Burbank Revokable Trust Lawyer

It is common for people to set up a revocable trust. These are also called living trusts. The primary benefit of revocable trusts is to avoid probate. Probate is expensive in most circumstances and setting up a revocable trust allows the beneficiaries of the trust to avoid probate and its expense.

You can review the explanation of probate proceedings on another page of this website. Probate matters are heard by a judge and are required in order to transfer assets. The benefit of a revocable trust is that the assets can be transferred by whoever is named as the successor trustee of the trust.

Probate is required because the deceased is not there to sign for the transfer of assets that require the decedent’s signature. The way a trust avoids probate is that the assets, such as bank accounts and real estate, are put into the name of the revocable trust. The person who is authorized to sign on behalf of the trust is normally the person who sets up the trust. There are provisions within the trust which provide that if the initial person is unable to act (such as in the case of death or disability), then other people are named to take over as trustee. This way, the bank which is holding money in a bank account will follow the direction of the successor trustee when presented with a copy of the trust and the Trustee’s death certificate, or a letter from the physician stating that initial trustee is no longer able to act. Instead of going to probate court in order to have the court appoint someone to sign on behalf of the deceased, the new trustee can sign and transfer assets.

The primary benefit of the trust is you avoid court supervision. The necessity for an attorney is reduced and in some cases even eliminated.

The biggest drawback to the trust is its expense. A trust is more expensive to create in most cases than a will. The other negative aspect of a trust is that you actually have to transfer assets into the name of the trust. The attorney should handle the transfers of real estate by deeds into the trust, but you will have to make sure that bank accounts and other assets with title are put into the name of the trust in order to avoid probate. Merely having a trust is not enough; you need to make sure that the assets have the trust’s title on them.

Without court supervision, things can be done much less expensively. However, this informality also poses some dangers. The trustee needs to keep just as accurate records of what assets were owned at the time of the deceased’s death, what money came in and what money went out, since the beneficiaries do have the opportunity to take any dispute with the trustee to the court. Usually the disputes involve the sale of assets and the payments of expenses. Trustees should keep the beneficiaries fully informed of the actions that are being taken. When any dispute arises, the trustee should petition the court for approval of those actions before taking them. This avoids the not-uncommon occurrence where a trustee exercises the power as trustee to sell a particular asset and then is sued by a beneficiary claiming that asset should not have been sold.

The trustee is entitled to be paid compensation. Reasonable compensation tends to be 1% to 1.5% of the gross value of the estate per year. Additional sums can also be paid for extraordinary services. The attorney is normally paid on an hourly basis.

There are some situations where creating a trust is not necessary because assets will be transferred without the necessity of probate. For instance, if bank accounts are payable on death to someone, probate would not be necessary because as a matter of law, upon the account holder’s death it would pass automatically to the beneficiary of that account. Assets held in joint tenancy with somebody also may pass to the survivor upon death. However, you have to be particularly careful when dealing with real estate. There are negative tax consequences to holding title to assets in joint tenancy when there are appreciated assets. You can also run into problems when a creditor of one of the joint tenants (such as a child) seizes the property for the payment of that child’s debt since the child is shown as an owner.