Orange County Trust Attorney: Creating a Living Trust
A living trust is a legal document that puts your assets in a trust during your lifetime. You are able to use the assets, e.g. a home that’s placed in trust can still be lived in. After your untimely death, the living trust assets are then passed to the people you selected as the beneficiaries.
In order to place assets in trust, it’s crucial to obtain the services of a trust attorney in Orange County. But before you meet with your attorney, it might be helpful to understand what a living trust really entails.
California Living Trusts
When you create a living trust, you maintain control of the process. You, as the grantor, decide who to choose as a trustee or the person who manages those assets during your life and distributes them upon your death.
You can choose anyone as a trustee, including yourself. In this case, you will also need a successor trustee to manage the process after you pass away if you choose yourself as trustee.
As the grantor, you choose which assets you place in the trust and can select as many as you’d like. You then name the beneficiaries and determine when and how they receive the assets. A revocable living trust is a living trust that can be changed or canceled at any point during your life, but an irrevocable trust is permanent.
Bypassing Probate
The most significant advantage of a California living trust is that it allows you to bypass probate for all of the assets in the trust. California probate law provisions are complicated, and assets not included in the trust will pass according to your will and then go through the probate process, which can take months to complete.
If you pass away without a will or a trust, your assets will be distributed in accordance with California’s intestacy statute, which will decide how your relatives divide the assets.
Why You Need a Living Trust
Control
Creating a living trust is an option that provides you with control over your assets. A trust means that you decide when and how your assets are distributed to your beneficiaries. You can give certain amounts at specific times, such as celebrations.
Assets can also be passed. If you have a will, your assets are passed at once after the will has gone through the probate process. You will also have the freedom to choose which assets go into the trust, and a will covers everything you own.
Privacy and Protection
The probate process is public record. Trust documents, however, never enter the court system. This means that the assets, amounts, terms, and beneficiaries are never public records. Living trusts offer you much more privacy than a Will alone.
They also provide protection during your life. If you are unable to manage your own affairs at any point, the trust will already be in place, including the control of all assets in the hands of your trustee. In such a case, you will typically not need any more documents or procedures for your assets to be balanced and protected.
Living Trusts and Estate Taxes
There is currently no estate tax in the state of California. However, the federal government applies estate tax to those in excess of the $5.4 million exemption.
A living trust may help you avoid these taxes if your estate is worth more than this amount – if it is formulated as an AB trust, QTIP, or marital trust. In this type of trust, your assets pass from one spouse to another directly. This benefit avoids the application of estate tax on the transfer.
Creating a Living Trust in California
Living trusts are created with a trust document. This legal document is a contract that sets up the trust and provides details on how it will be executed and distributed.
As the grantor, you sign the document in front of a notary. Afterward, you transfer ownership of the assets that you would like in the trust, and the trust then becomes functional. The process is that simple.
To set up a living trust, it’s important to meet with an Orange County trust lawyer who specializes in estate planning. Together, you will review the assets and your options. If you decide to continue with the process of a living trust, your Orange County estate planning attorney will write the trust document and review it with you.
Do You Still Need a Will?
You should sign a pourover will when you sign the living trust. This will is a back up for any property that was not transferred to the trust during your lifetime. Without this will, property acquired after you set up your trust would pass to your closest living relatives even if they are not named in the trust. Basically, the will ensures that any assets not named in the trust will be added to your trust so that they are distributed only to those listed as beneficiaries in your trust.
Further, your will is important because it nominates a guardian for your children, where a trust does not.
If You Become Incompetent
If you are the trustee and pass away or become incompetent, a trusted friend, relative, or professional can take over as trustee. The new trustee then has certain legal duties, which include the management and investment of your property, paying your debts, and spending assets for your benefit if you are still living.
Finding an Estate Planning Attorney
In order to make an effective and beneficial trust, you will need to work with an experienced law firm or trusts lawyer in Orange County. Make sure that they understand all of your needs so that together you can find the best way to make sure your assets are distributed as you’d like.
Make sure to work with California estate attorneys who have years of experience helping people in California set up trusts and wills.
Are you considering setting up a California Living Trust? Call the experts today or let us know your questions and concerns in the comments.