Orange Trust Lawyer
As a rule of thumb, if there is a convenient way to avoid an obstacle, it’s usually best to take the shortcut. In many situations, trusts help your heirs avoid probate. Trusts have advantages during your lifetime as well. You retain control over assets even though they are not legally in your name. These two things give many settlors (people who make trusts) a peace of mind which is literally priceless.
The dedicated Orange trust lawyers at The Probate Guy watch out for your future. We do this by starting every case with a conversation. So, instead of trying to pigeonhole your needs into a certain trust vehicle, after we listen to you, we lay out all the appropriate options, carefully explaining the pros and cons of each one. So, you can make the best possible choices for you and your family.
Basic Elements of a Trust
We’ve already mentioned settlors. The other basic trust parties are the trustee (person who manages the trust) and the beneficiaries. Usually, the settlor and trustee is the same person. Therefore, even though the settlor loses legal control over the corpus (property in the trust), the settlor, as the trustee, retains practical control, at least for the most part.
The one major limitation is that trustees have a legal duty to keep the beneficiaries’ best interest in mind when they manage the corpus. In most cases, the beneficiary is a child or grandchild. So, it’s only natural for trustees to put their well-being ahead of their own.
There are basically two kinds of trusts. Inter vivos (living) trusts allow settlors to add or subtract from the corpus during their lifetimes. The corpus of a testamentary trust is fixed at the time it’s made. Either way, the trust is ineffective without property in the corpus. These trusts also have different pros and cons in terms of taxes and other matters. An Orange trust lawyer can review these things with you.
All trusts are private. Probate courts require executors to make written reports which detail the estate’s assets, and these reports are public record. Since the items in trust aren’t technically part of the estate, they are not mentioned in the report. Furthermore, the items in the trust pass according to the terms of the trust, not according to the terms in the will.
Types of Trusts in California
Since there are many different types of families in California with many different needs, California law recognizes a number of different trusts, such as:
- Charitable Remainder Trust: CRTs are excellent vehicles for people who want to give assets to charitable organizations. That’s especially true for real estate. For example, if a settlor/trustee wants to give a house to a charity, the organization takes title after the current occupant leaves. CRTs also reduce capital gains taxes, at least in most cases.
- Qualified Domestic Trusts: QDTs protect non-citizen spouses by giving them the full benefit of the marital estate tax deduction. Usually, spouses pay no taxes on inherited assets. These exemptions generally have no limit.
- Special Needs Trusts: Persons with chronic physical or mental illnesses often need substantial financial support. SNTs give these individuals resources without compromising their eligibility for Medicaid and other government programs. These individuals are beneficiaries as opposed to owners, so the assets in the SNT don’t count.
Spendthrift and insurance trusts are very popular as well. Spendthrift trusts limit a beneficiary’s access to the property it contains. Insurance trusts shield life insurance proceeds from taxation.
Contact a Dedicated Orange County Lawyer
Trusts ensure that more of your assets reach the beneficiaries they are intended to help. For a free consultation with an experienced Orange trust lawyer, contact the Law Offices of Robert L. Cohen. Convenient payment plans are available.