Legal Question in Wills and Trusts in California
Need trust or not?
My grandmother owns a home that is worth about $300,000 and also has assets worth $300,000 in various bank-type accounts. She has 3 children and wants to leave all that she has to the 3 of them equally. She has written a will stating this and also has all three of them as beneficiaries on all of her accounts. Am I correct in my assumption, that upon her death, her house will have to go through probate? I don't think bank accounts go through probate, right? From the research I've done on the web, I see that the cost could be anywhere from $9,000 and up. She is looking to me for guidance, but she seems hesitant to pay to put her things in a trust. If she puts me on the deed to the house, can I then transfer the ownership to the 3 kids at the time of her death? Would I have to pay any type of taxes or capital gains? She doesn't want to put any of her kids on the deed, because she feels as though they would control any decisions regarding the house, while she is still alive.
4 Answers from Attorneys
Re: Need trust or not?
It sounds like a trust would be appropriate to avoid probate. It is not a good idea to put you or her children on title because a) there will be a capital gains issue because of the loss of the step-up in basis; b) her property will be subject to your creditors, and other issues of loss of control. If you need any further help, please contact me.
Mina Sirkin, Esq.
Certified Specialist in Estate Planning, Probate and Trust Law, State Bar of California Board of legal Specialization
Re: Need trust or not?
Ditto what the last person said. Those are the exact issues to be aware of... creditors, taxes, etc.... A trust is very simple and can be developed for a $1,000 or less by a well qualified attorney. Good luck!
Re: Need trust or not?
I will add a bit to what the other two have said so far. For your situation, a trust is most likely the way to go. Check out my webpage www.sfolaw.com for a chart of what the attorney and executor fees will be if the estate is subject to probate. I also describe in detail the commonly chosen options.
The bank accounts will be subject to probate as well if there are no beneficiary designations. This could a hardship on you, because you will face delay getting the money when you need to pay for funeral expenses, creditors, etc.
A will also does not deal with disability situations. What if your mother cannot make financial decisions? You would have to get a conservatorship proceeding in court, which gets extremely expensive. A trust and power of attorney address these situations.
If you are in northern California, feel free to contact me. Assuming the situation is as you describe it, we could set up a comprehensive estate package for about $700-$800.
Re: Need trust or not?
it will have to go through probate unless she sets up a living trust which should only cost a feww hundred dollars for an attorney to set up.
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