Legal Question in Wills and Trusts in California

When is the best time to revoke a trust? We are refinancing as co-borrowers with grandma on her property and the house is in a trust. She wants us to have it/take over payments. Can we take the trust out at re-fi aand not put it back in?

Asked on 9/12/13, 2:42 pm

3 Answers from Attorneys

Timothy McCormick Libris Solutions - Dispute Resolution Services

There is no good time or bad time to take property out of a trust and give it to a beneficiary, except that while the person who set up the trust is alive it is always a bad time, and the only good time is after that person passes away. Giving real estate, or any other major assets to beneficiaries before you die invariably has terrible tax consequences for everyone concerned. The person making the gift may be liable for gift tax, and the people receiving the gift may have to pay adjusted property tax rates immediately, and will almost invariably have to pay WAY more capital gains tax because they lose the stepped up basis of a property that passes by will or out of a trust after the grantor dies. You and grandma need to talk to an estate planning attorney before you make a really big mistake.

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Answered on 9/12/13, 3:28 pm

Victor Waid Law Office of Victor Waid

Best advice I have heard all day Timothy McCormick. I am in full agreement with Mr. McCormick. An ounce of prevention estate planning is cheaper than a pound of cure..

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Answered on 9/12/13, 6:47 pm
William Christian Rodi Pollock

Mr McCormic is absolutely right. This is a follow up to your prior questions, and each time you have been advised to have your grandmother seek competent counsel. The cost of effective advice will be far lettt than the cost to fix the likely mess if you proceed without really understanding what you are doing.

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Answered on 9/13/13, 5:35 pm

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