Benefits of a Living Trusts

Trusts are powerful tools that serve the purpose of

• avoiding the probate process

• leaving assets to your beneficiaries, and

• minimizing tax liability.

How a Revocable Living Trust Works

A revocable living trust is a legal instrument created by the “grantor” that can be amended or revoked during the grantor’s lifetime.  The grantor transfers assets to trust to be managed by the “trustee” for the ‘beneficiary” who receives the income and principal of the trust.  During the grantor’s lifetime, the grantor typically acts as the initial trustee.  When the grantor becomes incapacitated or upon death, a “successor trustee” manages the trust assets.  During the grantor’s lifetime, the grantor is the beneficiary.  Upon death of the grantor, the assets will either be managed for the benefit of other beneficiaries or distributed to the beneficiaries.  Types of trust utilized in estate planning include:

• Living Trusts

• Bypass Trusts

• Children’s Trusts

Living Trust Attorneys

Our experience and expertise enables us to determine whether a clients would benefit from a living trust and identify the appropriate type of trust given their individualized situations.  Our Orange County estate planning firm drafts and incorporates living trust into overall estate plans to assists our clients in directing the distribution of their property with minimum tax liability and delay.

As an estate planning firm based in Orange County, Ca, we provide comprehensive estate planning services including wills, trusts, power of attorney, and advance care directives for a full range of clients from high net worth to working class.

An A-B Trust also known as a credit-shelter, bypass, or family trust is a tax saving device that allow the maximum amount of property to pass to your inheritors without tax for a couple whose assets are above the estate tax exemption, which is $2 million for 2008.  An A-B Trust, Credit Shelter Trust, Bypass Trust, or Family Trust preserves the estate tax exemption for each spouse to use when leaving assets to their inheritors in effect doubling the amount of inheritance that passes free from estate tax.

How an A-B Trust Works

A revocable A-B Trust is created a married couple and can be revoked or amended while both spouses are living.  Upon the death of the first spouse, A, the A-B trust is divided into two trusts, Trust A and Trust B.  Trust A is funded with up to the tax marital deduction, which is $2 million for 2008.  The remaining assets are transferred to Trust B tax free under the marital deduction.  Trust A becomes irrevocable upon the death of the first spouse.  During the lifetime of the surviving spouse, the property in Trust A can be used by the surviving spouse for “health, education, support, or maintenance.”  When the surviving spouses dies, the assets in Trust A pass to the inheritors designated by the first spouse tax free up to the exemption limit utilizing the first spouse’s exemption.  During the lifetime of the surviving spouse, Trust B remains revocable and amendable by the surviving spouse.  When the surviving spouse dies, Trust B is passed to the inheritors of the surviving spouse tax free up to the limit under that spouse’s exemption.

A-B Trust Attorneys

Our experience and expertise enables us to determine whether clients would benefit from an A-B trust, credit shelter trust, bypass trust, or family trust and identify the appropriate type of trust given their individualized situations.  Our Orange County estate planning firm drafts and incorporates living trust into overall estate plans to assists our clients in directing the distribution of their property with minimum tax liability and delay.

As an estate planning firm based in Orange County, Ca, we provide comprehensive estate planning services including wills, trusts, power of attorney, and advance care directives for a full range of clients from high net worth to working class.