IRAs, Annuities and Guardianship: Providing for Your Minor Children if You Die Before They Reach Adulthood

, , , , ,

young-family 91024Deciding on a guardian for your minor children may very well be the most important decision you’ll make regarding your estate planning. Not only must you trust the appointed guardian to raise your children as you’d want them raised, but you also need that person to be financially responsible with your children’s inheritance. For example, if you have an IRA or an annuity that you wish to pass to your minor children, how can you ensure those funds will be used properly—especially if the person you trust most to raise your kids isn’t necessarily the best with finances?

This question is multifaceted, so let’s unravel one aspect at a time.

The Question of Guardianship

Here’s the good news: The person who raises your minor children and the person who handles their inheritance don’t have to be the same person. If necessary, you can appoint one guardian to serve each function, naming one as the guardian of the person and another as the guardian of the estate. In this arrangement, you entrust one person with your children’s assets and another with their care, while enabling each to interact with the other. This dual guardianship model gives many parents peace of mind—knowing they don’t necessarily have to risk their children’s inheritance while ensuring that they are raised according to the family’s values.

Although guardianship of the estate is an option, for many families the best strategy for financially providing for the children is to use a trust. In that case, a trustee fulfills the responsibility that would otherwise belong to the guardian of the estate. The trust assets can be released to the children or the caregiver incrementally according to age and needs. For example, the trustee could distribute money for the children’s needs until age 18 and then manage for the money until the child is a financially mature adult. Your trustee may also exercise discretion in investing and distributing the funds for the children’s support, education, etc., coordinating with their physical guardian to ensure the children’s needs are met until they come of age. This can ensure that the assets are there when they’re needed for your family.

Passing an Annuity to the Children

Annuities pay out regular income—which can make them convenient vehicles to cover ongoing expenses for minor children. If you have set up an annuity for yourself or a spouse, you can name the children as beneficiaries, or you can also name a trust for the benefit of your children. If you are still paying into the annuity at the time of death, your children may receive the balance, or you may give a trustee the option of rolling the balance into another annuity to be paid out to the children at a later maturity date. If you are already receiving annuity payments yourself, the children may simply continue receiving these payments for the remainder of the term. Depending on your annuity contract, payouts may also be made lump sum. Annuities are a very flexible financial product with many different options. If you have annuity now, or if you are considering purchasing one, bring it up with us as we work on your estate plan so we can make sure it meshes with your will or trust seamlessly.

Transferring an IRA to the Children

Individual Retirement Accounts (IRAs) are also excellent vehicles to pass along wealth for minor children’s welfare—because, unlike most annuities, they have the ability to grow over time and can provide a lifetime of financial benefit to your children.

When you name the next generation as beneficiaries on an IRA, you effectively extend the IRA’s life expectancy. While the required minimum distribution payments to the children will be smaller than they would have been for you (since, according to the IRS’s rules, they have a longer life expectancy), the account balance can remain invested for growth over time. Your financial and tax advisor can evaluate your situation to help you decide which type of IRA (Roth or traditional) is the best option for your goals. And we can work with you to set up a trust which fully protects your IRA against your child’s creditors, predators, future ex-spouses, and immature financial decision making.

Planning for the welfare of minor children after your death is neither simple nor pleasant to consider, but it’s absolutely necessary for peace of mind. Determining the right person(s) to be the guardian of your children requires careful thought, but you don’t have to sacrifice your children’s inheritance for their proper care. With the right financial plan, you can manage both facets successfully. As always, we’re here to provide assistance and explain your options. Call our offices for an appointment today.

Dedicated to building your wealth, empowering your family and securing your legacy,

Marc Garlett 91024

/by

Just a Few Of the Ways a Living Trust Helps Your Family

,

trust 91024There are several components to an estate plan, one of them being a living trust. Common benefits that prompt someone to create a living trust include increased privacy, reduced taxes, probate avoidance, and caring for family members with special needs. A living trust also lets you dictate how and when your assets will pass on to future generations after your death.

