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Types of Trusts

Types of Trusts used in California Estate Planning

Wills SigningMost people who hear the word “trust” think it is an estate planning tool used only by the rich. However, you should know that over the past few decades, individuals and families in all income brackets are using trusts to plan their estates and to avoid the costs and time delays of probate.

Estate planning is not just for the wealthy anymore, but should be considered by all individuals and couples when planning for their future. Estate planning provides you the opportunity to name that person who will take responsibility for your possessions upon your incompetency or death. Estate planning is properly deciding who will ultimately receive your property. Estate planning is the ability to choose who will raise your children if you are unable to do so yourself. Estate planning can include directives as to your medical care if you are incompetent due to illness or injury. A properly drafted Will coupled with a Revocable Trust can address all of these issues.

Accidents, illnesses or death can occur at any time for any person and all effect more than just the individual. Being unprepared for all of life’s events throws families into turmoil. Not planning means the family has to pick up the pieces at a most stressful time. This is your chance to lighten that burden for your family by making decisions now and establishing your own plan that they simply have to carry out, easing their grieving process.

Trusts have become an even more important estate planning tool for homeowners in California because of the appreciation of real estate. With the average cost of a home exceeding $500,000 or more, a trust can save the heirs thousands of dollars by avoiding the probate process where court costs, executor fees, and attorney fees are based solely on the percentage of the value of the entire estate, and not necessarily on work performed.
 
What is a Trust? 

Trusts ImageA trust is a written contract executed by the grantor or settlor (the person who creates the trust) and delivered to the trustee (the person who is in charge of the trust, usually the same person as the grantor or settlor), which is made for the benefit of a group of people called your “beneficiaries”. A living or revocable trust is called “living” because it is created and takes effect while you are alive, and because you can change it at any time during your life (revocable). Some people create "testamentary trusts" which only take effect upon death, and are often done through the language in a properly drafted will.

The beginning of any good estate plan includes a "revocable living trust" which allows you to revoke or change it any time, and as often as you like. Revocable trusts are very flexible, and can “own” all or some of your property. You can even have more than one revocable living trust to own different types of property, such as your separate property and your community property. There are many benefits to having a trust.

The Difference between Trusts and Wills

Trusts and wills are administered differently upon your death and are not complicated to create or manage. While you are alive, you will still own all of your property, and may do whatever you want with it. The most important difference between a will and a living trust is that your trust must be “funded” with all of your property in order to avoid probate for that property. If an asset is not properly titled, it may have to be probated by your heirs, thereby defeating the very reason for making a trust. Not all of your assets should be in the trust due to taxes and other reasons. We can discuss those differences.

Pleasanton Estate Planning Law Firm
When you begin planning your trust, it is important that you speak with an estate planning attorney, and obtain proper advice on how the entire process works. At our office, we will help you identify the right type of trust for you and your family. There are many different types of trusts, including:

Our attorneys will review your trust funding options, and help you accomplish this funding so it is done correctly. With your basic estate plan, you will receive one real property transfer deed. Our Law Firm will then direct you on how to fund your trust with the remainder of your assets.

 
 
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Daniela Lungu

Law Offices of Daniela Lungu
4695 Chabot Drive, Suite 200
Pleasanton, CA 94588

Phone: (925) 558-2710
Fax: (925) 558-2701

 

 


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