Sierra Madre Trust Lawyer

Trying to navigate the world of trusts can be an extremely intimidating experience. There are so many decisions that need to be made about how your personal belongings will be divided after your passing. On top of this, there are a number of legal requirements that must be satisfied to ensure your trust is compliant and honored when the time comes. Hiring an asset lawyer can help ensure no details are overlooked that will jeopardize the future of your assets.

At Robert G. Petrovich, Attorney at Law, we appreciate our clients’ desire to take care of their families and friends proactively through estate plans and trusts. We understand how important it is to ensure that a lifetime of personal assets are passed onto the next generation in the manner preferred by the client. A Sierra Madre trust attorney will have the education and experience necessary to take on the most complicated trust cases to ensure that the client’s wishes are legally enforced.

Different Types of Trusts

Trusts are one of the most powerful and flexible estate planning tools available. There are many varieties of trusts available to help protect your precious belongings while also reducing unnecessary tax burdens and ensuring your wealth will be distributed according to your wishes. Some of the most common types of trusts include:

Revocable Living Trusts

One of the most popular trusts selected by those looking to preserve their legacy are revocable living trusts. With this type of trust, the individual who creates the trust can keep control over all of their assets during their lifetime. Once it is created, the trust can be revised as much as needed in the future. It can be altered, amended, or even completely revoked for any reason by its creator.

One of the most compelling benefits of this trust is that it can help avoid the probate process. Probate is a legal process where the court evaluates the legitimacy of the trust and supervises the entire process of its distribution. This can be a lengthy process, so setting up a revocable trust to avoid this can save your loved ones time and headaches in the future.

Irrevocable Trusts

The opposite of a revocable trust is an irrevocable trust. These trusts cannot be altered or revoked at any point once they have been established, with only a few exceptions. Any assets that someone decides to put in an irrevocable trust are no longer under their direct control. They are immediately removed from the individual’s taxable estate. This makes irrevocable trusts very attractive, as it can shield certain assets from creditors and reduce overall tax liabilities.

Testamentary Trusts

Testamentary trusts are created at the same time as a will. These take effect after the creator of a will has died. Unlike a living trust, they do not help to avoid the probate process. This is because they are actually an established part of the probate process. When it’s time, the assets within the trust will be distributed according to the instructions outlined in the will.

This is a commonly used trust to help manage assets for beneficiaries either under the age of 18 or that have disabilities. It helps to ensure all assets mentioned in the trust are managed responsibly and distributed over time.

Charitable Trusts

A charitable trust is designed to fund a specific charitable organization rather than a number of relatives and friends in your personal life. There are two main types of charitable trusts. The first is a charitable remainder trust. This type of charitable trust allows the individual who created it or their beneficiaries to receive income from the trust for a specific period of time. Once this period has ended, the remaining assets would go to the charity of the trust creator’s choice.

The other charitable trust is called a charitable lead trust. This is a type of irrevocable trust that provides a steady stream of funds to a charity for a designated period of time. Once this period ends, the rest of the estate will be distributed to the estate’s heirs or other beneficiaries. This arrangement helps to reduce estate taxes while also allowing the opportunity to support a charity.

Special Needs Trusts

A special needs trust was designed to help benefit individuals who suffer from certain disabilities. At the same time, it helps to preserve their eligibility for different government run programs like Medicaid and Social Security. Any assets placed in a special needs trust do not count against individual resource limits for government benefits, as long as they are set up correctly by a trust attorney.

Spendthrift Trusts

Anyone who has concerns about their beneficiary’s ability to responsibly manage trust assets should consider opening a spendthrift trust. These are designed specifically to protect beneficiaries from their own poor financial habits. This is achieved by giving a trustee full control over how it is distributed to the beneficiaries. It prevents beneficiaries from accessing a large amount of money at once, which can protect them in the long-term.

The Role of a Trustee

One of the most important decisions you need to make when moving forward with any of these trusts is who your trustee will be. This is the individual you will appoint to be responsible for making sure your assets are correctly distributed after you pass away.

It’s important to understand what responsibilities they will be taking on to help you make this choice. If you believe the person you have in mind is capable of fulfilling the following duties, they may be a good choice for your trust.

Asset Management

All of the assets you place in your trust will be handled by your trustee. There are a number of tasks they will need to do to help manage these assets. This can include making investments with specific parts of your trust, overseeing your real estate properties, and making sure that your trust grows or is preserved to your liking.

