EDUCATION
Living Trust
A Living Trust is a legal document that allows you to keep control of your assets while you are alive, and avoids probate court intervention for the beneficiaries of your estate upon your death.
A Living Trust is a legal document that, just like a will, contains your instructions for what you want to happen to your assets when you die. But, better than a will, a living trust allows for protection of assets during life and allows assets to be distributed quickly and privately without the court’s intervention on death.
Creating a living trust is what prevents the court from controlling you and your assets if you become incapacitated during life, and avoids probate court intervention on death.
The specific type of trust needed for your estate plan will vary based on your estate size and goals and wishes.
Controls Assets
Keep Control of Your Assets in the Trust
While there are many types of trusts, the most commonly used in estate planning is a Revocable Living Trust, which allows you to maintain control of your estate during your lifetime.
You can name yourself the “Trustee” of your own trust, allowing you to do anything you could have done before creating the trust. Your taxes don’t change, you can buy/sell assets, or ultimately change or cancel your trust – which is why it’s called a “revocable” living trust.
Nothing changes, but now the names on title to your assets are not in your name(s) anymore, but in your name(s) as the trustee of the trust.
Legally, you no longer own anything. Don’t panic! Again, you still keep control. Everything now belongs to your Trust, so there is nothing for the courts to control when you die or become incapacitated.
Protection During & After Life
Trusts Prevent Court Intervention
While You’re Living
A Living Trust - used in conjunction with a durable power of attorney and an advance healthcare directive - avoids the court from taking control of your estate, your financial affairs, and your medical affairs in the event you become incapacitated during your lifetime.
In the unfortunate event you cannot conduct your affairs due to mental or physical incapacity (Alzheimer’s, dementia, stroke, heart attack, car accident, or for any other reason), only a court appointee can act on your behalf to help handle your estate, financial affairs, and medical affairs that may not be aligned with your wishes.
Once the court gets involved, it usually stays involved until you recover or die. The court, not your desired fiduciary, controls your medical decisions and how your assets are used to care for you. This public process can be expensive, embarrassing, time-consuming, and difficult to end if you recover.
After Your Death
Revocable living trusts are the only estate planning strategy that allows you to avoid probate court intervention for virtually any property you own, including, for example, real estate, financial assets such as bank accounts, stocks, mutual funds, investment accounts, businesses, jewelry, heirlooms, and much more.
A revocable living trust functions like a will, allowing you to leave your property to beneficiaries on death. The advantage of the revocable living trust, used in combination with the other estate planning documents included in Hanley Law’s Estate Planning package, comes on incapacity or death. Your estate will avoid probate court intervention during life in the event of your incapacity. Upon death, your estate is controlled by the person you named as your Successor Trustee, who has full authority to distribute the property as detailed in your trust to your beneficiaries - without court involvement.
Who Will Act On My Behalf?
Who Will Administer My Estate If I Am Unable or After My Passing?
A Chosen Successor Trustee Will Administer the Estate
A “Successor Trustee” is the person you name in your Living Trust to administer your estate upon your incapacity or death. In the event of your incapacity, your Successor Trustee manages your Trust Estate for your benefit for the rest of your life without probate court involvement under the terms of the Trust. On death, in general, the duty of your Successor Trustee is to take possession of your estate, pay off all your debts, and distribute the “net” estate to the beneficiaries in the share(s) provided for in the trust.
You want to make sure you “trust” your Successor Trustee! You want to have confidence that the Successor Trustee is willing and able to act when the time comes to properly carry out your intentions while following their fiduciary duties under the trust terms and California Probate law.
The Successor Trustee should be able to work well with others and should have sufficient time and flexibility to carry out their duties as the trustee. You can name an individual or group of people to act as Trustee or Co-Trustee of your trust. A Co-Trustee relationship provides the benefit of “checks and balances” between the Trustees, but it may cause problems if the Trustees don’t agree.
Who Will Act on My Behalf if I am Incapacitated?
A Chosen Agent Will Handle Personal Financial and Medical Decisions and Responsibilities.
An “Agent” is the person you designate to handle your personal financial and medical decisions and responsibilities on your behalf if you become incapacitated during life. The Agent you name in your durable power of attorney for finances will handle personal financial affairs outside your trust and other financial affairs that you must continue to handle - such as filing tax returns, paying debts, etc. The Agent designated in your advance healthcare directive ensures your medical desires are carried out.
Note: Agents are commonly the same people as the Successor Trustee in the living trust but do not have to be.
Legal Services
Education
Service: Trust Administration
We prepare our estate plans with the understanding that one day, the plans will be implemented with a Trust Administration.
We guide your Successor Trustee through the Trust Administration process to ensure all legal requirements are met and the estate is properly distributed pursuant to your wishes.