As your family’s trusted advisor, San Diego wills and trusts attorney, Kristina Hess, will help you to create a personalized will, living trust or revocable trust or review and restate your trust to make sure your estate plan protects your children’s inheritance and provides for your loved ones.
Trusts are legal entities that are capable of doing most things that people can, such as enter contracts, buy real estate, make investments, open bank accounts, start businesses, and even inherit property.
Settlors create trusts and put assets into them. A Trustee operates the trust, making decisions and directing trust assets according to the guidelines of the trust. Beneficiaries receive trust income and principal. This structure, where trustees manage trust assets for the beneficiaries can create a shield between the creditors of beneficiaries and assets held in trust.
A Grantor Trust is when the person establishing the trust is also the beneficiary. A Revocable Living Trust (RLT) is an example of a grantor trust in that the same person or people are the settlors, beneficiaries, and the trustees. The purpose of a revocable living trust is to provide for oneself in the event of an incapacity and to avoid probate and structure distribution of assets upon death. The settlor retains all the benefits of ownership, including the ability to sell, lease or mortgage certain property, and has a built-in last will and testament feature. However, revocable living trust assets are not protected from creditors.
I suggest that anyone living in California who dies with even a small net worth needs to have a revocable living trust and a Pour-over Will that typically leaves everything to the revocable living trust. The Pour-over Will serves as a safety net if an asset was not properly funded to the RLT. The trust then controls the distribution of assets. This is designed to avoid estate taxes and an expensive and unpredictable probate process.
Some people may need more protective trusts to guard against creditors, frivolous lawsuits or estate taxes. Whatever your ultimate goals may be, you plan will begin with these two tools. KR Hess Law would love to help you with your current or new estate plan and any questions you have. Contact our office at (858) 461–6844.
A will can distribute property that you own at the time of your death, fund trusts, and designate guardians for your minor children. Additional estate planning documents may be required for distribution of non-probate property, joint property, trusts, annuities, retirement benefits and life insurance. There may also be restrictions on disinheriting a spouse or children.
Testamentary Trust Wills establish trusts at the time of your death. Pour-over Wills leave assets to a trust created during your lifetime. These types of wills should provide for property management, protection from creditors, and minimize tax obligations for your heirs.
Kristina will make sure that your will is properly written, help you set up the right kind of trust, and counsel you on choosing the right trustee, so that the need for court supervision will be limited. We will also make sure that you are taking full advantage of the law.
A fill-in-the-blank form will not necessarily ensure that everyone gets what you want them to have and that Uncle Sam doesn’t take more of what you’ve worked for than your loved ones receive. If you would like personal advice and counsel on how effective your current will is or drafting a new will, call us to schedule a Legacy Wealth Planning Session today.
Trust Administration is the process of doing what needs to be done when someone dies and he or she had either a living trust or another type. Trust administration is much easier, faster, and less expensive than the probate court process. Further, while probate is a public process, trust administration is a private process that takes place in the comfort of your lawyer’s office.
Was the person who has died was single or married?
Trust administration is very important when the person who has died was married and had a joint revocable trust with his or her spouse. Trust administration for a single person is also important, however, it is often a simpler process.
What type of trust design did the deceased have?
Was it a disclaimer trust? Was it a Clayton Election? Did the Trust have a formula (pecuniary formula) or a fractional share formula? Fortunately, a review of the Trust (or the trust declaration) will reveal the type of trust.
Marshall the assets
Clients in our membership program, will know their assets because we keep up-to-date family wealth inventories. Otherwise, they keep their own family wealth inventory up-to-date so that if someone were to die, it is easy to marshal the assets and create a trust administration asset inventory.
Disclaimers, elections, funding, etc.
Depending upon the trust design, there may be disclaimers or elections to be made—funding various sub trusts. These steps are critical to preserve estate tax exemptions. For those who may have a trust that was drafted several years ago they may have a formula trust in which there is a formula about how the credit shelter (family bypass) trust is funded and whether a QTIP or marital trust is funded. If this is the case, your trust may need to be updated to take advantage of current tax advantages.
Let us help you
If this doesn’t make any sense to you, fear not. We are here to help and walk you through this process, explaining it to you every step of the way to make sure that your Trust Administration is handled properly with grace and ease. The reality is that if your loved one or spouse has died, you are going through a very difficult time and our goal is to make this process as easy for you as possible.