Avoiding Probate and Increasing Privacy

One of the primary reasons for creating an estate plan is to avoid probate. Unlike a will, a properly funded living trust will avoid probate, the lengthy and costly court-supervised process of transferring assets after death. Probate includes locating and determining the value of the deceased’s assets, paying off any outstanding bills and taxes, and then distributing the remaining value of the estate to the deceased’s rightful beneficiaries or heirs. Avoiding probate is often a top reason for estate planning, and there is no surprise as to why. First, probate can be a costly way to transfer your assets upon death. Second, it is very time-consuming for your family. It can take a year (or even longer) to complete the probate process. Complications, such as a contested will or an inability to find clear records of all of the deceased’s assets and debts, can extend this timeline. Finally, probate proceedings are a matter of public record so when your estate goes through this process, there is no privacy.

Reducing Taxes

While a living trust can help you avoid probate, it can also provide you with tax savings, especially if your estate is subject to death taxes (also known as estate and gift taxes). Of course, there are many types of trusts. One way to think about the variety is to consider a toolbox. For example, there are numerous kinds of screwdrivers, hammers, power tools, and so on. Each tool has an intended use. Trusts are no different. When you work with a family trust attorney, you ensure the type of trust is aligned with the tax-saving needs and other goals of your family.

Seeking Professional Help

It is important to understand that a trust only controls assets that are funded to the trust. In other words, you must place these assets in the trust – commonly referred to as “funding” the trust. Moreover, because our lives are always changing (marriage, childbirth, home purchase, etc.) and so are tax laws, it is essential to continually update and monitor the funding of your trust over your lifetime. For these reasons, you will want to work closely with your family trust attorney to make sure your assets are properly aligned with your trust. This will not only help you get organized, but it will also make things much easier for your heirs when you pass away. And you don’t have to go it alone. The right attorney can be an invaluable help to you and your family.

Dedicated to building your wealth, empowering your family and securing your legacy,

Marc Garlett 91024

/by

Do you really need a trust?

, ,

trust 91024Although many people equate “estate planning” with simply having a will, there are many advantages to having a trust as the centerpiece of your estate plan. While there are other estate planning tools (such as joint tenancy, transfer on death, and beneficiary designations, to name a few), only a trust provides comprehensive management of your property in the event of your legal incapacity (not being able to make financial decisions for yourself) or death.

One of the primary advantages of a trust is that it provides the ability to bypass the publicity, time, and expense of probate. Probate is the legal process by which a court decides the rightful heirs and distribution of assets of a deceased through the administration of the estate. This process can easily cost tens of thousands of dollars (and sometimes hundreds of thousands) and take a year or longer to resolve. Or course, not all assets are subject to probate. Some exemptions include jointly owned assets with rights of survivorship as well as assets with designated beneficiaries (such as life insurance, annuities, and retirement accounts) and payable upon death or transfer on death accounts. But joint tenancy beneficiary designations don’t provide the ability for someone you trust to manage your property if you’re unable to do so, so they are an incomplete solution. And having a will does not avoid probate.

Of note, if your probate estate is small enough – or it is going to a surviving spouse or domestic partner – you may qualify for a simplified probate process. In California, if your assets are worth $150,000 or more, you will likely not qualify for simplified probate and should strongly consider creating a trust. The cost of probate should also be a factor in your estate planning as creating a trust can save your heirs both time and money, not to mention emotional stress. Moreover, if you own property in another state or country, the probate process will be even more complicated because your family may face multiple probate cases after your death, one in each state where you owned property – even if you have a will. But beyond all of that, probate is a court proceeding and a matter of public record. That means your loved ones will have zero privacy. A trust, on the other hand, creates privacy which helps avoid conflicts, legal challenges, and keeps assets and beneficiaries hidden from potential predators.

