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The Key Differences Between a Will and a Trust

1/15/2020

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In the State of California there are currently three major ways your property will be inherited, with significant differences.

  1. If you die before having a will or Living Trust created, the State of California will create a will for you after your death. If this happens, your assets will be frozen while your “estate” goes through the probate process (if your assets are over approximately $125,000 or you own any real estate). This is a public court action.  In San Bernardino county, this often takes in excess of two years and will cost 8 percent or more of the estates assets. Public announcements are made to ensure all creditors have an opportunity to collect any money owed by you at the time of your death. Also, if there are minor children, the court will determine who will act as their legal guardian. At the end of probate, the assets are then divided according to a State statute called the “Law of Intestate Succession”. This statute determines who gets your possessions after the cost of probate, and valid claims against the estate have been paid.
  2. If you want to determine who inherits your property, then at minimum, you should execute a will. It follows the same probate process mentioned above, but you are able to determine who your beneficiaries are.
  3. The third way of transferring your property at your death is to create a Living Trust. A trust is its own “legal entity”. After the trust is created, you transfer your assets into the trust so that the trust has ownership of your possessions. Therefore, you are no longer the legal owner of your property, the trust is, however, you still have complete control over the trust and everything that has been transferred into it. While you are the “trustee” during your lifetime, you also name a successor trustee who will take over your property at your death. However, the trust is now an irrevocable, meaning that the successor trustee can only accumulate and distribute your possessions according to your instructions. This process avoids the probate process and can be accomplished as quickly as possible. In addition, it insures your minor children are raised according to your wishes.
A living trust can only be created by an attorney, and the upfront costs are greater than the other two options, but costs to settle your estate may save your children or other beneficiaries tens of thousands of dollars and a significant amount of time during the process.
 
If you would like to learn more about creating a Living Trust and how it might benefit your specific situation, you are invited to a free Seminar featuring a highly respected estate planning attorney, Randy Spiro, on the evening of January 23, 2020.
Registration can be made at https://www.russmorrisfinancial.com/trustseminar.html or by calling 909/599-2800.
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    Russ Morris, LUTCF

    In 1995, I became a licensed financial advisor and Life Underwriter Training Council Fellow (LUTCF) because I believe that next to our physical health, our financial health is the most important factor in our lives. For over twenty years, my goal has been to be a "financial doctor" that my clients can trust.  

    As a financial doctor, I take the time to listen, assess and understand each of my clients’ unique situations, goals, and concerns. I help grow assets for retirement and protect families from the financial loss that can occur after a premature death.  I truly enjoy helping my clients develop financially healthy lives.


    ​Along with my passion for helping all clients achieve strong financial health, I enjoy tennis, hanging out at Rancho Cucamonga's Bad Ass Coffee and meeting new people.

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