Some Basic Questions And Answers About Estate Planning
Although many people have a general knowledge about wills and trusts, many may also have a lot of questions. Wills and trusts can be complex, but the basics of estate planning are not complex. Here are some commonly asked questions, to give you some basic knowledge about wills, trusts, and how they work.
Q: I hear about estate planning, but what documents does that actually include?
A: Every situation is different, but generally, a typical estate plan will include a will, a trust, a health care directive, a power of attorney, and any paperwork needed to transfer any assets that you are putting into your trust.
Q: What is a trust?
A: A trust is a legal entity, formed while you are alive, that handles your assets before and after you pass away. Trusts allow you to make sure your assets are used properly, or used how you designate, even after you are gone.
Q: I have a trust. Do I still need a will?
A: Yes. Your trust may not own all of your assets. The will dictates what happens to assets that aren’t put into the trust. Additionally, you may need a pour over will—a will that says that when you are gone, all your stuff that’s not already in the trust, should be put in the trust.
Q: Are there advantages of a trust, over a will?
A: One big advantage is that a trust doesn’t need to be administered by a court, making it quicker, more private, and eliminating potential fighting between beneficiaries, as can happen with a will. Trusts may also give other protections immediately, such as tax avoidance or asset protection, that a will doesn’t offer.
Q: Can either a will or trust be changed?
A: Yes, so long as you are mentally capable of understanding what you are doing. Note however that some trusts are irrevocable, limiting how much you can change about the trust. Additionally, the language of a trust can make it permanent, or irrevocable, at a certain time, or upon the happening of a given event.
Q: How do I create a trust?
A; An estate lawyer should always be used in setting up a trust. Generally, you need a trustor—the person making the trust, and an initial trustee. You also need the declaration of trust, and property transferred into the trust.
Q: What happens if someone doesn’t have a will or trust?
A: Someone who dies with no estate documents, dies “intestate.” California law will then dictate who gets what property.
Q: What is a living trust?
A: A living trust is just a trust that is created, or which comes into legal formation, while the person making the trust is still alive as opposed to a trust that becomes effective on the death of the trust maker.
Don’t guess or leave your property to chance after you pass. Call the Torrance estate planning attorneys at Samuel Ford Law today for help to make sure your loved ones are taken care of after you are gone.