About 60% of my clients have their home in a Trust. To find out more about Trusts and who should have one, I interviewed local Trust attorney, Kayla Grant.
Marina Watts:
- Who needs a Trust?
Kayla Grant:
In California, if a person owns more than $184,500, then their assets have to be transferred through Probate Court. You can get around the process of having your estate probated if you have a Trust. If you own real estate, you should definitely have a one.
Marina Watts:
- What is the difference between a Trust and a Will?
Kayla Grant:
A Will is great if you own less than $184,500, but if you own more than that, your estate will still have to be probated when you pass away.
Marina Watts:
- Should my home be in a Trust?
Kayla Grant:
Absolutely.
Marina Watts:
- What if I do not have any children – does it still make sense to have a Trust?
Kayla Grant:
Yes, especially if you do not have a nuclear family, then you may want your assets to go to specific friends or charitable organizations.
Marina Watts:
- I created a Trust many years ago and have since bought or sold property. Does the Trust need to be updated?
Kayla Grant:
There should be a Schedule of Trust Assets attached to your original Trust, which can be updated without the need for an attorney. Also, you should have purchased the home and had it titled in your name as the trustee of your Trust.
Marina Watts:
- What if I have a Trust but I now want to make changes? Do I need a Trust attorney to make the changes?
Kayla Grant:
If you are changing things like who the beneficiaries or trustees are, then I highly recommend using an attorney to make these changes. Never handwrite changes on your trust, as this may be seen as fraud and make your estate end up in Probate Court, just what you wanted to avoid in the first place, right?
Marina Watts:
- My Trust was created many years ago by a Trust attorney who has since retired. Do I need to find a new Trust attorney?
Kayla Grant:
If it has been five years, it is probably a good time to review your estate plan and establish a relationship with a new attorney. Just like doing check-ups with your doctor, it is smart to do so with your financial affairs also. I offer a complimentary half-hour consultation if you are interested in doing a check-up!
Marina Watts:
- If I am getting a reverse mortgage, can my home be in a Trust?
Kayla Grant:
Yes, a revocable Trust gives you the authority to do anything you would like to do with your assets during your lifetime. The Trust does not become irrevocable until you pass away.
Marina Watts:
- My Trust was created many years ago. How often should I review my Trust?
Kayla Grant:
You should look at your estate planning documents every time something big happens in your life (e.g. life, death, marriage, and/or divorce). Otherwise, looking at it every five (5) years or so is a good idea.
Marina Watts:
- I have put friends in my Trust to become Trustee when I am no longer mentally capable or pass away. Now these friends have become old, too, and tell me they do not want the responsibility. What should I do?
Kayla Grant:
You can amend your Trust to appoint a new successor trustee. Preferably, someone younger than yourself. If you have trouble picking someone you trust, then you may consider hiring a Private Fiduciary. This is a licensed, bonded and insured professional that serves as Trustee.
Marina Watts:
- I’ve heard horror stories about people’s children fighting over money after their parents are gone. Is there any way to avoid this?
Kayla Grant:
The Courts like to see a “No Contest” Clause in every single estate plan. This means that if a beneficiary objects and there is no valid basis for that objections (i.e. fraud, undue influence, etc…), then that beneficiary gets nothing. The reason the Courts want to see this Clause is that they are burdened by the amount of estate and trust litigation cases and want them to be prevented from reaching the judicial system. Another way to deal with these issues when they come up is to mediate between the parties. Settling in the middle can often save all of the parties (siblings) in the long run because litigation can be so expensive and exhausting.
Marina Watts:
- In your experience, do children typically move in to a home their parent(s) leave to them or sell it?
Kayla Grant:
Now that we have Prop. 19, it has become more common for children to move into their parents homes, in order to preserve the low tax basis. Each situation is different.
Marina Watts:
- If I have a regular mortgage on my home with monthly mortgage payments due and leave this home to my children when I die, can the children assume the mortgage?
Kayla Grant:
Yes, your heirs can assume the mortgage payments. However, if you wanted to keep a home that has a Reverse Mortgage loan, you would need to pay off the loan.
Santa Cruz attorney Kayla M. Grant focuses on estate planning, trust administration and probate law.
Law Offices Of Kayla Grant
Kayla M. Grant, Esq. [SBN 243466]
133 Mission Street, Suite 290
Santa Cruz, CA 95060
(831) 440-7839
