Proceeding with setting up a trust and estate planning is often overwhelming to most people. State law has provisions for the different types of trusts that a grantor (the person establishing a trust/appointing a trustee) could use as an estate planning tool. An experienced Calabasas estate planning attorney can help you choose between a revocable or irrevocable living trust.

Why set up a trust?

Drafting and creating a trust helps provide organization for the trustor, heirs, and trustees he or she decides to appoint. Also naming a co-trustee, which could also be your successor trustee, is usually advised. This living legal document (in contrast to a testamentary trust created through the last will and testament of the deceased person) allows you to instruct a trusted family member or loved one on how to manage and administer trust assets, both before and when you die.

Keep in mind that estate assets and would-be inheritance that are still owned by the decedent (and not in the name of the trust) will generally be probated after death. This means that your supposed heirs will have to worry about probate costs. Transferring and distributing property held in a trust is ideal in many ways, but primarily because of this. If you created a trust, your loved ones can avoid probate court fees and related processes when you pass away. An experienced Calabasas estate planning attorney can explain why avoiding probate proceedings is important for beneficiaries of the trust.

Are there other reasons why I should create a trust?

Appointing a trustee is also helpful in case of incapacity since he or she could make decisions for you even without a durable power of attorney. Additionally, the income of estate assets, although taxable, will not be transferred to any beneficiary of a trust during your lifetime. They remain yours until you die and your trust estate can keep on growing.

Under relevant trust rules, your tax liability will likely be reduced. This is because accounts and property in a trust account are not included in one’s estate anymore. Compared to wills, there is also increased asset protection (from creditors and creditor lawsuits) for the property in trust.

Why do I need to ensure that my estate planning documents are up to date?

An unfortunate but common mistake by those creating an estate plan is failing to keep important documents current. It is crucial to periodically review and update trust documents, as they must still reflect your goals and your reality.

When a person creates a trust that is irrevocable (an estate planning document that one cannot revoke), you will not be able to make changes or alterations once it is set up. For trust beneficiaries to ‘fully’ benefit, you will also generally not be able to control what will happen to trust property (be it a bank account, personal property, or real property held in trust).

In contrast, however, a revocable living trust you create may be amended or revoked throughout the remainder of the time you are still alive. Under relevant trust law, future assets may be registered and trust records may be adjusted when necessary.

Some people fail to realize that outdated estate planning documents can confuse, particularly if they refer to situations that are no longer applicable.

Why is it necessary to keep your trust documents secure?

Your important legal documents must be ready when the need for them arises. As such, they must be kept in a secure, weatherproof safe or container. In the same way, documents related to property ownership should be kept away from exposure to dangerous elements, such as wind, floods, and fire. These difficult times are, in fact, one of those instances when such documents and paperwork will especially come in handy.

For estate or trust legal matters, estate tax problems, or questions on estate taxes and living wills and trusts, contact a competent law firm specializing in estate administration. Call our Calabasas estate planning attorney at Moschetti Law Group.

Share This Story, Choose Your Platform!

Free Consultation

Let us help you protect and grow your wealth, assets, and legacy