Estate planning, and even trust basics can look very different depending on the needs of your family and what you have planned for the future. A Last Will and Testament, a living will, or a power attorney can all be a part of your estate plan. Trusts are part of the center estate planning tools that you may want to consider as part of your plan for the future.
Trusts are, at their core, a relatively simple arrangement. The person who wishes to create the trust is called a grantor. He or she will transfer assets into a trust. The grantor will name a trustee, who is the person responsible for overseeing and managing the trust, as well as making distributions according to the grantor’s instructions. The grantor will also name a beneficiary. The beneficiary is the person or persons who, as their name suggests, receive the benefit of the trust distributions. The beneficiary can also be a charitable organization or even a loved pet. Depending on the type of trust, the grantor, the trustee, and the beneficiary can all be the same person.
There can be many advantages to creating a trust. The first is that a trust can help certain assets be passed outside of probate at the time of your death. Probate can be a long and complicated process. Creating a trust removes the assets from your estate effective at the time the trust receives the asset. This means that the asset will pass, be managed, and distributed according to the terms of the trust. Avoiding the probate process can save your friends and family time and money.
Another advantage can be that using a trust will minimize the potential for disagreements about valuation of assets for purposes of distribution. California and federal law both provide that if your estate is valued over a certain amount at the time of your death, your estate could be assessed heavy taxes. These taxes will have to be paid before the remainder is distributed to your named beneficiaries. These taxes can be substantial, so minimizing tax liability is important.
Trusts can also help smooth the transfer with highly regulated or highly personal assets. One example of this is an art trust. Using specialty trusts can allow you to pass on your artwork and to establish an ownership record for the artwork.
Feel free to talk to us about trust basics or your complicated trust situations. Our trust attorneys have extensive experience helping our clients select the correct type of trust for your assets and your family. Call us today so we can help you with your decision.