A common reason to create a trust is to provide ongoing financial support for a child or another loved one who may not ever be able to manage these assets on their own. Through a special needs trust, you can designate someone to manage the assets and distribute them to your heirs under the terms you provide. Giving an inheritance to an heir directly and all at once may have unanticipated ancillary effects, such as disqualifying them from receiving some form of government benefits, enabling and funding an addiction, or encouraging irresponsible behavior that you don’t find desirable. A trust can also come with conditions that must be met before someone receives the benefit of the gift. Furthermore, if you ever become incapacitated your successor trustee – the person you name in the document to take over after you pass away – can step in and manage the trust’s assets, helping you avoid a guardianship or conservatorship (sometimes called “living” probate). This protection can be essential in an emergency or in the event you succumb to a serious, chronic illness. So unlike a will, a trust can protect against court interference or control while you are alive and after your death.

Remember, trusts are not simply just about avoiding probate. Creating a trust can give you privacy, provide ongoing financial support for loved ones, and protect you and your property in the event you are unable to manage your own assets. Simply put, the creation of a trust puts you in the driver’s seat when it comes to your assets and your wishes as opposed to leaving critical life decisions to strangers, like a judge.

Dedicated to empowering your family, building your wealth, and securing your legacy,

/by

Why Go to the Trouble of Establishing a Trust?

, ,

trustMy last article talked about what a trust is. Now I’m going to tell you why someone would go to the trouble of creating a trust in the first place. Ready? The short answer is, because the trouble one goes through to create a trust is generally minuscule compared to trouble left for family members when someone dies without a trust. But let’s go a little deeper…

During our lifetime, we can transfer our assets with a simple stroke of the pen. By signing our name to a piece of paper – usually a contract of some sort – we can buy, sell, or exchange almost anything with almost anyone.

But after we die, how do we transfer the assets we own? It comes down to two options. We can either preplan to transfer our assets how and to whom we choose, or we can let the state transfer our assets for us once we’re gone. The first option is handled through a trust. The second option is handled through the court process called probate.

So why not just let the great state of California handle things for us? Well, probate is:

Expensive. Probate fees are statutory. In other words, they are written into California’s laws and based on a percentage of the total value of your estate (your estate = all your stuff). Probate fees consist of filing fees, court fees, attorney’s fees, executor’s fees, bond fees, referee fees, appraisal fees, etc. All totaled, probate fees generally amount to between 5 and 10 percent of the value of the estate. The fees for administering a trust are generally significantly less than probate.

Public. Value privacy? Probate is a court proceeding so everything is a matter of public record. EVERYTHING. Not only can your reputation and legacy be dragged through the mud but anyone who cares to look (and there are plenty of scoundrels and con-artists who do look) will know how much your beneficiaries are inheriting, when they will receive it, and exactly where to find them. A trust, on the other hand, is completely private with no public record or court involvement necessary.

Time consuming. Probate in California takes on average, around a year-and-a-half. And that’s only if things don’t get complicated. Probate can, in fact, take years. And keep in mind, throughout the probate process, the surviving family members have little to no access to the assets being probated. A trust, however, usually only takes months to administer and distribute, not years.

Emotionally draining. Most people (other than lawyers, that is) don’t like being hauled into court. Not only does it cost time, money, and privacy, it also takes a toll emotionally.  Rather than grieving for your loss on your timetable, you are forced onto the Court’s schedule. In comparison, administering a trust, because it is handled in private and not through court, can take place at the trustee’s pace and comfort level.

Loss of control. Finally, even with a will, probate means a loss of the ability to provide protection for your heirs’ inheritance against bankruptcy, lawsuits, and divorce. Going through probate also means giving up much of the ability provide your family with tax advantages, limits on how they may spend their bequest, or guidance as to what age (or maturity level) they should receive their inheritance.

It all comes down to making an already very difficult situation (your passing) more difficult or less difficult on the people you love most in the world. If your choice would be to opt for “less difficult” you understand why people go to the trouble of creating a living trust.

I sincerely hope you and yours have a wonderful new year and an outstanding 2017. Happy New Year!

Dedicated to empowering your family, enhancing your wealth and establishing your legacy,
Marc Garlett 91024

/by

What is a Trust?

