Kenwood Press


Serving the communities of Kenwood, Glen Ellen and Oakmont

email print
Elderlaw: 03/01/2017

Elderlaw

Do I need a living trust?



Dear Len & Rosie,

Do I need a living trust? I live in a mobile home. I don’t keep much in the bank, and my life savings, about $400,000, are invested in a 401k.

Penny



Dear Penny,

You probably do not need a trust. The rule is simple – if your probate estate is worth under $150,000, probate is not required so a trust is not necessary for you to avoid probate. And get this: Your mobile home doesn’t count against the $150,000 limit as long as it is registered with the California Department of Housing.

The same goes for your automobiles, provided they are registered with the DMV. When you pass away, your mobile home can be easily transferred to your children or other heirs using a small estate affidavit under Probate Code section 13101. The DMV has a form, called the REG-5, that does the same thing for any vehicles you own on your death.

Your 401k will also avoid probate, provided that you have designated beneficiaries to collect the account upon your death. It is vitally important for you to verify that you have done this. If you die and your 401k hasn’t got a beneficiary, then not only will it be subject to probate, costing your estate $9,000 in probate lawyer fees, your 401k will also be subject to income tax.

If, however, you have named your children or other loved ones as your 401k beneficiaries, then not only will your 401k avoid probate, your beneficiaries can roll over the 401k into Inherited IRA’s. This will allow each beneficiary to control how and when they’ll pay income tax on his or her share of your 401k by stretching out distributions over each beneficiary’s lifetime. Each beneficiary will be in control of his or her share. One may decide to cash it in all at once (and pay the income tax all at once), while another beneficiary may stretch out distributions for his or her entire life.

There are only two reasons you may need a trust. If you are on Medi-Cal benefits, then your mobile home would avoid a Medi-Cal reimbursement claim if it passes outside of your estate upon your death by being in a trust or is titled in joint tenancy with another person. Or, you may want a trust if you have a minor, disabled or spendthrift beneficiary who cannot or should not receive an inheritance directly from you.

Even though you do not likely need a trust, you should still have an estate plan. You need a will to dispose of your mobile home and other assets, and you also need a Durable General Power of Attorney and an Advance Health Care Directive so that people you trust can make important legal and medical decisions for you if you ever become incapacitated.

Len & Rosie

Len Tillem and Rosie McNichol are elder law attorneys. Contact them at 846 Broadway, Sonoma, CA 95476, by phone at (707) 996-4505, or on the Internet at www.lentillem.com. Len also answers legal questions each weekday, Noon-1 p.m. and Sundays, 4-7 p.m. on KGO Radio 810 AM.
Email: lenandrosie@kenwoodpress.com

Recently Published:

03/15/2017 - Elderlaw Advocates
01/15/2017 - Special Needs Trust Fairness Act
12/01/2016 - Elderlaw Advocates
11/15/2016 - Elderlaw
11/01/2016 - Elderlaw
10/01/2016 - Elderlaw
09/15/2016 - Elderlaw Advocates
09/01/2016 - Elderlaw Advocates
08/15/2016 - Elderlaw Advocates
08/01/2016 - Elderlaw
07/01/2016 - Elderlaw Advocates
04/01/2016 - Elder Law
03/01/2016 - Elderlaw
01/15/2016 - Elderlaw Advocates
12/15/2015 - Elderlaw Advocates

Recently Published:

03/15/2017 - All the way from Suessville
03/15/2017 - Dunbar melodrama turns 25
03/15/2017 - New scholarship program for wine industry workers and families
03/15/2017 - Support Kenwood School “Under the Kenwood Sun”
03/15/2017 - Rummage sale coming up
03/15/2017 - Breaking news: Kenwood shopping center vandalized
03/15/2017 - March 7 election results
03/15/2017 - Wandering in a winter wonderland...
03/15/2017 - Open Space District seeks input for Vital Lands Initiative
03/15/2017 - Santa Rosa to expand medical services for former SDC residents
03/15/2017 - SVCAC looks at new wine facility
03/15/2017 - Donation wall takes shape at Kenwood School
03/15/2017 - Kenwood Community Club has fun at the Oscars
03/15/2017 - Bouverie Preserve seeking to fight fire with fire
03/01/2017 - Après le déluge...les potholes

Community Calendar

Star of the Valley Church hosts Lenten retreat
03/29/2017
more...
Crushers of Comedy come to Landmark Vineyards
04/01/2017
more...
Volunteer trainings for state parks
04/01/2017
more...
Wildflower hike on East Slope Trail
04/01/2017
more...
Valley of the Moon Chamber Ensemble Gala Concert
04/02/2017
more...
Annadel Half Marathon
04/08/2017
more...
More Oakmont teams needed at Paws for Healing
04/22/2017
more...