If husband and wife each have simple wills leaving everything to each other; there is no separate property; total combined marital estate is below $10 million; all real property is titled in both names; spouses are listed as primary beneficiary on all retirement accounts, as well as investment and bank accounts that aren't already held jointly; then, is there any benefit in creating a living trust? Either in California or in North Carolina?
Yes. There are multiple benefits having a trust.
1. Your life can go on as you wish, should you be disabled at any time.
2. No probate fees (statutory percentages) and delays.
3. It’s private.
This is general advice. You are anonymous. If you PM me i won’t know what it’s about.
A Trust is used to avoid Probate (not a problem for a married couple owning everything jointly unless you die together, but once one of you is alone it is a big savings after their death), to lower estate taxes (not a problem currently but that can change), to control the funds after your death (like haunting your heirs!), and for nursing home planning. A Trust will protect your assets from pay back to the government if they pay for your nursing home care (Medi-Cal) so you can leave the assets to your heirs. It can protect heirs with Special Needs. A Trust also provides a mechanism for someone to manage your assets if you become incapacitated.
If either of you becomes incapacitated, the fully funded Trust avoids the Conservatorship filing (due to ERISA changes or other statutory changes, affecting third party financial entities' business conduct).
If both of you become incapacitated, the Successor Trustee is able to manage and apportion assets according to your respective needs.
The Survivor of you will have full use of the assets, which can be designed to include some income tax benefits (with a GRAT or a GRIT).
An Attorney consultation ~ with candor and confidentiality ~ can result in specific legal advice about your situation (and its documents) based on the statutes and case law. Why? Because this e-response is for information but is not construed "legal advice" for any particular case or client, just an explanation in response to what you posted. So this response creates NEITHER an Attorney-Client relationship NOR an Attorney-Client privilege ~ because everything is public, for all to see. For specific advice about your particular concerns or situation, consult an Attorney as a Fiduciary to you, with that 1-way Duty to you. This e-response is neither an advertisement nor a solicitation.
Once you have passed away, no one can set up a trust for you. So, by definition, you need to set up a trust while you are alive. In California, if your assets total $150,000 or more, your loved ones will almost assuredly be forced to go through the year-long probate court process to transfer assets from one of you to the other. Even if you are able to plan around the probate court for the first of you to pass away, the second one's estate will need to go through the probate court to be transferred to your children, charities or whomever you want.
Trusts cover both the period of time you are alive, but incapacitated, and the period after your passing, so there are other benefits to having a trust while you are alive.
Please know lawyers make approximately ten times (10x) the money when people DON'T plan because lawyers get more than a year's worth of legal work vs. the two to three weeks it may take to prepare a trust and trust-related documents. So, if lawyers are telling you to set up a trust, it is definitely in YOUR best interest, not the lawyer's. Go see a lawyer today. It will make your loved one's lives so much easier. Truly.
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I agree with the attorneys above. A trust would definitely provide you with benefits you do not obtain through your current estate planning, such as: avoidance of probate (and the time and fees that come along with that process); protection of your assets and insurance that they will be used for your benefit if either or both of you become disabled during your lives; protection of assets from recovery for Medi-Cal payments made on your behalf; avoiding the need for a conservatorship of either you or your husband if incapacity becomes an issue (benefits from a retirment or life insurance payout would likely need to be held by either a trust or a conservatorship if the beneficiary is incapacitated).
The Trust is well worth the cost.
This communication does not establish an attorney-client relationship. The information provided is not legal advice and is provided solely for educational purpose. Unless you receive advice under legal representation of a licensed attorney in your state, do not take any action, postpone any action, or decline to take any proposed action based on my response. The information provided herein is based on my knowledge of the laws of the State of California, the only state in which I am licensed to practice law. The response I provide is based solely on the limited information in the question posted and it is extremely likely that my response would change in the event I had further dialogue with you or gained additional information.
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