Critical Grantor Trust Fundamentals

Ever since the Middle Ages, people with significant assets have used the “Trust” concept to pass real property and personal effects to their children. In the previous fifty years , the “Living Trust” has become the de facto foundation of all estate planning resources.

But the question persists in many people’s minds: What exactly does a Living Trust do?

It is helpful to think of a Living Trust as a vessel (such as a glass) that one person successfully passes to another person. Everything within the glass (liquids, ice cubes, etc.) will be successfully passed to the other person. Everything that stays outside of the glass will not be passed on to them.

Funding is the process of adding your real and personal property– the “water” and “ice cubes”– to the Living Trust, so that they successfully will make it to your heirs.

See our article I’ve Got My Living Trust Now What Do I Do?

Three Critical Roles

The Living Trust has Three Fundamental Roles:

1. The Grantor/ Settlor/ Creator– This is the man or woman who establishes the Living Trust;

2. The Trustee– This is the Individual who manages the affairs of the Trust for the benefit of somebody else; and

3. The Beneficiary– this is the end recipient of the benefits of the Trust.

During your life, when you create a Trust, you act in all three roles. You are the Grantor– you created the Trust. You are the Trustee. And you remain the Beneficiary during your lifetime.

During Incapacity– If you are incapacitated, but are still alive, then you remain the Grantor and the Beneficiary. However someone else will need to be your Successor Trustee, to deal with your affairs for your benefit– if you can not do so.

After Death– Once you have passed away, your property is then managed by your Successor Trustee, for the benefit of your children or heirs (Beneficiaries).

REVOCABILITY

During the Settlor’s life, the Living Trust remains totally revocable. This means that the individual who developed the Living Trust can alter, amend, or revoke the Living Trust.

Upon the Disability or Death of the Settlor, the Living Trust becomes irrevocable. This means the Living Trust can no longer be altered, amended, or revoked without court permission.

THE JOINT HUSBAND AND WIFE LIVING TRUST (THE A-B TRUST)

Often a married couple will jointly settle (create) a Living Trust, which is commonly known as an A-B Trust.

Upon the death of the first spouse, the Living Trust splits in to two (2) separate and distinct trusts.

The Survivor’s Trust (Trust A) is also named the Marital Trust. This Trust continues being revocable during the Surviving Spouse’s lifetime. The Surviving Spouse has limitless use of Trust A’s Principal and Income during their life, and is free to add or remove the Beneficiaries of Trust A.

The Bypass Trust (Trust B) is also known as the Credit Shelter Trust. If planning is done properly, Trust B should distribute without being subject to Estate Taxes.

At this time, Trust A can either be (1) Joined into Trust B and distributed according to the conditions of Trust B, or (2) Distributed to the beneficiaries that the Surviving Spouse has selected during their lifetime.

THE IMPORTANT REQUIREMENT OF TRUST SETTLEMENT

The procedure of dividing the Living Trust into Trust A and Trust B is commonly known as as the Trust Settlement process. This is a critical process that can not be skipped.

When the first spouse dies, and a fully-funded Living Trust is in place, there is still work that will need to be done. While the assets funded to the Living Trust should not have to be subject to Probate, neglecting this Trust Administration until the Surviving Spouse dies can have devastating results for the beneficiaries.

Failing to appropriately divide the Living Trust at the time of the death of the first spouse may (in some cases) cause you to forfeit the Estate Tax credits that might otherwise be available. When property is distributed to the Beneficiaries, it can also cause major headaches.

It is crucial to remember that while a Living Trust has numerous advantages, it is crucial to use it in the manner it was designed.

CONCLUSION

A correctly funded Living Trust is the cornerstone of a successful Estate Plan. It helps Avoid Probate, Provides greater flexibility than a simple Will, and streamlines the Estate Settlement process, while keeping costs to a minimum.

Contact a Living Trust Attorney at Ainer and Fraker to discuss your Estate Planning needs in greater detail.

More A-B Living Benefits

Since the Middle Ages, families with assets have utilized the “Trust” idea to pass real estate and personal property to future generations. In the previous fifty years , the “Living Trust” has become the de facto foundation of all estate planning techniques.

But the question persists in many people’s minds: What exactly does a Living Trust do?

It is helpful to think about a Living Trust as a vessel (such as a glass) that one person successfully passes to another. Everything inside of the glass (liquids, ice cubes, etc.) will be successfully given to the other person. Everything that is outside of the glass will not be given on to them.

