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  • Daniel Rodriguez

Is a Living Trust Appropriate for a Californian? If I Form One, Do I Still Need a Will?

As most California lawyers and estate planning attorneys would likely state, estate plans are necessary to protect not only your assets and the things you have worked for, but also your goals. While there are many ways for an individual to achieve their estate planning goals, an organized and meticulous approach should guide the process. In doing so, the potential for accidental oversights or errors is reduced. The first step in the process is to identify the things that are important to a person. These goals may include giving away certain property to certain individuals or providing for a charitable cause during and after your lifetime.

The estate planning attorneys of NewPoint Law Group, LLP are dedicated to providing a strategic and flexible approach to estate planning. While we keep an eye on client costs and will not reinvent the wheel, we will pursue novel approaches where required. Our goal is to protect your goals. To schedule a free and confidential initial consultation at our Folsom or Roseville, California tax law offices, please call 800-358-0305 today.

What Is a Living Trust?

A living trust is a type of arrangement that can be used as an alternative to a traditional will. While a trust can achieve the same or a similar outcome as under a will, the legal concepts and processes involved are completely different. Further adding complexity to this determination is the fact that the living trust generally comes in two varieties: the revocable and irrevocable living trust. Therefore, it is wise to consult with a lawyer regarding which approach is more likely to align with your goals and values prior to taking any action.

The revocable living trust is, as its name applies, fully reversible and modifiable during the lifetime of the grantor. The grantor will place covered assets into the trust, will continue to manage the trust, and may make changes at any time. Due to the flexibility this type of trust provides, tax benefits are limited. In fact, while property will pass directly to beneficiaries, a living trust will not typically provide any tax savings or tax relief.

An irrevocable trust is still a type of trust, but its functioning and the benefits it provides are different. To start, an irrevocable trust cannot be easily undone. The creator of an irrevocable trust will permanently give up his or her right to, or ownership interests in, any property placed into the trust. However, since the property has been transferred to an entity that is separate and apart from the estate, beneficiaries will be gain tax benefits through this approach.

Thus, once an individual has decided that the use of a trust is the right approach for them, certainty regarding the bequests and the future need for flexibility often guide whether a revocable or irrevocable approach is appropriate. In any case, regardless of the form of trust you select, a trust will always provide additional privacy, avoid the in-court probate or conservator process, and save money on probate proceeding fees.

Do I Still Need a Will if I Form a Trust?

If you decide to utilize a trust as an estate planning device, many people want to know whether they will still need to draft and execute a will. Like most legal questions, the answer here is that it depends on the facts and circumstances present in your scenario.

In certain cases, you may be able to include all of your property in your trust. If it is all included in one or more trusts and there is nothing left for the estate, it is likely that you will not need a will. However, if a certain property is not included in the trust or multiple trusts, a will may become necessary. This type of will is known as a “pour-over will,” which covers any property that is not included in the trust. Absent a pour-over will, your property would be distributed according to state intestacy laws. These laws set forth a standard hierarchy regarding to whom property should be distributed, but they will not account for your goals or wishes.

Work with California Estate Planning Lawyers

If you are considering how to protect your property and carry out your wishes in the event of incapacity or after you’ve passed on, the lawyers of NewPoint Law Group, LLP may be able to help. We can work with you to assess your assets and goals. Only then will we work to develop a customized estate plan that respects these principles.

To schedule a free and confidential initial consultation regarding your estate planning goals, please call the Roseville or Folsom locations of NewPoint Law Group, LLP at 800-358-0305 or contact us online.

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