Living Trusts Attorney in Oakland, California

As an estate planning attorney in Oakland, California, I've seen firsthand how living trusts can provide families with peace of mind and protection. These powerful legal tools offer numerous benefits, but they're often misunderstood. 

Learn why setting up a living trust and working with my law firm, the Law Offices of Gary R. Kershner could benefit you and your loved ones.

What Is a Living Trust?

A living trust is a legal document that allows you to transfer ownership of your assets into a trust during your lifetime. As the creator of the trust (known as the grantor), you maintain control over these assets during your lifetime. The trust specifies how your assets should be distributed to your chosen beneficiaries.

There are two main types of living trusts: revocable and irrevocable. Revocable living trusts offer flexibility, allowing you to make changes or even terminate the trust at any point. This adaptability makes them a popular choice for many. 

On the other hand, irrevocable living trusts, once established, cannot be altered without the permission of the beneficiaries. While less flexible, irrevocable trusts can offer tax advantages and asset protection in certain situations.

The Benefits of Creating a Living Trust

Living trusts have several significant advantages over other estate planning tools. These include:

• Avoiding probate: One important reason to choose living trusts is they let you bypass the probate process. Probate can be time-consuming and costly, potentially tying up your assets for months or even years. With a properly funded living trust, your assets can be distributed to your beneficiaries more quickly and efficiently.

• Protecting privacy: Unlike wills, which become public record during probate, living trusts remain private. The details of your asset distribution stay confidential, protecting your family's privacy.

• Flexibility and control: You retain full control with a revocable living trust. You can add or remove assets, change beneficiaries, or even dissolve the trust entirely if your circumstances change.

• Incapacity planning: A living trust allows you to designate a successor trustee who can manage your affairs if you become incapacitated. This may avoid the need for a court-appointed conservatorship; you can rest assured your chosen representative will handle your affairs.

These benefits make living trusts a popular choice if you're looking to secure your legacy and assets.

How Living Trusts Work

Understanding the mechanics of a living trust can help you appreciate its value in your estate plan. Here's how living trusts typically function:

1. Creation: You work with an attorney to draft a trust document that specifies your wishes for asset management and distribution.

2. Funding: You transfer ownership of your assets (such as real estate, bank accounts, and investments) to the trust.

3. Management: As the grantor, you usually serve as the initial trustee, managing the trust's assets.

4. Succession: Upon your passing (or incapacity, if specified), your chosen successor trustee takes over management of the trust.

5. Distribution: The successor trustee distributes the trust's assets to your beneficiaries according to your instructions in the trust document.

This structure allows for smooth asset management and transfer, minimizing complications for your loved ones.

Common Misconceptions About Living Trusts

Despite their popularity, living trusts are often misunderstood. Let's clarify some common misconceptions:

1. Misconception: Living trusts are only for the wealthy.
   Reality: While living trusts can be particularly useful for those with substantial assets, they can also benefit individuals with modest estates. Their probate-avoidance and privacy features can be valuable regardless of the size of the estate.

2. Misconception: Once you create a living trust, you lose control of your assets.
   Reality: With a revocable living trust, you maintain complete control over your assets. You can buy, sell, or transfer assets in and out of the trust as you see fit.

3. Misconception: Living trusts eliminate the need for a will.
   Reality: Living trusts can handle the bulk of your estate, but having a "pour-over" will is still advisable. This type of will transfers any missed assets into the trust upon your passing.

4. Misconception: Living trusts provide complete asset protection.
   Reality: Revocable living trusts don't provide significant asset protection from creditors during your lifetime. However, certain types of irrevocable trusts can offer asset protection.

Key Considerations When Setting Up a Living Trust

Creating a living trust involves several important decisions that require careful thought and planning. One of the most important choices you'll make is selecting a trustee and successor trustee. 

This individual will manage your trust assets if you become incapacitated and will handle the distribution of assets after your passing. You should choose someone you trust implicitly, who is responsible and capable of handling financial matters.

Another critical aspect of setting up a living trust is identifying your beneficiaries and how you want your assets distributed. This process involves more than just deciding who gets what; it's about considering the needs and circumstances of each beneficiary. 

Carefully consider these factors so that your living trust effectively meets your estate planning goals.

Living Trusts vs. Other Estate Planning Tools

While living trusts offer many advantages, they're not the only estate planning tool available. Let's compare living trusts to some other common options:

• Living trusts vs. wills

  • Wills go through probate; living trusts avoid probate

  • Wills become public record; living trusts remain private

  • Living trusts can manage assets if you become incapacitated; wills can't

• Living trusts vs. power of attorney:

  • Powers of attorney typically end at death; living trusts continue after death

  • Living trusts can manage a broader range of assets more comprehensively

• Living trusts vs. joint ownership:

  • Joint ownership can lead to complications if the co-owner is incapacitated or dies

  • Living trusts offer more flexibility in terms of asset management and distribution

Each of these tools has its place in estate planning, and many comprehensive plans use a combination of these instruments. The right mix depends on your circumstances and goals.

Maintaining Your Living Trust

Creating a living trust is just the first step in a continuous process of estate planning. To keep your trust effective and aligned with your current wishes, you must maintain it over time. 

This maintenance involves regularly reviewing and updating your trust document to reflect changes in your circumstances, assets, or wishes. Events such as marriages, divorces, births, deaths, or significant changes in your financial situation may necessitate updates to your trust.

Laws Governing Living Trusts in California

Living trusts in California are governed by specific laws that aim to ensure proper management and protection of assets. Here are some key points:

• California law allows for the creation of revocable living trusts, which enable the trustor to modify or revoke the trust during their lifetime.

• Living trusts in California help avoid probate, allowing the estate to bypass the lengthy and expensive court process and ensuring a faster distribution of assets to beneficiaries.

• Trusts in California are subject to the Uniform Probate Code, which ensures consistency and fairness when administering trusts.

• State law requires the trustor to fund the trust adequately by transferring ownership of assets into it; otherwise, the trust may not fulfill its intended purpose.

• California law mandates that the trustee has a fiduciary duty to manage the trust with the utmost care, loyalty, and adherence to the trust terms, protecting the beneficiaries' rights.