Living Trust Attorney Serving Los Angeles & Orange County
Having a living trust established is a great way to control your assets and avoid probate court. It takes a seasoned professional, however, to ensure your living trust is airtight and in full compliance with the latest legal standards. An experienced Los Angeles trusts attorney from our firm can help safeguard you from the potential pitfalls of one of the many “trust mills.”
Oaktree Law is founded on the principle of working with out clients’ interests in mind at all times. We have earned an A+ rating from the Better Business Bureau because we aim to satisfy each client, first by informing them of their legal options, then by exceeding their expectations.
WHAT IS A TRUST?
A trust is a simple estate plan protecting your property and other assets which can prevent them from being taxed upon your death. You can typically also direct how your assets will be distributed to your beneficiaries after you pass on.
Generally, a trust delegates a third party (trustee) to hold assets on behalf of the beneficiaries named by the decedent prior to death. A fiduciary arrangement, it can specify how and when assets will pass to beneficiaries, and typically enables quicker access to such assets since probate is usually avoided.
There are many reasons to have a trust, and why you should consult with our Los Angeles living trust lawyers. Avoiding probate or a probate lawyer, and saving time, just touches the surface. Some of the key benefits of trusts include:
- Avoiding future court fees for your beneficiaries.
- Controlling who gets assets and when.
- Having assets still available during your lifetime.
- Designating to whom assets pass later, such as children from additional marriages.
- Protecting your legacy against heirs’ creditors or non money savvy beneficiaries.
There are several types of trusts you can place your assets into, one of them being a living trust which offers certain advantages.
With a living trust, you can:
- Take control your assets during your lifetime
- Have a solid exit strategy if you own a business
- Have your assets distributed after you die
- Maintain your privacy without having to file public documents with the court
- Keep your assets protected from dishonest persons and creditors
- Make provisions in the even you become incapacitated
- Save money on taxes and administrative costs after you die
Living trusts are typically preferable to the alternative, given they can be revocable in that they can be changed or cancelled during your lifetime. An irrevocable trust is immutable after they go into effect, as your assets are transferred out of your estate, so you no longer have control over them. The creator of the trust will then function as the trustee and beneficiary since they control all assets transferred into the trust. One benefit of an irrevocable trust is, if any assets generate income, is you’re freed of any tax liability.
A revocable living trust, however, can be changed whenever you feel the need to. You can change your mind about beneficiaries or trustees or alter any terms of the agreement. A trust amendment can be made at any time. You can also revoke it and reinstate the trust later. With a revocable trust, you can avoid probate on most of your property.
Living trusts do not help avoid estate tax. They are included in your estate, since you have the power to revoke or amend them. However, the trust can help you avoid probate.
TRUST VS. WILL
A will, which provides directions on who will receive your assets/property after your death, and names representatives or executors to oversee its implementation. It also names trustees. However, a trust is a more flexible arrangement for your estate planning. You, as a settlor, can name a trustee other than beneficiaries named in the trust if you don’t believe they can manage property or finances they inherit.
Also, the settlor can set conditions on how inheritances can be used. You may forbid a beneficiary from using the money for a personal vacation. Instead, you can list what the money is for, such as paying for sudden medical expenses and other emergencies such as home or car repairs.
A trust can outline how property will be managed if you become ill or otherwise unable to make decisions. Still deciding whether to instate a will or trust? Our Los Angeles estate planning lawyer can help determine the best choice for you.
TYPES OF TRUSTS
- Marital “A” Trust: Provides the surviving spouse and heirs with benefits, including their taxable estate; income-generating assets go to the surviving spouse as well.
- Bypass “B” Trust: Bypasses the surviving spouse’s estate. An irrevocable trust, it takes advantage of federal estate tax exemptions, and is also known as a credit shelter trust.
- Testamentary Trust: Provides for distribution of all/part of an estate or life insurance policy proceeds. Funds are subject to probate and transfer taxes.
