Your CBJ Living Trust Includes:
- Unlimited living trust consultations
- Funding the trust
- Unlimited customer support
- Peace of mind for you and your family
*Discounts available to members of legal plans
Living trusts are an essential aspect of estate planning for many individuals and families, and provide numerous financial and planning benefits that go far beyond those provided in a will. By creating a living trust, you can transfer property to the trust for your benefit or the benefit of family members, other loved ones, or charitable organizations while providing you and others with numerous legal protections.
Pasadena estate planning attorney Christopher B. Johnson works with clients across Southern California to create living trusts that provide family members and loved ones with the promise of a more financially secure and stable future.
Living Trusts in California
In California, a revocable living trust is a legal document that places some or all of your assets in the control of a trust while you are still alive. Even with the trust in place, you are able to continue using the assets. Upon your death, the assets are then transferred to whomever you named as beneficiaries.
Revocable living trusts are a popular estate planning tool because they allow the asset holder to maintain control of the entire inheritance process. In addition to naming your beneficiaries, you choose the trustee who will be responsible for managing the assets while you’re alive and distributing them after you’re gone. You also get to choose which assets are placed in the trust, and provide exact instructions for how the assets are to be distributed upon your death. A revocable living trust can be modified or cancelled at any time while you’re still alive.
If you are considering a living trust, you are taking the right steps to protect your assets for your loved ones. Living trusts are an effective tool for shielding assets, and for allowing a faster distribution to heirs. Your relatives will thank you for having the foresight to put together a detailed plan for the distribution of your assets, and you will enjoy the peace of mind that comes with knowing that your affairs are in order. Every person or couple has a unique situation, and a living trust should be crafted to meet those unique needs. A boilerplate, online version may create problems in the future, so ensure you connect with an estate planning lawyer if you are considering putting a living trust in place.
Benefits of a Living Trust That Everyone Should Know
There are numerous benefits to having a living trust. Here are 5 of them that you should know:
1. Avoids probate
A major benefit of a living trust is that it avoids probate. Probate is a legal process that determines the validity of a will or which distributes the assets of your estate by court order. Probate can cost thousands of dollars and you lose any degree of privacy since the court proceedings are public.
2. Tax Benefits
By removing the value of your assets from your estate, your estate will not be taxed on this property on your death since the trust owns the property. Also, you can reduce the value of your estate if it is subject to estate taxes by placing certain assets in trust.
3. Provide for Your Children
Your children will have full control and access to their inheritance at age 18 if you pass away before they reach this age. If you wish for them to become more mature before handling these assets, a living revocable trust will enable the property to be held in trust for them and managed by a more experienced person or trustee. The trustee can use the trust funds for the children’s benefit including paying for their education, buying a house or starting a business.
4. If You Have a Child with Special Needs
Should you have a child who will never be able to manage his or her own assets during their lifetime, you can ensure that certain assets in the trust are managed for the child’s benefit. Since your child is probably eligible for public benefits such as Social Security Disability, these benefits may be adversely affected if you leave property to them in a will. A Special or Supplemental Needs Trust can provide long-term management to assist your child with additional resources without affecting their right to continued public benefits.
5. If You Become Incapacitated
By creating a revocable living trust in which you are the beneficiary during your lifetime and funding it, you can create a process that ensures your assets will continue to be managed by your appointed trustee during the period of your incapacity. This eliminates the need to have a court appoint a conservator or guardian.
The Benefits of an Irrevocable Trust
In creating a trust for the benefit of others, a primary issue to address is whether you would like to make the trust revocable or irrevocable. As the names suggest, a revocable trust is one that you, as the creator, have the right to revoke at any point, meaning you can transfer whatever property is in the trust back to yourself. An irrevocable trust, on the other hand, is generally revocable only by unanimous consent of the beneficiaries or through some other mechanism outside of the control of the trust’s creator. So why would anyone ever create an irrevocable trust over a revocable trust? There are several reasons.
The Trust Assets Will Be Protected From Creditors
When you create an irrevocable trust, you are transferring the assets to the trust in such a way that the law will no longer view you as the true owner of the assets, as you can no longer reclaim those assets as you could in a revocable trust. Because of this, when creditors seek your assets, they generally cannot touch assets in an irrevocable trust, as they are no longer yours. This is not the case with a revocable trust.
