A Los Angeles trust attorney will help you evaluate what type of estate planning is best for your individual situation and family, as there are pros and cons to each approach. Our award-winning trust attorneys have decades of specialized experience in California estate planning, and are able to help you guide you through the process of establishing a customized trust.
Getting the input of one of our experienced trust attorneys will ensure that your trust is set up in the most beneficial way according to California’s estate laws, protecting your finances, your family and your wishes.
What is a Trust?
A trust is a fiduciary relationship in which a trustor gives another party, known as the trustee, the right to hold title to property or assets for the benefit of a third party. Trusts have a wide variety of uses for both modest income and wealthy estate holders and can be used to establish a number of different goals. For example, trusts can specify exactly how and when the assets pass to the beneficiaries. Each trust falls into six broad categories—living trust or testamentary trust, funded or unfunded, revocable or irrevocable.
How Does a Trust Differ From a Will?
Although there are a number of similarities between a will and a trust, there are some significant differences that should be taken into consideration when consulting with your estate planning attorney. These differences are as follows:
- A will is less complex than a trust, and is simply a set of directions that are issued upon your death.
- Wills offer limited control over the distribution of your assets upon your death.
- A trust offers greater control over your assets, especially if you are in a situation where you have more than one property, or substantial wealth.
- A trust allows the family to avoid unnecessary probate litigation, which can be lengthy, costly, and burdensome.
Benefits of Establishing a Trust
Trusts are popular for a number of reasons in estate planning. They are an effective vehicle to lower estate taxes, helping ensure your assets end up where you want them – in the hands of your loved ones. A trust also allows properties and assets to be distributed without going through probate; saving on court fees. One of the most important reasons for establishing a trust, however, is that they allow you to have greater control of your wealth and finances, while simultaneously providing legal protection for your estate. For example, a trust may:
- Create specific timelines for distribution, as well as more provisions if you wish to manage your assets in a more direct manner.
- Help protect the estate from heirs’ creditors, financial mismanagement, lawsuits, and other liability.
- Provide for a beneficiary who is underage or has a mental disability that may impair their ability to manage finances.
- Ensure privacy – a trust is private and is not public record in probate court.
What are the Different Types of Trusts?
Your attorney will help you determine which type of trust is best for you and your family. These are some examples that give you an idea of the different types of trusts that may be applicable in your personal estate plan:
- Marital or “A” Trust: Allows for the passing of inheritance and assets to a surviving spouse or children/grandchildren.
- Bypass or “B” Trust: Allows married couples to avoid estate tax on some assets if one spouse passes away.
- Testamentary Trust: Creates a trust under the terms of a will.
- Irrevocable Life Insurance Trust (ILIT): Creates a type of trust that is funded during your lifetime from insurance policies.
- Generation-SkippingTrust: This trust passes assets to a grantor’s grandchildren.
- Special Needs Trust: Allows for the preservations of a beneficiary’s eligibility for needs-based government benefits.
- Funded vs. Unfunded Trusts: A funded trust has assets placed into it by the trustor while they are alive. An unfunded trust is only the trust agreement with no funding source.
- Revocable vs. Irrevocable Trusts: A revocable trust allows for provisions to be altered or canceled, while an irrevocable trust prevents any provisions from being altered or canceled.
- Living Trusts: A living trust is one you create while you’re alive. The beneficiaries you name in your living trust receive the trust property when you die. Living trusts may be revocable or irrevocable, depending on your wishes.
What Does a Trust Lawyer/Attorney Do?
An experienced trust lawyer will meet with you and assess the financial needs of you and your beneficiaries. This involves reviewing financial documents, assets, familial relations and connections. Larger estates require more expert planning; the larger the estate, the more vital it is to ensure your assets will be distributed correctly.
An experienced attorney will help determine what type of trust is needed and take care of the legal details and creating of a trust. Everyone’s situation is different, and an experienced attorney will also help in relieving the stress that comes with establishing an estate.
Once your trust attorney has all the details of your wishes and finances, he or she will create a plan for the protection and distribution of the trustor’s properties after your death to maximize the benefits the beneficiaries may receive. This includes:
- Drafting documents intended to protect assets against lawsuits and taxes. These may include a last will and testament, living will and advance directives, power of attorney, and various other trusts and provisions that may be necessary depending on your situation.
- Naming a trustee to ensure proper distribution of the estate. In some situations, it may be wise to assign the estate attorney to be the trustee because they will be an impartial arbitrator when it comes to correctly and fairly distributing assets.
Overall, it is the responsibility of an estate attorney to guide a family through the process of creating and/or distributing an estate. It is often a challenging situation, and can certainly be an emotionally draining one, too. An estate attorney will relieve part of that burden while also ensuring the assets of an estate are correctly distributed.
Speak with Stone & Sallus Los Angeles Trust Lawyers
Call our office to set up a free trust planning consultation with one of our experienced estate planning attorneys. Estate planning is not something that should be left to the last minute. Planning ahead to establish your estate, or a loved one’s estate, is a wise step in making sure your family and loved ones will be taken care of.