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Do You Have a Revocable Trust?

January 18, 2021

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THE PROS AND CONS FOR SANTA BARBARA HOMEOWNERS

Let’s face it, estate planning is not necessarily fun, but it is definitely critical, especially as you get older and acquire more assets. Fun or not, I urge all Santa Barbara homeowners to consider preparing a revocable trust if they don’t already have one.

READ: Aging at Home in Santa Barbara

The reason is simple. Clients return to me all the time asking to list a property that was left to them by a deceased loved one. In working with these clients, I’ve found that the majority of people in the upscale communities of Santa Barbara have a trust; but many neglect to actually place their assets into it. This can cause your loved ones months to years of unnecessary grief when the property goes to probate.

The Difference Between a Will and a Trust

A revocable trust is essentially a will replacement. That is why I recommend my discerning clients prepare a revocable trust or living trust because of the benefits it provides. Rather than directing assets toward the court system for probate administration -- as is the case for wills -- assets are directed to a private entity, called a trust. A revocable trust is just that: revocable. A revocable trust is flexible and can be changed or modified at any time during the lifetime of the trust’s creator.

READ: Downsizing Your Home: 5 Signs It Might Be Time

Revocable trusts should not be confused with irrevocable trusts, which are generally used to remove assets from an estate, often for tax purposes. Think life insurance policies or shares of family businesses.

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Revocable Trust Advantages

There are many advantages when it comes to having a revocable trust. Here are the top 4:

  • No Probate Court
    Skipping the probate court process is the number one benefit. Probate is the administrative court proceeding where your personal representative is appointed and the payment of debts and distribution of assets is supervised, generally by a judge. Probate can be time-consuming, cumbersome, public and quite expensive.

    By placing assets, such as a home, cabin or business interest in a revocable trust, or by naming the trust as the beneficiary on non-probate accounts, such as life insurance or brokerage accounts, your assets will be distributed according to your wishes, free from court supervision.

READ: Moving to a New Home: 6 Considerations for Families

  • Avoid Conservatorship
    Another great benefit a revocable trust provides is protection from going to court for control over your finances if you become mentally or physically incapacitated and incapable of taking care of yourself and/or your finances.Top of Form

    When you create a revocable trust with your spouse or partner, he or she has the authority over all the trust property. And, if you’ve made an individual trust, your successor trustee will step in and manage the trust property if you become incapacitated.

  • Flexibility
    As I stated above, revocable trusts are flexible, allowing you to make changes or amendments up until your death. Along with amending it, you can also name unrelated, out-of-town individuals to act as the administrator; something that can be pretty cumbersome with a will.

  • Privacy
    A revocable trust is not made public upon your death, and your estate will be distributed in private. It also allows money to be available immediately after death. The trustee will be able to use the money to pay for estate taxes, administrative expenses and debts.

Revocable Trust Disadvantages

On the other hand, you might want to discuss the following 3 disadvantages with your attorney or tax consultant:

  • No tax benefits
    Revocable trusts are not tax shelters and provide no tax benefits. What’s more, not every type of asset you own qualifies for inclusion in a revocable trust. Most notably, individual retirement accounts (IRAs) and other qualified retirement accounts cannot be placed into your trust. Trust planning for retirement accounts must be done very carefully. Failure to do so can create adverse tax consequences.

READ: Capital Gains Tax: 3 Dreaded Words When Selling Your Home

  • Retitling
    You must retitle all of your assets that are to be held in the revocable trust. While this can be time-consuming, it is the only way to reap the benefits of this type of trust. If you choose not to retitle an asset or you forget about one, it will fall outside the trust and will be handled separately.

  • Heirs have longer to contest a trust
    If heirs want to contest a will, most states have specific statutes that dictate who can challenge a will and for how long. This time period can be as little as 30 to 90 days. If your heirs want to contest a revocable trust, however, they typically have longer than three months or longer to do so.

Consult Your Attorney to Decide

Is a revocable trust the right estate planning vehicle for you? The best way to determine the answer to that question is to speak with an estate planning attorney about your situation. Your attorney will help set up your estate properly in order to take care of the people you love once you are gone. And while it is no fun to think about planning for your passing, planning who will get your assets and how will give you — and your loved ones — peace of mind.


Meanwhile, if you’re looking for a new property to add to your revocable trust in Santa Barbara, Montecito and Hope Ranch, I’ll be happy to help. Just check out my website. See something you like? Call me at (805) 886-9378 or email me at Cristal@montecito-estate.com and allow me to do the rest. Once the transaction is complete, you can have the property added to your revocable trust and rest in the knowledge that your heirs will be protected.


 

 




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“Cristal is a pleasure to work with! Her knowledge of the local real estate market coupled with her amazing listening skills resulted in her showing us an array of homes that were all excellent choices. Her low-pressure patient attitude made us feel extremely comfortable with the whole process. I cannot recommend her highly enough.”

- M.F.

“Cristal Clarke is #1 in her field - and you don't become #1 by luck. Cristal works harder, and longer, and with more charm and patience than any real estate agent I have ever worked with in the past; her calendar has no weekend, her days have no clocks, her only concern is selling your property as soon as possible and for the best price on the market. Am I a fan? You bet!”

- P.B.

