Creating a living trust is an option you can do in the estate planning process. It’s quite popular among many who want to avoid probate court. Likewise, to those who want to keep the details of their estate private when it’s passed on to beneficiaries.
A living trust attorney danville ca can help you set it up. In addition, assist you in moving your assets into it. In doing so, you save money in legal fees by keeping your major assets out of probate court. Your beneficiaries also get their inheritance sooner. Yet there are a few facts about living trusts you should know before creating one. Then you can decide if it’s right option for you to take.
It Can Be Made Public in Case of a Lawsuit
A living trust can be made available to the public in the event of a lawsuit. This would involve parties who might have been disinherited. Hence, they want to contest the details of the trust. As a result, the document becomes part of official court records.
It Can’t Take the Place of a Will
It’s important to understand the specific applications of each document in the estate planning process. You’ll need to create a pour-over will in relation to the living trust. The document instructs the transfer of your other material assets to the trust upon your death. You can also specify a specific time frame in the will. This limits the period within creditors can pursue your assets.
It Can Still Fall Under State Tax Obligation
Be aware the assets in a living trust are still subject to state taxes. This would include your home or any other physical assets. Although some states do not impose an estate or inheritance tax. So, it’s best to check if the state you live in enforces it.
It Can’t Cover All Your Assets
It’s important to know what assets you can’t put into a trust. These include qualified retirement accounts, health/medical savings accounts, life insurance, and Uniform Transfers to Minor accounts (UTMAs) or Uniform Gifts to Minor account (UGMA). Likewise, you can’t retitle vehicles into a living trust. Examples of this are a car, motorcycle, boat, or scooter. You also can’t do it for a truck or an airplane if you happen to own either one.
Keep these facts in mind if you decide to create a living trust for your beneficiaries.