10th Jan 2013
Probate, while providing a legal mechanism for the transfer of property from the decedent to his beneficiaries, has developed into a tedious, costly and open process. Hence, the avoidance of this process may be seen as one key objective in estate planning. In Orange County, estate planning attorneys can help draft a Living Trust for you, as a legal means to avoid probate.
A Living Trust is a legal mechanism used in estate planning that allows you (known as the “Settlor”) to authorize another person (known as the “Trustee”) to administer your estate for the benefit of a third party (known as the “Beneficiary”). Unlike a Will, a Living Trust takes effect while the estate owner or settlor is still alive and mentally competent. (For advice on preparing a Will or a Living Trust, estate planning attorneys can give you assistance.)
In the event of your death or mental incapacity, your properties listed in the Living Trust are then transferred to your Trustee. With the orderly transfer of ownership, your estate thus need not go through probate. On the other hand, should you become mentally incapacitated, the same mechanism applies: Ownership of your estate goes to your trustee. You (and your beneficiaries) do not have to go through a conservatorship.
A Living Trust offers you other benefits, such as the following:
· Tax Payments. It can help avoid or lessen taxes on estate transfer, gifts and income. Depending on the size of your estate, your tax savings can go as high as hundreds of thousands of dollars.
· Fulfillment of Your Wishes. A Living Trust lets you decide as to how you would like to dispose of your property after you do. You may in fact write provisions in the trust that will put controls on how your beneficiaries can spend their inheritance.
· Protection from Creditors. Assets transferred to the beneficiaries by means of a trust are generally protected from the creditors of the beneficiaries. Note, however, that a Living Trust does not cover the settlor from his financial obligations. A creditor of the settlor has the same right to go after the trust property as if the settlor still owned the assets in his or her own name.
· Confidentiality and Discretion. A trust is not a public record. So a person who is not a beneficiary of the Trust does not have a right to know the contents of a Trust. The Trust only becomes “open” after your death in the sense that the successor trustee must give all of the designated beneficiaries and all heirs at law (people who have the right to inherit from you if you didn’t have a Will.)
Given the hassles and expenses associated with undergoing probate, you may want to
consider preparing a Living Trust. In Orange County, our law firm can assist you in preparing a Living Trust that can give you peace of mind… today and after you pass away.