Revocable Living Trusts
Living trusts go by many different names: revocable trusts, revocable living trusts, marital trusts, and other names but the characteristic they have in common is that they are revocable by the individual who creates one. A revocable living trust also has the function, unlike a will, of providing protection for your estate not only upon your death, but also upon your temporary or permanent incapacity. For that reason, many people choose a living trust as their estate plan.
The difference between a trust and a will are several. Assets that are titled in the name of your trust do not go through probate. A will is a public record that is open to the public to view. A trust is private and usually the Court does not get involved in a trust upon your death unless asked to by the trust’s trustee or other interested party. A trust also has the benefit of being able to utilize provisions to distribute assets to your minor children, or even adult children, at increments decided by you. You can also set up provisions in your trust for a disabled beneficiary so that the beneficiary does not lose public benefits by receiving an inheritance. A trust in most instances can be administered and distributed to the beneficiaries you have selected in a much shorter time period than probate.
The person who creates the trust usually names himself or herself as the initial Trustee. Assets are then transferred into the name of the trust however you do not lose control of your assets; they are just retitled. Upon your death, a successor trustee whom you name, takes over the management of the trust and distributes the assets to your beneficiaries.
There are a number of customized provisions that can be included in your living trust. You could include provisions for your minor children so that they do not inherit a lump sum upon your death. You can spread out the ages at which the children receive lump sum payments while still providing that they can utilize the trust for such expenses as education, medical care, or support. You can provide for a guardian for your minor children. You can provide for a “special needs beneficiary”, who is, or eligible for, public benefits such as Medi-Cal or SSI, by adding a third party special needs trust to your own trust. You can disinherit an heir or include provisions for beneficiaries who might be spendthrifts or have drug or alcohol problems.
A living trust should also include a pour over will, a durable power of attorney for property management, an advance health directive, an assignment of your personal property, a certificate of trust, and other miscellaneous documents important to the ongoing management of your trust. Contact me to determine what type of trust would be appropriate for your family and what the cost would be. Also, if your trust has been drafted more than 5 years ago, it may need to be reviewed to see if it complies with recent laws and still sets forth your wishes. Life events such as divorce, deaths, births, adoptions, inheritances, acquisitions of real property and timeshares are just some of the events that may suggest your trust needs to be reviewed.