- Irrevocable Life Insurance Trust: Excludes life insurance proceeds from a taxable estate, upon the death of the insured, providing liquidity to it and/or any beneficiaries.
- Charitable Lead/ Remainder Trust: A charitable lead trust distributes certain benefits to a charity and the rest to beneficiaries, while a charitable remainder trust states you can receive income for a certain time, with the remainder going to a charity.
- Generation-Skipping Trust: Assets are distributed to grandchildren or later generations; in doing so, the trust initiates the generation-skipping tax exemption upon your children’s death.
- QTIP Trust: A Qualified Terminable Interest Property trust provides a surviving spouse with income, which goes to additional beneficiaries upon their death.
- GRAT Trust: A Grantor Retained Annuity Trust is irrevocable; established during the grantor’s lifetime, it shifts future appreciation on fast-appreciating assets to the next generation.
WHAT HAPPENS IF I DIE WITHOUT A TRUST?
A trust enables you to control how your assets will be managed after your death. If you pass away and don’t have a trust, assets won’t automatically go to beneficiaries you would intend them to go to. Surviving spouses and family members may face the time and costs associated with the probate process and estate litigation. Resolving issues with an estate may then take months or years.
WHAT INFORMATION DO I NEED TO PREPARE A TRUST?
Wills and trusts require certain information to establish. While an estate planning lawyer can help make a list, here is an overview of what you’ll need:
- A list of all assets, including your house, car, stocks, life insurance policies, etc.
- Property titles/deeds, life insurance policies, stock certificates, and other important paperwork.
- A decision on whether you’re the sole grantor or will need a shared trust.
- The beneficiaries you’ve chosen; can be family members, friends, or charities/organizations.
- The name of a successor trustee to distribute assets and pay debts after your death.
- An individual to manage property for children, until they reach a certain age.
In each state, the legal statutes differ in how trust documents are written. At OakTree Law, our estate planning attorneys are familiar with creating trusts, which then must be signed and notarized. Once you fund the trust (transfer assets into it), make sure the document is stored safely so the successor trustee can access it.
WHAT CAN MAKE A TRUST INVALID?
For a trust to be valid, it must satisfy various legal requirements. The property transferred must be legal and existent. If the property is nonexistent or vaguely defined, the trust may be invalidated. Also, at least one beneficiary must be named, who has the right to receive the property delegated to them.
A settlor must also be mentally capable of executing a trust. The law typically requires one to be 18 years of age and capable of understanding what they are doing. State-specific requirements regarding mental capacity may apply as well.
If a trust was created through intimidation, force, or deceptive practices, such as any means of coercion by an outside party, the trust can be deemed invalid. Our Los Angeles wills and trusts attorneys are aware of the legal process, which is why a legal representative should be present when the trust is drafted and signed.
WHAT HAPPENS IF MY TRUST IS INVALID?
If you suspect problems with how a trust was created, it can be invalidated in accordance with state law. The process usually involves petitioning a probate court. You’ll need a probate lawyer to help. What happens to assets in the trust depends on the circumstances. If the settlor is alive, the assets will usually be returned to them.
On the other hand, if the person has passed away, trust assets become part of the estate, and distributed to beneficiaries according to a will. But if there’s no will, state laws will be followed in distributing assets. A trust dispute may result if the trust is invalid, but our estate litigation attorneys can inform you of your rights and fully assess your situation.
OAKTREE LAW CAN SAVE YOU TIME AND MONEY
The dedicated Los Angeles estate planning attorneys at OakTree Law know exactly how you could benefit from a living trust and can help you avoid the expenses associated with probate. Even if you have a trust or other estate plan in place, you need to ensure it is up to date, as recent legislation can have a significant effect on all types of estate plans. We can also help with powers of attorney, estate litigation, and more. For more information, and the peace of mind that comes from knowing your affairs are in your hands, contact us today at 800-535-1627!
Call Oaktree Law and get the peace of mind that comes from knowing your affairs are in your hands. Contact us today: 800-535-1627!