Estate administration is more than just about what one will inherit from deceased loved ones. Take legal documents related to a will, trust, and estate planning very seriously. Otherwise, surviving family members might have to deal with a legal issue when you die.

What is an estate planning tool?

This term refers to a legal document that is often useful for naming heirs or transferring and distributing estate assets or inheritance to a would-be surviving spouse, child, or grandchild. They are commonly used to transfer or to distribute (to heirs) the estate assets of a deceased person. Familiar examples include setting up a trust, last will, and testament, life insurance, or powers of attorney.

Estate planning law specifies the advantages and disadvantages of drafting wills, living trusts, or any estate planning document that you drafted during your lifetime. Estate planning laws can be quite complicated. As such, before proceeding, it is crucial to seek legal advice from a Calabasas estate planning attorney. He or she can explain to you your options and any wills or trusts law that is relevant to your circumstance.

Is creating trust difficult?

Upon establishing a trust, grantors are to 1) appoint a trustee who shall be managing, investing, and administering assets held in a trust account; and 2) determine such would administer property in trust when you pass away. Under relevant trust law, the grantor, a family member, or a trusted company can act as a trustee. Initial and successor trustees are usually included in a living trust you set-up.

Here, personal property, real property, bank account, and other estate assets held in trust are placed in the name of the trust (and not the one who created a trust).

Why should I set up a trust?

Most people establish a trust to make sure that the beneficiary of a trust will be avoiding probate after death. If a decedent established a trust, his or her trust property will not be probated after death. This means that your trust beneficiary will avoid probate and related probate costs.

A revocable trust, as the name implies, may be amended or revoked anytime within the remainder of the grantor’s life. Once your successor takes over, either because of incapacity or death, he or she (or it) can ensure that beneficiaries of a trust will really benefit from it.

How can I prepare my successor trustee?

1) The first step is to ensure that all estate planning documents are updated.

This is very crucial for your trust and your trust beneficiaries. Keep in mind that trustees rely mainly (or solely) on written terms. If your successor trustee gets outdated or faulty or instructions, trust assets may not be managed the way you want them to be.

Revocable living trust

Review trust documents and check if the person or entity that you appointed as successor trustee can still act and make decisions on your behalf. You might also find it useful to name a backup in case something happens to the successor. The beneficiaries of the trust and what will be distributed to them should also be reviewed. Remember that the circumstances of a beneficiary of the trust might have changed within a short period of time.

A financial power of attorney

Reviewing this will ensure that the agent you named to manage and handle your accounts (which could be the same as your successor trustee) can still do so. If these two are not the same person, check if they can work together well, especially when unexpected things take place in the future.

Healthcare documents

A lot of legal documents could specify how medical matters are to be handled. These include a living will or advance directive, a Health Insurance Portability and Accountability Act (HIPAA) authorization form, or medical power of attorney. While they are mostly medical in nature, they may have an impact on finances. Take for instance medical bills that shall be settled through a trust account. Note that a HIPAA authorization form is necessary for your successor trustee to have access to your medical information and clarify the payment process with professionals.

2) Discussing specifics of your estate plan to your successor trustee is the next step to prepare him or her for the role.

Whether he or she is a loved one or a professional, honest and open communication is key.

Most details kept private while you are still alive

Here, the conversation is mainly on informing the successor trustee of his or her would-be role. He or she can be briefed on where documents can be found and who to ask for specific questions (estate planning attorney, insurance agent, certified public accountant, etc).

A general overview

You may want to disclose more to your successor trustee and communicate the goals behind your estate plan. You may discuss who shall receive what but omit exact values. This may also be necessary if he or she should be alerted for possible scenarios or specific circumstances that must be addressed.

All details discussed openly

If circumstances allow, some prefer to give his or her successor trustee full access to any information related to the role. All legal documents involved could be discussed and other loved ones may be involved (when necessary or preferred). A professional from a law office specializing in trusts and estates can sit in on these meetings and answer questions or clarifications.

Who should I contact if I am planning to create trust?

Trust forms can be quite confusing and there are different types of trusts that work better for some than others. Start by placing your trust in a reliable law firm. If you already have a revocable living trust, now is the best time to discuss your intentions and wishes with your successor trustee. We never know what the future holds. Call us at Moschetti Law for a consultation.

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