By MICHAEL EDLEN | Special to the Palisadian-Post

In an era of increasing financial complexity and legal uncertainty, protecting what is most likely your most valuable asset—your home—has never been more critical.

A family trust offers a powerful legal mechanism to safeguard your property, providing layers of protection that individual ownership simply cannot match. Also, because life changes and your circumstances change, your trust may need to reflect these changes to ensure that your assets are distributed according to your current wishes.

Caveat and Disclaimer

The writer is not an attorney, estate planner or a financial planner. This article should not be considered legal advice. It is based on more than 30 years of observation, and learning of numerous and often avoidable family disappointments regarding real estate due to family trust issues.

The Vulnerabilities of Individual Property Ownership

When a home is titled solely in an individual’s or a couple’s name, it becomes exposed to numerous potential risks. Lawsuits, bankruptcy proceedings and personal liability can potentially put your most significant investment in jeopardy. For instance, a professional malpractice suit, a business-related legal action or a severe personal injury claim could potentially result in a judgment lien.

In addition, were that individual or couple to pass unexpectedly, without having placed the property in a family trust, the property would have to go through the painstakingly slow process of California probate. This could result in objections from potential heirs, which may greatly extend the time for distribution of estate assets.

Advantages of Placing Your Home in a Family Trust

Sophisticated Estate Planning Efficiency

Family trusts go beyond simple inheritance mechanisms. They offer nuanced control over asset distribution that traditional wills cannot match. Trustees can establish specific conditions for property inheritance to maintain future control over the trust assets by a successor trustee. This could include stipulating that beneficiaries must reach a certain age or achieve specific milestones before gaining full legal ownership of the property or a specific asset.

Advanced Tax Planning Strategies

Depending on the trust’s structure, homeowners may have significant tax advantages. Certain trust arrangements can help minimize estate taxes, protect generational wealth transfer and provide strategic options for managing potential tax liabilities. For instance, irrevocable trusts can adjust the property’s value thereby potentially saving hundreds of thousands in estate taxes. As indicated above, always consult with qualified legal and financial professionals in considering estate and tax planning.

Enhanced Privacy Protection

Unlike public property records that anyone can access, trusts offer an additional layer of privacy, if they do not include the individual’s name. The trust documents are not typically part of public records, providing a shield against potential identity theft or unwanted scrutiny. This is particularly valuable in an age of increasing digital transparency and potential personal information exposure.

When to Consider Establishing or Reviewing a Family Trust

Critical life transition moments are key time to establish or review a family trust:

• Marriage or divorce
• Birth or adoption of children or grandchildren
• Significant changes in net worth
• Purchase a new home
• Relocation to a different state
• Starting or closing a business
• Approaching retirement
• Experiencing major legal, financial or health changes
• Changes in tax laws
• Changes in personal relationships regarding someone named in
  the trust
• Desire to change beneficiaries
• Naming a new trustee
• Death of a beneficiary or trustee

Recommended Review Frequency

Financial experts recommend comprehensive trust reviews every three to five years, or immediately after significant life events. Laws change, family dynamics evolve and your financial landscape can shift, necessitating periodic trust adjustments to ensure continued effectiveness and alignment with your goals.

Periodic review can ensure that all roles are filled by people you trust and who are capable of fulfilling their duties. Don’t wait until it may be too late to make important updates and changes.

Potential Risks and Considerations

While family trusts offer substantial benefits, they’re not without complexities. Establishing a trust requires careful legal drafting and often involves upfront costs. This is why it is important to hire an experienced professional rather than use an online, one-size-fits-all service.

Poorly structured trusts can fail to provide intended protections or create unintended tax consequences. It is too late after the death of the trustor to have discovered there was a mistake in the drafting of the family trust.

Critical Cautions

• Not all trusts provide equal protection
• Some trusts require ongoing professional management
• Initial setup costs can be substantial
• Many trusts demand precise legal and financial expertise
• Most trusts must be regularly reviewed and potentially updated
• Consider the longevity and availability of your trustee, especially if they may retire or predecease you
• Have a co-trustee or an alternate trustee to step in if necessary

Selecting the Right Trust Structure

No universal trust solution fits every family. The most effective trusts are meticulously tailored to individual circumstances. Consulting with an experienced estate planning attorney who understands your specific financial landscape is crucial. They can help design a trust that aligns with your unique family dynamics, financial goals and potential future scenarios.

