Estate Planning documents Revocable Trusts Protect Loved Ones All Things Legal under $1,000

Our office is located in Thousand Oaks off the Rancho Road exit from the 101 near Roxy's Deli. This office is used as a mail drop ONLY. All meetings are done at a location of the customer's convenience -whether home, work, coffee shop, or hospital. I COME TO YOU!

1421 E. Thousand Oaks Blvd., Suite 12
Thousand Oaks, CA 91362

Phone: (805) 480-0171 OR (805) 778-0025 OR (866) 480-0171 Fax (866) 761-7108

Living Trusts

SERVICES: Wills, Revocable Trusts, Powers of Attorney, Advance Healthcare Directives (Living Wills), Trust Transfer Deeds

What Is a Living Trust?

The "living trust" described here is a revocable living trust. It is sometimes referred to as a revocable inter vivos trust, or a grantor trust. A living trust may be amended or revoked by the person creating it (commonly known as a "trustor," "grantor" or "settlor"), at any time during the trustor's lifetime, as long as the trustor is competent.

A trust is a written legal agreement between the individual creating the trust and the person or institution named to manage the assets held in the trust (the "trustee.") In many cases, it is appropriate for you to be the initial trustee of your living trust, until management assistance is anticipated or required.

In a living trust agreement:

The trustee is given the legal right to manage and control the assets held in the trust.
The trust provides for the persons or charitable organizations ("beneficiaries") who are to receive the income and principal on or after the trustor's death.
The trustee is given guidance and certain powers and authority to manage and distribute the trust property in a prudent fashion. The trustee is a "fiduciary." A fiduciary is one who occupies a position of trust and confidence and is subject to strict responsibilities, usually higher standards of performance than one who is dealing with his or her own property. Without the trustor's express written permission, the trustee cannot use trust property for the trustee's own personal use, benefit or self-interest. One must hold the trust property solely for the benefit of the beneficiaries of the trust.

A living trust can be an important part - in many cases, the most important part - of your estate plan.

What Can a Living Trust Do for Me?

A living trust can provide for the private management of your assets if you choose not to act as trustee, or when you are unable to do so, by the person or persons whom you appoint as trustee. When you are incapacitated, your trustee can assume responsibility for your assets in an accountable fashion, and manage them for your benefit without direct court intervention or supervision. At your death, the trustee acts much as an executor would, gathering your assets, paying valid debts and claims and taxes, and distributing your assets as you have directed in your living trust.

If your assets were in your name alone at your death, then they would be subject to probate. Probate is the court-supervised process developed under California law which has as its goal the transfer of your assets at your death to the beneficiaries set forth in your will, and in the manner prescribed by your will. At your death, a petition is filed with the court, usually by the person or institution named in your will as executor. After notice is given and a hearing is held, your will is admitted to probate and an executor is appointed. A full inventory of the assets held in your name alone at your death is filed with the court and the probate continues until your estate is ready for distribution and the court approves the final distribution of your estate. Probate can take more time to complete then the distribution of your trust following your death. Assets held in a living trust can be more readily accessible to beneficiaries than those in a probate. The cost of a probate is often greater than the cost incurred by a comparable estate managed and distributed under a living trust.

Should Everyone Have a Living Trust

No. The greater the risk of incapacity or death, the greater the need for a living trust. The greater the value of your assets, particularly if they include real estate, the greater the need for a living trust. A young, healthy individual with few assets probably does not need a living trust right now. Nor does the real estate developer who is frequently buying, selling or refinancing his or her real estate holdings want a living trust to hold those assets. On the other hand, many people recognize that a living trust will be helpful in the future, and set up a living trust now to have it in place in the event of an accident or sudden illness.

How Does a Living Trust Help if I Am Incapacitated?

If you are acting as trustee of your own living trust and become incapacitated, whoever you have named as your successor trustee will assume the responsibility for managing your assets on your behalf. If your assets are not in your living trust, someone else must manage them. How this is accomplished may depend on whether the assets are your separate or community property. If you are married, assets earned by either you or your spouse while married and while a resident of California are community property. On the other hand, a married individual may own separate property as a result of assets owned prior to marriage or received by gift or inheritance during marriage.

In California, community property may be managed by your spouse, if he or she is competent. If not, or if you own separate property or are unmarried, assets held in your name alone at the time of your incapacity are subject to the jurisdiction of the probate court in a proceeding called a conservatorship. The probate court, at a hearing, determines that, among other things, you are substantially unable to manage your own financial resources or resist fraud or undue influence, and names a person to assume responsibility for the management of your assets (a "conservator") accountable to the court on a regular basis.

