Revocable “Living” Trust

A revocable trust, also referred to as a “living” trust, can be a valuable tool to help with the transition of your assets to your designated beneficiaries while allowing you to manage your assets during your lifetime.

Picture a revocable trust like a trunk. Remember that trunk you had as a kid where you kept all those valuable things you owned? Your trust is like that. As the creator of the trust, you can pick who has the key to the trunk. Typically, the person with the key is you, or you and your spouse, or a trusted friend or relative. The person with the key is allowed to put things into the trust and take things out while you are alive. That person is called the “trustee”.

As creator of your trust, you name the person or persons who will get the key and become the trustee in the case of your death or permanent disability. This person is called the “successor trustee”. If you have minor children, you will also want to name the person who will care for your children, their “guardian”.

As the person with key, you have control during your lifetime to make changes to your trust and to buy and sell assets of the trust. However, once you die, the assets cannot be removed from the trust and must be distributed by the successor trustee to the named beneficiaries per the terms of the trust.

A key benefit of having a revocable trust and having your assets in the trust is avoiding probate. If you have assets in excess of $150,000 and die without a will or trust, a judge for the State of California will be the decision maker on who gets your assets. This process wastes time, money, is public information, and your assets might not be distributed the way you would prefer.

Other benefits to a revocable trust include privacy (as the trust is not a public document); ease of your beneficiaries having access to the assets upon your death; flexibility in making amendments throughout your lifetime; and avoidance of a court appointed conservator if you become incapacitated or incapable of taking care of yourself.

Don’t hand the key to your trunk to a California judge, make a revocable trust today and protect those assets for your beneficiaries!

Pour-Over Will

A pour-over will is a special type of will that is used in conjunction with a trust. Technically speaking, if you have a trust and all your assets are in the trust, you don’t need a will. However, maybe after you make your trust you purchase a car, or some other asset and you don’t “fund” it into your trust. In that instance, your will states that any asset you own personally should be placed into the trust. The executor of your will can then place the asset into the trust and your successor trustee can then distribute the asset per the terms of the trust. Think of the pour-over will like a safety net to catch those assets that are left out of the trust.

Durable Power of Attorney & Advanced Health Care Directive

A durable power of attorney and an advanced health care directive are legal documents in which you name the person who has the power to act in your place if you become incapacitated. The person is your “attorney in fact”. The durable power of attorney gives your attorney in fact authority over financial matters, such as bank accounts, investment accounts, DMV paperwork, etc. The durable power of attorney is different from an advanced health care directive which gives your designated person authority over your medical decisions when you are unable to make those decisions yourself. The advanced health care directive can make the difference between life and death in a medical emergency. Often times the person given these powers is a spouse or an adult child who you trust to make such decisions on your behalf. If you choose our “Gold Package” you receive both a durable power of attorney and an advanced health care directive along with your trust and the deed to place your home into the trust.

Funding your Trust

Continuing with our analogy, when you create your trust, it is like an empty trunk. Your work isn’t done yet, you must put assets into your trust, like you would put your valuable keepsakes into your trunk. This process is referred to as “funding” the trust. With our trusts, you get funding instructions on how to get this important step completed. In addition to reading the funding instructions, you may want to talk to your bank, investment advisor our accountant for more information about funding your other assets into the trust. If you choose the “Gold Package” you will receive a Trust Transfer Deed which will put your home into the trust (for most people, their home is their biggest asset).