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Pluses and minuses of a living trust (inter vivos trust)

For Californians, estate planning might be perceived as a dual-edged sword. On one hand, it is a strategy to make sure that loved ones are cared for and assets are allocated as the owner wants. On the other hand, it is acknowledging one's mortality and preparing for the inevitable. However, there are certain methods that are beneficial and should be considered even if it is difficult to contemplate. One is a trust. Specifically, a living trust (inter vivos trust) is a tactic that is useful. Knowing its benefits and potential drawbacks is key before deciding.

California law limits how long a trust interest can last


Creating a family trust that will endure for generations is an ambition of many people who have amassed significant wealth. Under California law, however, there is a limit on how long an interest created by a trust can last. That limit is called the "rule against perpetuities."

Living trusts have many advantages in California


For some people in California, estate planning is very simple. The cornerstone of their estate plan is a simple will containing instructions as to how their assets should be distributed upon death. Combined with a durable power of attorney to provide some protection if they become incapacitated, and a living will to make sure their health care wishes are respected, they have all they need in an estate plan.

Using a living trust to avoid probate in California


Probate in California is unfortunately an expensive and time-consuming process. Probate refers to the court proceedings to administer the estate of a deceased person and distribute their assets to heirs and beneficiaries. Court costs and legal fees can be prohibitive. For this reason, many people who are beginning the estate planning process are interested in avoiding probate.

A California pet trust can ensure care for a beloved companion


Trusts are a popular estate planning vehicle in California. But trusts can be used for many purposes besides managing financial assets for the benefit of loved ones. In fact, California's Probate Code specifically says a trust can be established for any purpose that is not illegal or contrary to public policy. A good example of a specialized trust is the pet trust.

Is it possible to modify an irrevocable trust in California?


In this blog we have on several occasions discussed the advantages of a revocable trust for estate planning purposes in California. A revocable trust is what the name implies: it can be modified or terminated at any time during the settlor's lifetime. But what about an irrevocable trust? Can it ever be modified or terminated?

Transferring assets is key to a California trust


The revocable trust is a popular estate planning vehicle in California. With a revocable trust an individual can avoid probate, protect the person's privacy, and provide for management of assets both during the person's lifetime and after death. To establish a trust, the first major step is to prepare and sign a trust document which sets out how the assets in the trust are to be managed, and under what circumstances income and principal are to be distributed to the beneficiaries.

Can a trust shield an inheritance from creditors in California?


In California, the revocable trust is a popular estate planning vehicle, in part because it provides for management of trust assets by a trustee during the settlor's life and after their death. A trust will typically provide that income generated by the trust assets will be paid to the beneficiaries at designated intervals. The trust may specify circumstances under which the trustee can pay trust principal to the beneficiaries, and may provide for lump sum payments of principal at designated times. A revocable trust may also give the trustee discretion about when to make payments to the beneficiaries.

My Sacramento law practice, Michael A. Sawamura, Attorney at Law, focuses on wills, trusts and estate planning law in addition to business law and corporate defense services. My clients include professionals, government employees, small businesses, blue-collar workers and national corporations.

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