Los Angeles Living Trusts Attorney
The Living Trust has been given considerable attention in the media. The Living Trust is not the perfect estate planning tool for everyone. There are certain times when it is appropriate and certain times when it is not. Sometimes other strategies would provide the same benefits with less cost. Sometimes the Living Trust is by far the simplest and easiest tool available to the estate planner.
One the most significant advantages of a Living Trust is that it can be designed to manage your assets for you in the event you become disabled or incapacitated. While other estate planning tools, such as the durable power of attorney, can be used to provide wealth management in the event of a disability, none is more flexible than the Living Trust. Also, the Living Trust can be used by those who need current management of their wealth even though they are in perfect health. This would include persons who have no experience handling money and those who simply lack the time to manage it. For example, a person who has just received a significant inheritance could create a Living Trust and name a bank or a trusted advisor as the trustee. The trustee would then invest the assets for the beneficiary's benefit and generally handle all of her financial affairs. One important aspect of such an arrangement is that the trustee is governed by certain well-settled legal principles which require the trustee to exercise a high degree of care in managing the Trustor's funds.
An alternative to the Living Trust as to asset management is the General Power of Attorney. Quite often, clients tend to think of the Power of Attorney as a simple form. This is never the case. Everyone's financial circumstances and family situations are different, and one should consider these differences carefully before drafting a General Power of Attorney. In addition, Health Care Directives are great tools for managing ones medical needs when one is unable to do so for oneself. All our clients receive a Health Care Directives as part of our services. You should talk with your attorney about the various options so that your General Power of Attorney and Health Care Directive are crafted to meet your specific needs.
Another reason to consider the Living Trust is if you own real estate in different states. For example, if a California resident also owns real estate in Florida, then upon his death it will be necessary to conduct estate settlement proceedings in both states. If, however, the Florida real estate was previously transferred to a Living Trust, the estate administration in Florida can be avoided. Living Trusts are also suggested if a Will contest appears likely. While this is not often a major issue, if there are reasons to suspect a challenge by disgruntled heirs, then you should consider the Living Trust as a substitute for your Will. It is difficult to successfully challenge either document. However, the trust does provide a stiffer barrier.
Revocable ("Living") Trusts
In lieu of preparing a Will for a client, a common form of testamentary instrument is the revocable or "Living" Trust.
A Living Trust takes effect while the party is alive, hence the name "Living." Living Trusts are also customarily revocable meaning they can be revised, cancelled or changed during the lifetime of the Trustor. Once the Trustor dies, however, they become irrevocable.
Living Trusts are commonly used in order to avoid having to have the estate go through a formal court procedure which is commonly referred to as "Probate." In most circumstances, if one has a living trust, probating the Estate is not necessary.
In the case of married couples, they too can utilize this process and create a living trust to handle both their individual and joint estates. For married couples living trusts can also provide a benefit of reducing and/or minimizing "death" (Estate) taxes.
The attorneys at Cooper-Gordon LLP have prepared many Living Trusts during their over 30 years each of practice and are available to consult with you regarding whether or not this would be an appropriate testamentary instrument for you and to better explain this process.