Funding is the procedure of putting in your real and personal property– the “water” and “ice cubes”– to the Living Trust, so that they successfully will make it to your inheritors.

See our article I’ve Got My Living Trust Now What Do I Do?

Three Fundamental Roles

The Living Trust has Three Critical Roles:

1. The Grantor/ Settlor/ Creator– This is the man or woman who sets up the Living Trust;

2. The Trustee– This is the Individual who manages the affairs of the Trust for the benefit of someone else; and

3. The Beneficiary– this is the final recipient of the benefits of the Trust.

During your lifetime, when you set up a Trust, you serve all three roles. You are the Grantor– you set up the Trust. You are the Trustee. And you remain the Beneficiary during your lifetime.

During Incapacity– If you are incapacitated, but are still alive, then you remain the Grantor and the Beneficiary. Someone else will need to be your Successor Trustee, to handle your affairs for your benefit– if you can not do so.

After Death– Once you have passed on, your Living Trust then is managed by your Successor Trustee, for the benefit of your children or heirs (Beneficiaries).

REVOCABILITY

During the Settlor’s life, the Living Trust remains entirely revocable. This means that the individual who created the Living Trust can alter, amend, or revoke the Living Trust.

Upon the Disability or Death of the Settlor, the Living Trust becomes irrevocable. This means the Living Trust can no longer be altered, amended, or revoked without court permission.

THE JOINT HUSBAND AND WIFE LIVING TRUST (THE A-B TRUST)

Often a married couple will jointly settle (create) a Living Trust, which is frequently called an A-B Trust.

Upon the death of the first spouse, the Living Trust splits in to two (2) separate and distinct trusts.

The Survivor’s Trust (Trust A) is also named the Marital Trust. This Trust continues being revocable during the Surviving Spouse’s lifetime. The Surviving Spouse has unlimited use of Trust A’s Principal and Income during their life, and is free to add or change the Beneficiaries of Trust A.

The Bypass Trust (Trust B) is also named the Credit Shelter Trust. This Trust becomes irrevocable upon the death of the first spouse to die. The Surviving Spouse is may use to All Income from Trust B, but may access the Principal only for designated purposes, such as for their health, education, maintenance and suppport . This is
named an Ascertainable Standard, and is legally required if the Surviving Spouse continues to serve as Trustee of Trust B.

Upon the passing of the second spouse, Trust B is distributed outright to its stated beneficiaries. Trust B should distribute without being subject to Estate Taxes if planning is done properly.

At this time, Trust A can either be (1) Joined into Trust B and distributed according to the language of Trust B, or (2) Distributed to the beneficiaries that the Surviving Spouse has chosen during their lifetime.

THE ESSENTIAL REQUIREMENT OF TRUST SETTLEMENT

The process of dividing the Living Trust into Trust A and Trust B is commonly known as as the Trust Settlement process. This is a critical process that can not be bypassed.

When one spouse dies, and a fully-funded Living Trust is in place, there is still work that needs to be done. While the assets put into the Living Trust should not need to be Probated, overlooking this Trust Settlement until the Surviving Spouse dies can have tragic results for the beneficiaries.

Failing to correctly divide the Living Trust at the time of the death of the first spouse may (in some cases) cause you to forfeit the Estate Tax exemptions that might otherwise be available. It can also cause major headaches when property is distributed to the Beneficiaries.

It is very important to remember that while a Living Trust has numerous advantages, it is important to use it in the manner it was designed.

CONCLUSION

A correctly funded Living Trust is the foundation of a successful Estate Plan. It helps Avoid Probate, Provides greater flexibility than a simple Will, and streamlines the Estate Settlement process, while keeping costs to a minimum.

Contact a Living Trust Attorney at Ainer and Fraker to discuss your Estate Planning needs in greater detail.

Fundamental Joint Living Trust Basics

Ever since the Middle Ages, families with assets have utilized the “Trust” idea to pass real property and personal property to the next generation. In the past half-century , the “Living Trust” became the de facto foundation of all estate planning techniques.

But the question persists in many people’s minds: What exactly does a Living Trust do?

It is helpful to think of a Living Trust as a vessel (such as a glass) that one person passes to another. Everything inside of the glass (liquids, ice cubes, etc.) will be successfully given to the other person. Everything that is outside of the glass will not be transferred on to them.

Funding is the procedure of putting in your personal and real property– the “water” and “ice cubes”– to the Living Trust, so that they successfully will make it to your heirs.

