Estate planning isn't only something that takes care of your family after you die. You can set up a revocable or revocable living trust that protects your assets before your death and benefits your family afterward. A trust attorney in Orange County will give you all the advice you need to create a revocable trust that enables you to preserve your wealth.
Revocable trusts aren't just for the rich. Everyone with a family, no matter how small, can create a revocable trust. This is because there are many benefits that apply to all income levels. For example, a trust isn't part of your estate and doesn't go through the probate process. The assets in a trust are available far more quickly and avoid probate costs.
A revocable trust is relatively fluid, you can change the terms at any time during your lifetime. You don't have this option if you have an irrevocable trust. Its fluidity allows you to draw income from the trust and use the trust assets. When you die, the assets are distributed as you have stipulated in the trust terms.
You could, for example, draw money from the assets in a trust to pay your medical expenses for a hip replacement.
When you die, your estate goes through a probate proceeding that authenticates your will and approves your executor. It can take a long time, sometimes a year or more, and probate expenses can mount up. The cost is taken out of the estate, reducing the assets distributed to your beneficiaries.
Trusts are separate from your estate so they don't go through probate. Furthermore, if you put assets in a trust in another state, you avoid probate estate proceedings in that state.
For example, if you have rental properties in California and Maine, they are also exempt from probate.
A will is a public document, which means anyone can take a look, including creditors who want to know if there are sufficient assets to pay your debt. Due to the fact that a revocable trust is separate from your estate, it remains a private document.
For example, an unscrupulous gold digger who frequently reads obituaries and looks at promising wills could latch onto your daughter who inherited your entire estate. That can't happen with a revocable trust document.
One of the greatest advantages of a revocable trust is the ability to change it when necessary. It may become necessary if you are incapacitated in some way and can no longer take care of yourself or your financial affairs.
For example, you find out that you have a degenerative spinal condition and know you will need help in the future. You can include terms in the trust that dictate your wants and needs, including who will manage your assets and the way in which you want them managed.
We said above that a revocable trust is private and can't be accessed by just anyone. This provides essential protection for your family against creditors.
It also provides protection from potential lawsuits.
For example, your son is sued by his ex-wife for child support. The assets in the trust can't be touched, so your son's financial problems won't affect your daughter's share of the trust property.
Revocable trusts are taxed in an entirely different way from irrevocable trusts. In an irrevocable trust, assets belong to the trust, which means the trust creator and beneficiaries don't owe any income tax. However, in a revocable trust, you retain ownership of the assets and, as a result, you must submit income tax returns.
Furthermore, your estate's total (gross) value determines the income taxes due. The revocable trust is yours and will be subject to estate taxes. However, a probate attorney in Orange County can help you with tax planning, which could result in estate tax savings or even no tax at all. This is achieved by maximizing estate tax exemptions.
For example, gifting the maximum amount allowed to your family. The gift is exempt from estate tax.
One of the biggest benefits of a revocable living trust is the control you maintain when you're incapacitated. The living trust specifies the way in which you want financial decisions and payments handled when you can no longer do so yourself. This is usually managed by your successor trustee.
It completely bypasses the need for a conservatorship, which is when the court appoints someone to manage your money.
However, you want to plan for more than your money matters. You can also dictate how you want your healthcare and personal affairs managed after incapacitating life events, such as a stroke.
Parker Law Offices specializes in every aspect of estate planning from probate to wills and trusts. We're one of the premiere Orange County estate planning attorney law firms. We will help you create a basic trust plan and go on to help you set up a revocable living trust for your adult and minor children.
We also help with larger estate plans that include biological children as well as step-children who aren't automatic beneficiaries.
You can rely on our expertise, professionalism, and confidentiality when drawing up your trust agreement. Contact our team at Parker Law Offices by completing the form on our website. Alternatively, you can call 949-867-4818 to book a consultation today!