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A Trust is a legal entity to which you transfer substantially all your assets and formally title them in your Trust instead of your individual name. Your assets are held by you as Trustee and administered for your own benefit. On your death, your designated successor Trustee steps in your shoes and manages and distributes the assets owned by your Trust to the Beneficiaries which you have designated in the Trust to inherit from you. As such, your Trust — and not your Will — determines who gets what after you are gone.
Trusts are a crucial element of any Estate Plan. If you have children from a prior marriage, a Trust can be used to ensure that they receive their rightful inheritance. If you do not have children, a Trust can be used to designate who you would like to receive your assets when you die. This can include individuals, charities, organizations, or causes you support.
How Trusts Work
The terms and structure of your Trust are customized to fit your specific circumstances and family dynamic and will depend on the extent of assets you own, the inheritance goals which you seek to put in place, and the circumstances of your intended beneficiaries.
With a revocable Trust, you can change the terms of the Trust at any time during your life by signing a Trust Amendment. You are always in full control of your Trust and your property. Your own social security number is the Tax ID of your Trust, so there is no change in how you file your taxes. And transferring real estate into your Trust does not trigger a reassessment of your property taxes.
While you have full control and access to all your Trust assets, those you name as Beneficiaries after you are gone do not have such access and control. This allows you to put in place asset protection provisions that may shield your Beneficiaries from their own creditors (i.e., spendthrift provisions).
Do I still need a Will if I am setting up a Living Trust?
The Trust can only govern the property you TRANSFER in the name of your trust during your life. If some (or all) of your property remains in your individual name at death, the Trustee has no access to it - because such property defaults to your Probate Estate, and is governed by the terms of a Will (or if no Will is left - by the laws of intestate succession of the California Probate Code). To ensure your "probate estate" is distributed as part of your living Trust after you die, it is necessary to also sign a Will named a "Pour Over Will." It is named so because by its terms, it "Pours" into your living trust any property which you did not transfer in trust during your life yourself. It does so by naming your Trust as the SOLE BENEFICIARY of the Will. The Pour Over Will is the safety net that ensures that all of your assets are distributed as per the terms of your living Trust.
Schedule a Consultation Today
If you are single or divorced, it is important that you have a plan in place for the future of your assets and legacy. The Law Offices of Maria N. Jonsson, PC can help you determine which Estate Planning tools are suited to your needs, as well as which type of trust may be right for you. We are proud to serve clients in Marina del Rey, Venice, and the surrounding areas. We can answer your questions and address any concerns you may have.