Creating a trust, similar to drafting other estate planning tools, must be taken very seriously. Before one creates a trust, it helps to be familiar with trust rules under relevant state law. A last will and testament is not the only legal document that can be used to transfer or to distribute inheritance, particularly to family members of a deceased person. An experienced Calabasas estate planning attorney can explain other estate planning documents that may also be used when naming heirs and transferring or distributing estate assets.
Why establishing a trust is ideal
Trust documents can be used to determine how property in the trust is to be managed (as specified by the one who created a trust). Any bank account, real property, or personal property held in trust is essentially put in the name of the trust. This means they are owned by the trust account and not the grantor.
Most people decide to establish a trust to make things simpler for any family member you designate as a trust beneficiary (from your surviving spouse to your grandchildren). A living trust can help them avoid probate after death. As in relevant trust law, if a deceased loved one established a trust, his or her trust property need not be brought to court to be probated. As any Calabasas estate planning attorney would tell you, avoiding probate costs is very useful for any beneficiary of a trust. This is not the case had the decedent only opted for last wills and testaments.
Including a trust in your estate plan options is also ideal since income from trust assets is yours throughout the remainder of your life. As stated in relevant trust law, revocable trusts may be revoked or amended virtually anytime during your lifetime.
Appointing a trustee
Once you set up a trust document, you are to appoint a trustee who shall be managing, investing, and administering trust property and accounts, both before and when you die. A trust you set up can have an adult child or grandchild, friend, or a corporate trustee from a trusted company as a trustee. Grantors themselves can also be appointed as the trustee of a revocable living trust (unlike most irrevocable trusts). In certain cases, however, although you may be allowed, it might not be the best choice.
Trustees have a fiduciary duty of administering the trust for the sole interest of trust beneficiaries. Naming someone as a co-trustee can help him or her be familiar with your trust and how you would want your estate plan to operate when you pass away. This will also allow you to evaluate the abilities of your co-trustee. For married individuals, spouses are often appointed as co-trustees.
Living trusts are good estate planning options since estates can 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, or at an appropriate time prior. When you create a trust, your successor trustee can enter the picture when you want to simply be a beneficiary of the trust or in case of incapacity (meaning you are still alive but cannot make decisions anymore). Note that your successor can also become a co-trustee.
Revocable living trusts allow you to maintain privacy in how property and accounts are managed. This estate planning tool allows you to keep control of your assets and spare your loved ones from the probate court. 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.
For questions on revocable or irrevocable living trust, asset protection, or trust administration, call our law office. Contact our Calabasas estate planning attorney at Moschetti Law Group for reliable estate planning services.