Before you (or your parents) make a will know this!
Before you (or your parents) make a will know this!
After thanksgiving dinner I was reading a retirement book my parents had lying around and I learned something very important that I had no clue about. While I'm sure we all know that you have to pay some form of taxes if your parents pass away it seems that the property they leave you isn't technically yours. For standard items such as possessions you do own that property but for things with a title (house, land, car, etc) you must get a court order to change ownership. The court fees and (excessive) taxes you must pay are due BEFORE you go to court.
In New York on a $100,000 house, the basic taxes alone are $6k and that's not even including lawyer fees! On a $200,000 house it's around $11k, and it seems in California these figures are almost 50% higher!
I don't know about you, but I had no idea the fees/taxes were so high. What this book mentions is that for things that have a title, the owner needs to setup a trust. In a nutshell it means another person can assume ownership of such property without a court order and without having to pay taxes (and you don't need a lawyer). So we're talking about tens of thousands of dollars in expenses if your parents pass away if they use a will, or virtually no costs if they setup a trust on the property.
I encourage you to Google for more info but in case you are wondering if a trust gives away ownership rights then you have assumed incorrectly. The other people on the trust can't steal away the property.
Be forewarned that a lawyer might encourage you to use a will instead of a trust and if that's the case, find a new lawyer. Because a lawyer can only make a few hundred dollars setting you up with a trust but they can make $5k or more transferring your property according to your will for your children (or spouse). If your lawyer is working for his best interests instead of your own, find a new one.