One of the main reasons to have a trust as a part of your estate plan is to avoid probate. In California, if your estate is worth more than $150,000, your estate is subject to probate. If your estate is worth less than $150,000, there are simplified probate procedures.
A trust, that your attorney assists you to properly fund, can help you to avoid probate.
The estate tax exemption in 2018 is $11,180,000 per individual, and spouses can still elect portability. Portability allows a surviving spouse to use any unused part of the deceased spouse’s estate tax exemption. Accordingly, there is up to $22,360,000 of estate tax exemption available for married couples in 2018. While the estate tax exemption has gone up under the new tax laws, that does not mean an estate plan and trust are no longer helpful.
A trust gives directions to the trustee about how to allocate assets upon the death of the first spouse. For some married couples, leaving everything to the surviving spouse has potential income tax benefits. For other married couples, especially those with children from prior relationships, there may be good reasons to separate some assets into a separate trust on the death of the first spouse.
There is no one situation that is right for everyone. Your attorney can assist you in drafting a trust that is customized to your family’s needs.
Providing Guidance to Your Family
Lastly, a trust can help you to avoid chaos in your family upon your passing by giving your family members and beneficiaries and guidance about what to do with your estate.
Although initially meeting with an attorney and working through the process of obtaining a trust, can initially be time consuming, it will give you peace of mind and help you successfully pass along your legacy to your loved ones.
Mendes Weed, LLP is here to help you if you have any questions. (925) 390-3222.
The tips and materials provided on this page are for informational purposes only, offered as public service. No information on this website should be considered legal advice or used as a substitute for legal advice. For legal advice, you should contact an attorney directly.
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Mendes Weed, LLP is located in Walnut Creek and serves clients around the Bay Area. For your convenience, we also have offices in San Francisco and Sacramento by appointment only.
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