Legal Question in Tax Law in California
REvocable Trust and Tax Implications
A local law firm completed my family trust. I sent it to the County Recorders office, but when it came back, the title showed my name as Trustee of (Name of the Revocable Trust). I have been advised that there are some tax implications and consequences of leaving the Trust name ONLY. For example, if the trsust reads Bob Jones Trustee for XYZ Revocable Trust, this is OK and has no tax implications and consequences, BUT if it reads XYZ Revocable trust, then it has some tax implications/consequences. The attorney that is preparing this trust is confusing me BIGTIME. My primary goal was that I did NOT want my name to appear on any basic county records search, but I need to calrify the tax Implications before I make this decision.
So my question is that does it matter if the trusts reads XYZ Revocable Trust? The law firm is willing to remove the trustee's name so the County could record it as the name of the trust, but will I shoot myself in the leg by doing that?
1 Answer from Attorneys
Re: REvocable Trust and Tax Implications
this question cannot be answered fully and completely without reviewing your trust agreement, the deed and the pcor.
if the real property is your residence, it will need to be in your name(s) or in your name(s) as trustees of a revocable trust (a disregarded entity for income tax purposes) in order for you to be able to deduct interest and taxes as itemized deductions.
if the real property is not your residence, there are other methods of holding title without your name appearing in the current deed.
in general, if you are interested in asset protection as well as estate planning, you should have your estate plan prepared by an attorney that is also fully conversant with asset protection planning so that a coordinated estate and asset proteciton stratgey can be developed and implemented.
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