Market Real Estate is thrilled to continually provide our clients with outstanding resources. The following is information about estate planning provided by an Estate Planning Attorney who is also a Market Real Estate’s client…
As you consider purchasing a home, it is also important to think about whether your home will be held individually in your name or in the name of your revocable living trust. If you don’t have trust, this is the time to think about getting an estate plan that includes a living trust.
What is an estate plan and why do you need one?
An estate plan is a set of documents that protect you and your assets in the event of your death or incapacity. The cornerstone of your estate plan is a revocable living trust. A revocable living trust is a document that acts like a contract and states who will get your assets upon your death (your Beneficiaries) and who will ensure your wishes are carried out (your Successor Trustee). Having a revocable living trust is very important because it allows you to avoid the probate process. In California, if you pass away with no planning or just a will, your beneficiaries will have to petition the court through a process known as “probate” to obtain your assets, including your home. The probate process not only takes a long time (1-2 years) but is very expensive. To avoid probate, most people who own a home in California will hold their home in a living trust. This avoids probate at your death and ensures that your home is transferred to the beneficiaries of your choosing in the manner you specify.
For those who are married, you may want to first take title to your house as community property with right of survivorship and then have your estate planning attorney transfer the home to your revocable trust. This provides the added tax benefit of a double step-up in basis on the final spouse’s death.
There are many other advantages to having a proper estate plan in place, including making sure you appoint a guardian for your children and ensuring that your medical wishes are carried out through a healthcare directive. As you consider purchasing a home, we suggest adding this to the list of important things you should do to protect your assets and family.
Nikki Semanchik, Esq.
Semanchik Law Group, Inc.