There are plenty of advantages to using a living trust as a significant piece of your overall estate plan. In fact, any Orange County estate planning attorney who doesn’t at least mention this option is behind the times. Call Parker Law Offices now at (949) 385-3130 for your free consultation with an experienced lawyer who will make your estate planning experience easy to understand, and be able to help you make the decisions that will financially help your loved ones in the future in the best way possible.
If you choose to go it alone, the worst thing that could happen is if your trust fails. When this happens, your trust may be ineffective, unable to help you, your family, or your beneficiaries.
Before you can understand the points of failure in a living trust, it’s worth exploring how living trusts work.
A living trust isn’t too far off from a standard will, but it has many different advantages. Ultimately, trust, along with a will, can help you avoid significant costs and time lost during the probate court process.
Unlike various other trusts, living trusts allow you to manage them yourself so long as you are alive and able.
Trusts can be full of property, bank accounts, real estate, and more. While you are managing your trust, you can add assets, transfer ownership of assets, add or remove beneficiaries, change the trustee to manage your trust, restate or cancel it altogether.
Some of the most significant benefits of using a living trust are the following:
Ultimately, a living trust gives you more control of how your assets are managed, which should result in reduced expenses and saving money. Make sure you consult an Orange County estate planning lawyer to completely understand how a living trust fits into your estate plan.
While your estate planning attorney in Orange County may have various issues to discuss and overcome with you, there is really only one major point of failure that matters.
Essentially, the biggest way your living trust can fail is if It’s not properly funded.
Funding a trust is just another way of saying you’re adding assets into the trust. This task typically involves retitling your assets into the name of the trust.
Instead of you owning your house, for example, the trust technically owns the house while you live in it. You may also have to retitle or set up life insurance policies, bank accounts, or other elements of your estate to fit into your trust.
This is when the help of an experienced estate planning attorney in Orange County CA, really comes into play.
Once your living trust is funded with your assets, your trustee is able to manage those assets if you become incapacitated. This is important as the trustee can use your assets to help pay for medical expenses you incur while you are incapacitated.
A power of attorney (also referred to as “POA”) may provide similar powers to a person of your choosing; it also allows for a person of your choosing to manage funds in the trust. For example, a beneficiary who is a child may need funds to pay for tuition in school, student housing costs, etc. Power of Attorney, in the event of your becoming incapacitated, can allow for the child to be looked after from an appropriate financial perspective and taken care of through your instructions, enabled by powers included in and allowed by your trust.
A living trust isn’t much different than your car needing fuel. For your car, you stop by the gas station and fill up the tank. With a living trust, you properly fund it. If there is no gas, you’re stuck on the side of the road. In the same way, if your trust isn’t properly funded, it won’t be much help to you, your family, or your beneficiaries.
An insufficiently funded living trust could result in time spent dealing with the probate court. The end result is that it may end up taking much time, and costing your family much more both financially and emotionally to receive assets of yours according to the decisions rendered by a probate court judge.
The other part of your car’s fuel system that is often overlooked until it’s needed is the fuel gauge. This indicator lets you know how much gas is in the tank. Keeping your trust updated and accurate is very similar to keeping your eye on the fuel gauge.
While it might seem like a good idea to run out and start throwing property and titles into your living trust without advice from an attorney, that may not be the best option. The last thing you want to do is lose money on your assets because of fees or taxes. That could mean negating the benefit of the trust altogether.
One more thing to consider, is that advice should only come from an attorney. There are examples of many paralegals and even notary publics who offer estate planning to clients. These individuals are not certified by the state bar to practice law, and do not have malpractice insurance to protect their clients against problems resulting from errors in trusts and wills that they offer. The problems from incorrectly written trusts and wills can result in partial or even complete losses, which can be catastrophic for loved ones in need of your financial assistance in the future.
Before you transfer things into the name of your trust, work with your attorney to see how the transfer takes place, and if there are any fees or issues you should consider.
