The death of a loved one can be an emotional and overwhelming experience. In addition to the grief experienced following such a loss, there are technical and legal details with which family members must contend. For many people, this is far too much to handle alone. At Morgan Law Group, our trust lawyers are here to help you in your time of need. If your loved one created a trust prior to his or her passing, and certain legal requirements are met, we can begin the trust administration process completely outside of probate court, saving you and your family time, money, and further heartache. For additional information on how an experienced trust attorney in Orange County can help you, please contact us today.
What Is a Trust?
A trust is a fiduciary relationship in which one party (the trustor) gives another party (the trustee) the right to hold title to assets or property for the benefit of a third party (the beneficiary). Trusts are beneficial in several ways, including:
- Trusts provide legal protection to a trustor’s assets
- Trusts ensure trust assets are distributed according to the wishes of the trustor
- Trusts reduce paperwork
- Trusts save money
- Trusts reduce or avoid inheritance or estate taxes
Types of Trusts
There are several types of trusts, each of which offer unique benefits. Types of trusts in California include:
Living trust: A living trust allows a trustor to use assets in the trust during his or her lifetime. After a trustor dies, the assets in the trust transfer to his or her designated beneficiaries. One of the key benefits of this type of trust is the avoidance of probate.
Revocable trust: The main benefit of a revocable trust is that the trustor can revoke, amend, or terminate the trust during his or her lifetime. With many revocable trusts, the trustor, trustee, and beneficiary are all the same person. After the trustor passes away, trust assets are transferred to beneficiaries of the trust.
Irrevocable trust: With an irrevocable trust, the trustor executes a trust that cannot be altered or changed during his or her lifetime. As is evidenced by the name, a trustor cannot revoke an irrevocable trust. In addition, a trustor who creates an irrevocable trust cannot remove assets from the trust once they are placed in the trust. Although irrevocable trusts offer less flexibility than revocable trusts, they offer other benefits. For example, in some cases, an irrevocable trust pays no estate taxes on assets in the trust. Irrevocable trusts are often used for gift tax and long-term care planning.
Testamentary trust: A testamentary trust is a trust created within a will. As a result, this type of trust is commonly called a “testamentary will,” “will trust,” or “trust under will.” Since a testamentary trust is created in a will, it doesn’t take effect until after the death of the trustor. This type of trust offers more flexibility than some other types of trusts and can help reduce or avoid estate taxes.
Life Insurance trusts: A life insurance trust allows a trustor to transfer his or her life insurance account into a trust. The benefit of doing this is that it shields the life insurance proceeds from taxation and allows the beneficiary to access life insurance proceeds immediately following the trustor’s death.
Charitable trusts: A charitable trust allows a trustor to name a charity or non-profit organization as beneficiary of the trust. At a designated time, assets in the trust are distributed to the charity or nonprofit named in the trust.
Blind trusts: With a blind trust, the grantor and beneficiaries have no control over or knowledge of the assets in the trust. A blind trust is useful for avoiding conflict between parties affected by the trust. Often, a trustor who executes a blind trust may be concerned that two or more beneficiaries will engage in conflict due to the terms of the trust.
Credit shelter trusts: A credit shelter trust, also known as a bypass trust, allows a trustor to pass along a certain amount of trust assets to a spouse recipient tax-free. This type of trust allows trust assets to remain tax-free even if the value of the trust grows due to investments.
How a Trust Attorney Can Help
As noted above, every trust has a trustee. The trustee’s responsibility is to ensure that trust assets are handled appropriately and that the terms of the trust are complied with. Serving as a trustee is a serious responsibility. In fact, trustees who fail to carry out their duties effectively can face legal liability. Often, trustees have limited experience in carrying out the financial and legal duties that accompany administering a trust—that’s where we come in. At Morgan Law Group, we understand the duties required of trustees, and we are here to provide trustees with the guidance necessary to ensure that all trust assets are handled and distributed in accordance with the terms of the trust. This provides trustees with the peace of mind that the trust is being administered properly and that all legal requirements are being met. And perhaps most importantly, this protects trustees from personal liability for failure to properly administer the trust.
Responsibilities of the Trustee
Trustees are tasked with several responsibilities, many of which they lack the experience to perform without legal guidance. These responsibilities include:
- Providing notification to beneficiaries and heirs of the pending trust administration
- Identifying and collecting assets
- Valuing assets
- Paying all trust taxes, expenses, and debts
- Preparing accountings during the trust administration process
- Soliciting professional guidance regarding the disposition of life insurance, jointly held assets, and retirement benefits that pass outside or through the trust
- Preparing state and federal tax returns, including generation-skipping transfer tax reporting and gift tax reporting
- Maintaining communication with all beneficiaries throughout the trust administration process
We Give Trustees Peace of Mind
If you are a trustee, we are here to assist you in your role to ensure that you perform your duties in a manner that meets all legal requirements. With our assistance, you can rest assured that you are not exposed to undue liability or risk due to your role as trustee. When you come to Morgan Law Group for assistance, we will help you administer the trust as quickly and smoothly as possible. For more information, contact a trust attorney for assistance.
Trust Administration Lawyers at Morgan Law Group
Regardless of whether you are a trustee or trust beneficiary, Morgan Law Group is here to guide you through the trust administration process. The trust administration process can be extremely complicated and time consuming, leaving beneficiaries and trustees overwhelmed and frustrated. At Morgan Law Group, our primary goal is to make the trust administration process as understandable and stress-free as possible for all parties involved, while avoiding probate, conflict, and personal liability. If you are interested in discussing how we can help you navigate the trust administration process, please contact our trust lawyers today to schedule a free initial consultation. You’ll be glad you did.
Frequently Asked Trust Administration Questions
Contact an Expert Trust Administration Attorney Today
At Morgan Law Group, our trust attorneys are here to guide you through the trust administration process. When you come to us for assistance, we will take the time to get to know you and understand your concerns as we guide you through the California trust administration process. We also understand that trust administration is a team effort, so our talented trust lawyers will answer any and all questions you may have as we help you ensure that the terms of the trust are faithfully executed. Please contact us today to schedule a free initial consultation.
No matter how complex the trust administration process may be, the trust administration lawyers at Morgan Law Group will guide you every step of the way.
All of this can be a hugely complicated and time consuming, not to mention overwhelming. Our primary objective is to make this process as understandable and stress-free as possible for the Trustee, while keeping matters out of conflict and out of court.
To learn more about the steps you need to take after the passing of a loved one, we invite you to call our warm and welcoming team member at 949.260.1400 or use this link to Book a no-charge 15-minute Call. We will help you understand your options and guide you to your next best step.