Living Trust Lawyer Folsom CA

A Living Trust Lawyer Folsom CA Trusts Discusses Divorce and Revocable Trusts

Living Trust Lawyer Folsom CA

A living trust lawyer Folsom CA residents trust from Yee Law Group Inc. has helped many families prepare for their legacy to be passed on to future generations. A revocable trust – also referred to as a living trust – is a trust that allows the creator of the trust, known as a settlor, to place assets in the trust for the benefit of a beneficiary upon the settlor’s death, but has the right to revoke the trust at any time and put the property back into their own estate. Revocable trusts can be positive when someone is trying to avoid probate or keep any irresponsible beneficiaries from wasting trust assets.

However, as a member of our legal team can attest, a revocable trust can make a divorce case very complicated for the beneficiaries and settlers.

Table Of Contents:

About Living Trusts

A trust is a way of keeping, overseeing, and distributing property. A living trust in particular is revocable, which means that the trustor has transferred assets into a living trust, and can obtain property back by revoking it. In the majority of living trusts that are established, the trustee, trustor, and beneficiary are the same individual. Living trusts can be a helpful tool in both estate and tax planning. The most common reasons for having a living trust are listed as follows:

  • You own property in a different state
  • You want to write other trusts within the living trust, so that court supervision is not required
  • One or more of your beneficiaries are disabled, and you want to have funds set aside so that person has financial support
  • You live in a state where probate is costly and time-consuming
  • You want to plan just in case you become incapacitated and may be vulnerable to undue influence 

The Probate Process

Probate is a court process that entails inheriting or transferring property, deciding if a will is valid, and resolving remaining debts of the deceased. As your CA living trust lawyer in Folsom may explain, property includes your cars, home, bank accounts, and anything else of monetary value. The court will supervise payment debts and then transfer property to beneficiaries. The probate court will appoint someone to act as the conversator, who manages the property and makes decisions about finances of the decedent.

Avoiding Probate Court

Your lawyer may advise that if you have significant assets upon your passing, your relatives will be better suited if you avoid your property from undergoing probate. In some states, probate can move quickly, but in others, the entire process can take up to a year or longer. Furthermore, probate can be expensive, and result in thousands of dollars in fees. In fact, because taxes on the estate are imposed during the transfer of assets during probate, this can cause up to 30%-50% taken out in fees from the property’s total value. But, the costs are lower if you utilize strategic estate planning tools that we provide at Yee Law Group Inc..

Additionally, probate is a public forum, so there will be records that can be viewed by anyone. Most families would prefer to have privacy in these types of matters, especially when in the midst of grief. If you want to learn more about how to avoid probate court for your loved ones in the future, call our law firm today.

Revocable Trusts in Beneficiary’s Divorce

When dealing with a divorce, every state has their own laws to divide the couple’s property. Most states do not allow the courts to divide any property that one party received as a gift or an inheritance. The beneficiary of a revocable trust has no legal rights to the trust principal or income because the settlor is able to revoke the trust at any time. Because of this, there is nothing for the family court to divide during a divorce. A revocable trust is seen as a beneficial way for a settlor to keep an ex-spouse of a beneficiary from receiving any income or trust assets, specifically in states where gifts and inheritances are able to be divided in a divorce.

Revocable Trusts in Settlor’s Divorce

A settlor is always able to revoke the trust and take back any assets. Because of this, those assets are able to be divided by the court if the settlor is going through a divorce. The legal title to the property in the trust may lie with the trustee, the right to take back all of the property and reclaim ownership has an actual value. If the trust was funded by the settlor using separate property while in an area that allows for separate property, the right to revoke the trust would also be viewed as separate. If the settlor is located in a state that allows for inherited or gifted property to be divided, having assets in a revocable trust will not prevent the court from dividing the property.

Income from a Revocable Trust in a Divorce

If a beneficiary receives income from a court, it is common that it can be used to calculate child support depending on the specific guidelines set by the state. Child support guidelines take into consideration all the different sources a parent receives income, which include a revocable trust. The revocable trust income can also be used to determine if the beneficiary needs to pay or receive alimony.

Irrevocable vs. Revocable Trusts

The settlor does not have any power over the trust assets in an irrevocable trust. In irrevocable trusts, the beneficiary has a type of entitlement to the trust property and income. During a divorce, an irrevocable trust will not be viewed as the settlor’s property in their divorce. Because the beneficiary is entitled to receive something from the trust, the beneficiary could lose some or all of their entitlement throughout a divorce case that does not acknowledge separate property.

Living Trust Lawyer Folsom CA 

One of the most popular tools that Folsom CA living trust lawyers recommend to clients is the use of irrevocable trusts. These trusts enable clients to protect their assets from creditors, lawsuit judgments, and other entities that threaten the seizing of these assets.

At Yee Lee Group, our Folsom CA living trust lawyers have been advising clients on asset protection options for years, and are available to help your family achieve the same level of protection.

Asset Protection Options

As mentioned above, trusts are one of the most popular options that are chosen as a way to protect property and assets. A living trust lawyer from Folsom CA shares that there are two categories of trusts: revocable (also called a living trust) and irrevocable. Both trusts are aptly named based on what you can and cannot do. A revocable trust is typically under the control of the grantor (the person setting up the trust) and can be changed or dissolved at any time. With an irrevocable trust, once it is established, it cannot be changed or dissolved.