,

trust 91024Black’s Law Dictionary defines a trust as “An equitable or beneficial right or title to land or other property, held for the beneficiary by another person, in whom resides legal title or ownership, recognized and enforced by courts of chancery.”

Say what?

Okay, ridiculous legalese aside, a trust is simply an agreement, between two parties, regarding assets. The first party, the trustor (also called the grantor or settlor), creates the trust and puts assets into the trust.  The second party, the trustee, agrees to manage the assets held in the trust for the benefit of – you guessed it, the beneficiaries identified within the trust document. And on a very basic level, that’s all there is to it.

But of course, trusts can be very lengthy and quite complicated. A good trust must meet the trustor’s goals, account for the trustor’s specific assets, and be set up to achieve favorable legal, tax, and asset protection results for the beneficiaries.

The trustee manages the assets per the terms written into the trust. The trustee also distributes the assets, or a portion thereof, to the beneficiaries when and how the trust specifies. The trustee takes on a fiduciary duty which mandates he or she follows the terms of the trust and carries out the wishes of the trustor.

There are many different types of trusts but probably the most common is the revocable living trust (“RLT”). Why? Well because one person can serve in all three roles (trustor, trustee, and beneficiary) during their lifetime.

For example, Peter could set up a trust, put his assets into the trust, manage those assets, and also benefit (receive income) from those assets. Peter can plan to transfer those assets to his minor son, Paul when he dies. To accomplish this Peter would name his sister, Mary, as his successor trustee. May would then manage the trust assets for the benefit of Paul, until Paul is old enough to manage the assets for himself.

Pretty cool, huh? But why would someone want to go to the trouble of setting up a trust? Well, because the trouble of setting up a trust is generally minuscule compared to the mess, expense, and yes, trouble left for loved ones when someone dies without a trust. I’ll go into more detail regarding the benefits of a trust in my next article. In the meantime, I wish you and yours a wonderful holiday filled with lots of love and laughter.

Dedicated to empowering your family, enhancing your wealth and entrenching your legacy,

/by

So What Is a Trust, Exactly?

,

Wills and Trusts 91024Trusts seem to be shrouded in mystery. Often thought of as an estate planning tool only for the ultra-wealthy, many people aren’t sure what trusts are really all about let alone whether or not a trust would be appropriate for their family.

Let me try to clear up the confusion: A trust is nothing more than a legal agreement set up to benefit someone or something. For example, some people set up trusts to benefit their children, their grandchildren, their favorite charities, or even their pets.

It is easiest to understand trusts if you think of them in terms of a relationship between three separate parties, people or entities.

The first party (called the trustor, settlor, or grantor – these terms are all interchangeable and refer to the same party), funds the trust by placing assets into the trust. Any type of asset may be used, such as money, brokerage accounts, cars, and even real estate.

The second party, known as the trustee, agrees to manage the assets held by the trust. Once the trust is created, legally executed, and the assets are moved into the trust, the trustee holds title to those assets on behalf of the trust.

The third party, who is known as the beneficiary, receives the benefits of the assets held in the trust. For example, those benefits might include interest paid on money in the trust, a monthly allowance, or even a place to live.

And the use of trusts as a planning tool isn’t just for the rich. Trusts can provide many advantages for the rest of us, too, including:

  • Avoiding the formal probate process associated with transferring property using a will;
  • Protecting assets from a beneficiary’s creditors;
  • Caring for those who cannot care for themselves, such as minor children or those with special needs; and
  • Reducing tax liability.

Although it may seem confusing, a trust can even be set up to benefit the person who puts the assets into the trust. In other words, while there are three roles to be played, each role does not necessarily have to be played by separate and distinct parties. One person can serve in more than one of those roles.

For instance, a person may place assets into a trust, select someone else to manage those assets, and then receive the benefits himself. To take that example one step further, the person who is both the trustor and the beneficiary could even be the trustee if the circumstances suited such a scenario.

