Trust Frequently Asked Questions
What is a Trust?
A trust is a separate legal entity that owns assets for the benefit of a third person (beneficiary). A Trust is a tool used by an Estate Planning lawyer to plan a client's estate. The Trustor of the Trust is the person who sets up and funds the Trust with property. The Trustee of the Trust is the person charged with keeping the Trust assets safe, invested properly, and finally distributing the Trust assets to the Beneficiary in accordance with the terms of the Trust. The Trustor sets and defines the rules of the Trust. In doing so, the Trustor leaves directions to the Trustee on how the Trust property should be handled.
What are some reasons that a Trust may be more beneficial than a Will Alone in Planning an Estate?
- You may save a great deal of money. An estate plan that contains a validly created Trust is not subject to Probate. Probate costs and fees can get quite costly, leaving your heirs with much less of your estate than that you intend to give to them. In California, the probate fees and costs are statutorily set based upon the value of the estate being probated.
- Confidentiality. Because court records and all documents in the court file are public records, the contents of the Will, the assets in the Estate, debts and claims against the Decedent, and who gets what can be viewed by anyone. With a trust only the Lawyer, Trustee and the Beneficiaries have access to this information.
- When carefully drafted by an Estate Planning Lawyer, a Trust may assist in the avoidance of Estate Tax or deferment of payment of Estate Taxes.
What is a Living Trust?
When you set up a Living Trust, you are the Trustor; anyone you name within the Trust who will benefit from the assets in the Trust is a beneficiary. In addition to being the Trustor, you can also serve as your own Trustee (Original Trustee). This allows for flexibility in setting up the Trust.
Within a Living Trust you typically provide the name of a Successor Trustee who will take over the management of the Trust if you die or become incapacitated. After your death, your Successor Trustee both terminates the Trust and distributes the assets to the beneficiaries that you named in the Trust, or the Trustee continues to maintain the Trust on behalf of your beneficiaries according to the terms of the Trust.
What is the difference between a Revocable Trust and an Irrevocable Trust?
A Revocable Trust allows the Trustor to change the terms of the Trust or even revoke the Trust altogether and take back all of the assets that are contained in the Trust. An Irrevocable Trust is where the terms of the Trust cannot be changed (i.e., the beneficiary cannot be changed), and that whatever assets are placed in the Trust cannot be withdrawn by the Trustor.
What is a Pour-Over Will?
A Pour-Over Will is typically used in conjunction with a Trust. Simply put, if an asset you own is not held by the Trust at your death, the Will instructs the Executor that such assets and any remaining property, "pour-over" into the Trust. This allows the administrator of the Trust to effectively distribute all property through the Trust.
If you or someone you know in Los Angeles or the surrounding areas of Orange and Ventura County needs the assistance of an experienced Estate Planning lawyer, then contact the Law Offices of Norman Yale Blaz for a free consultation with an experienced Estate Planning lawyer. We can be reached at 866-633-5090 or via our convenient contact form.