Living Trusts

Our living trusts are comprehensive. Included in the revocable living trust are the following: Administrative, Document Signing, and Funding Instructions; Revocable Living Trust Agreement; Schedule of Assets and Assignment to Trust; Pour Over Wills; Advanced Health Care Directive; Springing Durable Power of Attorney for Funding; Certification of Trust; Successor Trustee's Instructions; Final Checklist and a category for Miscellaneous. Our office assists with Deeds in San Diego and other counties and offers an Amendment service for any changes.

The law in the area of estate planning is constantly changing. The Legislature sometimes makes changes to the tax laws requiring new provisions in estate planning documents. Estate planning documents drafted before 2000 may have some outdated provisions. A client’s personal life may also change after the drafting of a living trust. All trusts should be reviewed at least every five years and sooner if any of the following occur: an inheritance, divorce, adoption, death of someone you have named in your trust, or changes in tax laws. Additionally, after the execution of a trust, all assets you later acquire must be titled in the name of the trust. It is quite common to find trusts that were not properly funded after execution. If you are uncertain about whether your trust contains all the assets it should, you should consult with an experienced estate planning attorney to review your trust.

What is a Living Trust? A trust is a written legal document that allows your assets to be transferred to your beneficiaries when you die. With a living trust, you transfer assets such as your home, banking accounts, stocks, etc. into the trust. Most people name themselves as the initial trustee in charge of managing the trust assets during their lives. Even though your assets are transferred into the trust, you remain control of your assets during your lifetime. A successor trustee is named in the document who will manage the assets and distribute them upon your death. Living Trusts are often called revocable living trusts because they can be amended or revoked at any time by the person or persons who created them.

What are the benefits of a Living Trust? The major benefit of a revocable living trust is to avoid probate. Probate can be very expensive (fees are statutory) and can reduce the amount of the estate actually passing to the intended beneficiaries. With a trust there is usually no supervision of the trust by the probate court and therefore no court costs involved. In addition a trust is not filed or recorded so a trust is more private than a will. The other extremely important advantage to a living trust is that it works in the event of incapacity so that conservatorships can be avoided.

What are the disadvantages of a Living Trust? The fact that there is no court supervision can be a disadvantage in some circumstances. A trustee who does not act in your best interest may, in some situations, be able to take unfair advantage. Some estates might need the supervision of a probate court because of conflicts and contentiousness among beneficiaries. In those cases a will with a testamentary trust may be needed. Some people might argue that another disadvantage is the initial cost to set up a trust. A trust is more expensive to set up than a simple will but the eventual cost to loved ones can be dramatic. Thousands of dollars can be expended in a typical probate as well as extending the time before the estate can be distributed.

Who should have a Living Trust? Any estate over $100,000 or an estate with real property over $20,000 is the threshold to have a revocable living trust. In addition even individuals whose estate is below those amounts may have reasons to create a trust. If you want to leave your estate to charity or to non-relatives, you should have a revocable living trust to accomplish those goals. Revocable trusts are not only effective after death but have attributes that are important even before your death. The documents that are included in a trust package that deal with incapacity are critical in the event you are injured or temporarily incapacitated from a medical condition. These reasons alone may be sufficient to consider obtaining a trust.

What is required to set up a Living Trust? Today you can find inexpensive trusts offered for download on the internet or in books or stationery stores. Setting up a living trust is a decision that can have important consequences in the future. Trusts are not one size fits all. There are various ways to draft a trust so that estate taxes can be reduced or eliminated. There are various ways to implement distribution plans among your children. As an example, some parents want to space out the age at which their children would receive a distribution, such as 1/3 at age 25, 1/3 at age 30, and the remainder at age 35. There are various means to leave some or all of your estate to charities. A trust is a document that should only be prepared by an experienced attorney. It also is essential that legal formalities are observed or the trust will not be valid. The trust has to be notarized and the will witnessed. Deeds to real property have to be prepared and properly recorded.

What other estate planning documents should be included in a trust package? In addition to a revocable living trust, other documents should be included in your estate planning package such as a pour over will, durable power of attorney for finances, an advance health care directive, nomination of guardians for your children ( if applicable), nomination of conservator, and special needs trust provisions (if appropriate). An experienced attorney is necessary to analyze your individual case and advise you as to the appropriate documents for your situation. In addition, depending on the size of your estate, our firm can suggest additional estate planning strategies.

Other issues in Living Trusts

Who should be the trustee of a Living Trust? Trustees have a very important fiduciary role as they have considerable authority and responsibility. Most people serve as trustees of their own living trust during their lifetime and name successor trustees to administer the trust upon their death. It is very important to have successor trustees named in your trust document who you can trust to handle your affairs upon an incapacity or fulfill your wishes after your death. Our firm usually suggests a relative who you trust. In addition, our firm normally recommends that you do not appoint co-trustees as this can lead to problems after your death. If you do not have a relative or family friend or business associate, a private fiduciary or corporate fiduciary can be used.

What if I have a previous wills or trust? Often people believe they have a valid will or trust but upon review, the document is found to be outdated or no longer reflective of the client’s wishes. It is essential to inform your attorney if you have a previous will or living trust as they will need to be revoked in any subsequent trust.

How are assets transferred into the trust? The purpose of creating a living trust is to avoid probate upon your death and a court-supervised conservatorship if you are incapacitated. Therefore, it is essential that your assets be properly transferred to the trustee of your living trust. This process is called funding the trust. Bank accounts, stocks, CDs, and mutual funds must be transferred into the trust by titling them in the name of the trust. Deeds to your real property must be prepared in the name of the trust and recorded. Our firm can assist you with determining what assets should be transferred into your trust.

Who should prepare a Living Trust for me? A living trust is an important legal document that should be prepared by a qualified estate planning lawyer. There are many individuals who purport to be experienced in estate planning but may have an underlying purpose of selling you commission based products such as annuities or insurance. You can check with the San Diego Better Business Bureau to check the record of any law firm you are considering retaining for your estate planning needs. Law Offices of Scott C. Soady, APC is proud to be affiliated with the San Diego Better Business Bureau.

Contact Us Online or call us at 877-HELP411 [877-435-7411] in Southern California or 858-618-5510 or e mail us. We will be pleased to offer you a complimentary and confidential consultation up to a length of 30 minutes to discuss strategies and techniques to assist in protecting your rights and trying to obtain your legal goals.

San Diego Estate Planning Lawyer Blog - Living Trusts