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trusts & trust administration Archives

Using living trusts

California residents with estate plans that include a revocable living trust may not be using the legal tool to its full advantage. This could result in a waste of the legal fees paid to create the trust and heirs not being able to reap the benefits of the trust as they should.

Tax law changes can alter estate planning strategies

Many people in California and across the country may be wondering about how they can benefit from the estate planning implications to changes made in federal tax law by the Tax Cuts and Jobs Act passed by Congress in December 2017. Provisions in the new law double the exemption provided for estate, gift and generation-skipping transfer taxes, which reflects the intensification of an ongoing trend in federal law to reduce estate taxes and other costs associated with wealth transfer after death. The law went into effect on Jan. 1, 2018, and the exemption for a single person rose to $11,180,000 and for a married couple to $22,360,000. These amounts are slated for a further annual increase every year in line with inflation.

The many advantages of a trust

California residents may believe that trusts are only worthwhile for those who are wealthy. However, this is not necessarily the case. An individual may benefit from creating a living trust that may go into effect if that person becomes incapacitated. During that time, a designated person or entity would manage the individual's affairs in accordance with the trust's terms.

Spendthrift trusts often call for a cautious approach

California is one of a number of states in which domestic asset protection trusts, which are also known as spendthrift trusts, can be used to safeguard assets. They have become more popular in recent years because they protect trust assets from creditors even when the grantor is a discretionary beneficiary. In addition to shielding assets from creditors, spendthrift trusts provide income and transfer tax planning benefits, allow for greater privacy and can be particularly useful when young adults inherit significant sums or beneficiaries do not pay U.S. taxes.

Exploring the intangible side of estate planning

An estate plan can be a critical part of creating a future for people in California and across the United States. Not only does estate planning help to distribute assets clearly through the use of wills, trusts, insurance and other instruments, it also helps to ease the period after death for heirs and calm the emotional pain following the loss of a loved one. A complex and unplanned estate can pile stress on to an already painful situation, while a well-planned estate allows for the easiest transfer possible of real and personal property. Because it is an in-depth process that includes important decisions about the future, estate planning can provoke nostalgia and an impetus to transfer thoughts, memories, connections and family stories to a new generation.

How the Cy Pres doctrine may help to save charitable trusts

In California, some people would like to leave money to charities in their estate plans. They are able to do so by establishing charitable trusts. These are trusts that have charitable purposes in order to benefit the public good in some way. Examples of charitable purposes might include education, religion, poverty relief, to benefit cities and others.

How California residents can protect their assets after death

According to WealthCounsel's estate planning awareness survey, 40 percent of Americans have set up a will but only 17 percent have a trust in place. The low numbers have some experts worried that many are not adequately protecting their assets for the benefit of their heirs. Whether they have a home, savings account or 401(k) plan, their assets will one day be distributed, so it's important to have an estate plan to protect their best interests.

Types of trusts

California residents have many options with regard to estate planning tools. One of these options, trusts, can be used to ensure that certain assets are protected and distributed to the intended beneficiaries according to the wishes of the trust's creator. There are multiple types of trusts one can choose from to make sure that the assets intended for their heirs are properly managed.

Think of estate planning during divorce

California residents have a lot on their mind when going through a divorce. Most people probably are not thinking about estate planning. However, divorcing spouses may need to update their existing wills, trusts, retirement beneficiaries and end-of-life documentation.

Why decanting may be best when altering a trust

California residents may have a need to either cancel or make changes to an irrevocable trust. While it may be more difficult to do so compared to a revocable trust, there is a process that allows that to happen. It is called decanting, and it involves creating a second trust and pouring assets into it from the original trust. Once the asses are inside of the second trust, its terms will govern how assets are to be treated.

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