Tax Implications and Administration

Once a revocable living trust is established, it requires minimal record-keeping. However, it’s crucial to document any transactions that add or remove property from the trust, but this is generally straightforward.

Example: Emily and Robert Wilson placed their residence into a living trust to sidestep probate. When they later decide to sell, they simply sign the contract and the deed as “trustees of the Emily and Robert Wilson Revocable Living Trust.”

Since the trust is revocable and you are both the grantor and trustee, there is no need for separate tax filings. Income generated by trust assets should be reported on your individual tax returns – a standalone trust tax return is unnecessary.

Posthumous Property Transfers

Upon your passing, the successor trustee – whom you will have named in the trust document – will assume the responsibility of transferring the trust property to your designated beneficiaries. This process is often completed with minimal paperwork and without probate court intervention, typically within a matter of weeks.

Creating a living trust is only slightly more complex than drafting a will, and for those with straightforward circumstances, it can be an endeavor accomplished with a detailed estate planning guide or software. However, personal guidance and professional oversight can ensure the trust is crafted to suit your individual needs.

The time to take control of your estate’s future is now. Contact Goldberg & Goldberg at (301) 654-5757 for a Free Consultation, and let us assist you in establishing a living trust that preserves your wealth and honors your legacy with clarity and confidence.

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