Reminders When Setting Up a Trust and Estate Planning
By: Tilden Moschetti
Before proceeding to establish a trust, it is important to be familiar with relevant state law covering such an estate planning tool. A grantor, or an individual establishing trust and appointing a trustee, may choose from different types of trusts. When choosing between a revocable or irrevocable living trust, for instance, an experienced Calabasas estate planning lawyer can help you make a decision.
Drafting and creating a trust is something that you should take seriously. Below are some reminders that you should take into account when you set up a trust. It includes:
– Choosing the appropriate legal documents
– Knowing the advantages of trust documents
– Constantly updating an estate plan
– Getting legal advice from a good local attorney
Choosing the appropriate estate planning documents
Living trusts are ideal for those who wish to ensure that things are well-organized, for both the trustor and his or her heirs. This is also true for the trustees (co-trustee and/or successor trustee) that he or she decided to appoint. In contrast to a testamentary trust that is created through the last will and testament of the deceased person, a living legal document is best for those who wish to instruct a trusted family member or loved one on how to manage and administer trust assets. An experienced Calabasas estate planning attorney can explain this in great detail.
Transferring and distributing property held in a trust is ideal in many ways, especially when avoiding probate proceedings. Keep in mind that estate assets and would-be inheritance that are still owned by the decedent (in contrast to those in the name of the trust) will generally be probated after death. This means that your would-be surviving spouse, children, or grandchildren will have to worry about probate costs. If you created a trust, beneficiaries of the trust will be able to avoid probate court fees and related processes when you pass away.
Knowing the advantages of trust accounts
Appointing a trustee is helpful in case of incapacity since he or she could make decisions for you even without a durable power of attorney. Additionally, income from estate assets remains yours until you die. Trust property will not be transferred to any beneficiary of a trust and your trust estate can keep on growing. Under relevant trust rules, your tax liability will also likely be reduced when you create a trust. This is because accounts and property in a trust account are no longer included in one’s estate. Compared to wills, there is also increased asset protection for the property in trust.
When a person creates an irrevocable trust, you will not be able to revoke or change it once it is set up. This means that both the grantor and trust will generally not be able to control what happens to any bank account, personal property, or real property held in trust. This is in contrast to a revocable living trust you create. Such 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 whenever the need arises.
Updates and a lesson from Kobe Bryant
A lot of people fail to realize that an outdated estate planning document can confuse, particularly if they refer to a circumstance that has since changed. Otherwise, they might not be able to fully protect you during your lifetime and provide for your loved ones when you die. The need for constant updates can be seen in the life of Kobe Bryant, the legendary professional basketball player who died in a tragic helicopter accident (that also took the life of his daughter and other passengers) on January 26, 2020.
With an estate worth estimated at $600 million, he wanted to make sure that his surviving family members will be well taken care of. However, he failed to update the Kobe Bryant Trust upon the birth of his youngest child. His trust account has been amended every time a child was born, but he was not able to amend it when his youngest child was born in June 2019. This can be problematic for his family in the future. As such, to make sure that your wishes will be carried out in the manner you want, all your legal documents must be reviewed and kept up to date.
The need for reliable Calabasas estate planning lawyers
A hands-on estate planning lawyer can help update your documents, especially in case of any marriage, divorce, birth, or death. This is also applied if you wish to modify the amount of money or specific items that will be left to certain beneficiaries of the trust, or if you want to modify the individuals chosen as trustee, guardian of a minor child, healthcare decision-maker, or agent under a power of attorney.
Contact a competent law firm specializing in estate administration. Call our Calabasas estate planning attorney at Moschetti Law Group for estate or trust legal matters, estate tax queries, or questions on estate taxes and living wills and trusts.
At Moschetti Law Group, our practice serves the needs of Founders by providing real estate law and real estate syndication attorney services to Founders. Whether you are the Founder of a real estate empire or building a business and need assistance with purchase and sales, real estate transactions, or real estate litigation, we serve Los Angeles County, eastern Ventura County, and North Orange County from our office in Calabasas. We also have a primary focus on helping Real Estate Syndication Founders throughout the United States with forming their syndication, understanding crowdfunding, private placement memorandums, and operating agreements.