by: John B. Palley, Attorney
When meeting with clients we often discuss the benefits of employing a revocable (or “living”) trust to help plan the client’s estate. The living trust becomes the centerpiece of basic estate planning for most people both due to the benefits it provides but also due to the horror stories it can help avoid. With the changes in the federal estate and gift tax rules in recent years each United States citizen can currently give away far greater amounts of money when they die without incurring the federal estate tax.
The mistake that many people make is thinking that they do not need a living trust, or even wanting to revoke the one they have, because they “only” have $400,000 in assets. This is a big mistake because the federal estate tax exemption has absolutely nothing to do with the California probate laws. Probate laws still kick in at $100,000 in assets and can be necessary for even smaller estates in some instances. Thus the value of living trusts needs to be considered for anybody who has assets!
This article is written with California laws in mind by a California attorney. The principles are the same or similar in most states but you should review the law in your state with a licensed estate planning attorney.