Here are some of the most common areas that could prove problematic when you’re transferring assets into your trust. Mistakes here could result in the failure of your trust as well.
Real estate. Some homeowner associations (known as “HOAs”) require that you get their permission before transferring your home’s title. They may even charge fees. Some states may require a tax or treat your home as if you sold it when you transfer the title.
Personal Property. It’s often worth transferring the title of personal property into your trust. Things like cars, boats, motorcycles, etc., are great candidates. Transferring ownership might well result in fees.
Untitled Property. Property that doesn’t have an official title can still be transferred into the trust. Your estate planning lawyer in Orange County can help you understand this process. It is crucial that your property is described in enough depth so that no one can question it.
Retirement Accounts. Transferring your 401(k), IRA or qualified annuities often requires a process of withdrawing any funds in the account, opening a new account, and then putting the money back. The problem is that emptying a retirement account can come with considerable fees, not to mention having to count that money as income on your tax return.
Regardless of how big or small your estate is, thinking about your future is a best practice of wealth management. A living trust offers benefits that you may not find anywhere else, but it does take work.
Before making any significant decisions, make sure to meet with an estate planning attorney in Orange County, CA. It’s time you protected your life’s work.
For the best estate planning team around, schedule your free initial consultation with us at Parker Law Offices. Contact us at (949) 385-3130.
The concept of creating a power of attorney (POA) isn’t new. Your Orange County estate planning attorney will often assist you with naming your POAs to help handle financial decisions, business transactions, and even medical directives to your estate plan.
Have you ever considered what happens to your email, social media, and online banking accounts? By working with an estate planning lawyer in Orange County at the Parker Law Offices, you can ensure that your digital assets are not only protected but in the right hands at the right time.
As your estate planning attorney in Orange County CA, will tell you, a digital asset includes both hardware and data.
Hardware can include things like computers, cell phones, external hard drives, flash/thumb drives, tablets, e-readers, digital music players, and more.
These items don’t just contain digital information but also have a physical monetary value.
Data is best described as information stored on hardware or on third-party servers, like the cloud. Some of this data has monetary value, like domain names, e-commerce accounts, online stores, income-generating online accounts, and so on.
There are also digital assets that do not necessarily have a monetary value, like photographs, documents, videos, music, and more.
In the modern world, digital assets are becoming more prevalent. It’s less common to have physical photo albums or Video Home System (VHS) tapes sitting around that family members can access.
In fact, most people are resorting to online storage for these kinds of assets, making them only accessible to the account owner.
Beyond pieces of personal data, many people are moving other essential elements of their lives into digital assets. This includes things like going paperless for utility bills, bank statements, investments, and more, not to mention completely digital entities like cryptocurrency.
A POA works in such a way that if you are incapacitated or pronounced dead, a person of your choosing can make decisions on your behalf within the limits of the POA.
These powers can include selling your property or making decisions regarding your medical care—the same system exists for digital assets.
Imagine a scenario where the executor of your estate is tasked with paying off debts, canceling accounts, etc. If you only receive bills, statements, and account information online, your executor may not have the ability to complete these necessary tasks.
At best, they will have to file for a court order to access your email or online accounts. Ultimately, this process complicates the handling of your estate and could waste valuable time or money.
You also probably have multiple online profiles and accounts with sites like Facebook, Twitter, LinkedIn, Instagram, TikTok, and more. These accounts may need to be closed, updated, or changed.
Without a POA for these digital assets, your executor may need to acquire a subpoena or face lengthy legal battles.
We not only include Orange County estate planning services but can also protect your digital assets.
That means safeguarding account information, passwords, and online accounts so that those you choose can have access when needed. We can even help ensure that your loved ones can access your digital footprint online such as your password-protected social media accounts and emails.
Learn more about how you can adequately account for your digital assets during your free one-hour consultation.
Putting your affairs in order is our order of the day, contact our team at the Parker Law Offices today.