Estate Plan and Living Trust
What is a power of attorney, and why is it important?
A power of attorney is a legal document that gives someone you trust the authority to make decisions on your behalf if you’re unable to. This can include managing finances, paying bills, or handling real estate. Without one in place, your family may need to go to court to get that authority, which can be stressful and costly.
What happens if I do nothing, no will, no trust?
Intestacy laws decide who inherits, and your family may face probate. You also miss incapacity planning.
How does an estate plan work?
An estate plan outlines your wishes for managing your assets, finances, and health decisions during your lifetime and after you pass away. It typically includes a set of legal documents—such as a will, living trust, power of attorney, and health care directive—that work together to protect you and your family.
A living trust allows you to place your assets into a trust managed by a trustee who follows the instructions you outline. This helps your loved ones avoid probate, ensures your assets are distributed according to your wishes, and can provide protection for beneficiaries.
A power of attorney authorizes someone you trust to manage your financial and legal affairs if you cannot.
A health care directive allows you to document your medical preferences and appoint someone to make healthcare decisions on your behalf. Estate planning ensures your assets are protected, your wishes are honored, and your family is cared for during life’s unexpected events and after your passing.
Do I need an estate plan if I don’t have many assets?
Yes. Estate planning isn’t just about wealth—it’s about making sure your wishes are followed. Even if you have modest assets, a basic plan can help your loved ones avoid unnecessary legal complications, designate guardians for your children, and make healthcare or financial decisions if you’re ever unable to do so.
I own property can I just do a Will?
A Will is still subject to probate, you are merely letting your wishes known. In order to avoid probate you must transfer title of your assets to the name of your trust.
What’s the difference between a will and a trust?
A will takes effect at death and usually goes through probate; a revocable trust works during life, including incapacity, and after death and can avoid probate for trust-titled assets. Many families use both.
If I have a living trust, do I still need a will?
Yes. A “pour-over will” catches any assets that didn’t make it into your trust and directs them to it.
What is probate?
Probate is the court process to transfer property after someone dies. It can be public, time-consuming, and include court/attorney fees.
Does a living trust avoid probate?
Yes. Assets properly titled in your trust generally pass outside probate. Probate is the court process to transfer property after death.
What is a revocable living trust and why do people set one up?
A revocable living trust is a legal arrangement you create while alive to manage your assets and direct who receives them when you pass. Two big reasons people choose one: it can avoid probate and still let you use/control your assets while you’re alive.
Roles and Responsibilities
Does my 18 – Year old need a plan?
Yes. It may not be a subject you want to think about, but before you send your young adult into the world, you need to help your 18-year-old obtain basic estate planning documents. Even though your child may not own substantial assets at this time, your child is a legal adult now.
If your child became incapacitated, even temporarily, you might not have the authority to make medical or financial decisions for your child without court intervention.
A basic estate plan for an 18-year-old should include:
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- Health Care Directive
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- Power of Attorney Financial
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- HIPAA Authorization
Where do I start with Estate Planning?
The first step is to contact an AmeriEstate Legal Plan for a free consultation.
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- Decide who you want to inherit your property and in what proportion. Create an inventory of your assets and a list of debts. The initial inventory need not be detailed, but it should list major assets and who should inherit them upon your death.
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- Decide who you want to name as guardian and conservator for your children if they are minors at the time of your death. Your attorney can explore several estate planning documents with you that provide income for your children while protecting the corpus of their inheritance.
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- If you have a child or other relative with special needs, how do you want to care for this person after your death?
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- Do you have a business? If so, who do you want to inherit your business?
What assets do I put in my trust?
Yes. Trustees are legally required to adhere to both the terms of the Trust and applicable state laws. Failing to comply with these requirements could result in personal liability. Trustees must take steps to protect Trust assets, ensure proper tax filings, and maintain accurate records of all transactions. AmeriEstate provides guidance to help Trustees navigate these responsibilities efficiently.
How much does a trust typically cost?
Costs vary depending on the complexity of your estate, if you are married or single, etc. AmeriEstate costs are typically 30-50% less than a private attorney. We are happy to provide a free quote.
What is your legal plan? Do I need it?
The Legal Plan, which is included free for the first year with the delivery of your trust, has three primary benefits to you: trust assistance, support for other legal issues, and DocuBank Access. For trust assistance, membership in the Legal Plan offers: assistance to your heirs regarding your trust or estate plan, simple amendments to your AmeriEstate Living Trust, an annual review and update of your AmeriEstate Living Trust, and Periodic updates to Powers of Attorney for the primary member.
DocuBank provides immediate access to Healthcare Directives and Emergency Medical Information. Anywhere, anytime, 24/7/365.
When should I update my estate plan?
Review your estate plan annually, or at least every two to three years, to ensure it still reflects your wishes.
For Legal Plan members, we offer an annual complimentary “Trust Review” upon your request. However, some life events should automatically trigger a review of your estate plan. Events such as a change in marital status or the number of dependent minors may necessitate a review.
Other events that should prompt you to contact your estate planning attorney include:
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- Marriage
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- Divorce
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- Death of a spouse
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- Birth or death of a child
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- Purchase or sale of a business
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- Retirement
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- Acquisition of a substantial asset
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- Sale or transfer of a substantial asset
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- Receiving a large inheritance
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- Moving to a new state
Can a Trust help provide for my special-needs child?
