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best trust lawyer in Downey

Why Homeowners in Downey Need a Living Trust ASAP

For most Downey residents, their home is the biggest purchase they will ever make. One cannot get a loan without purchasing home insurance and most homeowners will not think twice about protecting their assets this way. Unfortunately, not every homeowner in Downey has a living trust.

The most common myths about a living trust

The most common myths about a living trust are that the trust is too expensive, the person doesn’t need it, or they will do it later. Unfortunately, we don’t know when we are going to die and once we no longer on this Earth, we cannot redo our estate planning. Sadly, life will go on without us and our hard-earned assets may end up in the wrong hands and your most vulnerable family members may lack the protection they need.

Finally, just like many Californians, some Downey residents mistakenly think that a living trust is for wealthy individuals or families only. This cannot be further from the truth! Every adult individual in Downey, but especially homeowners and married couples with children, should have a trust done by an experienced attorney (more about this later).

What is a living trust?

A living trust is a contract. It’s a contract between the settlor (the maker of trust) and the trustee to hold the assets (e. g.: the home) for the beneficiaries (e.g.: the children). The trustees manage the trust property for the beneficiaries. In California, a trust is used primarily as an estate planning document that ensures that the assets of the settlor are distributed in accordance with his or her wishes.

Top 5 benefits of a living trust for Downey residents

1) Probate avoidance

Probate is another term which many Downey residents find confusing. A probate refers to the California court supervising the process of administering the decedent’s estate. This is a lengthy (one year or more) and expensive (tens of thousands of dollars) process.

Why and when is a probate needed? A somewhat simplified answer is in the absence of a trust. When a Downey homeowner dies and leaves assets (this includes real estate, cash, bonds, businesses, etc.), we as a society have decided that there must be certain rules on who gets the inheritance. Say, a parent has died, and children want to sell the house. But the parent – the original owner of the property – cannot sign the listing agreement, so a due process is needed to make sure the rightful heirs get to step into the parent’s shoes and legally act as the new owners.

Contrary to popular belief, a will does not avoid probate in California. To avoid the lengthy and expensive (and sometimes contentious) probate, homeowners in Downey should form a trust by hiring a qualified attorney.

2) Uninterrupted management of a business

If you own a business, the living trust will allow continued, uninterrupted management of the business.  If you die or become incapacitated then your business will come to a dead stop, however, if you named a successor trustee in your living trust to run your business, your business will have no interruption in management.

3) Planning for incapacity

A living trust can be a useful device for planning for incapacity. Once the assets are transferred into the living trust, then the trustee can manage the assets for you in your absence due to you being out of the country or temporarily incapacitated. This avoids another lengthy and costly process called conservatorship, which includes petitioning a judge and declaring a person incapacitated.

4) Tax benefits

Giving your home to your children in a living trust means that they will get the house after your die, which ensures that the children will not have to pay any capital gains if they choose to sell the house, in many cases. However, due to the recently passed Proposition 19 in California, some tax benefits are no longer available or may be capped. This is yet another reason to hire an experienced attorney who can custom tailor your trust to ensure the maximum tax benefits.

5) Keeping money in the family and protecting the most vulnerable members

The trust will serve as asset protection for the beneficiaries. If you leave the house in the trust for your children, your children’s creditors cannot come after the house. The assets in the trust are untouchable by the children’s spouses or children’s creditors.

In addition, your living trust can specify at what age your children will receive any portion of their inheritance. For example, your son might get all of his inheritance at age 30 or will get $100,000 per year while he is going to college (and the remainder later) or by some other formula.

This is especially important in case if you have special needs children or grandchildren. A trust can provide financial stability, medical care, and ensure they will be taken care of.  For example, you can specify that a disabled child may live in the house until his or her death, and the remaining heirs can only sell the property after the disabled child had passed away.

Can I use online services like Legal Zoom to form a trust in Downey, California?

Of course, but you must manage your expectations. If it’s a basic trust for a single person who owns no house and has no children, a simple online will or trust may be fine. Do keep in mind that you will find out the efficacy of the trust when you are no longer alive! You won’t be able to come back and redo it.

If you own a house in Downey (or anywhere in California), have children and grandchildren, have income-producing property, or have a blended family, it is imperative that you hire a seasoned attorney who specializes in estate planning.

No online service or so-called affordable paralegals can craft a trust which would address complex or less common situations. Also, a trust that is too generic, ambiguous, or in any way inaccurate, is an open invitation for litigation. All in all, saving a couple of thousands of dollars and foregoing a trust may cost you and your family a lot more money and, possibly, heartache, in the future.

How do I find the best living trust attorney in Downey?

Finding the most qualified attorney who can craft a family trust in Downey may seem like a daunting task. At the very minimum, you want to make sure that the lawyer specializes in estate planning, trusts, and probate. If a law firm does too many things, there is a risk they may not be good at most of them. We have written an extensive separate article on how to find the most qualified trust lawyer in California. You may want to check it out here.