Los Angeles Revocable Living Trust Lawyer

Established Revocable Living Trust Attorney in Los Angeles, CA

A trust is a legal method of holding and managing assets solely for the benefit of a trust beneficiary during your lifetime and transferred to your beneficiaries after your death. A revocable living trust is amendable which means an individual can make changes to it or revoke/terminate it in its entirety so long as that individual has the mental capacity to do so. By creating a trust, an agreement is created by which the Grantor/Settlor/Trustor (you) vests legal ownership of assets to the trustee (the person you select) who is under a legal obligation to manage those assets for the beneficiaries. Most often, the initial trustee is the person creating the trust. Upon either incapacity or at the passing of the Grantor/Settlor/Trustor, a successor trustee (a person you select) will begin managing the assets for the beneficiaries. A living trust serves many purposes, such as avoiding probate, preventing distribution of large sums of money to young family members, protecting beneficiaries’ inheritance in the event of bankruptcy or a legal judgment in a lawsuit, etc.

Why Avoid Probate?

A main reason to create a living trust is to avoid probate, which is a court-supervised process of transferring a deceased person’s assets either to their intestate heirs if they die without a Will, or to the beneficiaries listed in their Will. The disadvantages of probate are:

• Cost – The cost of probating an estate is exponentially higher than the cost of creating a living trust. There are Statutory fees for both the Attorney and the Personal Representative based on the gross value of the estate, including additional fees for filing, publication, appraisals, etc.
• Time Delay – The probate process takes about 9 months to complete, which means beneficiaries or heirs will need to wait that long to receive their inheritance.
• Not Private – Another reason to create a living trust is privacy. All probate documents are public documents. A Living Trust, however, is a private document that is not readily available to the public, unless there is litigation surrounding the terms of the trust, causing it to have been filed with the court.

Preventing Distribution of Large Sums to Young Individuals:

A living trust allows an individual to determine how and when, children, grandchildren or beneficiaries receive their inheritance. For example, even though an eighteen-year-old is considered to be a legal adult, it may not be wise for him or her to receive a large sum of money at that age. An eighteen-year-old does not have the means or knowledge to wisely spend or invest a large sum of money. With a trust you are able to determine at what age increments beneficiaries can receive their inheritance, such as: 21/25/30.

Protecting a Beneficiary’s Inheritance:

These are sub-trusts within a living trust that allow a trustee to distribute the assets and/or invest the assets for beneficiaries according to the terms of the sub-trusts. Even though, in California, an inheritance is not subject to division as marital property in a divorce, by leaving assets in lifetime trusts, there is an extra layer of protection preventing inherited assets from being commingled with community property assets. It is very easy for a lump sum distribution to be placed in joint accounts or to be combined with other joint assets, making it difficult for beneficiaries to keep separate in case of divorce. A living trust also provides protection from bankruptcy and creditors by containing a spendthrift provision prohibiting assignment of a beneficiary’s interest to creditors. It should be noted, however, that trust assets are not protected from the creator’s own creditors.