Proper estate planning is an important matter—but in the event of your death, not having an estate plan for your assets can make things difficult and costly for your loved ones. Without a properly drafted estate plan conveying your wishes, everything you have worked hard to achieve and protect will be controlled and distributed according to the State of California! Don’t let that happen!
A Revocable Living Trust directs how your assets will be distributed and enables your successor trustee to carry out your instructions when you die or should you become incapacitated. A Revocable Living Trust is especially appropriate for individuals who own real estate or have complex financial accounts.
The greatest advantage of a Revocable Living Trust is that it eliminates the lengthy and expensive probate process. Probate can take years to complete, including assessing property, paying taxes and outstanding debts, and distributing the remaining assets to the beneficiaries. Fees payable to attorneys and personal representatives are dictated by law and typically are based upon the value of the estate.
Additionally, a Living Trust and a properly executed Durable Powers of Attorney may avoid the necessity of having to initiate a conservatorship for disabled or incapacitated individuals.
There are two types of trusts: Revocable and Irrevocable. A Revocable Living Trust, by its nature, offers the most flexibility. The settlor (the person who creates the Revocable Living Trust) maintains control of the assets and has the ability to revoke or amend the trust at any time during their lifetime and while they have legal capacity.
Irrevocable Trusts, though less commonly utilized, have some advantages over a Revocable Living Trust —mainly tax benefits and reduced liability. However, by its design, an Irrevocable Trust cannot usually be terminated, amended, or modified once created.
Since an Irrevocable Trust allows you to permanently give assets away during your lifetime, those assets, whether real estate, money, investments, or personal property, may be protected from the settlor’s creditors. There may be significant tax issues as well. Properly created, funded and managed
Irrevocable Trusts may offer asset protection from creditors and court judgments. There are several legal and tax-related requirements associated with creating and managing Irrevocable Trusts making them more costly and complex to set up than a Revocable Living Trust.
Be sure to work with an experienced estate planning attorney when establishing either a Revocable Living Trust or an Irrevocable Trust. Proper estate planning ensures your family and property are taken care of according to your wishes. Whether you need a Revocable Living Trust or an Irrevocable Trust, we can help!