See our post I’ve Got My Living Trust Now What Do I Do?

Three Critical Roles

The Living Trust has Three Fundamental Roles:

1. The Grantor/ Settlor/ Creator– This is the individual who sets up the Living Trust;

2. The Trustee– This is the Man or woman who manages the affairs of the Trust for the benefit of another person; and

3. The Beneficiary– this is the final recipient of the benefits of the Trust.

During your lifetime, when you set up a Trust, you act in all three roles. You are the Grantor– you set up the Trust. You are the Trustee. And you remain the Beneficiary during your lifetime.

During Incapacity– If you are incapacitated, but are still alive, then you are still the Grantor and the Beneficiary. However someone else will need to be your Successor Trustee, to handle your property for your benefit– if you can not do so.

After Death– Once you have passed away, your property then is handled by your Successor Trustee, for the benefit of your heirs or children (Beneficiaries).

REVOCABILITY

During the Settlor’s lifetime, the Living Trust remains fully revocable. This means that the individual who created the Living Trust can alter, amend, or revoke the Living Trust.

Upon the Disability or Death of the Settlor, the Living Trust becomes irrevocable. This means the Living Trust can no longer be altered, amended, or revoked without court permission.

THE JOINT HUSBAND AND WIFE LIVING TRUST (THE A-B TRUST)

Often a husband and wife will jointly settle (create) a Living Trust, which is frequently called an A-B Trust.

Upon the death of the first spouse, the Living Trust splits in to two (2) distinct and separate trusts.

The Survivor’s Trust (Trust A) is also referred to as the Marital Trust. This Trust continues being revocable during the Surviving Spouse’s lifetime. The Surviving Spouse has limitless use of Trust A’s Principal and Income during their life, and is free to add or subtract the Beneficiaries of Trust A.

The Bypass Trust (Trust B) is also referred to as the Credit Shelter Trust. This Trust becomes irrevocable upon the death of the first spouse to die. The Surviving Spouse is entitled to All Income from Trust B, but may invade the Principal only for specified purposes, such as for their health, suppport, education and maintenance . This is
known as an Ascertainable Standard, and is legally required if the Surviving Spouse continues to act as Trustee of Trust B.

Upon the death of the second spouse, Trust B is distributed outright to its stated beneficiaries. If planning is done properly, Trust B should distribute without being subject to Estate Taxes.

At this time, Trust A can either be (1) Folded into Trust B and distributed according to the terms of Trust B, or (2) Distributed to the beneficiaries that the Surviving Spouse has chosen during their lifetime.

THE IMPORTANT REQUIREMENT OF TRUST SETTLEMENT

The procedure of dividing the Living Trust into Trust A and Trust B is commonly known as as the Trust Settlement process. This is a critical process that can not be skipped.

When one spouse dies, and a fully-funded Living Trust is in place, there is still work that will need to be done. While the properties funded to the Living Trust should not have to be subject to Probate, overlooking this Trust Settlement until the Surviving Spouse dies can have terrible outcomes for the beneficiaries.

Failing to appropriately divide the Living Trust upon the death of the first spouse may (in some cases) cause you to forfeit the Estate Tax credits that might otherwise be available. It can also cause major headaches when property is distributed to the Beneficiaries.

It is crucial to remember that while a Living Trust has numerous benefits, it is necessary to use it in the manner it was designed.

CONCLUSION

A properly funded Living Trust is the cornerstone of a comprehensive Estate Plan. It helps Avoid Probate, Provides greater flexibility than a simple Will, and helps streamline the Estate Settlement process, while keeping costs to a minimum.

Contact a Living Trust Attorney at Ainer and Fraker to discuss your Estate Planning needs in greater detail.

Basic A-B Trust 101

Ever since the Middle Ages, people with assets have used the “Trust” concept to pass real estate and personal effects to their children. In the past fifty years , the “Living Trust” became the de facto bedrock of all estate planning techniques.

But the question persists in many people’s minds: What exactly does a Living Trust do?

It is helpful to think of a Living Trust as a vessel (such as a glass) that one person passes to another person. Everything inside of the glass (liquids, ice cubes, etc.) will be successfully given to the other person. Everything that remains outside of the glass will not be passed on to them.

Funding is the process of putting in your real and personal property– the “water” and “ice cubes”– to the Living Trust, so that they successfully will make it to your beneficiaries.

See our article I’ve Got My Living Trust Now What Do I Do?

