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Information about Revocable Living Trusts

Nolo's Encyclopedia of Everyday Law:
Answers to Your Most Frequently Asked Legal Questions

Beware of Annuities

Your place for information about Revocable Living Trusts. 

A trust is a fiduciary relationship in which one person or entity (the trustee) holds the title to property (the trust estate or trust property) for the benefit of another (the beneficiary).

A Living Trust is a legal entity, desribed by the trust document, where the trustee transfers his (or her) property into the trust with instructions on how to distribute or manage the trust after his death.  The main purposes of a living trust are to
eliminate probate fees and make sure the trustor's wishes for their property are carried out after their death or incapacitation.

NOLO Press
(Do it Yourself)

A revocable living trust is a popular probate-avoidance device. The trust, created by managed for the trustor (also called grantor, donor, creator or settlor,) is by managed for the trustor (grantor, donor, creator or settlor). 

Probate is very expensive.  In California during 2010, the probate lawyer is entitled to 4% of the first $100,000 and 3% of the amount above that.  A "small" California estate of $250,000 could easily see a probate fee of $8,500 just to have a lawyer run some papers by a probate judge!

  • $100,000 x 4% + $150,000 x 3% = $4,000 + $4,500 = $8,500
(From Pg 238 of Nolo's Encyclopedia of Everyday Law) "You create the trust by preparing and signing a trust document.  Once the trust is created, you can hold property in the trust, without giving up any control over the trust property.  When you die, the trust property can be distributed directly to the beneficiaries you named in the trust document, without the blessing of the probate court.  Living trusts are discussed in more detail in the next set of questions (in the book.)"

Article: Beware of Annuities




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