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Frequently Asked Questions about Trusts and Wills

WHAT IS THE DIFFERENCE BETWEEN A LIVING TRUST AND A WILL? A last will is a written document that states whom you wish to be the guardians for your minor children and how you would like your assets distributed at your death. The last will names an executor to facilitate the management of your assets during the probate process. Trusts are a legal construct that allows you to create a separate legal entity to hold your assets. A trustee is named who manages the assets for the benefit of you and your beneficiaries. Revocable living trusts are created and funded during your lifetime and you often name yourself as trustee to maintain control of the assets until your death or incapacity. A testamentary trust is created after your death by a provision in your will. Trusts are very flexible and there are many different types. The type of trust used is dependent on your specific goals and circumstances. A Living Trust offers protection should you become incapacitated by allowing your successor trustee to manage your assets without interruption. Please note that even with a Living Trust you should still have a will known as a “pour-over” will. These wills make sure that any assets, which may not be in your Living Trust at the time of your death, “pour over” into the trust. Your Trust Package will include all of the necessary estate planning documents including a “pour-over will”.

WHY DO I NEED AN ESTATE PLAN? A well-thought-out estate plan ensures that your plans for your medical care, guardianship for minor children, and management and distribution of your assets will be carried out according to your wishes and not left to the State or others to decide.

HOW WILL I KNOW WHETHER I NEED A 'WILL' OR A 'REVOCABLE LIVING TRUST'? We offer FREE email support to answer these types of questions. Based on your particular circumstances we can assist you with making the right decision. If I set up a Living Trust, can I be my own trustee? Yes. In fact, most people who create Living Trusts act as their own trustee. If you are married, you and your spouse can act as co-trustees. During your life, you will have complete control over all of the assets in your trust. In the event of your incapacity, your hand-picked successor trustee assumes control over your affairs.

ISN'T A LIVING TRUST ONLY FOR THE WEALTHY? No. A Living Trust can help anyone protect his or her family. Any person with an estate large enough to require probate may derive meaningful benefits from a Living Trust.

WILL A LIVING TRUST SAVE ON ESTATE TAXES? A living or a testamentary trust may help save on taxes in certain circumstances. The estate and gift tax laws are complex and fluid. Trusts are flexible vehicles that are often used in tax planning. Your individual situation will determine what trust type, if any will help best preserve your assets. Always reach out to your CPA with tax-related questions.

WILL A REVOCABLE LIVING TRUST PROTECT MY ASSETS SHOULD I NEED TO GO INTO A NURSING HOME? No. Because you maintain complete control over your assets titled in your Living Trust, those assets are considered available for your use should you have to go into a nursing home.

WHAT TYPE OF TRUST DO WE NEED? There are a number of different trust types for a married couple; all of which are typified by the result after the first death. The factors which go into determining the correct type of trust are the size of the estate, the tax laws, the underlying ownership of the trust assets, and the comfort level the couple has with the degree of control the survivor should have over the trust.

WE ARE NOT MARRIED, CAN WE STILL CREATE A JOINT TRUST? You have the option to prepare a Joint Trust along with all of the matching supporting documents for a “Non-traditional Couple”.

WHAT DO I NEED TO DO, AFTER I HAVE CREATED MY TRUST? You need to make sure that you title appropriate assets in the name of the trust. Once a trust is created and funded, it will continue on until it is revoked or it is distributed pursuant to its terms. There are no on-going costs or fees to establishing a Living Trust; nor are there any separate accounting’s or tax returns required during your lifetime. IRS Regulations provide that a revocable living trust uses the tax identification number — your Social Security Number — of the Grantor as its identification number and no separate tax returns should be filed for the trust. Instructions on how to transfer or title assets into the name of the trust will be provided.

IS A LIVING TRUST VALID IN ALL 50 STATES? Yes, a Living Trust is valid in all fifty states, plus the District of Columbia.

CAN A NON-TRADITIONAL COUPLE CREATE A LIVING TRUST OR A WILL? Yes, LDA Document Services is proud to offer these services to you and your Living Trust is valid in all fifty states, plus the District of Columbia.

WHEN DO I LODGE THE ORIGINAL WILL? Probate Code Section 8200(a) requires the custodian of the original Will to “lodge” it with the probate court within 30 days of death. “Lodge” is an old-fashioned legal term for “file.” The court filing fee is $50. Remember to include an original Death Certificate to the Will.

DO I NEED TO NOTIFY THE BENEFICIARIES WHEN SOMEONE DIES? According to California Probate Code, the trustee must send a notice to all Trust beneficiaries and potential heirs. The notice must comply with Probate Code Section 16061.7 and needs to be sent within 60 days of the date of death

HOW MANY DEATH CERTIFICATES SHOULD I REQUEST WHEN SOMEONE DIES? It is common to need 5 - 10 Death Certificates, and they can be requested from the funeral home.

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