The question of whether a living trust can be utilized to manage property during one’s life is a frequent inquiry for estate planning attorney Steve Bliss here in San Diego. The short answer is a resounding yes. A revocable living trust isn’t just for what happens *after* you’re gone; it’s a powerful tool for managing your assets while you are still living, particularly useful if you anticipate potential incapacity or simply desire a streamlined management system. This type of trust allows you to retain control over your assets as the trustee during your lifetime, and seamlessly transitions management to a successor trustee should you become unable to do so. Approximately 60% of Americans believe they need estate planning, but only about 30-40% actually have the necessary documents in place. Utilizing a trust can be a significant step towards securing your future and the future of your loved ones. It’s a proactive measure, ensuring your wishes are respected, even if circumstances change.
What assets can be held in a living trust?
A remarkably broad range of assets can be transferred into a living trust. This includes real estate, such as your home or rental properties, as well as financial accounts like checking, savings, and brokerage accounts. Personal property, including vehicles, artwork, jewelry, and collectibles, can also be held within the trust. Intellectual property, business interests, and even life insurance policies can be effectively managed through a living trust. Steve Bliss often explains to clients that the key is to *title* the assets in the name of the trust, rather than in your individual name. This transfer of ownership is what allows the trust to function effectively. A well-structured trust isn’t about giving up control; it’s about strategically arranging ownership for better management and protection.
How does a living trust avoid probate?
Avoiding probate is one of the most compelling reasons people choose to establish a living trust. Probate is the legal process of validating a will and distributing assets after someone’s death. It can be time-consuming, expensive, and public. Assets held in a living trust bypass probate altogether because they are not legally owned by the deceased individual at the time of death; they are owned by the trust. This means that your beneficiaries can receive their inheritance much more quickly and privately. Recent statistics suggest that probate costs can range from 3% to 7% of the estate’s total value, making the avoidance of this process a significant financial benefit. Steve Bliss often emphasizes that a living trust isn’t just about avoiding probate; it’s about ensuring a smooth and efficient transfer of wealth to your loved ones.
Can I be both the trustee and the beneficiary?
Absolutely! This is a common and perfectly acceptable arrangement. As the grantor (the person creating the trust), you retain complete control over the trust assets as the trustee and remain the primary beneficiary during your lifetime. You can buy, sell, and manage the assets as if they were still your own, and you continue to receive the benefits of those assets. This arrangement offers you flexibility and convenience, while still providing the benefits of trust ownership. It’s important to remember, however, that once you step down as trustee or become incapacitated, a successor trustee will take over management of the trust assets. Steve Bliss always advises clients to carefully select a trustworthy and responsible successor trustee.
What if I become incapacitated?
This is where a living trust truly shines. If you become incapacitated due to illness or injury, your successor trustee can seamlessly step in and manage the trust assets on your behalf, without the need for court intervention. This is a significant advantage over a traditional will, which requires a court-appointed conservator or administrator to manage your assets if you are unable to do so yourself. The successor trustee can pay your bills, manage your investments, and ensure your financial needs are met, all according to the terms of the trust. It’s about maintaining continuity and protecting your financial well-being, even when you are unable to manage things yourself. Approximately 70% of Americans over the age of 65 have concerns about potential cognitive decline, making incapacity planning a critical part of estate planning.
What’s the difference between a revocable and irrevocable trust?
A revocable trust, as we’ve been discussing, allows you to maintain control and make changes to the trust terms during your lifetime. An irrevocable trust, on the other hand, is generally fixed and cannot be easily altered once it’s established. Irrevocable trusts are often used for specific estate tax planning purposes or to protect assets from creditors. Revocable trusts offer flexibility and control, while irrevocable trusts offer greater asset protection and potential tax benefits. Steve Bliss guides clients through the pros and cons of each type of trust to help them determine which one is best suited to their individual needs and goals. It’s not a one-size-fits-all situation, and careful consideration is essential.
I’ve heard stories of trusts going wrong – what are common pitfalls?
I recall a client, Mrs. Davison, who created a living trust but failed to properly fund it. She meticulously drafted the trust document, but she never transferred ownership of her real estate or financial accounts into the name of the trust. After she suffered a stroke and became incapacitated, her family faced a protracted and expensive probate process because the assets were still legally owned by her, not the trust. It was a heartbreaking situation that could have been easily avoided. Another common pitfall is failing to update the trust document to reflect changes in your life, such as marriage, divorce, or the birth of a child. Or choosing a successor trustee who is not equipped or willing to handle the responsibilities. Proper funding and regular maintenance are crucial to ensure the trust functions as intended.
How did things work out for Mrs. Davison’s family after seeking legal assistance?
Fortunately, Mrs. Davison’s family engaged our firm to rectify the situation. We worked with the probate court to “pour over” any remaining assets into the trust after the initial probate process. It involved additional legal fees and court costs, but we were able to minimize the financial impact compared to if the entire estate had gone through probate. We then worked with the family to create a properly funded trust for their own estate planning, and we made sure they understood the importance of regular maintenance and updates. It wasn’t a perfect outcome, but it highlighted the importance of having a valid and properly funded trust. The process demonstrated the value of seeking expert legal advice and taking proactive steps to protect your family’s future. The family was grateful that we could help them navigate the complexities of the situation and secure their financial well-being.
What’s the best way to get started with creating a living trust?
The best first step is to schedule a consultation with an experienced estate planning attorney, like Steve Bliss. He can assess your individual circumstances, discuss your goals, and explain the different options available to you. He will guide you through the process of creating a customized trust document that meets your specific needs. It’s important to gather all relevant financial information, such as account statements and property deeds, to streamline the process. Remember, estate planning is not a one-time event; it’s an ongoing process that requires regular review and updates. Don’t wait until it’s too late; take proactive steps today to protect your family and secure your future. Approximately 55% of adults in the United States do not have a will or trust, leaving their loved ones vulnerable to unnecessary legal and financial burdens.
About Steven F. Bliss Esq. at San Diego Probate Law:
Secure Your Family’s Future with San Diego’s Trusted Trust Attorney. Minimize estate taxes with stress-free Probate. We craft wills, trusts, & customized plans to ensure your wishes are met and loved ones protected.
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Probate Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Map To Steve Bliss at San Diego Probate Law: https://g.co/kgs/WzT6443
Address:
San Diego Probate Law3914 Murphy Canyon Rd, San Diego, CA 92123
(858) 278-2800
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Feel free to ask Attorney Steve Bliss about: “What is trust administration?” or “What is the difference between formal and informal probate?” and even “What is the role of a guardian in an estate plan?” Or any other related questions that you may have about Probate or my trust law practice.