{"id":488,"date":"2014-06-09T16:55:32","date_gmt":"2014-06-09T16:55:32","guid":{"rendered":"http:\/\/www.myestatelitigation.com\/?p=397"},"modified":"2023-06-22T13:11:05","modified_gmt":"2023-06-22T13:11:05","slug":"three-important-reasons-creating-living-trust-2","status":"publish","type":"post","link":"https:\/\/www.myestatelitigation.com\/three-important-reasons-creating-living-trust-2\/","title":{"rendered":"<!--:en-->Three Important Reasons for Creating a Living Trust<!--:-->"},"content":{"rendered":"<p><!--:en--><\/p>\n<div>There are many reasons to have a living trust. &nbsp;I can\u2019t begin to cover all of them, but will touch on three important reasons very briefly.<\/div>\n<h2>Reason #1: Protecting Property for Your Beneficiaries<\/h2>\n<div>When most of us think about estate planning, we think about passing our property to our family or loved ones after we die. &nbsp;However, sometimes our intended beneficiaries are not able to responsibly manage a large of sum money. &nbsp;Minor children are probably the most common example of this. &nbsp;In California there are restrictions against minors having direct control of money or other property. &nbsp;Typically, a guardian is either appointed to hold and manage the property on behalf of inheriting child until the child turns 18, or the funds are placed in a court monitored blocked account until the age of 18. &nbsp;Even then, most parents would cringe at the thought of their teenage sons or daughters having unfettered control of and access to large sums of money. &nbsp;An 18 or 20 year old with access to a large sum of money might not have much of an incentive to work or stay in school or pursue other worthy goals. &nbsp;They might be more inclined to buy a sports car, have fun and maybe even head to Vegas. &nbsp;Having a living trust can solve this problem because you get to control the age or ages for distribution to your children or other beneficiaries. &nbsp;For example, you can provide that your children will receive their inheritance in stages, a portion at 25, 30 and 35 is a common distribution pattern; or upon reaching certain milestones, such as attaining a bachelors or graduate degree. &nbsp;There are numerous alternatives depending on your family or financial circumstances. &nbsp;Prior to attaining the ages or milestones that you select for distribution to your children, the trustee of your trust will continue to manage the money and property and provide for your beneficiaries\u2019 education, healthcare and support needs.<\/div>\n<h2>Reason #2: Managing Property upon Incapacity.<\/h2>\n<div><\/div>\n<div>If you can believe it, a major planning concern today revolves around living too long! &nbsp;Many people worry about whether or not their parents can live in their own homes. &nbsp;Many worry about how their parents\u2019 bills are being paid and about protecting their money and other assets from people who might take advantage of them. &nbsp;Unfortunately, in the case of parents who have not done adequate estate planning, the only solution is to file a petition with the probate court for a conservatorship. &nbsp;Having to establish and maintain a conservatorship is a very unpleasant experience for many reasons. &nbsp;It is an open court proceeding and therefore exposes personal and financial information to total strangers; it involves thousands (and often tens of thousands) of dollars in recurring court and legal fees; and it frequently results in costly disputes between family members. &nbsp;In addition to all of that, it can be a humiliating experience for the family because it involves an open court determination that the person who needs the conservatorship is legally incompetent. &nbsp;Don\u2019t expose your own family to that difficult experience. &nbsp;It is easily avoided through proper planning.<\/div>\n<div><\/div>\n<div>A revocable living trust together with an advance health care directive and durable power of attorney for finances solves this problem. &nbsp;A revocable living trust allows your successor trustee to take control of and manage your property and financial affairs whenever you resign or if at any time you are incapable of handling your own affairs. &nbsp;There is typically no interruption in the management of assets, and there is no required court supervision. &nbsp;Revocable living trusts also enjoy a great level of acceptance throughout the legal and financial community with a broad range of statutory powers regarding the management of trust property. &nbsp;The idea is to have someone you trust and have personally selected \u201cstep into your shoes\u201d to manage your financial affairs and make health care decisions for you if you can no longer do that for yourself. &nbsp;Of course, at Velasco Law Group we can help you with all the details.