Yes, a bypass trust, also known as a credit shelter trust or an A-B trust, can absolutely own out-of-state property, but it requires careful planning and adherence to the laws of both the state where the trust is established and the state where the property is located.
What are the implications of probate if I don’t have a trust?
Without a properly funded trust, assets often have to go through probate, a court-supervised process that can be time-consuming, expensive, and public. Approximately 65% of Americans do *not* have a will or trust, leaving their assets subject to the often cumbersome probate process. This can involve court fees, attorney fees (often calculated as a percentage of the estate’s value – typically 3-5%), and delays that can stretch on for months or even years. Consider the story of old Man Hemlock, who owned a small cabin in Montana. He passed away without a trust or will. His family spent nearly two years and over $15,000 in legal fees just to transfer ownership of that single cabin, a simple, sentimental piece of property that he wished to pass on easily.
How does a bypass trust avoid estate taxes?
A bypass trust is a powerful estate planning tool designed to minimize estate taxes by utilizing the federal estate tax exemption. In 2024, the federal estate tax exemption is $13.61 million per individual, meaning estates below this amount are generally not subject to federal estate tax. A bypass trust works by funding it with assets equal to the exemption amount at the first spouse’s death. These assets are then held in trust for the benefit of the surviving spouse and, upon their death, pass to the beneficiaries without being subject to estate tax. This is particularly beneficial when owning property in multiple states, as each state may have its own estate tax laws in addition to the federal tax.
What steps should I take to ensure my trust is valid in another state?
The key is to ensure the trust document is drafted with “situs” considerations in mind. Situs refers to the location where the trust is administered and where the property is located. When a trust owns property in a state different from where it’s established, it may be subject to the laws of that other state regarding trust administration and taxation. It’s also important to properly title the out-of-state property in the name of the trust. This might involve recording a deed or other document with the local land records office. Steve Bliss, as an estate planning attorney in Escondido, always recommends a thorough review of the laws of each state where the trust owns property to ensure compliance and avoid potential legal issues. He once worked with a client who owned a vacation home in Arizona; failing to properly register the trust in Arizona led to significant complications and extra expense.
Can I simplify things by using a revocable living trust for all my assets?
A revocable living trust can indeed simplify estate administration and potentially avoid probate, even with out-of-state properties. However, it’s crucial to understand that a revocable trust generally doesn’t offer the same estate tax benefits as a bypass trust, especially for larger estates. But for many families, a well-drafted revocable trust provides sufficient protection and flexibility. I recall a couple, the Andersons, who owned properties in California, Nevada, and Oregon. They initially hesitated to create a trust, fearing it would be too complicated. After meeting with Steve Bliss and understanding the benefits of a revocable living trust, they decided to proceed. The process was seamless, and upon their passing, their children were able to avoid probate in all three states, saving them significant time, expense, and emotional stress. They were extremely grateful for the guidance and expertise they received, and it allowed their family to focus on celebrating their parent’s lives, not on legal paperwork.
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About Steve Bliss at Escondido Probate Law:
Escondido Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Escondido Probate Law. Our probate attorney will probate the estate. Attorney probate at Escondido Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Escondido Probate law will petition to open probate for you. Don’t go through a costly probate call Escondido Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Escondido Probate Law is a great estate lawyer. Affordable Legal Services.
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Estate Planning Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Services Offered:
estate planning
living trust
revocable living trust
family trust
wills
banckruptcy attorney
Map To Steve Bliss Law in Temecula:
https://maps.app.goo.gl/oKQi5hQwZ26gkzpe9
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Address:
Escondido Probate Law720 N Broadway #107, Escondido, CA 92025
(760)884-4044
Feel free to ask Attorney Steve Bliss about: “What’s the best way to leave money to minor children?” Or “What does it mean for an estate to be “intestate”?” or “Is a living trust private or does it become public like a will? and even: “What should I avoid doing before filing for bankruptcy?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.