Folsom Trust Attorneys
Guiding Folsom Clients To the Right Trust
For many Californians, estate planning starts with a will, but it shouldn’t end there. Trusts are incredibly valuable tools that can be used to manage assets, protect wealth, and avoid probate after you pass away. A will won’t take care of you should you suffer a medical emergency and become temporarily incapacitated, but a trust can.
The Law Offices of Daniel A. Hunt is here to help you with your specific estate planning needs. Whether you’re just getting started or expanding your planning, we have an estate planning attorney who can help you meet your goals.
Read more to find out more about trusts, the services we offer, and how we can make your estate planning journey easier. Are you ready to just get going? Call our Folsom office at 916-957-3803 to schedule a free initial consultation with an estate planning attorney.
What Is a Trust?
A trust is a legal arrangement where assets are transferred from your ownership to the trust’s ownership.
A valid trust consists of several key parties:
- The Grantor – This is the person who creates and funds the trust.
- The Trustee – This is the person who will manage the trust and its assets.
- The Beneficiaries – These are those who receive assets from the trust.
There are certain instances where the grantor, trustee, and beneficiaries are all the same person.
Regardless of what kind of trust you form, you will have to include these three designations.
Why Would You Create a Trust?
While a will is a great start, it shouldn’t be the last step. Trusts have a variety of issues that can benefit you throughout your life and eventually benefit your heirs after you pass away.
A properly funded trust can help your family avoid the probate process. Because assets held by a trust are generally not considered a part of your estate for probate purposes, your family will not have to wait for probate to be completed before receiving assets. The probate process is public record, meaning anyone can find out the contents of your estate and even certain disputes that arise throughout probate. Trusts avoid all of that, and the distribution of their assets is private.
By funding a trust, you maintain far more control of how and when assets are distributed. And while a will only kicks in after you pass away, a trust can ensure you and your family are taken care of should you become incapacitated.
What Can Go Into a Trust?
Just about any valuable assets can be used to fund a trust.
The following are often used to fund trusts:
- Real estate
- Bank accounts
- Investments
- Some life insurance policies
- Owned businesses
- Personal property
The goal is to ensure that your most important assets are protected and passed on exactly as you want them to be, without probate getting in the way.
What Types of Trusts Are There and How Do You Use Them?
You have likely heard of trusts in passing, but you may not be aware that there are many types of trusts, each with its own benefits.
Revocable Living Trust
This is the most common type of trust used in estate planning. It lets you stay in control of your assets while you’re alive and allows them to pass directly to your beneficiaries when you pass away, all without the need for probate. As long as you are mentally capable, you can alter or even revoke this type of trust at any time.
Irrevocable Trust
Once set up and funded, this type of trust can’t be easily changed. Irrevocable trusts are often used for asset protection, long-term care planning, or reducing estate taxes. By giving up control, you may even be able to shield your assets from creditors and lawsuits.
Testamentary Trust
This is created through your will and doesn’t take effect until after your death. It is often used to manage money for minor children or family members who aren’t able to manage their finances. Because you give detailed instructions for its trust administration, you can rest assured with the knowledge that your assets are being used as you intended. Because this is tied to your will, it still has to go through probate.
Special Needs Trust
If you leave an inheritance for a loved one who relies on government benefits without proper planning, you may risk them losing their eligibility for those life-saving benefits. This helps you provide for someone with disabilities without affecting their eligibility for things like SSI and Medi-Cal.
Charitable Trust
This lets you support a cause you care about while potentially getting tax benefits. You can set it up during your life or include it in your estate plan.
Bypass Trust
Married couples often use this type of trust to reduce or avoid estate taxes. When the first spouse passes away, part of the estate goes into this trust rather than directly to the surviving spouse.
Each trust has its purpose. Choosing the right one now comes down to your specific estate planning goals, whether that’s avoiding probate, protecting assets, planning for long-term care, or making sure your family is taken care of after you’re gone.
If that sounds like a lot to take in, you’re right. You’re not expected to understand all of the nuances surrounding trusts. That’s where an experienced estate planning attorney comes in. With our guidance, we will get to know you, your family dynamics, and your goals, then build a comprehensive estate plan customized for your specific estate planning needs.
How Do You Properly Fund a Trust?
Creating your trust is only half the job. Funding it is what makes it actually work. An unfunded trust doesn’t avoid probate and won’t be able to protect assets. In order to create a valid trust, you will have to fund it by transferring assets.
The first step, after creating the trust, is to retitle assets into the name of the trust. For real estate, you will have to update deeds with the county recorder. For bank accounts, you will have to change ownership or open new accounts under the trust. Vehicles will require you to visit the DMV and fill out the necessary forms.
You may have to work with your bank to complete the proper paperwork to link your accounts to a trust. Title companies can help with recording an estate transfer. You may be required to provide a copy of the trust or certification of the trust while doing any of these steps.
If you wish to include personal property in your trust, you will have to assign it through a general assignment document. Likewise, transferring business interests will require you to complete operating agreements or stock transfer forms.
It is important to work with a qualified estate planning attorney who can make funding your trust easier. Furthermore, they can help with ongoing services to keep your trust current, as funding is not a one-time task. Anytime you acquire new assets, they should be reviewed for trust inclusion.
What Common Mistakes Do People Make With Trusts?
It may seem obvious, but one of the more common mistakes people make after completing the whole process of creating a trust is simply not funding it or properly titling assets. After that, it’s not keeping the estate planning documents current. Leaving your plan as is after major life events, like marriage, divorce, new children, or major purchases, can leave assets exposed and require probate.
Trust administration is important, and you should be sure to name a successor trustee, just in case your chosen trustee is unable to serve. Naming alternatives can help keep your trust moving, no matter what.
Estate planning can be an intimidating, difficult process, but with proper assistance and a knowledgeable approach, you can complete this with peace of mind.
The Law Offices of Daniel A. Hunt can assist you with extensive estate planning services with a strategic approach and efficient completion. Losing someone is one of the most difficult times a person can go through; help alleviate their legal worries with the help of an experienced estate planning attorney.
Contact us for a free initial consultation, during which you can ask as many questions as you need. Call 916-957-3803 to schedule your consultation. We offer a variety of practice areas for your estate planning needs.