December 2009

Why You Should Hold Title To Your Home in a Living Trust

After months of dealing with the complex process of buying a new home – from selecting an agent, to viewing properties, to securing a loan, to negotiating a purchase price –homebuyers often think that once the ink is dry on the escrow papers, the deal is done. However, taking the extra step to determine how best to hold title to your home can potentially save thousands of dollars in fees and taxes, and prevent costly title defects that can hinder your ability to sell the property. Holding title to your home in a living trust – as opposed to “community property”- is the single best way to avoid these complications. The living trust is a self-settled revocable trust (you created it) that, when someone dies, causes their estate to avoid the public probate process. Like a will, a trust specifies who is to inherit your home and other assets when you die. Holding title to your home and your other assets in a trust ensures that your instructions on how to distribute them will be carried out after you die. Additionally, if a husband and wife hold title to a home as community property, instead of in their names as trustees of their living trust, and one of them dies, the surviving spouse is prevented from selling the residence as quickly as it would be if it were in a living trust. One of the other reasons for utilizing a living trust is to avoid the exorbitant statutory fees associated with the probate process. For example, on an estate of $1 million, fees will run about $46,000 ($23,000 payable to the attorney and $23,000 payable to the Executor), whereas the costs of administration of a living trust is generally much, much less. In addition to real estate, assets including liquid cash accounts, savings accounts, stock brokerage accounts and personal effects like jewelry, furniture and other personal items can also be transferred to the living trust. The consequences of your home being in the name of an individual or as “community property” between spouses or registered domestic partners, upon the death of you or your loved one, is a formal court proceeding known as probate (proving of the Will). If you had a living trust upon your death and your successor trustee can prove that you intended for your home to be in it, a quicker and easier judicial process known as the “Heggstad petition” may result in a court order transferring the assets to the successor trustees of your living trust. The probate process is generally a nine-month minimum period whereas the “Heggstad petition” process can usually obtain the needed court order in about six to eight weeks. Both the probate process and the “Heggstad petition” court order transfer the assets to the successor trustee of the living trust. When an attorney assists with the creation of the living trust, he generally prepares and assists with the recording of deeds with the appropriate county(ies) transferring title to the trustees of the trust. Often times though, certain assets do get transferred to the living trust, but somehow are transferred back into the individual name of the settlor(s) of the trust. This happens most often with the family residence as a result of a refinance. Some lending institutions want the borrower’s name on the deed before they will lend and as a result, ask that the property be deeded back to the settlor of the living trust before the loan can be completed. This is just fine, however, one should never allow for their real estate to be transferred out of the living trust without clear instructions that it is to be transferred back into the name of the living trust immediately after securing the loan.

Indications of an emerging rebound of housing in the Playa/Marina condo market

Just read the article below and thought it definitely applies to anybody currently shopping or selling in the Playa Vista, Marina del Rey or Playa del Rey condo markets.

Condos in a failed Marina del Rey complex built during the height of the real estate boom were auctioned at a discount Sunday with buyers spending $20.5 million for 41 units in two competitive hours of bidding.

The complex, called Element, at 4141 Glencoe Ave. was built by John Laing Homes and intended to appeal to young, single buyers, according to a report in The Times in early 2008. At that time, the builder hoped to sell units at prices ranging from about $569,000 for a 1,055-square-foot unit to $1.5 million for a 1,594-square-foot penthouse.

Only nine units were sold and the property was taken over by a consortium of lenders including Bank of America, Bank of the West and City National Bank.

Sunday’s sales prices were 33% over the opening bids and a total of 525 bids were received in two hours, according to the court-appointed receiver, Taylor B. Grant of Newport Beach-based California Real Estate Receiverships. The average price was just over $500,000.

“We think the results tend to indicate an emerging rebound of housing in Southern California,” Grant said.

– Roger Vincent, Los Angeles Times Article

Latest News on the Village!

Playa Vista’s long-awaited village delayed for more than two years because of a court ruling will get another look this week from the Los Angeles City Planning Commission.

Developers hope the panel on Thursday will recommend that the City Council approve a new environmental analysis and package of land-use entitlements that could push the second phase of Playa Vista a step closer to completion.  But even then, it will likely face challenges from determined opponents.

The Village is planned for 111 acres within the master-planned development, bringing 2,600 new homes, 150,000 square feet of retailers, 175,000 square feet of office space and 40,000 square feet of community uses to an area described as “the heart” of the neighborhood.

Residents, many of whom are expected to be in the audience Thursday, are eager to see construction start. This is the exact same project that won Los Angeles City Council approval in 2004.

Almsot all of the analyses that are required are completed. Not only is Playa ready, but the community has been waiting forever for this approval.

Although roughly half of the roads have been paved and the infrastructure is in place, however, continuation on The Village was stopped in September 2007 when an appellate court ruled that its environmental impact report was flawed.

Previously, a Los Angeles Superior Court judge had said that the city and Playa Vista provided decision-makers with adequate information. But the appellate court, which combined two separate lawsuits on the matter, found the environmental report lacking in three areas.

The judges questioned the analysis of the project’s effects on the nearby Hyperion wastewater treatment plant, the treatment of human remains and artifacts dating back 3,500 years, and whether the city accurately described permitted land uses for the site.

On the last issue, the court said the EIR did not acknowledge that the retail complex would “dramatically increase the amount of development permissible” on the land. Therefore, Playa Vista has been required to seek various land-use amendments that will accommodate a higher-density project.

Playa Vista was counting on Caruso Affiliated to develop its village, which will be within walking distance of residences in its first phase, now home to more than 6,000 people. Caruso designed The Grove in Los Angeles and the nearby Waterside shopping center at Lincoln Boulevard and Fiji Way in Marina del Rey.

The agreement has expired by now but hoping he may reconsider.  The project’s revised environmental report has won endorsements from various community groups, including the neighborhood councils of Westchester-Playa del Rey and Del Rey and the LAX Coastal Area Chamber of Commerce, among others.

What: The Los Angeles City Planning Commission considers a revised environmental impact report and various land-use approvals for The Village at Playa Vista

Where: Los Angeles City Hall, 10th floor, 200 N. Spring St.

When: Meeting starts at 8:30 a.m. Thursday

Information: http://cityplanning.lacity.org/