Legal Question in Administrative Law in California

Re: Living Trust

Nobody "needs" a living trust; it is simply the best way to pass property from generation to generation in most cases, because it avoids probate AND preserves the tax advantages of inheritance over making large gifts or transferring ownership without getting a step-up in the cost basis of the property.

If your mother has already transferred property to you, it is almost certainly too late to get the tax advantages. You have avoided the probate process (I suppose), but you have lost the opportunity to avoid gift tax liability now and capital-gains tax liability if and when you sell the property at a gain.

Why not see an estate planner now, to see if the mistake can be corrected at this point, or for advice for future moves? It could pay off.

Re: Living Trust

Did your mother file a gift tax return in the year she put you on the deed and on the bank account. I doubt she did because she probably did not intend to make a gift of a present interest in either asset. As to the house, therefore, the deed is an illegal attempt to transfer an asset. Yet if you accept the status quo, you will be estopped for tax purposes from claiming a step up in the tax basis on your half of the house, even though you didn't really own it. Plus, any interested parties may well attack the validity of the deed and put the house back into the probate estate.

If you want to know how to do something right, look at what the rich do. They make a living trust with the accompanying documents.

PLEASE. GET YOURSELF AND YOUR MOTHER A NEEDED EDUCATION.

READ "Create Your Legacy & Save the American Middle Class. How You Can Protect Your Family and Loved Ones in the Event of Death or Disability (Without Paying Legal Fees) and Win their Gratitude and Admiration." This short book (about 100 pages) explains all you need to know in simple, plain English. You can go to www.yourlivinglegacy.info for more information on this and obtain a download of the book. If you do decide its best to handle all of this without a lawyer, I offer online my Legacy Trust Package which includes a complete planning package, in simple English and valid in every State. The book is $19.95. The do it yourself trust package if you choose to use it is only $79.95.

You can also go to www.mwroth.com and find there a link to listen to a short radio interview about this subject.

You can undo the damage. You will have to get some help from us to do that right. You won't find that in the book, but it is not all that complicated.