Woodland Hills Living Trust Lawyers also serve West Hills residents.
Woodland Hills Living Trust Lawyers
What is a Living Trust?
A Living Trust is a vital component of an estate plan, and part of estate planning documents prepared for you by a skilled trust lawyer in Woodland Hills while you are alive. In order for a Trust to work properly, you must transfer most of your assets to your living trust. Title to some assets cannot be transferred to the trust, such as IRA accounts. While you are alive and well, you are the Trustee of the Trust. Since you are the trustee, you manage the day-to-day operations of the Trust while you are alive and well. Normally, while you are alive and have mental capacity, the Trust is revocable. This means that you have full control over the assets and that can spend all the money in the Trust, revoke or cancel the Trust, amend or change the terms of the Trust, and change any of the beneficiaries of the Trust. You select one or more successor trustees in your Trust document. The successor trustee is the person or persons who will manage the Trust after you are no longer able to do so. Our Woodland Hills law firm offers a free living trust consultation appointment in Woodland Hills.
Why prepare a Trust?
Simply, a Living Trust is most frequently an alternative to probate and conservatorship. In the event of your incapacity or death, the Successor Trustee steps in and manages the Trust for you. If properly funded, the selection of the Successor Trustee is a very helpful estate planning tool in avoiding a conservatorship proceeding. The successor Trustee can give you income and principal for your benefit while you are alive. Normally, the primary successor trustee is your spouse, if you are married. For most unmarried persons, the Successor Trustee can be one of the following: A child, a private professional fiduciary, a friend, or a bank. Take advantage of our free trust consultation in Woodland Hills.
Probate Avoidance and Cost Savings
Assets which are properly transferred to the Trust normally escape Probate. Estate Planning can result in a significant savings to your heirs. Probate Fees in California are Statutory and Extra-Ordinary and can range between two percent and ten percent of your estate. Our Woodland Hills probate attorney can consult with you on how to avoid probate with a living trust.
Tax Planning Opportunity
In the case of married persons, the Trust can take advantage of the Marital Deduction and can be set up to save a substantial amount of estate taxes. Each person is allowed to transfer a certain limit during their lifetime, or after their death, tax-free. The 2020 IRS exemptions from Federal Estate Tax are as follows: According to Lexology, “In calendar year 2020, the exclusion amount for a single individual has increased to $11.58 million from the 2019 exclusion amount of $11.4 million. With proper planning or the use of portability, a married couple has a combined exclusion of $23.16 million. The Federal estate and gift tax rate will remain unchanged at 40%, and the annual exclusion amount, which allows taxpayers to make annual gifts of a present interest, remains at $15,000 per taxpayer per beneficiary.”.
Portability has requirements, which if not met prevent the survivor from using the decedent’s unused exemption. When one spouse passes away, the Trust is divided into two SubTrusts. One Trust is called the Decedent’s Trust and the other Trust is called the Survivor’s Trust. An election to use the decedent’s unused exemption has to be made. The Decedent’s Trust contains the deceased spouse’s marital share of the assets. The Decedent’s Trust becomes irrevocable on the death of the first spouse. To protect the Decedent Spouse’s wishes, the surviving spouse cannot change this portion of the Trust. However, all income of the Decedent’s Trust will normally be paid out to the surviving spouse. The principal of the Decedent’s trust is available to the surviving spouse if he or she needs it for his or her health, education, support or maintenance. When the surviving spouse passes away, the balance of each SubTrust is paid out to the beneficiaries of that Trust. It is important to discuss the exact configuration of living trusts by meeting with an experienced Woodland Hills Living Trust lawyer.
In a living trust, the surviving spouse’s share is called the Survivor’s Trust, sometimes referred to as Trust A. The Survivor’s SubTrust remains revocable by the surviving spouse. The surviving spouse can spend all the assets in the Survivor’s Trust, can amend or change that SubTrust, can change the beneficiaries, and can revoke or cancel the Trust. The entire income and principal of this SubTrust are paid to the surviving spouse. When the surviving spouse passes away, the remaining balance of the Survivor’s Trust is paid out to the beneficiaries of the Survivor’s Trust. You will see references to an AB Trust in many places. An AB Trust is a strategy used to double the estate tax exemption. A skilled living trust attorney helps serve Woodland Hills residents.
One benefit of AB Trust planning with a living trust is that both spouses can make use of the Exemption Equivalent Amount, thus taking advantage of a significant tax savings, and also to insure that the decedent’s wishes are complied with by the surviving spouse. Our well-versed living trust attorneys in Woodland Hills can talk to you about special issues in your family during our free living consultation.
For most people, the main benefit of proper estate and trust planning is that the estate can avoid Probate. But there is also the goal of incapacity planning that our clients seek from our living trust counsel. The heirs can benefit by between two and ten percent of the gross estate by proper estate planning. Additionally, an estate plan can eliminate a substantial amount of time taken in Probate Administration. Getting a Woodland Hills Living Trust Attorney who is an expert will help you determine the best ways to protect your family.
Talk to us about Woodland Hills Living Trusts. This article and our e-course are not intended to replace the specific advice of an expert living trusts attorney and are intended to be educational only. We highly recommend that you consult with a qualified living trust attorney for specific advice regarding your living trust and estate and for professional preparation of all legal documents. Call our attorneys for a free living trust appointment at 818.340.4479.
WOODLAND HILLS CLIENTS, CALL US FOR A FREE LIVING TRUST CONSULTATION with our Woodland Hills Living Trust Attorney in Woodland Hills at 818-340-4479. We also offer free online virtual consultations.
