Drafting other estate planning tools to save for the rainy days is an excellent strategy. Creating a trust, specifically, can be a great way to set aside money or property for a future date. Indeed, a last will and testament can be used to transfer or to distribute the inheritance to family members of a deceased person. However, aside from naming heirs and transferring or distributing estate assets, estate planning documents may be used to properly invest and manage money and ensure a happy retirement. This can be explained well by an experienced Calabasas estate planning lawyer.

An example of such an estate planning tool is a revocable living trust, which shall be the focus of this article. Specifically, it covers:

Establishing a trust 

– Reasons to set up a trust document

– Looking into the case of Iverson

What happens when you establish a trust?

Setting up a Trust Trust documents can be used to determine how property in the trust is to be managed, in the way specified by the one who created a trust account. Any bank account, real property, or personal property held in trust are essentially put in the name of the trust and are no longer owned by the grantor (but are owned by the trust).

A living trust can help any family member you designate as trust beneficiary (from your surviving spouse to your grandchildren) avoid probate after death. Under pertinent trusts law, the trust property of a loved one who established a trust need not be brought to court to be probated. Avoiding probate costs is useful for the beneficiary of a trust, which is not the case for a decedent who opted for last wills and testaments instead.

Before one creates a trust, it helps to be familiar with trust rules under a relevant state law covering such a legal document. An experienced Calabasas estate planning lawyer can explain these in great detail.

Why should I appoint a trustee and create a trust?

A trust you set up can have an adult child or grandchild, friend, or a corporate trustee from a trust company as a trustee. Grantors themselves can also be appointed as the trustee of a revocable living trust (unlike most irrevocable trusts). Trustees have a fiduciary duty of managing, investing, and administering the trust for the interest of trust beneficiaries, particularly when they pass away.

Living trusts allow estates to continue to grow and be managed for the beneficiaries of the trust. The successor trustee in a revocable trust can carry out your wishes and manage and administer the trust when you die, in case of incapacity to make decisions, or if you wish to simply be a beneficiary of the trust while you are still alive.

From the name itself, and as stated in relevant trust law, revocable trusts may be revoked or amended virtually anytime during your lifetime. Including trust in your options is also ideal if you want to ensure that income from trust assets is yours throughout the remainder of your life.

A lesson from ‘The Answer’

During his professional basketball career from 1996 to 2013, Allen Iverson played professional basketball for several teams such as the Memphis Grizzlies, the Detroit Pistons, the Denver Nuggets, and the Philadelphia 76ers. It is estimated that he made a total of around $200 million throughout his career, but it was rumored in 2012 that he had an outstanding creditor issue and is experiencing financial troubles.

His saving grace came from a 2001 deal he signed with Reebok, which gives him $800,000 per year and had a $32 million lump sum placed into a trust. While the specifics of the trust are not disclosed and there are rumors that his ex-wife may be entitled to half of it, the trust has protected a good portion of the Reebok contract for Iverson’s future enjoyment and use. The trust will become accessible to him in 2030 when he turns fifty-five years old.

Additionally, Iverson can update his estate plan and develop an asset protection strategy for the said trust. Depending on his current circumstance and the terms of the existing legal document with Reebok, steps can be taken to further protect the money before the first disbursement is made.

Contact reliable Calabasas estate planning attorneys

If you have questions on the above or are facing a similar situation as Iverson, seek legal advice from experts. Before creating a trust, talk to an experienced Calabasas estate planning attorney who will explain to you the advantages of the different types of trusts and estates. Revocable living trusts allow you to maintain privacy and spare your loved ones from the probate court.

For questions on revocable or irrevocable living trust or trust administration, call our law office. Consult with our Calabasas estate planning attorneys at Moschetti Law Group for reliable estate planning services.

Share This Story, Choose Your Platform!

Free Consultation
888-224-9615

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