Trusts
There are many different types of Trusts that may be beneficial to you and your family in carrying out your estate planning goals.
An estate planning attorney can help you establish a trust and fund that trust with assets that would otherwise be subject to probate upon your death. A trust can help you avoid probate, minimize estate taxes, provide for a disabled loved one without jeopardizing their public benefits, minimize capital gains taxes by funneling highly-appreciated assets into charitable giving vehicles, and much much more. A trust is private, as opposed to a will which becomes public record when it is deposited into probate court. Finally, a trust takes effect immediately, meaning that you can include provisions in your trust to dictate how your finances, your business and other matters should be handled if you are incapacitated by illness or injury.
When you transfer assets into your trust, the “owner” of those assets becomes the Trust, and you name a trustee (usually yourself or you and your spouse jointly), and successor trustees to take over once the original trustee(s) either dies or is no longer able to act as trustee. Because the owner of the assets (i.e. the trust) does not die, the probate process is not required to transfer the assets to your loved ones or other such as charitable beneficiaries.
In California, many people choose a Living Trust as their primary estate planning document, even if they are not wealthy. Contrary to the common notion that trusts are for and extremely wealthy families (e.g. "trust fund kids"), a trust can be a very effective tool for ordinary families. While a Living Trust may cost slightly more to prepare than a Will, it can actually save you much more money in the long run. The primary reason for this is the avoidance of probate. When a person dies with a will, or "intestate" (without a will or trust), their estate will most likely have to be "probated". Probate is a costly and lengthy court process. In California, attorneys' fees for probate are set by statute at 4% of the value of the estate for the first $100,000, 3% of the next $100,000, 2% of the next $800,000, 1% of the next $9 million, ½% of the next $15 million, and an amount to be determined by the court for amounts over $25 million. So, for example, a relatively modest $500,000 estate (not so uncommon in California given the price of homes!) attorney's fees alone will be $13,000!
An estate planning attorney can help you establish a trust and fund that trust with assets that would otherwise be subject to probate upon your death. A trust can help you avoid probate, minimize estate taxes, provide for a disabled loved one without jeopardizing their public benefits, minimize capital gains taxes by funneling highly-appreciated assets into charitable giving vehicles, and much much more. A trust is private, as opposed to a will which becomes public record when it is deposited into probate court. Finally, a trust takes effect immediately, meaning that you can include provisions in your trust to dictate how your finances, your business and other matters should be handled if you are incapacitated by illness or injury.
When you transfer assets into your trust, the “owner” of those assets becomes the Trust, and you name a trustee (usually yourself or you and your spouse jointly), and successor trustees to take over once the original trustee(s) either dies or is no longer able to act as trustee. Because the owner of the assets (i.e. the trust) does not die, the probate process is not required to transfer the assets to your loved ones or other such as charitable beneficiaries.
In California, many people choose a Living Trust as their primary estate planning document, even if they are not wealthy. Contrary to the common notion that trusts are for and extremely wealthy families (e.g. "trust fund kids"), a trust can be a very effective tool for ordinary families. While a Living Trust may cost slightly more to prepare than a Will, it can actually save you much more money in the long run. The primary reason for this is the avoidance of probate. When a person dies with a will, or "intestate" (without a will or trust), their estate will most likely have to be "probated". Probate is a costly and lengthy court process. In California, attorneys' fees for probate are set by statute at 4% of the value of the estate for the first $100,000, 3% of the next $100,000, 2% of the next $800,000, 1% of the next $9 million, ½% of the next $15 million, and an amount to be determined by the court for amounts over $25 million. So, for example, a relatively modest $500,000 estate (not so uncommon in California given the price of homes!) attorney's fees alone will be $13,000!