Living Trusts from A to Z

A living trust is a legal document that a person creates while he or she is still alive. They transfer all of their assets into this living trust and often name themselves as the “trustee” in order to maintain control over their assets while they are still alive. This person usually also names a “successor trustee” to take over control if they become incapable of managing their assets on their own. As long as the person is still alive, they can amend or revoke the trust. Once they pass on, the assets go to a named beneficiary. Any property or assets that are not named in the living trust after they pass on would go into probate. It is possible to avoid this process by having a will in addition to a living trust that would cover any additional assets or property that was not listed in the living trust.


A living trust ensures that all of your assets are used and distributed as you have instructed without the involvement of the courts. However, a living trust is not for everyone. Young couples with no or little assets and no children do not need a living trust. Others with little or simple assets do not need a living trust. Lastly, those who wish to have court supervision should not get a living trust.


If you suddenly become incapacitated and have a living trust, the trustee would manage your assets for you. If you did not have a living trust, your assets and property would be separated into community property, in which your spouse could manage, or separate property, in which an agent under a power of attorney would manage who is usually appointed by the court. This could lead your separate assets into probate, which could be very costly and time consuming to your family. This can be avoided by ensuring that everything that you own and all of your assets are transferred to the living trust, which can distinguish the community assets from the separate assets within the trust. It is also important to issue a durable power of attorney for property management in the event that you become incapacitated and will need someone to manage your assets. It is good to also consider doing a durable power of attorney for health care. This person can make health care decisions based on prior wishes and instructions that you set when you issue this type of power of attorney.


If you own real estate in another state, you can have a lawyer from that state transfer the property to your living trust. It is important to seek advice from a qualified attorney before naming a beneficiary for items such as a 401(k) or an IRA since there are serious tax income issues. Before getting ready to have your living trust and will prepared, be sure to have a qualified estate planning lawyer help you since it is a legal document. Be sure to ask the person you chose their qualifications and think about whether or not they have a financial gain by selling you an annuity or any other policy that might make their advice biased. Lastly, be aware of people who call themselves “trust specialists”, “promoters”, “certified planners” or any other titles that might insinuate that the person has had advanced training in this area. California is facing problems currently with these types of people who are only seeking to obtain your financial information to sell insurance-based products to you.


Here at the James Sexton Law Firm, we are qualified and experienced lawyers in estate planning and can help answer any questions that you may have. We have helped many people just like you set up wills and trusts. Call us today to for a free consultation or to set up an appointment.