Three Fundamental Roles

The Living Trust has Three Critical Roles:

1. The Grantor/ Settlor/ Creator– This is the person who sets up the Living Trust;

2. The Trustee– This is the Person who manages the affairs of the Trust for the benefit of somebody else; and

3. The Beneficiary– this is the end recipient of the benefits of the Trust.

During your lifetime, when you set up a Trust, you serve all three roles. You are the Grantor– you created the Trust. You are the Trustee. And you remain the Beneficiary during your lifetime.

During Incapacity– If you are incapacitated, but are still alive, then you are still the Grantor and the Beneficiary. Someone else will need to be your Successor Trustee, to handle your affairs for your benefit– if you can not do so.

After Death– Once you have passed on, your property then is handled by your Successor Trustee, for the benefit of your heirs or children (Beneficiaries).

REVOCABILITY

During the Settlor’s life, the Living Trust is entirely revocable. This means that the man or woman who developed the Living Trust can alter, amend, or revoke the Living Trust.

Upon the Incapacity or Death of the Settlor, the Living Trust becomes irrevocable. This means the Living Trust can no longer be altered, amended, or revoked without court permission.

THE JOINT HUSBAND AND WIFE LIVING TRUST (THE A-B TRUST)

Often a husband and wife will settle jointly (create) a Living Trust, which is generally known as an A-B Trust.

Upon the death of the first spouse, the Living Trust splits in to two (2) separate and distinct trusts.

The Survivor’s Trust (Trust A) is also called the Marital Trust. This Trust continues being revocable during the Surviving Spouse’s lifetime. The Surviving Spouse has limitless use of Trust A’s Principal and Income during their life, and is free to add or remove the Beneficiaries of Trust A.

The Bypass Trust (Trust B) is also known as the Credit Shelter Trust. If planning is done properly, Trust B should distribute without being subject to Estate Taxes.

At this time, Trust A can either be (1) Joined into Trust B and distributed according to the terms of Trust B, or (2) Distributed to the beneficiaries that the Surviving Spouse has chosen during their lifetime.

THE IMPORTANT REQUIREMENT OF TRUST SETTLEMENT

The procedure of dividing the Living Trust into Trust A and Trust B is commonly referred to as the Trust Settlement process. This is a critical process that can not be skipped.

When one spouse dies, and a fully-funded Living Trust is in place, there is still work that will need to be done. While the properties funded to the Living Trust should not have to be Probated, ignoring this Trust Settlement until the Surviving Spouse dies can have devastating outcomes for the beneficiaries.

Failing to correctly divide the Living Trust upon the death of the first spouse may (in some cases) cause you to lose the Estate Tax credits that might otherwise be available. It can also cause major headaches when property is distributed to the Beneficiaries.

It is crucial to remember that while a Living Trust has numerous benefits, it is necessary to use it in the manner it was designed.

CONCLUSION

A correctly funded Living Trust is the cornerstone of a successful Estate Plan. It helps Avoid Probate, Provides greater flexibility than a simple Will, and helps streamline the Estate Administration process, while keeping costs to a minimum.

Contact a Living Trust Attorney at Ainer and Fraker to discuss your Estate Planning needs in greater detail.

Key Joint Revocable Trust Features

Since the Middle Ages, people with properties have used the “Trust” idea to pass real property and personal effects to future generations. In the previous fifty years , the “Living Trust” became the de facto bedrock of all estate planning tools.

But the question persists in many people’s minds: What exactly does a Living Trust do?

It is helpful to think of a Living Trust as a container (such as a glass) that one person passes to another. Everything within the glass (liquids, ice cubes, etc.) will be successfully transferred to the other person. Everything that is outside of the glass will not be passed on to them.

Funding is the procedure of putting in your real and personal property– the “water” and “ice cubes”– to the Living Trust, so that they successfully will make it to your inheritors.

See our article I’ve Got My Living Trust Now What Do I Do?

Three Fundamental Roles

The Living Trust has Three Essential Roles:

1. The Grantor/ Settlor/ Creator– This is the individual who creates the Living Trust;

2. The Trustee– This is the Individual who manages the affairs of the Trust for the benefit of another person; and

3. The Beneficiary– this is the final recipient of the benefits of the Trust.

During your lifetime, when you set up a Trust, you act in all three roles. You are the Grantor– you set up the Trust. You are the Trustee. And you remain the Beneficiary during your lifetime.

During Incapacity– If you are lack capacity, but still alive, then you remain the Grantor and the Beneficiary. Someone else will need to be your Successor Trustee, to deal with your affairs for your benefit– if you can not do so.

