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Most people want to know - is it better to put your real estate into a living trust or a will?.   This is the question I have heard the most oten over the last fifteen years.  

For most people the answer to the question is easy. Preparing a will is like preparing to pay the legal system $20,000 at a future date.  Preparing a living trust saves this $20,000 because a living trust avoids probate fees.  Someone who does nothing or someone who prepares a will condemns their family to pay probate fees to transfer the property. Your family pays the same probate fees if you do nothing or if you prepare a will.  

PREPARING A WILL IS THE SAME AS DOING NOTHING In short, preparing a will is the same as doing nothing.  Some of my clients save even more money.  On a $600,000 home the full probate fee would be $30,000.  The probate fee is charged on the full market value of the property, not just the equity.   A million dollar home would generate a full probate fee of $46,000. 

SIMPLE TRUST VS. COMPLEX TRUST If you decide to set up a trust, you need to make sure you have the right trust.  Most people need just a simple trust, but some married couples need a complex trust.  A married couple needs a complex trust if their net worth plus life insurance is over $2,000,000. A married couple with assets over $2,000,000 pays a 45% tax on the amount in excess of $2,000,000.  A married couple with assets of $3,000,000 would pay federal estate tax of approximately $450,000.  All of that estate tax could be eliminated with a complex trust.  I just want to tell you - in over 2000 client meetings, I have never heard a client say they were doing their living trust too soon.  Everybody procrastinates on setting up a living trust or a will.  The important thing is to get started. 

For more information, please visit my website at www.billwais.com or contact me by e-mail at wgwesq3@aol.com 

William G. Wais

Law Offices of William G. Wais

100 W. Broadway, Suite 900

Glendale, California

91210