Living trusts are a nifty legal tool — they allow you to oversee your assets during your lifetime and distribute them fairly and equitably after you pass away without your heirs needing to go through the probate process. Your heirs will receive these assets according to the framework and guidelines established by a living trust. Regardless of the site of your estate, creating a living trust can bolster your estate plan in numerous ways.
What Is a Living Trust, Exactly?
A living trust is a legal entity which holds title of your property for you, appoints someone to take over control of the property when you can no longer act on your own, and then passes the title to your chosen beneficiaries when you pass away according to any guidelines you provide. Property the trust holds for you (or collects after your passing) can include bank accounts, retirement funds, brokerage accounts, residential properties, business interests, life insurance proceeds, family heirlooms, and most other possessions that you own. The trustees are in control of the trust property, manage the assets, and distribute them to beneficiaries that you listed in the trust according to your wishes. Most people will serve as the trustee of their own living trust during their lifetime and name successor trustees to serve in this capacity once they pass away or become incapacitated.
You also have the choice to establish either a revocable or irrevocable living trust. What are the main differences between the two? Here is a breakdown:
Revocable Living Trust: This is your most flexible option, as it allows you to modify the framework of your living trust at any time. You can remove or incorporate assets (and also legally alter or completely withdraw the trust) whenever you desire. For the average family, a revocable living trust will be the right choice in their planning both from a flexibility and tax advantage perspective. In blended family scenarios, a hybrid trust type may be used at the passing of the first spouse where part of the trust becomes irrevocable, and part remains revocable by the surviving spouse.
Irrevocable Living Trust: Once you establish an irrevocable trust, it becomes permanent. When you place assets inside the trust, you cannot freely remove assets again or change any terms of the trust. While there may be ways to maneuver around the irrevocability if all parties involved are on the same page, you have to assume that an irrevocable trust cannot be changed and that you are relinquishing control of the property when you establish this type of trust. Depending on the structure of the trust, you may either gain or lose tremendous tax benefits, so you have to be careful in setting up this type of trust and only proceed with an experienced estate planning attorney in San Diego. Irrevocable Living Trusts are most often appropriate as an additional tool in planning for high-net-worth individuals who are utilizing a particular type of irrevocable trust to achieve a particular goal but are not often the right fit for the average family establishing their estate plan.
Why You Need to Establish a Living Trust
You are already in the process of planning your estate — why not add another layer of protection? Establishing a living trust offers many benefits, our trust attorneys in San Diego want to explain why this is the right decision for you and your family:
Avoiding Probate: Probate is not only extremely time-consuming, but it could cost your estate tens of thousands of dollars to go through depending on the value of your estate. Probate in California is generally looked at as unnecessary time, money, and headache, and only serves to muddy the process of settling your estate. Without a living trust in place, you can potentially cause a lot of strife and conflict in your family or between heirs by forcing them through the Probate process.
Protecting Your Family: When you are no longer around, how else are you going to protect your family? A living trust allows you to manage your assets and distribute them to your heirs so that they have financial security for the foreseeable future.
Schedule an Appointment Today with Trust Attorneys in San Diego
Here at Jenkins & Jenkins Estate Planning Attorneys, we take pride in helping our clients plan for the future so that they can protect their families. A major medical catastrophe or death in the family can occur at any time, which is why you need to begin drawing up estate planning documents right away. Based out of San Diego, we ensure that Californians are able to take control of their futures. Get in touch with us today to talk about your options for a living trust.
Testimonial from Joe, Satisfied Trust Client in San Diego
Jenkins and Jenkins, Estate Planning Attorneys, just completed a trust for my parents and I have to say it was a great experience. I know this is an anomaly since we don’t usually hear great experience used in a sentence when dealing with an attorney but let me assure you it is true in my case. Michael Jenkins is a very knowledgeable and a compassionate attorney. He spent over an hour with my family during the free consultation via Zoom to understand our needs in order to come up with a strategy to best structure the trust to accomplish our desire. Michael was patience and allowed us the time and the opportunity to ask all of our questions. We did not feel rushed with Michael like we did with the first attorney that we consulted with an hour before. We all decided immediately after the Zoom meeting that Michael was the right attorney to do our family trust. He is an excellent communicator and kept us in the loop on his progress throughout the process. He delivered draft documents to us for review prior to the promised date. He walked us through the documentations to ensure we understood the contents and I truly appreciated that since reading the legal stuff is like reading a foreign language…maybe worst since I can read it but could not fully comprehend it! Overall, the process was smooth, and we are left feeling exhilarated knowing that the trust that we signed is accurate and it captured my parents’ wishes. Michael is knowledgeable, reliable, and compassionate. Huh… another word that we don’t usually use to describe an attorney…but let me assure you, compassionate is in Michael’s DNA. I highly recommend Michael to anyone looking for an estate planning attorney. Give him a call and you will agree with my review.