Conclusion

A family trust is a living and breathing document—it’s a strategic financial tool that provides comprehensive protection and peace of mind. By proactively managing your home’s legal status, you’re not just preserving an asset, but securing your family’s financial future against unpredictable challenges.

Disclaimer: This article provides general information and should not be considered legal advice. Always consult with qualified legal and financial professionals when making estate and tax planning decisions.

Michael Edlen has observed the benefits and shortfalls of hundreds of family situations where homes were held or not held in family trusts. He is not able to consult in any capacity involving legal or tax matters, but can be reached regarding real estate issues at 310-600-7422 or michael@edlenteam.com.

By MICHAEL EDLEN | Special to the Palisadian-Post

As of November 30, there were 66 single-family Palisades residences listed in the Multiple Listing Service, which is 3% lower than this time last year. So far this year 205 Palisades homes have sold, which is a 3% decrease over last year at this time. There are now 22 homes in escrow in the Palisades.

The average sale price per square foot is 6% lower compared with the same period in 2023 and is now at $1,524 per square foot. Median sale prices are currently $3.82 million, compared to $4.5 million a year ago, a decrease of 15%.

The lowest-priced available home is a four-bedroom, three-bath on Las Lomas being offered at $1,999,000. The highest-priced property is a seven-bedroom, 11-bathroom house on Casale asking $49.95 million.

The lowest sale price so far this year was a three-bedroom, three-bath on Chalet Terrace, which sold for $1,395,000. The highest sale so far this year was a six-bedroom, 12-bath on Chautauqua Boulevard, which sold for $32.3 million.

There are 16 condominiums/townhouses on the market (a 60% increase from last year) with a median list price of $1,292,500 (an 8% increase from last year). Only two condos are currently in escrow.

There have been 59 condo sales so far this year (a 2% decrease) ranging from $539,000 for a one-bedroom, one-bath condo on Sunset to $2.8 million for a three-bedroom, three-bath unit on Palisades Drive. The median condo sale price is currently $1,395,000, which is a 7% increase from last year’s $1.3 million median.

There are currently seven pieces of raw land available, ranging from a 3,703-square-foot lot on Castellammare for $650,000 to a two-acre lot on Casale being offered at $7,995,000. There has been only one land sale so far this year: nearly two and a half acres off Via Santa Ynez for $550,000.

There are currently 69 available leases in the Palisades, which is a 33% decrease from this time last year. They range from a one-bedroom, one-bathroom unit on Sunset Boulevard asking $2,900 per month to a six-bedroom, 18-bath fully furnished home on San Onofre asking $450,000 per month.

There have been 281 leases so far this year, up 13% from last year. The highest lease so far this year was a six-bedroom, 10-bath on Anoka for $76,000 per month and the lowest was $2,200 per month for a studio with one bathroom on Glenhaven. The median lease price is currently $11,500 per month, which is up by 15% from this time last year.

Michael Edlen, an agent with Coldwell Banker, has been keeping statistics on Pacific Palisades housing prices for the last 38 years.

Submitted by WILD BIRDS UNLIMITED | Contributing Writer

Beginning in November, thousands of people across the country—including some from the Los Angeles area—will be participating in the Cornell Lab of Ornithology’s Project FeederWatch, a winter survey of the birds that visit backyard feeders in the United States and Canada.

The collected Project FeederWatch information helps ornithologists track changes in the abundance and distribution of bird species that use feeders in the winter.

“We are excited to help FeederWatchers get started,” said Julie Hanson, owner of the Santa Monica Wild Birds Unlimited. “Wild Birds Unlimited customers play a significant role in this study each year.”

To be a FeederWatcher, participants must watch birds for Project FeederWatch once every two weeks from November through April, count the kinds and number of birds at their feeders, and record the information on data forms. The information is then submitted online or mailed back for analysis in the spring.

For the $18 enrollment fee, new participants receive a bird identification poster, bird feeding information and instructional material. All participants—new and renewing—receive a calendar tally sheet.

Those interested can also explore maps and charts online to see what others are reporting during the count. More information about participating in Project FeederWatch is available at Wild Birds Unlimited.

“This is not only an opportunity to see a variety of birds,” Hanson said, “but it’s also a fun way to take part in a scientific study.”

Wild Birds Unlimited, located at 12433 Wilshire Boulevard, is part of the original and largest franchise system of backyard bird feeding and nature specialty stores with more than 275 locations throughout the United States and Canada. Wild Birds Unlimited specializes in bringing people and nature together with bird feeding and nature products, expert advice, and educational events. For more information, visit wbu.com/santamonica.