The most common choice you have when setting up an estate plan is the choice between a Will and a Living Trust. A Will is always a one-way ticket to probate, unless your estate falls below a minimum threshold of value. In many states the minimum threshold is about $50,000. In California, that threshold is $150,000, except that if real estate is part of your estate, the threshold falls to … [Read more...]
Is a Living Trust a Public Record?
This seems to be a very common question. Many clients assume that they, are and ask how they are supposed to go about recording them. The answer in fact is the opposite. Living Trusts are not required to be recorded, are not designed to be recorded and in nearly all circumstances should not be recorded. One of the benefits of having a living trust is to ensure privacy by avoiding the public … [Read more...]
Are All Grantor Trusts Revocable?
Most, but not all grantor trusts are revocable, but all revocable living trusts are grantor trusts. Generally speaking, a grantor trust status does not hinge on whether a trust is revocable or irrevocable, but whether the grantor is responsible, in whole or in part for taxes on the income produced by the trust assets. There are a number of myriad features of grantor trusts, but this is its … [Read more...]
Can An Irrevocable Trust Be Amended?
One of the defining features of an Irrevocable Trust is that it cannot be amended, either at it’s outset, or at the occurrence of a specified event, such as the death of the Grantor. Sometimes an irrevocable trust contains the ability for it to be modified through the use of a power of appointment. A power of appointment is a specific power granted usually to a surviving spouse or a … [Read more...]
Administering an Estate through Probate With or Without a Will
Only a Trust Avoids the Probate Process In California, a probate process will need to be initiated in order to administer the estate if the decedent passed with no estate planning at all or only a Will. Probate is a Court-Supervised process that involves a 6-9 month minimum process (more often 15 months or more) in order to properly transfer assets from a decent to beneficiaries. Please … [Read more...]
Naming Trusts as Designated Beneficiaries of Retirement Accounts
Treasury Regulations Permit Naming Trusts as (Designated) Beneficiaries of Retirement Accounts While often viewed as a "gray" area, the reality is that a trust can absolutely become eligible for designated beneficiary treatment, qualifying as a "see-through" trust where the post-death RMDs are calculated based on the life expectancy of the oldest of the trust's underlying beneficiaries. In … [Read more...]
Funding a Living Trust
How Do Life Insurance and Qualified Retirement Plans Fit In? The most important aspect of owning a Revocable Living Trust is ensuring that your assets are titled in the name of the Trust and therefore owned by the Trust. There is an exception to this rule, that involves Qualified Retirement Plans (QRP’s), which include your IRA, 401(k), SEP, Keogh, 403(b) and even ROTH IRA’s. None of these … [Read more...]
Can a Creditor Go After Non-Probate Assets?
When someone dies, one of the first questions that close relatives usually have is whether they are personally responsible to pay the credit card bills of the decedent. They may even start getting telephone calls from creditors asking them to pay outstanding balances. Close relatives may also want to know: Who is responsible for paying the mortgage of the decedent? If they are entitled to … [Read more...]
What Financial Advisors Should Look for When Reviewing Client(s) Living Trusts
After practicing estate planning for almost 20 years, I've learned that having estate-planning documents doesn't always mean the estate planning goals are being accomplished. Usually, this is a result of not clarifying objectives before legal documents are drafted, or failing to review and update legal documents when significant life changes occur. As a primer for Financial Planners seeking to … [Read more...]
Special Needs Trust: What Expenses Can They Pay For?
A special needs trust or a supplemental needs trust can be established to help a disabled individual who is receiving assistance from the government -- or is eligible to receive it. Disabled people, who cannot support themselves and rely on government assistance, are not allowed to have more than a certain amount of personal assets, so family members can't just give them money to pay for just … [Read more...]