How a trust is drafted and who plays each of these three roles depends on the goals of the person setting it up. Call our office today to schedule a Family Estate Planning Session, where we can explain trusts further, answer all your questions, and help you determine if a trust is the best strategy for you and your family.

Dedicated to your family’s wealth, health, and happiness,
Marc Garlett 91024

/0 Comments/by

If You Have a Trust, Don’t Settle for a False Sense of Security – Part I

, ,

Estate Planning 91024It is estimated that more than 80 % of trusts fail at the trustor’s death. EIGHTY PERCENT! What a shameful statistic. Think about it. Out of every five people who put the time, effort, and money into creating a trust, only one of them actually protects and provides for their family as they intended. That means the vast majority of people with a trust have nothing more than a false sense of security while they are living and leave their family with a big mess to clean up after they die.

There are three equally important phases to trust-making. Neglect any of these phases and your trust is likely to fail. Phase 1 is the actual creation of your estate plan documents. This includes not only the trust, but many other critical documents as well (your will, powers of attorney, healthcare directives, HIPAA waiver, kids protection plan, etc.). Each of these documents should be customized to your own specific situation, goals, and assets. Remember, your family is unique and your estate plan should be, too.

The courts are filled with cases where simple, fill-in-the-blank, template wills or trusts, downloaded from the internet, led to family disputes, ugly probates, expensive litigation, and hundreds of thousands of dollars (or more) in lost inheritance for intended beneficiaries. The recent family quarrel over an “E-Z Legal Form” estate plan serves as one such cautionary tale. But all one really has to do with such services is read the fine print, such as the Legalzoom disclaimer, to be very clear they’re just selling documents, without any legal guidance, advice, direction, or guarantee about what they mean or whether they’ll even work.

Unfortunately, people who get sold on saving a few thousand dollars now by doing it themselves, often force their families to hand over tens of thousands of dollars to lawyers later, to straighten out the mess they’ve left behind. Of course many times those messes cannot be straightened out at all. But it’s not just online legal services selling a false sense of security. I’ve also heard far too many stories of cut-rate, cheaper-than-anyone-else lawyers whose plans don’t work when they’re needed. And yet again, it’s families who are left holding the bag.

This should all be malpractice, if you ask me. Regrettably, it’s common practice instead. So what can you do to protect yourself – and more importantly, protect your family? Here’s how NOT to get sold a false sense of security:

  1. If the lawyer or service you’re using to prepare your estate plan doesn’t first spend some serious time asking you questions, getting to know you, your background, and your goals, they are much more interested in selling you a set of documents than a plan that will actually work. And if they quote you a fee before getting to know you first, that’s a good indication they are never going to invest their time in you.
  2. Ask the lawyer or service if they are available to provide guidance and answer questions throughout the process. If they answer is no, move on. If the answer is yes, ask them how much they charge for that. If it’s not included as part of a flat fee, they are clearly more concerned about selling documents than they are about providing good legal counsel.
  3. Determine if the plan fee is too good to be true. If the lawyer or service undersells everyone else, that’s a big red flag. It takes a lot of work and time to customize a plan for someone so it is guaranteed to perform as intended. Cut-rate firms and services work on a volume based business model. Their goal is to sell you a set of documents with the smallest time investment possible, then move on.

You can, and should, strive to do better than that. Don’t settle for a lawyer or service who’s just in the business of selling documents. There’s too much at stake and your family has too much to lose. The documents are critically important but they should not be the sole focus of the lawyer or service you work with. The documents alone won’t give you real security – the kind of security both you and your family deserve.

To your family’s health, wealth, and happiness,
Marc Garlett 91024

/0 Comments/by

Is Your Living Trust Really Going to Work For the People You Love?