Our trust has provisions that ensure your child’s benefits will not be impacted as a result of their inheritance. We take careful care in preparing our estate to meet you and your family’s needs.
I have a trust through another attorney, will you help me?
We can amend and/or settle your trust provided the trust allows it. If you have a copy of your trust, please call us on (800) 235-0963 we will review it with you at no charge.
Can my beneficiary also be the trustee?
Yes, a beneficiary can also serve as a trustee, especially in family trusts. However, if the trustee is also a beneficiary, it’s essential to ensure the trust terms are clear to avoid conflicts of interest.
Do I need living trust?
Yes, whether your estate is large or small. A Living Trust is a revocable trust you create to hold property during your lifetime. You maintain control over the assets within the trust by serving as the trustee.
A Living Trust may be changed or revoked. Upon your death or incapacitation, the trust becomes irrevocable.
Who Needs a Living Trust?
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- Married couples or single parents with minor children.
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- Anyone who owns real estate.
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- Anyone who desires assets be held “In Trust” and distributed to heirs beyond the default age of distribution, or according to special terms.
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- Anyone with special needs dependents.
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- Married couples in a second marriage who want to protect the children of a first marriage.
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- Business owners.
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- Domestic partners.
If you become incapacitated, your successor trustee continues to manage the trust for your benefit.
Upon your death, the trustee distributes the assets to the beneficiaries or continues to manage the assets for their benefit, depending on the terms of the trust.
Can the settlor and trustee be the same person?
Yes, you can be both the settlor (creator) and trustee of your trust while you’re alive. However be sure to name an alternate trustee who will step into this role after you pass away.
Can my spouse be a co-grantor, trustee, and beneficiary of the trust?
Yes. Your spouse can hold multiple roles within the trust, depending on how you set it up.
What does “funding” a trust mean?
Retitling assets, home, bank/investment accounts, to the trust and updating beneficiary designations where appropriate. Unfunded trusts may still result in probate.
I don’t have anyone to act as my Successor/Executor, can the attorney settle my estate?
If you don’t have anyone that you trust to serve as your trustee and reside in CA, you may assign a fiduciary. A fiduciary is a company that specializes in settling estates.
Can my kids be my beneficiaries and Successor?
Yes
Trust Administration
Are there laws and statutory rules that Trustees must follow?
Yes. Trustees are legally required to adhere to both the terms of the Trust and applicable state laws. Failing to comply with these requirements could result in personal liability. Trustees must take steps to protect Trust assets, ensure proper tax filings, and maintain accurate records of all transactions. AmeriEstate provides guidance to help Trustees navigate these responsibilities efficiently.
What are the first steps in the Trust Administration process after someone dies?
AmeriEstate provides guidance and support throughout this process to help Trustees fulfill their duties efficiently and effectively.
What is Trust Administration?
Trust Administration involves a Successor Trustee managing and distributing Trust assets after the original Trustee can no longer serve due to death, incapacity, or resignation. The Successor Trustee, named in the Trust, must follow its provisions.
Will my heirs inherit my debts?
When you pass away, your estate is responsible for paying your final debts. But, your heirs are not personally liable for your debts.
Do I need professional guidance to administer a Trust?
While some Trustees feel confident in following the terms of the Trust, the process can be complex. As a Trustee, you have a fiduciary obligation to the Beneficiaries, meaning you are responsible for managing the Trust in their best interest. AmeriEstate offers a structured approach to Trust Administration, guiding you through the required steps and documentation to ensure compliance with state laws and Trust provisions.
Will the Estate pay for an attorney’s trust administration fees?
Yes, most Trusts allow for the Trustee to enlist the services of a Trust Administration attorney, with all the legal fees paid by the Trust.
Deferred Sales Trust
I’m interested in finding out if this works for me. What should I do next?
A. The process is easy. Your next step is to contact Reef Point USA at: https://reefpointusa.com/
Can I cancel the whole deal after a few years and get my money?
If the DST Trained and Approved Trustee deems appropriate, they may elect to terminate the installment sales contract. However, you would immediately owe all the taxes, including all unpaid capital gains due from the original sale of the property/capital asset.
What happens if capital gain tax rates are changed after I set up the DST?
Politicians, from time to time, discuss changing capital gain rates. If that happens, you would pay the new rate on the capital gains portion of your installment note payment. However, there is usually adequate notice to make a sound financial decision prior to any such change in taxation or tax rates.
Can I use my installment sales note to get back into real estate?
Yes, please contact the Estate Planning Team or a duly qualified DST tax professional to discuss this option. We recommend that you work with the Estate Planning Team's Professional Advisors, who are experienced in trust law, trust asset management, and tax law.
When the trust sells the property may I keep some of the cash from the sale?
Yes, in that case, you would pay taxes only on the capital gain portion of the money which you kept for yourself outside the trust.
What is a Deferred Sales Trust?
The Deferred Sales Trust is a legal contract between you and a third-party trust in which you transfer real property, personal property, or a business to the Deferred Sales Trust created for you. This is in exchange for the Deferred Sales Trust’s contractual promise to pay you a certain amount over a predetermined future period in the form of an installment sale note or promissory note. It is often referred to as a “self-directed note” because you control the note’s terms. The Deferred Sales Trust gives you the ability to negotiate your capital gains tax exposure, reinvestment terms of the sales proceeds, and installment payments made from the Trust.