Distribution of Assets

When it’s time, a trustee will need to review the details of your trust and distribute everything as outlined. You should hire someone for the role that is capable of following specific instructions. For example, if you have certain assets that need to be held for minors until they turn 18, your trustee will be responsible for making sure this happens.

Fiduciary Duty

Your trustee will have a legal duty to act in your interest. You need to put someone in the role who can handle this responsibility and will not be tempted to make decisions that benefit them. If you have any hesitations about a person’s honesty, it could be a reason to consider selecting someone else as your trustee.

Record Keeping

All trustees are required to keep clean, detailed records of all transactions and asset distributions. This is to help keep a paper trail of all trust activity in the event someone challenges a specific transaction. If the person you are thinking of is known to be disorganized or has a lack of attention to detail, they may not be the right person for the role. They should also be strong communicators so that all beneficiaries are aware of the trust’s activities.

Tax Management

Trusts have many different tax implications. Some implications you can plan for, and some may arise unexpectedly. You need to hire someone who is responsible enough to handle any current tax obligations and flexible enough to address other tax issues that may later arise. If your trustee makes mistakes in this process, it could cause you unnecessary penalties and fines that will impact all of your beneficiaries.

How Can a Trust Attorney Help?

Hiring a trust attorney can make a huge difference in successfully navigating the complexities of trusts and estate planning. They can help ensure your trust documents are in place and compliant with estate law. Some of the most common reasons people decide to hire a trust attorney include:

Tailored Trust Planning

Trust attorneys understand that not every client needs the same type of support. An attorney can get to know each client to better understand their specific financial goals. An experienced attorney will take all your personal details into consideration and make their professional recommendation on what trust will suit your needs.

Ensuring Legal Compliance

There are various mistakes that could be made when creating and enforcing a trust. Estate laws strictly protect the integrity of an estate owner’s assets. An attorney can step in to help clients avoid any legal pitfalls that could compromise their estate, like having to pay more taxes than they originally expected.

Protecting Assets From Creditors

A trust attorney can help establish certain trust protections that keep your wealth from being taken advantage of by creditors. This is especially beneficial for high-net-worth individuals who have a large amount of assets that could tempt bad-faith actors. Trust attorneys understand the nuances of state and federal asset protection laws and can help structure your trust to provide as much security as possible.

FAQs

Q: How Much Does It Cost to Create a Trust in California?

A: The total cost of creating a trust in California depends on how complicated your estate is and what type of trust you are looking to establish. Basic revocable trusts with a limited number of assets will be on the lower side of costs, while complicated trust arrangements like irrevocable or special needs trusts will be more expensive. Work with your attorney to discuss your estate planning goals to see what trust option could yield the results you are looking for.

Q: What Kind of Lawyer Do I Need for a Living Trust in California?

A: If you are looking to set up a living trust in California, most estate planning attorneys can provide this service. It is wise to ask these specific questions during your initial consultation to ensure they are prepared for the job. You want someone who can draft trusts, wills, and any other legal documents that protect the items that mean the most to you. This can help ensure your estate plan is legally sound and meets your financial goals.

Q: What Are the Disadvantages of a Trust in California?

A: There are many advantages to trusts, but there are also some disadvantages that are important to consider. For example, setting up a trust is more time-consuming and costly than setting up a traditional will. Another consideration is that trusts require constant maintenance, requiring you to transfer assets into the trust and possibly needing to update it as laws change. Discuss your needs with an attorney to see if your needs outweigh these disadvantages.

Q: Can You Set Up a Trust Without an Attorney in California?

A: Yes, it is possible to set up a trust without an attorney in California, but it is not recommended. With so many regulations to manage and mistakes that could be made, it is not worth the risk. Poorly drafted trusts risk you having your prized possessions not being transferred the way you wish. It could also cause unnecessary disputes among your beneficiaries after your pass. An attorney can prevent all of this from happening.

Q: How Much Does a Trust Attorney Cost in California?

A: The cost of a trust attorney in California will vary depending on a multitude of factors. Perhaps the most important factor to consider is the complexity of the trust. Generally speaking, the more complex the trust is, the more an attorney may charge. The fee structure of the attorney will also be an important factor. Some attorneys charge an hourly fee, and some may charge a flat fee. Additionally, you should consider the location and experience level of the attorney.

Contact Robert G. Petrovich, Attorney at Law, Today

If you are considering setting up a trust but are not sure what option is the right fit for you, contact the Sierra Madre legal associates of Robert G. Petrovich, Attorney at Law, as soon as you can. Our experience in estate law allows our practice to provide professional recommendations on how to set up your trust properly while minimizing financial risks. Contact us today to learn more about how we can help you.