, , , ,

Legacy Planning 91024Traditionally, one of the primary reasons for establishing a living trust has been to avoid probate. But your living trust that can help you accomplish much more than that, if it’s set up correctly:

Asset protection for heirs. One of the most significant benefits of a living trust can be to protect inherited assets for heirs. For example, because minor children are not allowed by law to inherit property, a guardian is appointed by the state to hold the property for them until they reach the age of 18. Most parents would agree, however, that 18 is still too young to manage even a modest inheritance. Executing a living trust on the other hand, allows you to control how and when an inheritance is distributed and to name a trusted person to act as trustee. In addition, a living trust can be especially useful in protecting assets from spendthrift heirs, their creditors or a potential divorce, if it’s set up right.

Most living trusts I review have been set up to distribute assets outright to kids at age 21, 25, or 30 instead of keeping assets in trust for the life of the kids – and eventually giving the kids control of those assets. This type of planning is still fairly unknown to most attorneys, but can ensure that what you leave to your kids will not be at risk from any future divorces, lawsuits, bankruptcies or other creditor matters.

Ensure none of your assets are lost. The vast majority of the time a living trust is created, one of the most important and valuable aspects of creating the trust is lost — making sure that when you become incapacitated or die your loved ones stay out of Court and the assets you’ve worked so hard for make it to the people you want to have them.

If your assets are not titled in the name of your trust correctly, that won’t happen. Your loved ones will have to go to Court to take ownership and control of your assets. And, oftentimes, they may not even be able to find your assets. There are currently billions of dollars in assets sitting in the State Departments of Unclaimed Property because people die and their loved ones didn’t know what they had.

One of the things we do in our office is prepare a Family Wealth Inventory to ensure your assets are easily located by your family. As long as it is kept up to date (and we help with that, too) you’ll never have to worry that what you are working so hard to create will be lost when you are gone.

Plus, when you have a relationship with our office, we’ll make sure your loved ones know just what to do if anything ever happens to you.

Incentivize your children to grow your wealth, not squander it. As I mentioned, most trust plans are crafted to distribute assets outright to kids when they turn certain ages, whether they are ready for it or not. And chances are that if you die when your kids are still young, they will not be ready to fully inherit your wealth at an early age.

We recommend you use your living trust to properly prepare your children to receive their inheritance. That means allowing them to be a co-trustee for some period of time before receiving full control of their trust assets. It means introducing them to us, if we are your lawyer, so we can begin to help guide them during your lifetime and not wait until after you are gone.

You may also want to consider making small lifetime gifts into an irrevocable trust for their benefit so you can start to teach them how to grow the assets while you are living and enter into a partnership for creating more family wealth that can last for generations.

One of the main goals of my law firm is to help families like yours plan for the safe, successful transfer of wealth to the next generation. Call our office today if you have a trust that hasn’t been reviewed recently or if you’re ready to get a comprehensive plan in place to protect your loved ones.

To your family’s health, wealth, and happiness,
Marc Garlett 91024

 

/0 Comments/by

How to Avoid Probate by Properly Funding Your Trust

, , ,

probate court 91024A common estate planning mistake made by many people – including celebrities and the wealthy – is not ensuring the trust you have created actually holds all your assets. This process of transferring your personal assets into your trust is called “funding.”

Unfortunately, most lawyers do not make sure this is properly handled for their clients, so even if you’ve worked with an attorney you need to double check this critical issue. If you do not transfer your assets into your trust correctly, it is nothing more than an empty shell and will not accomplish the objectives (such as avoiding probate) you had in mind when you established it.

Here is a basic rundown of the proper procedures for funding your trust:

Real estate – a new deed in the name of the trust must be drawn and recorded at the county clerk’s office. For properties with mortgages there may be additional issues to consider so always seek legal counsel before recording a new deed.

Stocks, bonds, mutual funds – to transfer the ownership of these assets into your trust, you need to contact your broker, investment counselor or transfer agent for the proper paperwork and complete those documents as instructed.

Savings bonds – you will need to obtain a reissue form from the Federal Reserve Bank and re-title the bonds in the name of the trust.

Brokerage accounts – contact your broker for the proper forms that will enable the broker to close the existing accounts and transfer the assets into a new trust account.

