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:

Recently Published:

06/01/2018 - Elderlaw Advocates June 1, 2018
05/01/2018 - Elderlaw Advocates May 1, 2018
02/15/2018 - Elderlaw Advocates Feb. 15, 2018
01/15/2018 - Elderlaw Advocates Jan. 15, 2018
09/15/2017 - Elder Law
08/15/2017 - Elderlaw Advocates Aug. 15 2017
06/15/2017 - Elderlaw Advocates
06/01/2017 - Elderlaw Advocates
04/15/2017 - Elderlaw Advocates
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

Recently Published:

06/15/2018 - The short and the long of it
06/15/2018 - Help a child through CASA
06/15/2018 - June 25 talk on foster parenting
06/15/2018 - Tin Lizzies on parade
06/15/2018 - Recovering, Reimagining, Rebuilding
06/15/2018 - Oakmont residents listen to pitch for aiding golf club
06/15/2018 - Public to weigh in on SDC site assessment
06/15/2018 - Regional Parks seeks funding – again
06/15/2018 - Filing period open for Kenwood School board seats
06/15/2018 - On a roll...
06/15/2018 - Cal Fire points to PG&E equipment as cause of Sonoma Valley fires
06/15/2018 - Sonoma GSA to discuss groundwater basin reclassification
06/15/2018 - Impact100 Sonoma awards grants to local nonprofits
06/15/2018 - New nonprofit launches ‘100 precious things for 100 priceless people’
06/01/2018 - Good project, bad location

Community Calendar

Residents invited to share concerns at ‘listening session’
06/19/2018
more...
Free “Skits Under the Stars” from Transcendence
06/20/2018
more...
“The American Presidency and the American Dream – The Role of Leadership"
06/20/2018
more...
SR Symphony violin and flute concert at Deerfield Ranch Winery
06/21/2018
more...
Cal Alumni Club Saddle Club Dinner
06/21/2018
more...
Funky Fridays
06/22/2018
more...
Open art studio tour in Oakmont
06/23/2018
more...
Public meeting to weigh in on SDC site assessment
06/23/2018
more...
Open art studio tour in Oakmont
06/24/2018
more...
Brain health education forum at Star of the Valley
06/26/2018
more...
Funky Fridays
06/29/2018
more...


Weather Underground PWS KCAKENWO2