The following is an excerpt from an interview with Michael I. Burstein, Esq. of Burstein Law Firm that occurred over lunch on October 7, 2009 in Hermosa Beach, CA:
Tony: Thank you for having lunch with me today. So how long has it been now that you have been practicing law in CA?
Michael: In December, I will have been an attorney in California for 22 years. I have been focused on estate planning, estate administration, and probate since 1992.
Tony: We have noticed a growing number of people using Family Trusts to take title on their homes. What are the advantages of doing this? Are there any downsides to doing this?
Michael: One of the main reasons that clients do a living trust (or a family trust) is because it avoids probate. However, a trust avoids probate only for those assets that have been re-titled in the name of the trust. Failure to re-title an asset, especially a piece of real estate, in the name of the trust, may cause that asset to be subject to probate.
Therefore, many residences, as well as other types of real estate, are owned by living trusts. Other means of holding title include limited liability companies (LLCs), family limited partnerships (FLPs), joint tenancy, community property, as well as in an individual’s name.
Tony: What does one need to do to create a Family Trust?
Michael: Most living trusts (or family trusts) are done with an attorney. While it is true that it is not legally required to have an attorney prepare a trust, have worked with over 3,000 families, I can tell you that there are questions that I ask my clients that they have not thought about previous to my asking them the question.
There is a much greater chance of litigation on trusts when the trust has been created by the individual themselves or with the aid of software. It brings to mind the old saying “penny wise, pound foolish.”
Tony: Are Family Trusts the main component of Estate Planning or are there additional concepts that you would recommend?
Michael: Living trusts are the foundation for virtually every estate plan. Depending on the size and composition of the estate, additional estate planning may be necessary. Therefore, there are ILITs (irrevocable life insurance trusts), FLPs, LLCs, GRATs (grantor retained annuity trusts), CRTs (charitable remainder trusts), and a whole host of other estate planning options.
Tony: Thank you for this. Is there anything else that you would like to add?
Michael: Estate planning is a highly rewarding area of the law. It provides me with the opportunity to make a difference in a lot of people’s lives. I see this everyday because we do a lot of estate administration and probate work. It is at that point that we see whether the deceased was able to do estate planning that is of the most benefit to his/her children, loved ones, heirs, and beneficiaries.
Tony: That is great and thank you again for taking the time to have lunch with me.
Michael: My pleasure and thank you.
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