Stock certificates – you will need to send a completed “stock power” form as well as a W-9 form with your tax ID number with the original stock certificates to the company’s transfer agent.

Bank accounts, CDs – new accounts will need to be established in the name of the trust. If your bank cannot transfer CDs until the maturity date, then mark them “in trust for” a beneficiary until the CDs mature and you can transfer them to the trust.

Life insurance, retirement plans – these assets cannot be owned by a living trust but it may be appropriate to name your trust as beneficiary. Seek legal counsel before changing the primary or contingent beneficiary on these types of assets.

Written confirmation – don’t just assume everything has been transferred correctly because you submitted the paperwork. Always ask for and keep a copy of a written confirmation indicating your assets have been moved into your trust.

As your partner in planning for the financial security of yourself and your family, we would never let your trust go unfunded. That’s because our concern for you doesn’t stop with the signing of your legal documents — we always follow up with clients to ensure everything has been done properly so they are fully protected.

If you’d like to learn more about how a trust might benefit you and your family, call us to schedule a Family Estate Planning Session and get educated about your options. There’s no obligation and if you mention this article there will be no fee.

To your family’s health, wealth, and happiness,

Marc Garlett 91024

/0 Comments/by

Good Reasons to Establish a Trust (and Being Rich Isn’t One of Them)

, ,

family estate plan 91024As far as estate planning goes, many people have the misconception that trusts are only for the wealthy while wills are for everyone else. But that couldn’t be further from the truth. You don’t need to live in a mansion or own a fancy yacht to benefit from having a trust. The fact is, a will simply isn’t enough for most of us. Why not? There are many reasons, but one of the biggest is that a will won’t keep your family out of probate.

What is probate? Probate is a court process used to transfer the assets (not held in a trust) of a deceased person to their heirs. In other words, after your death – if you don’t have a trust in place – someone will have to petition the court to open probate so your assets can be transferred to your beneficiaries. A will only serves to guide the court on how to distribute your assets, it does not keep your family out of court.

So why do I want to avoid probate? All assets passing through probate court become a matter of public record, and as such, vulnerable to creditors, predators, and opportunists – and believe you me, there are plenty of scammers and con-artists who read the probate records to identify who is receiving an inheritance so they can go after their next mark. The court system in California is underfunded and overburdened and the probate process can take years to get through. Also, probate is very expensive, ultimately diminishing the overall assets available to your family by a substantial margin. Keep in mind too, if you have minor children the probate court will give them complete, unrestricted control of their inheritance as soon as they turn eighteen. And think about it, the probate process is generally the last thing family members want to endure after losing a loved one. Ultimately, probate just makes a hard time that much harder.

Okay, how do I avoid probate? Avoiding probate is not hard to do. By creating and transferring assets into a revocable living trust there will be no need for probate at your death. In fact, probate is really only for people with little to no assets or for those who, during their lifetime, failed to plan to keep their families out of probate court.

What are the advantages of a trust? Putting your assets in a trust avoids the probate process once you pass away. This saves your loved ones the time, money, and emotional hassles associated with probate. A trust can also be kept confidential which allows families to keep their privacy in the process. Another advantage is that a trust allows you to give your assets to minor children exactly when and how you see fit – they don’t have to become instant millionaires at eighteen if that’s not what you want. Finally, a trust can provide asset protection from your beneficiaries’ creditors, court judgments, divorces, and even their own bad money management practices.

As you can see, there are many reasons to create a trust, and being rich isn’t one of them. You can learn more about how a trust might benefit you and your family by calling us to schedule a Family Estate Planning Session. I’d be happy to sit down with you, talk about your particular situation, and help you make sure things are as easy as possible for your loved ones in the future.

To you family’s health, wealth, and happiness,
Marc Garlett 91024

/0 Comments/by

Our Office

Phone

(626) 355-4000

Address

100 West Lemon Avenue, Suite 202
Monrovia, California 91016

Cali Law Office California

Schedule a Complimentary Consultation

Simply Fill Out This Form

1 + 3 = ?