Fresno California Law Firm- Law Offices of Mark D. Edwards

Trusts - Are They For Everyone? [2009-03-06]

Mark D. Edwards

Is a trust right for your estate planning transfer needs upon your death? It depends. For contentious families, sometimes death probate is better as the court will police the distribution of the assets and provide finality. For most families, however, avoiding death probate is the preferred method of estate distribution.

Why is this? Trust administration (i.e., the process of distributing assets held in trust) is private, is generally quicker, minimizes legal fees, and provides for layers of planning options. Trust administration, though private, should not take place absent counsel unless the trustee is sophisticated and versed in the law. So, what exactly is a trust?

To boil a trust down, understand that there are the following parties to the transaction: 1) the trust makers - often referred to as trustors/settlors/grantors; 2) the trustees - those given responsibility to manage the trust assets; and 3) legally identified trust beneficiaries. For a trust to be valid it must have trust property, which is known as "corpus." There are many other legal requirements for a trust as well mostly centering around a valid legal purpose and legal capacity of the trust maker and trustee. A trust, during the trust makers lifetime, can be completely revocable and amendable if that is the desire of the trust maker.

A trust that is both revocable and amendable during the trust makers lifetime is commonly known as a "revocable living trust." During the trust makers life, they are generally the trust maker, the trustee and the beneficiary though circumstances sometimes require otherwise. There are many options for the trust after the trust maker passes away including outright distribution, creation of irrevocable trusts and etc.

A major decision is also the size of the estate. Some estates are small enough that trust planning is not recommended. Conversely, some estates are so large that simple revocable living trust planning is just a starting point and other more complex planning is required. There are numerous legal options when it comes to properly drafting a revocable living trust.

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Law Office of Mark D. Edwards

Trusts - Are They For Everyone? [2009-03-06]

Mark D. Edwards

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