Trusts

Why Create a Trust? What is a trust?

Traditionally used to minimize estate taxes, a trust can provide other benefits as part of a well-designed estate plan.

A trust is a fiduciary arrangement that allows a third party, or trustee, to hold assets on behalf of one or more beneficiaries. Trusts can be arranged in many ways and can specify exactly how and when assets pass to beneficiaries.

Because trusts typically avoid probate proceedings, your beneficiaries may gain access to these assets more quickly than assets transferred in a will. Also, if the trust is irrevocable, it may not be considered part of the taxable estate, so there may be less tax due on your death.

Assets in a trust may also be able to be passed on outside of the probate process, saving time and court fees and potentially reducing inheritance taxes as well.

Other advantages of trusts are:

  • Control of your wealth. You can specify the terms of a trust and control when and to whom distributions can be made. For example, you can set up a revocable trust so that the trust assets remain accessible to you during your lifetime and you determine who the remaining assets go to afterwards, even in complex situations such as children from more than one marriage.
  • Protecting your heritage. A properly constructed trust can help protect your estate from creditors of your heirs or beneficiaries who may not be able to manage money.
  • Privacy and Legacy Savings. Probate is a matter of public record; A trust can allow assets to be passed outside of the probate process and remain private, potentially reducing the amount lost to court fees and taxes in the process.

Basic types of trusts

  • Marital or "A" Trust. Designed to provide benefits to a surviving spouse; usually included in the taxable estate of the surviving spouse
  • Bypass or "B" Trust. Also known as a Credit Shelter Trust, formed to bypass the surviving spouse's estate to take full advantage of the state estate tax exemption for each spouse
  • Testamentary Trust. Set out in a will and created by the will after death, with funds subject to inheritance and transfer tax; After that, it often continues to be subject to supervision by the probate court
  • Irrevocable Life Insurance Trust (ILIT). Irrevocable trust is designed to exclude life insurance proceeds from the taxable estate of the deceased while providing liquidity to the estate and/or trust beneficiaries
  • Nonprofit Leadership Trust. Allows certain donations to go to a charity and the rest to your beneficiaries
  • Charitable Residual Allows you to receive an income stream for a defined period of time and set the rest to go to a charity
  • Intergenerational Trust. By taking advantage of the generational skip tax exemption, trust assets can be distributed to grandchildren or later generations without incurring a generational skip or estate tax on the subsequent death of your children
  • QTIP Trust (Qualified Terminable Interest Property). Used to provide income to a surviving spouse. After the death of the spouse, the assets pass to other beneficiaries named by the testator. Commonly used in second marriage situations and to maximize estate and generational leap taxes or estate tax planning flexibility
  • Grantor Retained Annuity Trust (GRAT). Irrevocable trust fund funded by gifts from its founder; designed to shift future appreciation to the next generation through the rapid appreciation of assets during the donor's lifetime
law books with gavel

When To Use a Paralegal

Trust Creation

  • Prepare documents and assist with creating and transferring assets into trusts to ease the probate process.
  • Secure documents related to the client's estate
  • Assist in valuing the assets in the estate.
  • Drafting estate documents for the attorney's review (wills, powers of attorney, healthcare directives, and living wills).

During probate proceedings

  • Creation and filing of estate files in the estate administration (applications, requests, execution of wills, inventories, accounts, and notices)
  • Filing life insurance claims and other death benefits Liaising with beneficiaries and dependents regarding the approval of the will and other probate hearings
  • Administering estate accounts and assisting in the liquidation and transfer of real estate
  • Preparation and filing of the testator's final income and tax returns with CPA (Accountant)
  • Participation in the administration of guardianships and trusts
  • Assistance with name changes and adoption procedures

 

A Paralegal cannot give legal advice or go to court and advocate for you the same way a trust attorney will. The cost for a paralegal is usually less than an attorney.

In estate planning and probate law, paralegals research the law and local court rules to guide the attorney in probate decisions better.

estate planning

Related Services

Trusts

Trust Agreement

Pour Over Will

Organizational Section Uniform Statutory Form Power of Attorney

Advance Health Care Directive

Wills

Simple Will

Organizational Section Uniform Statutory Form Power of Attorney

Advance Health Care Directive

Checklist for Executor/Personal Representative

Deeds

Correcting Deeds

Grant Deed

Interspousal Transfer Deed

Quitclaim Deed

Probate

Affidavit for Collection of Personal Property

Inventory and Appraisal

Probate with Will

Probate without Will

Letters of Administration with Will

Annexed Spousal or Domestic Partner Property Transfer

Transfer of Real Property

Call (559) 819-0224 or email ja@acrosstownotary.com for more information or to schedule an appointment.