<\/div>\n<h2>Reason #3: Avoiding Probate.<\/h2>\n<div><\/div>\n<div>When you die, property held in your revocable living trust will not go through probate. &nbsp;That\u2019s because the living trust itself spells out who gets to take ownership of the property. &nbsp;In this regard, a living trust is very similar to 401(k) plans, life insurance, annuities, IRAs, and company retirement plans. &nbsp;Since those types of assets allow you to designate a beneficiary who will automatically receive the funds at your death, those assets are not subject to probate.<\/div>\n<div><\/div>\n<div>Jointly owned property with a right of survivorship does not go through probate either. &nbsp;It passes automatically to the surviving joint owner. &nbsp;Unfortunately, relying on joint tenancy as a manner of holding title for most assets is not advisable for many reasons. &nbsp;For example, if you add a child or other person to your real property or bank account as a joint tenant, it potentially exposes those assets to lawsuits against that child. &nbsp;Many people don\u2019t realize that by adding someone as a joint owner to property, they are actually making a gift of that property to the other joint owner. &nbsp;If a creditor then obtains a judgment against your child or any other person you add to the title as a joint tenant, that judgment creditor could levy against those assets to collect on the judgment. &nbsp;Also, what would happen if that person you added to your property as a joint tenant becomes incapacitated? &nbsp;You may have to establish a conservatorship for that person in order to get control of the property during that person\u2019s incapacity. &nbsp;Also, if the joint tenants die simultaneously, the property may be subject to two separate probates. &nbsp;There are just a few of the many reasons to avoid holding title to property in joint tenancy. A revocable living trust and proper estate planning will help to avoid all of these problems. &nbsp;There are no shortcuts!<\/div>\n<h2>Estate Planning can be Overwhelming<\/h2>\n<div>The thought of creating a living trust, wills, powers of attorney, advance health care directives and other legal documents that make up a properly drafted estate plan can be somewhat intimidating. &nbsp;The good news is that when you have the right law firm to assist you, the actual process is much easier and painless than you would think. &nbsp;The most common response from clients is, \u201cWow, I thought it was going to be a lot harder than that.\u201d &nbsp;When all is said and done, creating a property estate plan will give you great peace of mind to know that you have taken an important step in providing for the future financial security and well-being of your family. &nbsp;If you would like to learn more about how you can make that happen, call our office today to schedule a complimentary consultation with one of our estate planning attorneys.<\/div>\n<div><\/div>\n<div>\n<h3>Velasco Law Group<\/h3>\n<p>333 W. Broadway, Suite 100<br \/>\nLong Beach CA 90802-4459<br \/>\nPhone: 562-432-5541<br \/>\nFax: 562-432-5581<\/p>\n<p>Long Beach &#8211; Main Office<\/p>\n<p><strong>Estate Litigation, Long Beach<\/strong>&nbsp;|&nbsp;<strong>Estate Planning, Long Beach<\/strong>&nbsp;|&nbsp;<strong>Probate Attorney, Long Beach<\/strong><\/p>\n<h3>Downey Office<\/h3>\n<p>10631 Paramount Blvd.<br \/>\nDowney, CA 90241<\/p>\n<p><strong>Estate Litigation, Downey<\/strong>&nbsp;|&nbsp;<strong>Estate Planning, Downey<\/strong>&nbsp;|&nbsp;<strong>Probate Attorney, Downey<\/strong><\/p>\n<\/div>\n<div><\/div>\n<p><!--:--><\/p>\n","protected":false},"excerpt":{"rendered":"<p>There are many reasons to have a living trust. &nbsp;I can\u2019t begin to cover all of them,&#8230;<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[12,13,7,8,9,10],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Three Important Reasons for Creating a Living Trust<\/title>\n<meta name=\"description\" content=\"There are many reasons to have a living trust. 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