“We have used Cristal now several times and cannot express how grateful we are for her expertise, dedication, and unwavering support throughout the entire home-buying process. Cristal is knowledgeable, patient and attentive. Her attention to detail is remarkable, and she consistently went above and beyond to provide us with all the information and resources we needed to make informed decisions. Cristal is a skillful negotiator and advocate. She can navigate complex negotiations with professionalism and grace and felt like a true partner to us in the home-buying process. Cristal has a genuine passion for real estate and a deep commitment to her clients' satisfaction. I cannot speak highly enough of Cristal and her exceptional service. She is a true expert in her field and her dedication to excellence, combined with unwavering support is the reason we choose to work with her for all our real estate buying needs.”

- T.C.

“Cristal is a top-notch realtor who sold my home before it ever went on the market. I had two competing offers that enabled me to get top dollar for my home. Not only is Cristal superb but her team is extraordinary. I cannot say enough about Cristal and her team. They are simply phenomenal, the consummate professionals, who took care of every possible detail, making the sale and transition period, smooth from our end. They are also lovely, caring people, who knew all the right professionals, to get the job done. Thank you, everyone!”

- D.R.

“I could list lots of cool adjectives to describe Cristal. All good by the way. But, that is not why I or anyone should hire Cristal. My reason for hiring her, which proved to be correct, is very simple. She got the job done. And, she does it time and time again and with zero issues. And, that is why she is one of the top agents in the country. End of subject. ”

- M.A.

“Working with Cristal was a complete pleasure. Cristal was extremely patient with us as we evaluated nearly 2 dozen homes over a span of 2 years. Her knowledge of the market is unmatched. Cristal provided us with exceptional counsel as we evaluated opportunities and negotiated pricing. The closing process was handled thoroughly and efficiently. We could not be happier with our purchase and even more happy to now call Cristal our friend.”

- D.K.

“Cristal Clarke has conducted numerous real estate transactions for me beginning 13 years ago with the purchase of a Lemon Ranch. She has handled both large and small purchases and sales with equal dedication. As a negotiator, you can’t find anyone better. Her transactions are always conducted in the most appropriate and professional manner. Cristal has considerable knowledge of the Santa Barbara market.”

- S.N. Decker Ph.D.

“Living in Europe, we were to say the least, unaccustomed to the nuances of Real Estate acquisition in California and Cristal steered us through the process with absolute professionalism and personal attention to detail at every turn. Her in-depth knowledge of the market place combined with enthusiasm and drive was the only reason we secured the property of our dreams and will be forever grateful. If you are looking for personal discrete and private representation of the highest quality we suggest you look no further than Cristal Clarke.”

- Johan and Paula van den Berg

“Cristal is very straightforward, cheerful, helpful, professional and trustworthy….we felt very lucky to work with her.”

- John and Lacey Williams

“After considering our many choices, we are grateful it was Cristal Clarke of Sotheby’s International who represented the sale of our Montecito cottage. We are familiar with Cristal’s reputation of hard work and dedication to clients, but it was her attention to detail that made our experience so positive. She offered suggestions for staging the property, worked in harmony with potential buyers and was even able to secure back up offers. The sale of our cottage was completed much sooner than we expected, due in great part to Cristal’s professional skills and support. We highly recommend Cristal as a first choice for anyone needing representation with real estate.”

- Michael & Nancy Lee

“Our experience in working with Cristal Clarke resulted in the successful and discrete acquisition of a property which was not yet on the open market. Her knowledge of the Montecito/Santa Barbara area and vast expertise blended with her passion for real estate and architecture, provided us with the very highest level of professionalism and personalized services. Cristal exhibited a rare combination of excellent communications, attention to detail, creativity and patience.”

- Richard and Catherine Frinier

“Cristal really breaks the mold. She knows every nook and cranny of this real estate market, understands value, and follows up on everything, all the time. She was incredibly patient with our two year quest to find the perfect house. Every house hunting trip from across the country was well planned, and our time was never wasted. On top of her professionalism and expertise, she is delightful to spend time with. We are thrilled with the home we purchased, and grateful to Cristal for so wisely advising us through this process, right through to the close and beyond.”

- Laurie Siegel

“We met Cristal first in the course of renting a winter home (for three years), then buying a house using her as our agent. She was amazingly good at listening to our wants and showing us homes that fit our needs. Her mastery of the paperwork was perfect. Most importantly, there was never a situation where we doubted her straightforwardness or integrity. If we do another real estate transaction in Montecito (which I doubt, we’re happy with what we purchased), without question we’d use Cristal again.”

- Ken Saffir

“Susan and I just want to thank you for your efforts in the sale of our home. You are really quite amazing. Your competence, persistence, optimism and humor made the entire process effortless. Every problem that arose, you somehow fixed; any obstacle, you overcame. We have bought and sold many homes. It has never been such a painless and enjoyable process!”

- Michael & Susan Marquart

“A little something about “our” realtor, Cristal Clarke. My wife and I came to Santa Barbara about fifteen years ago looking for a seasonal home from which to enjoy the weather and amenities of the central coast. Being in the real estate business myself I was familiar with agents and brokers so entered the market with open eyes. We “flipped” a few houses in the early years, dealing with various agents and finally ended up in Montecito. That’s when good fortune put us together with Cristal. To say we were impressed is to put it mildly. Cristal really knows the market. She is familiar with the area, its history and trends. When we have questions about a particular property she either has the answers immediately or gets back to us by phone or email. There is no waiting or wondering with Cristal. She is an agent who is “on top of it.” Her recommendations as to price points, contractors, inspectors and title agents have proven to be exceptional, showing great insight and the highest professional standards. We consider ourselves exceedingly fortunate to say that Cristal Clarke is our realtor and would recommend her services to any serious buyer or seller.”

- Rob & Judi Kelch