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Estate planning

San Jose, CA |

I am planning to do some estate planning like making a revocable trust . There are two hitches in doing so
1 . I heard that you end up paying more taxes in case of married filing jointly cases.
2 refinancing a mortgage would be difficult .

I would appreciate if somebody can confirm this ?

Attorney Answers 3


  1. First of all, it is possible to have a joint revocable trust where each spouse actually owns their own property separately within the trust. In some cases, married couples filing jointly will have more income taxes than if they file separately, but that is not a function of whether or not their property is owned in a trust or not. It is more a function of how income, deductions and gains or losses are characterized by the husband wife.

    Refinancing a mortgage will generally be more difficult in that most lenders will require you to take your property out of trust ownership before making a new loan on the property, triggering the need to then have the property transferred back into the trust. This will cause an additional expense for two sets of deeds and other transfer paperwork, including notary fees and recording fees. This is not a legal requirement in the law, but rather a function of internal rules for the banks.

    A few lenders, however, are no longer requiring properties held in a revocable living trust to be take out of trust ownership in order to be refinanced. In our area of the South Bay, Fremont Bank is not requiring that. Other banks or credit unions should be asked in advance if they have this requirement.

    Please remember to mark what you believe to be the best answer to your question. This answer is provided by estate planning attorney Robert P. Bergman, with offices in San Jose, California. Mr. Bergman is a Certified Specialist in Estate Planning, Trust and Probate Law (State Bar of California Board of Legal Specialization), and has been practicing since 1980. This answer does not create an attorney-client relationship, and is only intended to provide general legal advice within the limits of the question asked. If you wish to create an attorney-client relationship for specific legal advice, it will be necessary to enter into an engagement for legal services. More general legal information about wills, living trusts, and estate planning can be found at Mr. Bergman's main website at www.lawbob.com, or his information website at www.lawbob.net. Mr. Bergman also offers free living trust seminars and wealth preservation seminars at his offices in San Jose. For those unable to attend a live seminar, an online living trust seminar may be viewed or downloaded at www.freelivingtrustseminar.com.


  2. Mr Bergman offers sound advice. There is no substitute for sitting down with an estates attorney to discuss your specific needs and goals. Each family and its assets are different. Do yourself the best service and get with a good estate planning attorney. You will be really happy afterwords and your family will be eternally grateful.

    LEGAL DISCLAIMER Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery Counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336 or his email address is sjfpc@comcast.net , his website is www.sjfpc.com. and his blog is <http://frommtaxes.wordpress.com/> Mr. Fromm is ethically required to state that the response herein is not legal advice and does not create an attorney/ client relationship. Also, there are no recognized legal specialties under Pennsylvania law. Any references to a trust, estate or tax lawyer refer only to the fact that Mr. Fromm limits his practice to these areas of the law. These responses are only in the form of legal education and are intended to only provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and timelines that if known could significantly change the reply or make such reply unsuitable. Mr. Fromm strongly advises the questioner to confer with an attorney in their state in order to ensure proper advice is received. By using this site you understand and agree that there is no attorney client relationship or confidentiality between you and the attorney responding. This site should not be used as a substitute for competent legal advice from a licensed attorney that practices in the subject area in your jurisdiction, who is familiar with your specific facts and all of the circumstances and with whom you have an attorney client relationship. The law changes frequently and varies from jurisdiction to jurisdiction. The information and materials provided are general in nature, and may not apply to a specific factual or legal circumstance described in the question or omitted from the question. Circular 230 Disclaimer - Any information in this comment may not be used to eliminate or reduce penalties by the IRS or any other governmental agency.


  3. I agree with Mr. Bergman. I think you were given bad legal advice by whoever spoke with you. It is time to actually meet with an estate planning attorney to discuss this, so you can get straight information. There should be absolutely no difference in taxes if you are using a revocable grantor trust. As for refinancing, it is not a problem to transfer real estate out of trust, if you need to. In Michigan, we use lady bird deeds to avoid the need for this. I understand that that particular type of deed is not authorized under CA law. There may be other options that would achieve the same purpose, however.

    A Trust is an outstanding estate planning tool. Whether or not it is the best option for YOU depends on your assets and your objectives. The only way to know for sure is to meet with an estate planning attorney. You would not want to contemplate setting up a trust without one.

    James Frederick

    *** LEGAL DISCLAIMER I am licensed to practice law in the State of Michigan and have offices in Wayne and Ingham Counties. My practice is focused in the areas of estate planning and probate administration. I am ethically required to state that the above answer does not create an attorney/client relationship. These responses should be considered general legal education and are intended to provide general information about the question asked. Frequently, the question does not include important facts that, if known, could significantly change the answer. Information provided on this site should not be used as a substitute for competent legal advice from a licensed attorney that practices in your state. The law changes frequently and varies from state to state. If I refer to your state's laws, you should not rely on what I say; I just did a quick Internet search and found something that looked relevant that I hoped you would find helpful. You should verify and confirm any information provided with an attorney licensed in your state.

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