Revocable Living Trusts, Wills, Powers of Attorney, Advanced Health Care Directives, Special Needs Trusts, Irrevocable Trusts, and Uncontested Trust and Probate Administration
Trust Adam Gauthier, President of Gauthier Estate Planning, A Professional Law Corporation,
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Revocable Living Trusts
Do you wish to distribute your home and your assets in an easy, convenient, and affordable manner? Our revocable living trusts help you dispose of your assets to your loved ones while avoiding the time-consuming and costly process of probate. With our revocable living trusts, you can create a legal entity to hold title to your property and your valuables while still retaining complete control over the management and decisions concerning your assets. Revocable living trusts provide a private and confidential way to distribute your assets while providing your family with a smooth transition during a very difficult period of their lives.
Irrevocable trusts, such as an irrevocable life insurance trust (ILIT) can be used to remove the proceeds of life insurance from your gross estate significantly reducing estate taxes on your estate. Other irrevocable trusts such as a Qualified Personal Residence Trusts (QPRTs) to remove the value of your qualified personal residence from your gross estate for estate tax purposes.
Our pour-over wills provide a catchall for transferring all your personal and real property assets to your established trust. Pour-over wills ensure that all the assets you own will be distributed upon your death according to the provisions contained in your living trust. It is also within your Will that appoint guardianship instructions.
Advanced Health Care Directives
California law gives you the right to determine the manner in which will you be treated
in an end-of-life situation. You may choose whether or not you would like to refuse treatment in the event you are unable to make your wishes known due to incapacity or some other condition. Let your decisions be known with our advanced health care directives. Our directives include a customized approach that gives you the right to specify when and how you wish to refuse lifesaving measures. Advanced health care directives provide clear concise instructions to your family and medical professionals to instruct them in making very difficult end-of-life decisions.
Durable Powers of Attorney
If you cannot care for your well being or if you become incapacitated, durable powers of attorney give someone else the power to make important financial and legal decisions for you. By establishing a power of attorney in advance, you can allow a loved one to handle your estate and your affairs if you are unable to do so without the need of a costly conservatorship.
In order to protect your children in the event of your death, parents with minor children should decide in advance who they would like to care for their children in the event they die prematurely. In California, parents may appoint a guardian to care for their minor children in the event they pass away prematurely. A parent's decision to appoint a guardian in writing provides the probate court with an individual it can call on to care for your minor children until they reach the age of majority. Your living trust can also provide for the money needed for your children's financial support.
After the death of the trustor (the creator of the trust), certain steps must be taken to administer the trust. The steps are taken in order to comply with state law, to preserve the federal estate tax exclusion amount, and to change title to assets. This is called "trust administration," and the complexity of the administration depends on the number and type of assets, their total value, and whether the trust includes tax planning provisions, such as an A-B trust which includes an Exemption Trust designed to capture the deceased spouse's exclusion amount so that it does not go to waste. Other steps include, appraising major assets and preparing an inventory to determine the net worth of the decedent for federal estate tax purposes. The decedent's will must also be filed with the Superior Court in the County where they had lived at the time of their death. Income tax returns also must be filed for the estate and for the decedent. If the trust became irrevocable as a result of the death, the decedent's heirs and trust beneficiaries must be notified of that fact and given an opportunity to request copies of the trust. If the surviving spouse does nothing to administer the trust after the death of the first spouse, the exemption trust will not exist and will therefore provide no tax reduction benefit to the estate. As a result, the couple's estate will pay higher estate taxes. The Exemption Trust must be properly funded, and other procedures must be followed, such as filing income tax returns, or the trust will be included in the surviving spouse's estate for federal estate tax purposes, increasing the federal estate taxes for the estate.
Special Needs Trust
A Special Needs Trust is designed to benefit an individual who has a physical or mental disability. The Special Needs Trust provides the individual financial and emotional support during their lifetime while still preserving the individual's ability to qualify for much-needed public benefits. A properly established Special Needs Trust will allow the person with a disability to receive and hold the assets without losing public benefits and allow the settlor to state instructions for the lifetime care and advocacy of that person. Public benefits are divided into two main categories, (1) needs-based and (2) entitlement. Needs-based public benefits include Supplemental Security Income (SSI) and Medi-Cal, while entitlement benefits include Social Security Disability Insurance (SSDI) and Medicare. For the most part, only recipients of SSI and Medi-Cal require an Special Needs Trust. This is because an individual may only have a very limited income and $2000 in his or her own name to be eligible for such benefits. Assets held in an Special Needs Trust are not counted as the public benefit recipient's assets for eligibility purposes and thus preserve eligibility. However, even when preservation of public benefits is not of primary importance, it may still be prudent to prepare and fund a Special Needs Trust. Special Needs Trusts fall into two basic categories: (1) the third party Special Needs Trust; and (2) the first party Special Needs Trust. A third party Special Needs Trust is the best method for bequeathing or gifting assets to a person with a disability. It derives its name from the fact that it is established with the assets of someone other than the person with a disability. A first party Special Needs Trust is a federally authorized safe harbor trust that allows an individual with a disability to transfer his or her own assets into the trust without being penalized by needs-based public benefit programs. 42 USC §1396p(d)(4). As long as the statutory requirements are met, an individual with a disability can transfer his or her assets into a first party Special Needs Trust without penalty. All other transfers to a trust will trigger some type of penalty.
One common misconception people have is that if you die with a will then your estate does not have to go through probate. The opposite is true. In California, probate is necessary to distribute the assets of an estate whether or not a will was in place at the time of the decedent’s death. For centuries wills have been used to distribute an individual’s assets after his or her death. A “will” is a written instrument that contains the instructions the probate court uses to dispose of the individual’s assets after his or her death. The key to understanding a will is that it almost always involves probate. Probate is a costly and time consuming court process that in most instances can be avoided with the use of other estate planning devices, such as a revocable living trust. In California an estate with less than $150,000 worth of assets may be probated through an affidavit process. However, for anyone who has or expects to have more than $150,000 worth of assets upon his/her death than an estate plan involving a living trust is imperative!
NO ATTORNEY-CLIENT RELATIONSHIP This website is intended for educational purposes only. The information provided herein is not intended to constitute legal advice or provide any opinion about the application of legal authorities to a particular circumstance, set of facts, or situation. Please contact an attorney to obtain advice regarding your particular circumstances.
U.S. TREASURY DEPARTMENT CIRCULAR 230. As a result of new rules promulgated under U.S. Treasury Department Circular 230, effective June 20, 2005, any written advice rendered by me concerning a federal tax issue is subject to certain requirements concerning form and content. Depending on the nature of the federal tax issue or issues addressed by the advice, it is possible that you may not be able to rely on the advice to avoid federal income tax penalties with respect to issues addressed therein. Alternatively, you may not be able to rely on the advice to avoid federal income tax penalties with respect to issues or conclusions not specifically addressed by the written advice. The extent to which our written advice is intended to provide protection against federal income tax penalties, and the cost of providing such advice, will be discussed with you from time to time as appropriate.