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If we have children under 18, we should appoint a guardian in case we become incapacitated or die. We will avoid the following problems:
If we already have a Living Trust and then refinance the house, the mortgage company will often take the house out of the Living Trust and transfer it back to our personal name. After the refinance is complete, they often forget to transfer the house back to the Living Trust for us. This can cause problems for the heirs later because the house is no longer in the Living Trust and will most likely have to go through the court control (probate).
A Special Needs Trust is a special type of Living Trust that is designed to ensure the care of our loved ones when we die. A Special Needs Trust helps our loved ones live a fuller life while still retaining important benefits. If our children or parents are incapacitated and are receiving government benefits, such as SSI or Medi-Cal, leaving them a direct inheritance may cause them to lose access to these programs. What a Special Needs Trust does:
A Springing Power of Attorney is a type of power of attorney that becomes effective only when a specific event or condition occurs, usually when the attorney becomes incapable of making decisions for himself or herself, such as becoming seriously ill or incapacitated. Until that condition occurs, the attorney retains full authority to make decisions regarding his or her property, health, and legal affairs.
When two people (or more people) co-own a house but cannot agree to divide or sell it, the Court must intervene.
Using a non-attorney to set up a Living Trust can be risky. In short, not using an attorney to set up a Living Trust will save you money. However, the potential risks and complications can far outweigh the initial savings.
Adding more people or transferring the house to relatives or children can result in a reassessment and land tax will increase each year.