That person may be someone whom you have nominated to act as conservator, or, if you have not, may be your spouse or another family member. While conservatorship proceedings are designed to provide you with protection and security at a time when you are vulnerable or incapable of managing your assets, the proceedings are public in nature. Because of the substantial court intervention, a conservatorship proceeding can be costly as well. Compared with a well-managed living trust conservatorship proceedings may also be less flexible in managing real estate or other interests.

How Does a Living Trust Help at my Death?

Assets held in your living trust at your death can be managed by the trustee of your living trust and distributed in accordance with your directions in the trust. The trustee is also accountable to your beneficiaries for the trust assets held for their benefit after your death. The trust is not under the direct management of the probate court at and after your death and, therefore, the value and the nature of your assets and the identity of your beneficiaries do not become a public record. At your death, however notice must be given to all of your heirs and to all beneficiaries of your living trust, advising them, among other things, of their right to obtain a copy of the living trust.

Once created, the trust must be "funded ." The funding of a trust is simply the transfer of assets from your own name to whomever is acting as trustee of your living trust - be that you or some other person. Deeds to real property must, therefore, be prepared and recorded, bank accounts transferred, and stock and bond accounts or certificates transferred as well. These are not necessarily expensive tasks but they are important ones and require some paperwork to complete in order to make your trust effective.

If I Have a Living Trust, Do I Still Need a Will?

Yes. Your will affects any assets which, for one reason or another, were held in your name alone at your death and not in your living trust or in some other form of ownership. With the living trust, your will usually contains as its primary provision for the distribution of your estate, a "pour over" provision, which simply directs that any assets held in your name be transferred at your death to your living trust. Of course, a probate is not avoided with respect to those assets which are transferred to your living trust by your will.

Your will may also nominate the guardians of the person and estate of your minor children, to care and provide for them.

Does a Living Trust Pay Income Taxes?

Not during your lifetime. The taxpayer identification number for the trust is your Social Security number, and all income and deductions related to the assets held in the trust are reportable on your individual income tax returns. When you are no longer a trustee of your trust, then information returns must be filed by the trustee, reporting all of the income and deductions relating to the trust assets to the IRS and attributing them to your personal return; no additional tax is assessed by reason of the living trust. After your death, the income taxation of the living trust is similar to that applicable to a probate estate.

What Other Estate Planning Documents Should I Have?

A durable Power of Attorney for Property Management deals with assets which have not been transferred to your living trust prior to your incapacity or which you may receive after your incapacity. In such a power, you appoint another individual to make property management decisions on your behalf. This document, however, cannot replace the living trust, inasmuch as, among other things, it cannot dispose of your assets in accordance with your wishes at your death.

A durable Power of Attorney for Health Care allows your attorney-in-fact to make health care decisions for you when you can no longer make them yourself. It may also contain statements of wishes concerning such matters as life sustaining treatment and other health care issues and instructions concerning organ donation, disposition of remains and your funeral.

What Other Kinds of Trusts Are There?

Irrevocable trusts are trusts which, immediately upon their creation, are not amendable or revocable by you. These are generally tax-sensitive documents. Some examples include irrevocable life insurance trusts, irrevocable trusts for children, and charitable trusts. A qualified estate planning lawyer should be consulted with respect to these documents. All Things Legal, Inc. does not prepare irrovocable trusts.

How Do I Transfer Assets to My Living Trust?

Once your trust has been signed, assets must be transferred to the trustee of the living trust. This is known as "funding" the trust.

A living trust can hold both separate and community property. If community property is held in a living trust, then both spouses are the grantors. Care must be taken to carefully designate the property held in a living trust by married persons as either separate or community property.

You should consider changing beneficiary designations on life insurance to the trust. As for beneficiary designations on a qualified plan, such as a 401 (k) or IRA, serious income tax issues require the advice of a qualified professional concerning the appropriate beneficiary designation on those assets.

If you need to have a living trust set up or just the powers of attorney or advance healthcare directive, feel free to call us at (805) 778-0025 or (866) 480-0171 toll free outside the LA area or email us at info@venturalegal.com.

Pricing for the above services.

Why use us?

Where are we?

Member of

Living Trusts

Services

News

Need a Referral?