The last will and testament is the workhorse of any estate plan, but for some, a trust may be a more effective estate planning tool. Among the advantages of trusts are avoiding probate and protecting assets should you become incapacitated. Furthermore, revenues in the trust industry continue to exhibit substantial growth, largely attributed to the desire to avoid income, capital gains, and estate taxes.
As with many things in life, having the right tool makes it easier to get a job done. Estate planning is no different. To find out if a trust is right for you, you should consult with an experienced California estate planning attorney. If you want the assets of your estate distributed according to your wishes while allowing your loved ones to grieve without worrying about the complex probate process, a trust might be exactly the tool you need.
For more than 40 years, John L. Shaw, Attorney at Law has helped hundreds of clients in Temple City, Pasadena, Arcadia, Rosemead, and Alhambra, California, craft trusts that provide peace of mind. Call today to schedule a free consultation to learn more.
A trust is a legal agreement between three parties, including the settlor (the maker of the trust), the trustee (who manages the trust and its assets for the benefit of the third party), and the beneficiaries of the trust. Typically, the settlor serves as the trustee until their death or incapacitation, at which time the successor trustee, named in the trust document by the settlor, assumes that role.
The two basic types of living trusts are revocable and irrevocable. A revocable trust can be changed from the time it is created until the settlor dies. An irrevocable trust cannot be changed once it has been created and signed. An irrevocable trust may have greater tax advantages, but it also requires the settlor to relinquish ownership of all assets to the trust.
The process of creating a trust involves several key steps you can take with your trusts attorney, including allowing you to:
Decide which type of trust achieves your goals
Choose which assets to place in the trust
Decide who to name as beneficiaries of the trust
Choose a successor trustee
Craft the trust document and fully execute it
Transfer all relevant assets into the trust
There are four key reasons why a trust is important to your estate plan:
It allows you to bypass probate. A trust, unlike a will, is not subject to probate. Probate is a complicated and extended process in California so many people want to avoid it. For example, you may also need a will to appoint a guardian for a minor child. A trust doesn’t need to be filed with the court and requires no public notice.
It holds your assets in the trust until a date determined by you. The assets held in the trust don’t have to be distributed as soon as possible upon death, as is the case with probate. This allows the settlor to have the proceeds held in the trust and managed by the trustee until a minor beneficiary reaches adulthood or another age at which the settlor believes a beneficiary will be able to make sound financial decisions.
It provides protection of your estate should you become mentally incapacitated. Should you become unable to manage your trust, the successor trustee would assume those responsibilities, not only managing the trust’s assets but ensuring that the trust takes care of your needs as well.
The terms remain private and confidential. Because a trust is not subject to probate and is never filed in a court of law, the assets and terms of the trust never become part of the public record. Not only does it protect your privacy as the settlor, but the privacy of your beneficiaries as well.
Even a trust with few assets can be complicated. There are issues with property and businesses owned by the trust, joint tenancy issues, and issues with minor beneficiaries, guardianships, and other beneficiaries such as charitable organizations. Trusts can be marvelous tools for avoiding unnecessary taxes and public scrutiny, but only if they have been carefully crafted by a knowledgeable California estate planning attorney.
John L. Shaw, Attorney at Law had followed three key tenets for more than 40 years:
The firm treats clients with respect.
The firm is motivated by doing what is in the best interest of the clients.
The firm invests the time and resources necessary to educate clients so they can make informed decisions about their estate plans.
If you want to join the clients in Temple City, Pasadena, Arcadia, Rosemead, and Alhambra, California, who have benefited from the legal advice and expertise of John L. Shaw, Attorney at Law, call the firm to schedule a consultation. It is never too early to begin planning for what happens when you are gone, so reach out and start today.