An Irrevocable Trust Can Provide Tax Benefits
Similarly, assets in a revocable trust may be considered part of your estate when you die, and thus could be subject to federal and state estate taxes. But assets in an irrevocable trust are not considered part of your estate, and thus would not be subject to the estate tax.That said, careful attention should be given to gift tax issues, which are linked with estate tax matters. Working with an experienced estate planning attorney can lessen your gift tax burden in creating an irrevocable trust.
Assistance In Medical Planning
Many states have strict asset requirements for those seeking Medicaid assistance for assisted living and nursing home care. Placing assets in an irrevocable trust may assist in planning for Medicaid eligibility.
The Beneficiaries Can Gain Assurances Regarding the Trust
Finally, when you place assets in an irrevocable trust, your beneficiaries will have assurances that they can count on the funding from the trust without concern that it could be revoked at any time. This is, of course, a preference that is entirely up to you, and there is certainly nothing at all wrong about creating a revocable trust, but some persons like being able to offer this feature to their beneficiaries.
Amending a Revocable Living Trust in California
If you already have a living trust in place, you probably understand that the primary benefits of a living trust are to provide resources to your beneficiaries (which can include yourself) in a way that serves your intended purposes (e.g. medical or educational needs) while protecting your privacy and avoiding the probate process. But there may be a number of reasons why you want to amend some aspect of your living trust. For example, a new family member may come into your life that you want to include as a beneficiary, or they may be a current beneficiary for whom continued financial support no longer makes sense. You may also want to add property to the trust or revise the conditions by which funds can be distributed. In all cases you will need to take legal action to amend your revocable living trust.
Determining Whether Your Trust is Revocable or Irrevocable
Your trust documents should indicate whether the terms of the trust are revocable or irrevocable, and, if it less than clear, an estate planning professional can review your documents and provide guidance. Under California law, a revocable trust can be modified at any time or revoked in full. If the trust is irrevocable, modification or revocation may still be possible if all of the beneficiaries consent to the change and a court approves as well.
Methods for Amending or Revoking a Living Trust
California’s probate code lays out several methods that the settlor (the person who created the trust) of a living trust can take to validly effectuate an amendment or revocation. First off, the contents of the trust itself may provide a method for making changes, and a court will uphold any changes made in accord with those terms. Furthermore, a settlor may create a new legal document (other than a will) expressing his or her wishes regarding changes to the trust which is then transmitted to the trustee named in the trust.
A settlor may also authorize another person to have power of attorney over the trust which gives that person the right to make changes to the trust in accord with California law (although if an attorney is provided power of attorney, the trust document itself must reflect this). Finally, where there are multiple settlors contributing property to a trust, each settlor has the right to modify the trust with regard to his or her own contributions.
There are multiple settlors contributing property to a trust, each settlor has the right to modify the trust with regard to his or her own contributions.
Lawyer for Living Trust in Pasadena, California
Creating a living trust requires reflection and assistance from experienced counsel. A qualified lawyer can help you draft a living trust in Pasadena, California. As every estate is different, determining how to best protect your assets for those you love requires an evaluation of your estate. Generally, the process of creating a living trust is not difficult, particularly for the transfer of ownership of a home. This process requires drafting documents to transfer property to the living trust. Keep in mind that putting a living trust in place makes the distribution of your estate far simpler.
A living trust functions similarly to a will, in that the trust sets out exactly how it will be administered, and how the assets will be distributed to the various named heirs, including children, grandchildren, or other people or organizations that are important to you. The advantage is that with a living trust, the estate will not need to be probated. With a will, this is not the case. The probate process can be lengthy, and the costs associated with administering the estate will diminish the value of the estate. With a living trust, the entire process of transferring your assets after your death generally takes just a few weeks. Your loved ones will appreciate your efforts.
Contact us at CBJ Law Office to schedule a consultation about establishing a living trust in Pasadena, California. We are committed to finding estate planning solutions that suit our clients’ specific goals and needs.