A Living Trust is an important legal estate planning tool that details how your assets should be used or distributed in case of incapacitation or death. A living trust includes a Grantor, who funds the trust, a Trustee, who manages the trust and the Beneficiaries, who receive the proceeds and assets of the trust. It allows you to control your assets while you’re alive, but pass them to a trustee at certain times to pay beneficiaries under specified conditions. These conditions allow for greater control over your assets at death.
There is a common misconception that Trusts are intended only for extremely wealthy people. This is not true. There are many reasons why it is a good idea to arrange how your assets should be handled upon death. A Living Trust will ensure your beneficiaries and surviving spouse are protected during a tough and emotional time. You can place many different assets into a living trust, such as bank accounts, allowing loved ones to be cared for immediately. There may be some assets that you would not want to place into the trust. These can include retirement accounts and life insurance policies. These and other tax-deferred accounts may lose their tax benefit status when placed in a revocable living trust.
Living Trusts also protect your children. There are numerous ways to protect both minor and adult children with a Living Trust. The two main ways to protect your minor children in your estate plan would be to get a Living Trust that includes a “Pour-Over Will." With a Pour-Over Will you can nominate someone to physically care for your children if something were to happen to you. Our Living Trusts include this important tool to convey physical guardianship of your children. Second protection could be used for your adult children who are either not ready to inherit hundreds of thousands of dollars, or they have some actual special needs. They could be on government entitlements such as Medi-Cal, Section 8 or SSI. In that case, our firm will be able to build into your Living Trust something called the “Special Needs Trust," which would financially take care of your children outside what they are already receiving from their entitlements.
Contact First Class Counsel to learn more about the Various ways we can protect you and your loved ones with a tailored Living Trust to suit you and your family’s unique needs, part of our Estate Planning Package.