What Is a Living Trust?
A living trust is a legal arrangement established by an individual during their lifetime to protect assets and guide the distribution of assets following the individual’s death. A living trust may also protect you if you become incapacitated, giving another individual of your choice the responsibility of making decisions on your behalf. These may include healthcare, financial, and business decisions. A living trust can be revocable or irrevocable. While an irrevocable living trust offers significant tax benefits, it cannot be altered or revoked once put into place. A revocable living trust can be altered or revoked by the trust maker.
In many cases, the trust maker or grantor will name themselves as trustee, allowing them to remain in control of their assets for their lifetime or until an incapacitation occurs. Then, a successor trustee is named to take over for the trustee during an incapacitation or after the grantor’s death. One of the primary benefits of a living trust is that no probate is required as it is with a will. This means that loved ones are spared an often lengthy, public, complex, and costly probate process when they use a living trust. Living trust attorneys in San Jose, CA, from Steburg Law Firm, can help prepare your living trust, ensuring it accomplishes your goals.
What Are the Risks Associated with Not Having a Living Trust?
While a will is necessary in some instances (such as naming a guardian for minor children), in most cases, a living trust can handle everything you want to accomplish with your estate plan. When you don’t have a living trust, you leave yourself open to liens and creditor garnishments—in other words, your assets are not protected. In some instances, failing to have a living trust can cost you additional money in taxes, as a living trust—particularly an irrevocable living trust—offers a wide range of tax reduction and asset protection strategies.
As noted above, a living trust allows you to avoid probate. When you don’t have a living trust, your loved ones will be forced to go through the probate process whether you have a will or not. The probate process is public, unlike a living trust—anyone interested can learn the details of your will once probate begins. Probate can be expensive and take many months, even years, to complete. This means that beneficiaries must wait a significant time to receive their inheritance. If you sell a property for considerably more than you paid, you could be subject to substantial capital gains tax if you do not have a living trust. The trust can potentially defer these capital gains taxes.
Securing Your Legacy with a Living Trust
The old adage that says, “You can’t take it with you,” certainly has merit. However, a living trust allows you to define how you want your life’s work and assets to continue to benefit the people you love and care for. A living trust is an effective yet flexible way for most families to manage their particular challenges associated with transferring assets and wealth while creating a lasting legacy. A trust can help parents with grown special needs children who require long-term care to ensure these adult children continue to be eligible for government programs while having funds in the trust for additional items they may need or want. If you have a history of giving to charities that are meaningful to you, there is a specific type of trust that allows this legacy to continue after you are gone.
What Do Living Trust Attorneys Do?
Like most things, you can create a DIY trust using forms and information from the Internet. However, just because you can prepare your own living trust, there are other indicators as to whether you should do it yourself. One tiny mistake on your trust document could potentially void the entire document. Each state has its trust laws and requirements regarding what the trust must include, such as how it will be signed, whether it requires witnesses and whether transferring assets into the trust requires an attorney.
If you fail to transfer ownership of your assets to your living trust, the trust has no effect whatsoever. You may need to include conditions in your trust that control when and how assets are distributed. This requires the services of experienced living trust attorneys in San Jose, CA. You may not know what assets should be placed in your trust and what your will should contain. A trust attorney from Steburg Law Firm can ensure your assets will be appropriately distributed following your death or taken care of in the event you become incapacitated.
If you have a particularly large estate and your loved ones will owe estate taxes, your attorney can help you review your options, using a living trust to minimize the taxes your estate will owe. For example, suppose you are skipping generations with your asset distribution. In that case, a trust attorney can help you use a living trust to avoid a federal tax known as the Generation-Skipping Transfer Tax, which is a flat 40 percent. You may have a significant life insurance policy for your loved ones—if so, your living trust attorneys in San Jose, CA, can help you set up a special trust that prevents those proceeds from being hit by estate taxes. Most people are much better off with an experienced living trust attorney who knows all the ins and outs of trust preparation.
What Are Some of the More Common Issues Associated with a Living Trust?
The advantages of a living trust usually significantly outweigh any disadvantages, yet there are certain downsides to living trusts. A living trust is more expensive than a will—although the savings your loved ones reap from a trust usually far outweigh these initial expenses. Trusts are more complex to draft than wills, requiring more details. Creating new deeds and other documents to transfer ownership of your assets into the newly formed trust can be time-consuming. Speaking to a knowledgeable estate planning attorney from Steburg Law Firm is the best thing you can do when considering using a living trust as an estate planning tool.
How Can You Select the Best Living Trust Attorneys for Your Current Situation and Future Needs?
At Steburg Law Firm, our living trust attorneys in San Jose, CA, understand you have many choices when considering an estate planning firm. First, we will help you determine what type of trust(s) will work best in your situation. We can advise you regarding the types of property that can be placed in your trust, as well as provide guidance on choosing a trustee. Our experienced attorneys will guide you through the transfer of all applicable assets into your trust and explain any taxes consequences associated with implementing a living trust. If your living trust is a part of a bigger estate plan, we will ensure all parts of that plan work together seamlessly to accomplish your goals.
We hope you will allow us to meet with you and discuss your estate planning goals. We believe that once you have spoken to attorneys Anita Steburg and Anam Hasan, you will know we are the right law firm. Our attorneys will use every tool at our disposal to create the most effective estate plan for your future and your family. Our depth of knowledge regarding estate planning and high-wealth planning, along with our willingness to always put your needs front and center, makes Steburg Law Firm the living trust attorneys of choice in San Jose, CA.
How Will the Steburg Law Firm Protect Your Family and Preserve Your Legacy?
We at Steburg Law Firm will work hard to ensure your wishes are thoroughly outlined and legally protected. We want to ensure that you have peace of mind after having our attorneys prepare a living trust or other estate planning document. We are proud to be a woman-owned, family-focused estate planning law firm and look forward to helping you meet your goals. Contact Steburg Law Firm today.