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Probate & Business – Estate Planning – Trust Litigation – Inheritance Disputes – Product Liability – Trust Administration – Tax Planning
Creating a trust involves complex legal procedures and requirements. For this reason, hiring an attorney specializing in trusts and estate planning is crucial to ensure the trust is structured correctly, appropriately drafted, and executed following applicable regulations and laws. Are you looking for a trust attorney Newport Beach, CA, residents rely on? Our expert attorneys have the knowledge and skill to assist you best.
What Is a Trust?
A trust is a legal arrangement where a person, called the grantor or trustor, transfers assets such as money or property to another party, called the trustee. The trustee manages these assets on behalf of the beneficiaries. The trust document outlines the terms and conditions under which the assets are to be managed, distributed, and used for the benefit of the beneficiaries.
Fiduciary Duties of Trustees
A trustee bears the responsibility of a fiduciary, obligated to prioritize the best interests of present and future beneficiaries of the trust. Failure to fulfill this duty can result in personal liability for the trustee in the event of a breach. For this reason, A trustee must exercise due care and diligence.
Benefits of a Trust
Trusts serve various purposes in the estate planning process. For example, trusts provide asset protection, charitable giving, and financial support to individuals such as minors. They offer a flexible and efficient way to manage and distribute assets. Moreover, trusts come with advantages, such as potential tax benefits, privacy, and continuity of asset management after the trustor passes on.
Common Types of Trusts
- Revocable Living Trust
- Irrevocable Trust
- Testamentary Trust
- Charitable Trust
- Special Needs Trust
- Grantor Retained Annuity Trust (GRAT)
- Life Insurance Trust
- Asset Protection Trust
Charitable Remainder Trust
A charitable remainder trust allows individuals to donate to charities while providing themselves or other designated beneficiaries with income for a specified period or throughout their lifetime. Benefits of this type of trust include providing regular income payments to loved ones while contributing to charity organizations. Additionally, these trusts offer tax benefits for the grantor. For example, the grantor may be eligible for an income tax deduction. Moreover, when appreciated assets are transferred to the trust, the capital gains tax on those assets is deferred until they are sold by the trust. Therefore, the overall tax liability is reduced.
There are a few drawbacks of a charitable remainder trust. First, it is irrevocable. Therefore, the grantor cannot change it once they establish it. For this reason, the grantor should meet with a skilled trust attorney in Newport Beach, CA, to discuss their goals for the trust. Doing so will ensure the trust fund is being set up correctly to align with the grantor’s goals. A charitable remainder trust provides income to the designated beneficiaries during the trust term. However, the ultimate distribution of the assets in the trust goes to the specified charity. Therefore, the non-charitable beneficiaries will receive a smaller inheritance than they would when other types of trusts are utilized.
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SOUTHERN CALIFORNIA ATTORNEYS
We are an industry-leading estate, trust, and probate attorney serving clients in Irvine, CA and surrounding communities within Orange County, including Irvine and Laguna Beach.
We are an industry-leading trust attorney serving clients within Orange County, including Dana Point and Laguna Beach.