Our Folsom CA living trust lawyer knows that you have a hefty decision to make when choosing between the two. Although both revocable trusts and irrevocable trusts are solid estate planning tools, revocable trusts do not offer the same tax advantages or asset protection that irrevocable trusts do. Assets placed in a revocable trust may be subject to estate taxes, as well as income taxes that may be owed from interest, dividends, or any other type of profit generated by the trust. With an irrevocable trust, the person forming the trust is no longer considered the legal owner of the trust contents and has no tax obligation to any profits the assets may generate.

For business owners, our Folsom CA living trust lawyer can present you with different entity options that clients have to choose in order to protect assets. These options include Limited Liability Company (LLC) and Family Limited Partnership (FLP).

An LLC is a type of corporate structure that protects each member of the company from being personally liable for any debts or liabilities that the company has. Our Folsom CA living trust lawyer shares that LLCs are basically a combination of the characteristics of a sole proprietorship or partnership with those of a corporation.  

With an FLP, family members pool their money together in order to set up and operate a business. Each member purchases shares of the business and any profit they make is based on the number of shares they own as outlined in the partnership operating agreement developed upon the formation of the FLP.

A Folsom CA living trust lawyer wants you to know that LLCs and FLPs are required to be publicly registered, which can hinder a client’s financial privacy. However, an irrevocable trust is not required to be publicly registered. There is also more control over how each asset should be handled because there can be different terms for each asset, including the family home, real estate, business property, savings, life insurance policies, and other assets. 

Are you planning out future of your estate and do not want it to go through probate? Are you interested in reaping the financial benefits associated with protecting your assets in certain ways during your lifetime? Have you been thinking about gifting money, property or other assets to your loved ones with certain conditions attached? Please consider connecting with a Folsom, CA living trust lawyer to discuss your legal options. A host of estate planning tools designed for use during an individual’s lifetime and for use by beneficiaries after an individual’s death may help you to maximize the value and use of your property.

The Basics of Forming a Trust

Many people choose to use a legally enforceable will as their primary estate planning tool. However, wills only serve to address property distribution after death and do not benefit either the estate holder or beneficiaries during an individual’s lifetime. For this reason, more and more Americans are turning to trust agreements, in lieu of, or in addition to their traditional wills. Creating trusts is a complex business, partially because there are several kinds of trusts an individual can choose from. Consulting with an experienced living trust lawyer in Folsom, CA can help you to weigh any options appropriate to your unique needs and priorities.  

A trust is a document in which assets are held by a named party for the benefit of another. If you were to create a trust, you would be responsible for naming a “trustee” who would be granted the duty of holding and managing the assets for all of the beneficiaries named in the trust.

It is important to select a responsible person to serve as your trustee, regardless of whether you choose to draft a living trust or a trust that will go into effect after death. An experienced living trust lawyer in Folsom, CA can help you to select an appropriate trustee. In addition to planning out a general distribution of assets, a Folsom, CA living trust lawyer can help you to select the kind(s) of trust that will best suit your needs. Certain trusts work better for the purposes of:

  • Incapacity planning
  • Protection of assets
  • Future planning of a pet
  • Charitable gifting
  • Medicaid planning
  • Special needs planning

Living Trust vs. Testamentary Trust

In general, trusts can be divided into two different categories: testamentary trusts and living trusts.

Testamentary Trust – A trust that activates only after the trust creator dies. A testamentary trust can be generally be revoked until that individual’s death. At this time, the trust becomes irrevocable.

Living Trust – Living trusts may be set up to benefit a trust creator and/or the trust creator’s beneficiaries during that individual’s lifetime. There are numerous financial benefits to managing property, income and other assets in this way. Please consider speaking with a Folsom, CA living trust attorney about your options. When considering a living trust, please note that these financial tools can be separated into revocable and irrevocable trusts.

  • Revocable – A revocable trust can be modified, amended, or revoked anytime by the trust creator, and for whatever reason.
  • Irrevocable – The trust cannot be modified, amended, or revoked at any time.

Reasons to Retain a Folsom, CA Living Trust Lawyer

At the minimum, a will, trust, or any other estate planning document should be reviewed by a lawyer to ensure it is legally binding and therefore enforceable. Many people will decide to draw up a living will on their own; however, drawing up a trust without an attorney’s guidance can be a big mistake. The following are a few reasons on why you may need a trust lawyer:

  • You are unsure about what type of trust you need.
  • You are creating a living trust and want to ensure it will succeed.
  • You were appointed to be the trustee of a living trust.
  • You are administering a trust.
  • You would like to challenge a living trust.

Let a Folsom CA Living Trust Lawyer Assist You

If you would like to learn more about the different legal options you may have to protect your assets and set up the most appropriate entities moving forward to secure your future, contact Yee Law Group today. Contact us today to set up a free consultation with one of our Folsom CA living trust lawyers at Yee Law Group Inc. we can evaluate your situation and offer guidance as to what your best legal options are.

For more details about how trusts can be a useful tool in your estate plans, contact a living trust lawyer in Folsom, California from Yee Law Group Inc. to find out how we can help.