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 How to Avoid Probate, Save Estate Taxes and More

 By Don D. Nelson, Attorney, CPA

 If I have a Will, why would I want a Living Trust’? A will is not now the best way to plan your estate for most people.  Why? Because a Will does not avoid probate.  Wills must be probated and verified by the court before it can be enforced. A will provides you with no protection if you become physically or mentally disabled... which is a real concern if you are growing older. lf you only have a will, and become physically or mentally incapacitated, you can easily end up in an expensive conservatorship requiring court approval and attorneys for almost all of your finances.

There is an alternative. The REVOCABLE LIV1NG TRUST. It avoids probate and provides for the administration of your financial and business affairs if you become disabled without the use of expensive attorneys or conservatorships.

What Is probate? It is the legal procedure where the court, after your death, makes sure all taxes and debts are paid, and that the assets of your estate are distributed to the individuals named in your Will.  In California a probate usually goes on a year or two. Probate legal and administrative expenses often run from 4 to 10% of the gross value of your estate (prior to deducting debts). All probate files are public and all of your affairs are open to public inspection. It is an invitation by disgruntled heirs to contest your Will.

 Doesn’t joint ownership avoid probate? Not really, though it may postpone it. It does avoid it when the first owner dies, but not when the second owner dies. If both owners die at the same time the property must be probated.

 What is a Living Trust? It looks a lot like a will. It does what most people think a will does and lot more. Since a trust is not probated, there are no expensive court proceedings and delays are eliminated. Privacy is preserved. It can reduce or eliminate estate taxes. it is extremely hard to contest and often provides effective pre-nuptial protection.

 Who should have a Living Trust? Everyone can benefit from a living trust. You will especially benefit  if you have children and/or own real estate.

 How does a living trust avoid probate? When you establish your trust, you transfer all of your sets into the name of the trust, which you control or you and your spouse control jointly. Legally you longer own anything, your trust does. Therefore there is nothing to probate when you die.

 How does a Living Trust save on estate taxes?  If the net value of your estate is more than $675,000 (for 2001), estate taxes must be paid.  The tax rate starts at 37% and goes up to 55%. When a living trust is established with A-B provisions, you and your spouse can then pass up to $1,350,000 estate tax free to your children.  This saves over $220,000 in estate taxes and thousands of dollars in probate fees.

 Do I lose control of the property in my trust? No! You are trustee of your trust and have full control. You can do everything you could do with your property before you transferred It to the trust...buy id sell property and borrow against it. You can cancel your trust or amend it at any time. Its revocable. Nothing changes but the manner in which you hold title.

 If something happens to me, who has control? You chose the successor trustees who take control of the trust and administer it for your benefit or for the benefit of your heirs.. People usually pick their spouses, and then their adult children or brothers and sisters to serve as successor trustees. You can also chose a bank.

 Is a Living Trust expensive? Not when its compared to the cost of probate. How much you pay depends on the complexities of your estate plan and the need for additional tax saving provisions and, planning.

 How long does It take to have a Living Trust prepared? It should take only a week or two after you meet with your attorney and make the basic decisions.

 Should I have an attorney do my Trust? Yes. One who specializes in taxes, trusts and estate planning. Such an attorney can provide you with valuable assistance and guidance for your particular situation and assure that the legal documents are prepared correctly. Avoid generic do it yourself kits and form books… they can’t address every family’s unique needs and can be very dangerous.

If I have a Living Trust, do I still need a Will? Yes, you need a Will in the event you fail to put all of your assets into the name of the trust. It will transfer any such assets to the trust in the event of your death. That property will still have to go through probate, but it will then be distributed pursuant to your overall plan. A will is also important if you have minor children. It will name their guardian in the event both you and your spouse are deceased.

 Included with your living trust we also provide you with a personal Advanced Health Care Directive  and a Durable Power of Attorney (for legal and financial matters)





  •  Avoids all probate and related costs

§         Can reduce or eliminate estate taxes (in excess of $220,000 in larger estates)

§         Allows quick distribution of assets to beneficiaries

§         Preserves Privacy

§         Very hard to contest

§         Can be changed or canceled at any time

§         Protects assets for minor children

§         Minimizes emotional distress on family

§         Inexpensive to set up and maintain

§         Avoids the problems of joint ownership

§         Avoids conservatorships when mentally or physically incapacitated



Don D. Nelson, Attorney, C.P.A., PFS, has prepared living trusts, wills and performed estate planning for over most of his 25 years in professional practice. Due to his multiple professions, as a legal and tax expert, he knows how to draft your trust to fit your particular needs and maximum tax estate tax savings. Please call Mr. Nelson if you have questions or wish to set up an appointment. We will meet with you in the privacy of your home if you wish. The fees charged are often less than those advertised at trust seminars and those law firms which are ‘trust mills.’

Appointments are available  with Don on evenings and weekends and at your home or via phone or email..

Law Offices of Don D. Nelson, CPA
34145 Pacific Coast Highway #401
 Dana Point, California  92629 USA

Phone (949) 481-4094


Email: dondnelson@yahoo.com

Fax (949) 218-6483


Website: www.dondnelson.com

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