Creating a California trust can be an effective estate planning tool. At The Law Offices of Daniel Hunt, we offer clients estate planning seminars that introduce the various types of trusts and their purposes. Many of our clients use trusts when creating an estate plan in order to avoid the expenses of using a probate court. Trusts have become more popular than ever in estate planning. Individuals can tailor the terms of their trust to meet their unique needs and financial situations.
If you would like to set up an estate plan but do not know where to start, we can help. Our attorneys have helped many Sacramento residents create effective and thorough estate plans. We can discuss the different types of trusts available to California residents and help you decide on which trust or trusts are right for you and your family. Our attorneys also assist clients in the management of trusts. We offer a no-cost initial consultation to the successor trustee(s) in which we go over the process of trust administration. Contact our Sacramento estate planning office today to schedule your initial consultation and learn how our law firm can help you.
What are Trusts?
California trusts are written legal documents that allow a trustee to manage assets on behalf of the beneficiaries of the trust. The creator of the trust is known as the settlor. The person or people who manage the assets within the trust are called the trustees. Beneficiaries are the people who will receive the assets of the trust.
The transfer of assets depends on the type of trust created by the settlor. The trustee may pay beneficiaries part of assets overtime or the assets may transfer to the beneficiary upon the settlor’s death. Settlors can structure their trust in a variety of different ways. Settlors have an enormous amount of control as to when and how beneficiaries may access the assets in the trust.
The Many Benefits of Creating a Trust
Living trusts have become particularly well-used in California. Many estates use a trust to eliminate potentially exorbitant probate costs. By placing your assets into a trust, you can avoid the months that it often takes for probate courts to distribute assets according to a will. In addition to saving your family time and money by avoiding a lengthy probate process after your death, trusts offer several other advantages.
The Benefit of Asset Protection by Trusts
It is usually more difficult for someone to successfully challenge a living trust than to challenge a last will and testament. The creator of the trust, also called the settlor, is usually active in the creation of a trust as well as the transfer of property in and out of the trust. Making decisions regarding your living trust helps demonstrate that the trust creator is competent.
Once the creator of the living trust transfers assets into a trust, those assets are protected from lawsuits and creditors. Upon transfer, the trust as a legal entity owns the legal title of the assets held within the trust. Properly drafted trusts often limit the ability of creditors to access the assets within the trust. The less control that a trust beneficiary has over the assets, the lower the likelihood that the beneficiary’s creditors can access the assets in the trust.
California Revocable Living Trusts
Revocable living trusts are a commonly used type of trust in California estate planning. These types of trusts are often referred to as family trusts or living trusts. Revocable trusts transport the owner of the trust’s assets upon the passing of the settlor. Typically, a parent will create a revocable living trust and transfer assets into the trust during their lifetime. The settlor typically has the ability to move assets in and out of the trust and make changes to the trust during his or her lifetime. In a revocable living trust, the settlor can revoke or cancel the trust at any time up until his or her death. Revocable trusts give the settlor flexibility in his or her ability to make changes to the trust.
California Irrevocable Trusts
Irrevocable trusts are designed for long-term asset management. These types of trust are also commonly used in estate planning. In an irrevocable trust, the settlor of the trust does not have control or ownership of the property held in the trust. Irrevocable trusts offer settlors the benefit of asset protection. Most creditors of the settlor typically cannot access the assets held within the trust because the settlor himself or herself does not have access to the trust. Some exceptions exist, however. Irrevocable trusts are still susceptible to child support claims, federal tax claims, alimony claims, and California state tax claims.
Sacramento Trust Management Services
At The Law Offices of Daniel Hunt, we have helped hundreds of trustees properly administer their trusts. Trustees have a legal duty to administer the trust according to its provisions. If you have been named as a successor trustee, we can advise you as to your duties and take the burden off of your shoulders. Trustees must make all decisions for the benefit of the beneficiaries and place their interests above his or her own interests. Trust administration can involve the following essential tasks:
- Maintaining complete and accurate accounting of all trust income and expenditures
- Notifying beneficiaries and creditors of the decedent’s death
- Investing the assets responsibly while attempting to reduce risk
- Trustees must file tax returns on behalf of the trust
- Trustees need to transfer assets of the trust when necessary for the benefit of trustees
Our Sacramento Trust Attorneys can Help You
Whether you need assistance creating an estate plan, you need help updating your trust, or you would like help administering a trust, we can help. With the right Sacramento trust attorney by your side, you can create a thorough estate plan that meets your unique needs. Contact our Sacramento estate planning law firm today to schedule your initial consultation.