Valencia Estate Planning Attorney
Also serving Oxnard and Ventura County
Broadly speaking, proactive estate planning allows you to determine who'll receive your assets after you're gone and, perhaps more importantly, how they will receive those assets. If you have young children, your estate plan nominates who will become the guardian of your children in the event of your untimely demise. If you lose capacity, your estate plan dictates who you want to be in control of your financial affairs as well as who you want to make medical decisions for you. These are just some of the issues addressed with a robust estate plan.
Our team provides people with a full suite of estate planning services that keeps them out of court, helps them protect their assets, helps them pay less tax, helps them access public benefits, and provides a whole host of other benefits and solutions to problems that most are not even aware exist. Indeed, for the ultimate peace of mind, Kaiden Elder Law Group, PC, specializes in assisting people not only with basic everyday planning, but also with the most complex issues that can arise in life or in death.
California Revocable Living Trusts: The Cornerstone Document
A revocable living trust is a flexible and powerful estate planning tool that facilitates the efficient transfer of property - among other things - when a person passes away. In a basic trust, the trust’s creator – the “Settlor” – will legally give a trusted individual or corporation – the “Trustee” – legal authority to hold and distribute property on behalf of one or more third parties – the “Beneficiaries.”
In most cases, the Settlor of a Living Trust initially serves as the Trustee and Beneficiary. In this way, the creator of the Living Trust is using it as a tool to manage their own property. This means that nothing changes for you when you set up a Living Trust. The real benefit of establishing a Revocable Living Trust is understood when a person becomes incapacitated or passes away.
At that time, the Settlor’s “Successor Trustee” will assume control. The Successor Trustee has a legal obligation to responsibly manage the trust’s assets, including any investments, and follow the terms outlined in the Living Trust. Many choose to appoint an immediate relative, trusted friend, or legal representative as their trustee.
What Are the Advantages of California Living Trusts?
First, it's important to note that because California Living Trusts start out as revocable, there is very little disadvantage to creating one. That's because if the Settlor decides they do not wish for the trust to continue to exist, they can simply revoke it. When it comes to the advantages of Living Trusts, they are too numerous to detail, but in every case there are certain benefits all Settlors and Beneficiaries obtain.
Core benefits of a Living Trust include:
- Avoidance of Probate. If your estate plan only consists of a Last Will and Testament, your estate will almost certainly be forced into California’s probate system. This means that your loved ones will not promptly receive the assets you intended to leave them. In fact, they will likely be burdened with an expensive and drawn-out court process. Assets placed in trusts are generally not subject to probate. By placing a majority of your property in a California Living Trust, you ease the burden of what will already be a difficult time for your loved ones.
- Privacy. The contents of a Last Will and Testament as well as all of your assets are both a matter of public record in a California Probate Proceeding. This means that anyone can research and learn the details of your final wishes. Any ugly legal battles waged during probate will also be public. Trusts, however, are entirely private. Only the Settlor, Successor Trustee, and your Beneficiaries will have access to the details of the trust’s contents, assets and any final instructions.
- Tax Efficiency. If you have an especially large estate, your assets may be subject to federal estate taxes. When properly and carefully utilized, Living Trusts along with other tax advantaged Trusts, can help you to reduce the impact of gift taxes, estate taxes, generation-skipping taxes, property taxes and even income taxes.
- Control. When you leave property to your loved ones through a Last Will and Testament, there is little flexibility as to when and how your beneficiaries will receive their inheritances: that is, assets are generally transferred once probate has concluded. A California Living Trust, conversely, allows for a significant level of customization in deciding how assets are distributed. Not only can you decide when assets will be distributed, but you can also specify how assets are to be distributed. You could choose to specify that funds from an account passed to a child must be used for educational purposes, for example.
- Creditor & Predator Protection. Assets transferred to beneficiaries through a trust can, in the right circumstances, enjoy protection from creditors and predators. Who are the worst predators you wonder? It is any future ex-spouses of your beneficiaries.