LIVING TRUSTS / REVOCABLE TRUSTS:
A “LIVING TRUST” is also referred to as a “revocable trust” which means that it can be changed prior to the death of the creator (also known as the Trustor, Grantor or Settlor).
A LIVING TRUST is an estate planning tool to place assets “in trust” which are then managed by a trustworthy person or entity selected to act as the “Trustee”. The LIVING TRUST is created when a Declaration of Trust is signed and notarized, and the LIVING TRUST is “funded” when the assets are placed into the Trust.
Typically, the Trustor acts as the initial Trustee until he or she is no longer able to act in that role (due to physical or mental incapacity or death), then the “successor” Trustee steps into the shoes of the initial Trustee.
Certain legal requirements must be met in order to transfer certain assets into the Trust, and to have the proper individual or entity named as a beneficiary to certain accounts, such as retirement accounts or life insurance policies.
A LIVING TRUST allows the estate to avoid probate. A probate requires documents to be filed with the California Superior Court and can be quite costly and time-consuming.
If a husband and wife create a LIVING TRUST, then they can both act as the initial Trustees, however, certain decisions must be made on how the estate is to be distributed and / or accounted for after the death of the first Trustor / Trustee.
It is recommended that anyone who owns a home, has assets over $150,000.00, or who has children, should have a LIVING TRUST in order to protect the assets, provide for the minor children or grandchildren, and ensure that the estate is distributed in the manner that the owner decides.
IRREVOCABLE TRUSTS – SPECIAL NEEDS TRUSTS
An IRREVOCABLE TRUST is a trust which cannot be changed by the Trustor once it is created.
A SPECIAL NEEDS TRUST is a trust which is created to care for individuals with disabilities, or special medical, mental and /or physical needs in order to maintain his or her eligibility for public assistance benefits, despite having an asset that would otherwise make the person ineligible for those benefits.
Attorney Sandra A. Reising and Attorney Linda L. Harper are knowledgeable and experienced estate planning and trust attorneys who are available to assist you and provide you with legal advice for the distribution of your estate to ensure that it is distributed to the persons or entities selected by you and to avoid potential conflicts over how, when, and to whom the assets are to be distributed after one’s death.