Estate Planning and Trust

Estate Planning and Trust Attorneys in Mission Hills and Riverside

Two important estate planning arrangements are wills and trusts. These are legally binding mandates for how your property will be handled in the event of your death.

In a will, you designate who will receive your assets and who should raise your children, if you have any. You can specify that your belongings go to specific people, or that your assets are placed in a trust.

You also appoint an executor, a person you entrust to carry-out the terms in your will. The executor is given legal power to act on behalf of the deceased, and they see to it that the terms of the will are fulfilled.

A trust is created by one individual (the trustor) to give another (the trustee) the right to hold property or assets for a third party (the beneficiary). Trusts provide legal protection for the trustor’s assets and establish how their property should be distributed in the event of their death.

Putting one’s money in a trust can protect it from some taxes, creditors, and probate proceedings. While they are often associated with the ultra-wealthy, they are versatile financial tools that can be useful to middle-class families and individuals.

You may not think you have any assets worth protecting, but consider the value of:

  • Bank accounts
  • Retirement accounts
  • Stocks and bonds
  • Real estate
  • Cars
  • Jewelry
  • Musical instruments
  • High-value collectibles

When you write a will or establish a trust, you ensure that your property will go to those who deserve it most.

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    What is Estate Planning?

    Imagine you are 25 years old and engaged to be married. You are driving home from work when a truck T-bones your car. You go into a coma. Who gets to make your medical decisions: your parents, or your fiancé?

    In an emergency, the important people in your life would be able to come to a consensus, but in highly charged emotional situations, that is rarely the case. No one wants to think about providing for your family, but if you fail to plan, you are leaving important decisions in the court's hands.

    Most people prefer not to think about it, but what would happen to your property if you passed away? Planning for such an event is maudlin, to be sure, but the temporary uneasiness is better than the chaos that could ensue if you leave no plan behind.

    Talk to a Estate Planning and Trust Attorney Right Now

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    Our Estate Planning Services Include:

    Power of Attorney

    The aforementioned scenario can be avoided by naming someone as your healthcare proxy; this is also referred to as giving “power of attorney.” Your healthcare proxy has the sole right to make medical decisions when you are unable to advocate for yourself; this is also called a “living will.”

    Similarly, you can name an individual to be your durable financial power of attorney. If you are in an accident and can no longer oversee your finances, your assets will be managed by this trusted person.

    If you do not currently have anyone named as your financial or medical proxy, that right will go to your closest living relative. If you are married, this would be your spouse – even if you are separated. If you are single, it is likely to be a parent or sibling. If you would not want any of those people to have decision-making power over your affairs, you would be wise to meet with an attorney and draft power of attorney documents.

    Writing a Will and/or Trust

    Another important document in estate planning is a will. Wills are legally binding mandates for how your property (and custody of any minor children) will be handled in the event of your death. In a will, you designate who will receive your assets and who should raise your children, if you have any. You can specify that your belongings go to specific people, or that your assets are placed in a trust.

    You also appoint an executor, a person you entrust to carry-out the terms in your will. The executor is given legal power to act on behalf of the deceased, and they see to it that the terms of the will are fulfilled.

    You may not think you have any assets worth protecting, but consider the value of:

    • Bank accounts
    • Retirement accounts
    • Stocks and bonds
    • Real estate
    • Cars
    • Jewelry
    • Musical instruments
    • High-value collectibles

    When you write a will, you ensure that your property will go to the people who deserve it most.

    What Are Other Benefits to Planning My Estate With an Attorney?

    One of the main benefits to estate planning is confirming your assets are distributed in a way that minimizes taxes. Estate taxes, inheritance taxes, gift taxes, and income taxes can all be taken out of a person’s inheritance, chipping away at the amount they receive. If you’ve worked hard to give as much as possible to your children, it can be frustrating to know that they won’t receive the full amount they are owed.

    Granted, unless you are leaving an exceptionally large inheritance, your beneficiaries will likely not lose anything to estate taxes; as of 2021, up to $11.7 million per person is exempt at the federal level. California does not have an estate tax of its own, nor does it have an inheritance tax.

    Additionally, if you have not planned your estate in advance of your incapacitation, a large portion of your assets could go to court costs. A Probate period occurs when a person passes away and the courts divide assets; if there is an executor, this process is short lived. However, if the deceased did not leave a will, the courts will have to divide assets. The longer probate lasts, the more expensive this process will be. Court and lawyer’s fees will chip away at your estate, leaving less for your loved ones.

    How to Choose the Best Estate Planning Attorney to Help You

    If you have a small estate and your plans are straightforward, you may find that an online program makes the most sense for your family.

    However, if you are a business owner, a parent, or wish to leave bequests to people outside your family, you will want to work with a lawyer. The Law Offices of Larry D. Simons helps residents of Mission Hills and Riverside with their estate planning needs.

    To ensure your loved ones are protected in the case of your death or incapacitation, start by contacting our office right now. You’ll be able to speak with an attorney who can walk you through the steps to provide you and your family peace of mind.

    What Are the Different Types of Trusts?

    Trusts fall into six categories:

    • Revocable or Irrevocable
    • Living or Testamentary
    • Funded or Unfunded

    Revocable trusts can be altered and dissolved during a trustor’s lifetime. Irrevocable trusts cannot be changed once established,

    Living trusts, also known as inter-vivos trusts, place an individual's assets into a trust for their own use throughout their lifetime. Upon their death, a successor trustee transfers these assets to any beneficiaries. A testamentary trust, or will trust, indicates how a person’s properties are to be distributed after their death.

    A trustor can add assets to a funded trust while they are alive. An unfunded trust is a trust agreement that is only funded once the trustor passes away – or it can remain unfunded.

    How Are Trusts and Wills Different?

    Trusts and wills are useful estate planning tools that serve different purposes. Generally, when a person passes away, their assets are easily transferred to their spouse. The United States Estate and Gift Tax Law contains an unlimited marital deduction that allows a spouse to take possession of assets without owing gift or estate taxes. But leaving assets to others – including children and dependents – gets more complicated.

    A will indicates how property should be divided following a person’s death, but bequests are often subject to taxes. A trust protects inheritances from taxes and fees, as well as probate costs. Trusts do not undergo probate when the trustor dies, and they cannot be challenged in court.

    Wills also cover requests which are not purely financial. If you have dependents (such as children who are minors, or parents who rely on your support) you can specify your wishes for their care in a will.

    Do I Need Both a Trust and a Will?

    An individual may choose to establish a trust as well as write a will. These two financial instruments can work in concert to protect property and ensure it is distributed correctly. Some people may want to set up trusts in lieu of a will.

    Others may prefer not to use a trust, due to their annual maintenance costs. They are also difficult to dissolve once they have been established. An attorney can go over your finances with you and determine which estate planning options will be best for your family.

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