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Richard, Attorney
Category: Estate Law
Satisfied Customers: 55708
Experience:  29 years of experience practicing law, including tax and estate planning.
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My Mother and I are trying to decide which is better,

Customer Question

My Mother and I are trying to decide which is better, for her to have a Living Trust, or for her to add me to the Deed of her property and bank accounts? What are the pros and cons for either of us?
Submitted: 2 years ago.
Category: Estate Law
Expert:  Richard replied 2 years ago.
Hi! My name is ***** ***** I look forward to helping you. A living trust allows you to avoid the probate process. Plus, it allows for an adjustment of the basis of property to its fair market value at the date of death so if you sell it then at its fair market value, there is no gain on the sale. But, a living trust requires you to set up the trust now, transfer the assets to it now, and then the cost of transferring them again from the trust to you after death. Going the other way, allows you to avoid the probate process as well and only requires one transfer of the real property. Certain assets pass outside probate and thus are not governed by the will and thus do not require probate. These include the following: i) joint brokerage and bank accounts which vest automatically in the surviving owner upon the death of one owner; ii) real property held as joint tenants or tenants by the entirety, which also vest automatically in the surviving owner upon the death of one owner; and iii) assets with designated beneficiaries other than the estate such as life insurance and retirement accounts. If her real property has appreciated in value, what you would want to do is have your mom retain a life estate which will automatically terminate at death so you can avoid probate and get the adjustment to fair market value at the date of death under Section 2036 of the Internal Revenue Code. Thank you so much for allowing me to help you with your questions. I have done my best to provide information which fully addresses your question. If you have any follow up questions, please ask! If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service as OK, Good or Excellent (hopefully Good or Excellent). I thank you in advance for taking the time to provide me a positive rating!