The Basics of Living Trusts


Click to Read Transcription





Is a Living Trust Right for You?


The test is really simple.  If:

– You own your own home and/or other real estate, or

– You don’t own real estate but have assets in excess of $100,000

The Living Trust as a planning tool SHOULD be used by you to avoid the Government Plan, i.e., the need to use the Probate court.

If you don’t own real estate or have $100,000 in assets, a will-based estate plan should suffice to avoid the Government Plan due to a specific summary proceeding available in this circumstance, which will most often bypass the need to use the Probate Court.

Assuming then that a Living Trust makes sense for you to use, let’s take a moment to talk about the basics of the Living Trust, specifically the Death Plan component we briefly discussed earlier.


The Death Plan

The basic Living Trust which we refer to as a Death Plan has essentially two objectives:

  1. Avoid the Need To Use the Probate Court, and
  2. Avoid the Payment of Unnecessary Estate Tax.

Avoid the Need To Use the Probate Court. WHY?

Probate Image · As previously mentioned, the costs can be exorbitant
· The delays can run months to years
· The process is public
· A need for multiple probates if real estate is owned in more than one state
· It can be easily challenged by the heirs
· Will not control much of the property

Just to give you a feel for the costs involved, check out the various gross market values below.  Now remember, don’t deduct your debt from that number. The fees are calculated on the GROSS value of your estate. Which one are you closest to?   Now look across from that number and see what the statutory probate fees are.

These fees are deducted right off the top of the estate and is money your family will never receive.  And this is for a straight, run of the mill probate.  If extraordinary service is needed, such as if a contest arises, all bets are off.  The fees will skyrocket from there.


CA Probate Code Sections 10800 and 10810
GROSS Market Value
Statutory Probate Fees


Avoid the Payment of Unnecessary Estate Tax

Tax Bill ImageWe avoid unnecessary estate tax by making sure BOTH spouses’ lifetime exemption or credit is efficiently used. You see, in one-dimensional planning, the entire estate is sent to the surviving spouse using the unlimited marital deduction to avoid taxation at the first spouse’s passing. This may create an estate tax which could otherwise be totally avoided.

Conversely, two dimensional planning assures that upon the first death, the decedent’s lifetime exemption or credit is efficiently used in conjunction with a credit shelter trust. This one concept can save substantial amounts of unnecessary estate tax if properly set up.

In summary, then, a living trust with:

  • No probate
  • No unnecessary estate taxation, and
  • Distribution directly to you heirs

Is a Basic (DEATH) Plan. Utilization of this level of planning WILL get you off the Government Plan.

Even though the Living Trust can help avoid probate, unnecessary estate taxes, and asset distribution going directly to your heirs, further, important protections are available under a “Life Plan,” which is outlined in the next video in our series called Beyond the Basics: Life Planning.”

If we can answer any questions or provide a complimentary counseling session to discuss your specific needs, please contact us at 805-277-5020 or e-mail

Wealth Counsel

Wealth Council



Contact Us

Steven M. Greenwood, P.C.
2801 Townsgate Rd., Ste. 210
Westlake Village, CA 91361

805-277-5020 - Phone
805-277-5021 - Fax

click for map