There are a lot of decisions you have to make as an adult. It’s overwhelming sometimes, and there are some things that may not seem like they’re in your control. But there’s one thing you can always control: the choice to make plans for your future. A living trust is an essential part of estate planning for many people. Keep reading to learn more about living trusts.
Why You Need A Living Trust If You Live In San Diego, CA
People first think about the phrase “living trust” as two things: you’re a famous actor, athlete, or celebrity in San Diego, CA, or you have enough money to hire a lawyer to create what many consider unnecessary paperwork.
This is a common misconception for people, especially those close to retirement. A living trust is a valuable tool that can protect your San Diego home and other important assets. Living trusts are not complicated, but they are extremely valuable. Many people dismiss them or don’t understand the benefits.
Fortunately, you still have time to draft one. Living trusts can be created literally at any age, and the earlier you take advantage of this powerful legal instrument, the better your income savings will turn out.
If you have a good amount of assets in San Diego, CA, living trusts can help manage them. If you do not have a trust and want one, reach out to an attorney focused on estate planning. They can help you create a living trust when doing an estate plan.
This article can give you a preview of various types of living trusts. You may even attempt to draft one on your own. But an experienced estate planning lawyer can better explain these trusts and help you choose the most appropriate ones.
5 Primary Types Of Living Trusts
You don’t have to stress about selecting the trust type that best suits your needs and circumstances. Even though there are numerous trust types available in San Diego, CA, the common types of living trusts are listed below. They are explained in detail so you may choose the best one that suits your needs.
Special Needs Trust
A Special Needs Trust is a unique type of trust that manages ownership of assets for the welfare of a child or adult with a handicap without affecting that person’s capacity to receive public assistance. This trust can supplement payments from several government assistance programs, such as SSI and Medi-Cal, and meet a person with special needs. A trust may be the owner of life insurance policies and possess cash, real estate, personal property, and other assets.
When families consider their plans, the cost of caring for a disabled child or other loved one can be overwhelming. With the best intentions, parents and relatives want to give an inheritance to family members with special needs. But, if not left properly, a legacy might sabotage important benefits.
Charitable Living Trust
Furthermore, charitable trusts are quite popular. A charity or non-profit organization is designated as the beneficiary of a charitable trust by the trustor. During the trustor’s lifetime, this kind of trust is frequently established. The assets will be given to the truster’s chosen charity or nonprofit organization after the trustor passes away.
Estate planners frequently use charitable trusts to lessen the estate taxes in San Diego, CA. In certain charitable trusts, a portion of the trust’s assets passes to a charity after the trustor dies, and the children or heirs receive a portion.
Trustors establish revocable trusts while they are still alive. They can enjoy the assets under this trust during their lifetime. The main advantage of a revocable trust is that it can be changed, canceled, or revoked by the trustor at any time during their lifetime. The trustor, trustee, and beneficiary are frequently the same in revocable trusts. The trust’s assets will pass to other beneficiaries once the person who created the trust passes away.
Irrevocable Living Trust
An irrevocable trust is one that the trustor establishes and cannot change or revoke while they’re still alive. When assets are transferred into an irrevocable trust, the trustor cannot withdraw them. Although less versatile than revocable trusts, irrevocable trusts have some notable advantages. Irrevocable trusts are more tax-efficient.
In some situations, the trust pays no taxes on the assets possessed by the irrevocable trust. Planning for retirement and long-term care also uses irrevocable trusts. Assets that the trustor transfers into an irrevocable trust do not count against the trustor.
Irrevocable Life Insurance Trust (ILIT)
Trusts for life insurance enable the trustor to convert their life insurance policy into a trust. The advantage of giving a trust control over a life insurance policy is that it keeps the proceeds tax-free and enables the beneficiary to access them as soon as the trustor passes away. Trusts for life insurance are permanent and irrevocable. The trustor is also not permitted to modify the trust or borrow money from the life insurance policy.
Living trusts lawyers in San Diego, CA, can assist you if you want to include a trust in your estate plan. Based on your particular requirements and objectives, they can design distinctive estate plans.
5 Things To Consider Before Creating A Living Trust
Creating a living trust is an important decision that can have long-term consequences. It’s essential to take the time to consider all of the relevant factors before making your decision.
If you’re thinking about creating a living trust, there are five things to consider before you start one.
Your health is important. No question about that. If you have a severe illness or disability, it might be time to consider your long-term care options. You can indicate in your trust the medical procedures you want and how your medical bills will be paid. You can specify these and other medical preferences to ensure you’re cared for when incapacitated.
Choosing your heirs should be one of the first things you’ll consider when establishing trust. If you want to ensure your heirs’ needs are fully taken care of after your death, a living trust is one way to establish a plan for managing the estate during their lifetime.
A living trust is meant to deal with your assets after you die. If you have children, you must ensure they’re cared for after your passing. Otherwise, they may not receive the inheritance you prepared for them.
If you have properties that you want to leave to your heirs after you die, but don’t want them to go through the time-consuming process of probate court, then a living trust may be right for you.
Probate is the legal process by which an executor or personal representative administers an estate when there is no valid will. It involves gathering all the deceased person’s assets and paying off their debts. It also distributes any remaining assets according to the terms of their last will, file final income tax returns on behalf of the deceased person’s estate, and transfer property ownership.
A living trust does not require any court involvement because it’s created before death and becomes effective immediately upon death. When an experienced attorney properly drafts these documents, they become very effective tools for avoiding probate court proceedings
The cost of creating one depends on how complicated the situation is. The cost also varies depending on where you live in the United States. You should also consider whether or not there are additional fees associated with administering the trust after your death, such as paying for an accountant.
You’ll need help from an experienced attorney if you want to create a solid plan for distributing assets after your death and protecting them from creditors and predators while you’re still alive. It’s essential to choose an attorney who understands the legal and emotional aspects of estate planning. It should be someone who can help guide you through this process with compassion, professionalism, and knowledge about current laws.
Work With An Experienced Living Trust Attorney From Weiner Law
As with any legal decision, creating a living trust is not something you do on your own. You may attempt to try it at first to save money, but it will become a challenge. It may even cost you more when you’re unfamiliar with the whole process. So, it would be better if you ask for input from an attorney focused on this practice area.
Living Trusts lawyers from Weiner Law have a track record of helping clients throughout the country with their living trust needs. Their attorneys work with people from all walks of life, and they understand that your situation is unique to you. They can provide the personalized attention that you deserve.
Working with an experienced living trust attorney ensures that your wishes are properly executed and protected from unnecessary probate court proceedings when you pass away. You will also benefit from having all documents prepared by an expert in this area who understands how best to serve your needs and those of your beneficiaries.