Living Trusts FAQ
Living trusts hold and manage certain assets and property on behalf of a grantor or settlor (i.e., the person who has developed the trust). Also referred to as revocable living trusts, revocable inter vivos trusts or grantor trusts, living trusts can be important parts of overall estate plans, as they can offer some valuable protections to both grantors and beneficiaries.
Given that living trusts can be essential but that they are not for everyone, we will answer some commonly asked questions about living trusts in California.
If you are ready to develop a trust or proceed with other estate planning options, you can turn to an experienced Santa Clarita and San Fernando Valley estate planning attorney at the Law Offices of Darrell C. Harriman. All of our legal professionals are skilled at devising and implementing the best estate planning solutions for our clients.
Q – How can a living trust help me?
A – Depending on your situation, developing living trusts may offer you various benefits. This is because, with living trusts, you can:
- Transfer certain assets and/or property to the trust.
- Ensure these assets and/or property are handled as you wish should you ever become incapacitated in the future.
- Detail how you want these assets and/or property to be distributed upon your death, and your wishes can be carried out without court supervision or approval.
So, essentially, living trusts can provide you with an effective way of transferring certain assets out of your possession and, ultimately, into the possession of your chosen beneficiary both in the manner you want and with minimal legal interventions.
Q – Are living trusts for everyone?
A – No. While living trusts can certainly be beneficial when people own significant assets and/or property, these estate planning tools are generally not recommended for:
- Younger people without children and without significant assets.
- People who have very simple estate plans.
- Those who would like the court to supervise the administration of their estate after they pass away.
In contrast, people who do have more significant assets will usually benefit far more from developing living trusts.
Q – What happens with my living trust if I’m incapacitated in the future?
A – While the specific course of action will depend on the provisions of the living trust you’ve set up, in general, your selected “successor trustee” would step in to manage the trust and carry out your wishes regarding it.
Here, we also want to point out that living trusts are just one component of estate planning that should generally be supported with other tools, such as powers of attorney, wills, etc. This is because, should you become incapacitated in the future:
- Your successor trust will be able to manage the assets held by the trust, but (s)he may not have any power or control over your assets that have not been transferred to the trust.
- Other estate planning tools can offer you other protections and prevent the court from appointing strangers (or even people who you may not prefer) to be conservators for you and your affairs.
Q – What happens with living trusts after I pass away?
A – Upon your death:
- A revocable living trust that you have set up will automatically become an irrevocable trust.
- Your successor trustee will manage and distribute the property of the trust according to your wishes (detailed in the trust documents).
- This can be done without the intervention of the court, which can save your beneficiaries time and money.
Assets and property you own outside of the living trust will likely have to go through probate.
Q – How are assets transferred into living trusts?
A – After you’ve officially set up a living trust, the next step will be to transfer assets into the trust – or funding the trust. This process generally involves completing various paperwork to transfer property, like the following, into living trusts:
- Real estate (including that owned in other states)
- Bank account holdings
- Stock and bond certificates
- Community property
Q – Do I still need a will if I develop a living trust?
A – Most likely yes. While living trusts can manage certain assets for you, they will not cover other aspects of your affairs that wills can. In particular, unlike living trusts, wills can have provisions to cover things like end of life directives, future guardianship of minor children, etc.
So, if you are thinking about developing a living trust, it’s probably also a good time to put a will – and a comprehensive estate plan – in place with the help of an experienced lawyer.
Q – Are there any drawbacks to having living trusts?
A – There can be. In fact, the most notable disadvantage to setting up living trusts can be the fact that trustees, who are not under direct court supervision, can end up not acting the best interests of grantors and/or beneficiaries. In the worst cases, this could result in unethical trustees doing things like misappropriating trust assets, stealing from the trust, etc.
While these situations can be frustrating and maddening, there is legal recourse to hold such trustees accountable (such as pursuing breach of fiduciary lawsuits).
Q – Who should I choose as the trustee for my living trust?
A – When setting up living trusts, many people appoint themselves as the trustee. If, however, you are too busy to manage a trust and/or you want experienced help with this effort, you can choose someone else to be the trustee (and you will have to name someone else to be the successor trust to manage the trust if you become incapacitated or at the point when you pass away).
While good trustees will generally be people who you trust and/or who you are close to, specifically, these people can be:
- Spouses or domestic partners
- Children, parents or siblings
- Other relatives or family friends
- Colleagues or business associates
- Professional fiduciaries
Q – Do I need a lawyer to help me develop living trusts?
A – Yes. Living trusts are legal documents, and the California State Bar “urges you to seek advice only from professionals who are qualified to give estate planning advice” when you are considering or are ready to develop a living trust.
Santa Clarita and San Fernando Estate Planning Attorney at the Law Offices of Darrell C. Harriman Helps Clients with Living Trusts
Are you ready to set up a living trust or put other estate planning options in place? If so, the trusted Santa Clarita and San Fernando estate planning attorney at the Law Offices of Darrell C. Harriman is here for you. For more than three decades, our San Fernando estate planning attorney has been dedicated to providing his clients with personalized, highly responsive service, as well as superior representation for their important legal matters.
To find out more about how we can help you, let’s talk about your case and legal needs today. You can contact our firm by calling (818) 462-8355 or by filling out the contact form on this page.
From our offices based in North Hills, we provide the highest quality legal services to our clients throughout the San Fernando Valley, Simi Valley, Santa Clarita and the greater Los Angeles area.