ESTATE PLANNING / LIVING TRUSTS (LEGACY / INHERITANCE)
What is Estate Planning & what is a Living Trust? How does it work? What can it do for you? How can you build and leave a Legacy & an Inheritance to those you love?
what is estate planning?
Estate Planning is the process of anticipating and arranging, during a person's life, for the management and disposal of that person's Estate during the person's life and at and after death, while minimizing gift, estate, generation skipping transfer, and income tax. Estate Planning includes planning for incapacity as well as a process of reducing or eliminating uncertainties over the administration of a Probate and maximizing the value of the estate by reducing Taxes and other Expenses. The ultimate goal of Estate Planning can be determined by the specific goals of the client, and may be as simple or complex as the client's needs dictate. Guardians are often designated for minor children and Beneficiaries in incapacity.
The law of Estate Planning overlaps to some degree with Elder law, which additionally includes other provisions such as Long-term Care.
Devices of Estate Planning involves: the Will, Trusts, Beneficiary designations, Powers of Appointment, property ownership (Joint Tenancy with rights of survivorship, tenancy in common, tenancy by the entirety), gift, and Powers of Attorney, specifically the durable Financial Power of Attorney and the durable Medical Power of Attorney.
More sophisticated Estate Plans may even cover deferring or decreasing estate taxes or business succession.
Wills:
Trusts:
Advance directives:
Taxable Income, gift, and proper in advance Estate Tax Planning plays a significant role in choosing the structure and vehicles used to create an Estate Plan.
The law of Estate Planning overlaps to some degree with Elder law, which additionally includes other provisions such as Long-term Care.
Devices of Estate Planning involves: the Will, Trusts, Beneficiary designations, Powers of Appointment, property ownership (Joint Tenancy with rights of survivorship, tenancy in common, tenancy by the entirety), gift, and Powers of Attorney, specifically the durable Financial Power of Attorney and the durable Medical Power of Attorney.
More sophisticated Estate Plans may even cover deferring or decreasing estate taxes or business succession.
Wills:
- Wills are a common estate planning tool, and are usually the simplest device for planning the distribution of an estate. It is important that a Will be created and executed in compliance with the laws of the jurisdiction where it is created. If it is possible that Probate proceedings will occur in a different jurisdiction, it is important also to ensure that the Will complies with the laws of that jurisdiction or that the jurisdiction will follow the provisions of a valid out-of-state Will, even if they might be invalid for a Will executed in that jurisdiction.
Trusts:
- A Trust may be used as an estate planning tool, to direct the distribution of assets after the person who creates the trust passes away. Trusts may be used to provide for the distribution of funds for the benefit of minor children or developmentally disabled children. For example, a Spendthrift Trust may be used to prevent wasteful spending by a Spendthrift child, or a Special Needs Trust may be used for developmentally disabled children or adults. Trusts offer a high degree of control over management and disposition of assets. Furthermore, certain types of trust provisions can provide for the management of wealth for several generations past the settlor. Typically referred to as dynasty planning, these types of trust provisions allow for the protection of wealth for several generations after a person's death.
Advance directives:
- An Estate Plan may include the creation of advance directives, documents that direct what will happen to a person's estate and in relation to their personal care if the person becomes legally incapacitated. For example, an Estate Plan may include a Healthcare Proxy, Durable Power of Attorney, and Living Will.
- After widespread litigation and media coverage surrounding the Terri Schiavo case, estate planning Attorneys often advise clients to also create a Living Will. Specific final arrangements, such as whether to be buried or cremated, are also often part of the documents.
Taxable Income, gift, and proper in advance Estate Tax Planning plays a significant role in choosing the structure and vehicles used to create an Estate Plan.
What is a living trust?
A Living Trust (sometimes called an "inter vivos" or "Revocable" Trust) is a written legal document through which your assets are placed into a Trust for your benefit during your lifetime and then transferred to designated Beneficiaries at your death by your chosen Representative, called a "Successor Trustee" or also known as the Executor of the Estate.
A Trust is created by a Settlor, who transfers title to some or all of his or her property to a Trustee, who then holds title to that property in trust for the benefit of the Beneficiaries. The trust is governed by the terms under which it was created. In most jurisdictions, this requires a contractual trust agreement or deed. It is possible for a single individual to assume the role of more than one of these parties, and for multiple individuals to share a single role. For example, in a Living Trust it is common for the Grantor to be both a Trustee and a lifetime Beneficiary while naming other contingent Beneficiaries.
- A Trust is a three-party fiduciary relationship in which the first party, the Trustor or Settlor, transfers ("settles") a property (often but not necessarily a sum of money) upon the second party (the Trustee) for the benefit of the third party, the Beneficiary.
- A testamentary trust is created by a will and arises after the death of the Settlor. An inter vivos trust is created during the Settlor's lifetime by a trust instrument. A trust may be Revocable or Irrevocable; in the United States, a trust is presumed to be irrevocable unless the instrument or will creating it states it is revocable, except in California, Oklahoma and Texas, in which trusts are presumed to be revocable until the instrument or will creating them states they are irrevocable. An Irrevocable Trust can be "broken" (revoked) only by a judicial proceeding.
- FYI- Trusts and similar relationships have existed since Roman times.
- The Trustee is the legal owner of the property in trust, as Fiduciary for the Beneficiary(ies) who is/are the equitable owner(s) of the trust property. Trustees thus have a Fiduciary duty to manage the trust to the benefit of the equitable Owners (many times they are the Children of the Settlor / Parent that has passed-away). They must provide a regular accounting of Trust Income and Expenditures. Trustees may be compensated and be reimbursed their expenses. A court of competent jurisdiction can remove a Trustee who breaches his/her fiduciary duty. Some breaches of fiduciary duty can be charged and tried as criminal offences in a court of law.
A Trust is created by a Settlor, who transfers title to some or all of his or her property to a Trustee, who then holds title to that property in trust for the benefit of the Beneficiaries. The trust is governed by the terms under which it was created. In most jurisdictions, this requires a contractual trust agreement or deed. It is possible for a single individual to assume the role of more than one of these parties, and for multiple individuals to share a single role. For example, in a Living Trust it is common for the Grantor to be both a Trustee and a lifetime Beneficiary while naming other contingent Beneficiaries.
LIVING TRUST INTAKE FORMS - download files
| Joint Trust Intake form |
| Single Trust Intake form |
Call Western States Investments to find out how Estate Planning and a Living Trust can aid you in leaving a Legacy and the Inheritance to your Beneficiaries that you desire.
Call (951)371-7608 today!
Call (951)371-7608 today!