After Death– Once you have passed away, your property then is managed by your Successor Trustee, for the benefit of your children or heirs (Beneficiaries).

REVOCABILITY

During the Settlor’s lifetime, the Living Trust is entirely revocable. This means that the person who put together the Living Trust can alter, amend, or revoke the Living Trust.

Upon the Incapacity or Death of the Settlor, the Living Trust is irrevocable. This means the Living Trust can no longer be altered, amended, or revoked without court permission.

THE JOINT HUSBAND AND WIFE LIVING TRUST (THE A-B TRUST)

Often a husband and wife will jointly settle (create) a Living Trust, which is typically known as an A-B Trust.

Upon the death of the first spouse, the Living Trust splits in to two (2) distinct and separate trusts.

The Survivor’s Trust (Trust A) is also referred to as the Marital Trust. This Trust continues to be revocable during the Surviving Spouse’s lifetime. The Surviving Spouse has unrestricted use of Trust A’s Principal and Income during their life, and is free to add or remove the Beneficiaries of Trust A.

The Bypass Trust (Trust B) is also known as the Credit Shelter Trust. If planning is done properly, Trust B should distribute without being subject to Estate Taxes.

At this time, Trust A can either be (1) Folded into Trust B and distributed according to the terms of Trust B, or (2) Distributed to the beneficiaries that the Surviving Spouse has chosen during their lifetime.

THE IMPORTANT REQUIREMENT OF TRUST SETTLEMENT

The process of dividing the Living Trust into Trust A and Trust B is commonly referred to as the Trust Administration process. This is a critical process that can not be bypassed.

When the first spouse dies, and a fully-funded Living Trust is in place, there is still work that must be done. While the assets put into the Living Trust should not have to be Probated, neglecting this Trust Settlement until the Surviving Spouse dies can have devastating outcomes for the beneficiaries.

Failing to properly divide the Living Trust at the time of the death of the first spouse can (in some cases) cause you to forfeit the Estate Tax exemptions that might otherwise be available. It can also cause major headaches when property is distributed to the Beneficiaries.

It is vital to remember that while a Living Trust has many advantages, it is vital to use it in the manner it was designed.

CONCLUSION

A correctly funded Living Trust is the cornerstone of a successful Estate Plan. It helps Avoid Probate, Provides greater flexibility than a simple Will, and helps streamline the Estate Settlement process, while keeping costs to a minimum.

Contact a Living Trust Attorney at Ainer and Fraker to discuss your Estate Planning needs in greater detail.

Fundamental Joint Trust Features

Since the Middle Ages, individuals with properties have made use of the “Trust” concept to pass real property and personal effects to the next generation. In the past half-century , the “Living Trust” has become the de facto bedrock of all estate planning resources.

But the question persists in many people’s minds: What exactly does a Living Trust do?

It is helpful to consider a Living Trust as a vessel (such as a glass) that one person passes to another. Everything within the glass (liquids, ice cubes, etc.) will be successfully passed to the other person. Everything that remains outside of the glass will not be given on to them.

Funding is the process of putting in your real and personal property– the “water” and “ice cubes”– to the Living Trust, so that they successfully make it to your inheritors.

See our article I’ve Got My Living Trust Now What Do I Do?

Three Essential Roles

The Living Trust has Three Essential Roles:

1. The Grantor/ Settlor/ Creator– This is the man or woman who sets up the Living Trust;

2. The Trustee– This is the Man or woman who manages the affairs of the Trust for the benefit of someone else; and

3. The Beneficiary– this is the end recipient of the benefits of the Trust.

During your lifetime, when you create a Trust, you act in all three roles. You are the Grantor– you created the Trust. You are the Trustee. And you are the Beneficiary during your lifetime.

During Incapacity– If you are lack capacity, but still alive, then you are still the Grantor and the Beneficiary. However someone else will need to be your Successor Trustee, to handle your affairs for your benefit– if you can not do so.

After Death– Once you have passed on, your Living Trust is then handled by your Successor Trustee, for the benefit of your heirs or children (Beneficiaries).

REVOCABILITY

During the Settlor’s lifetime, the Living Trust is totally revocable. This means that the person who put together the Living Trust can alter, amend, or revoke the Living Trust.

Upon the Disability or Death of the Settlor, the Living Trust becomes irrevocable. This means the Living Trust can no longer be altered, amended, or revoked without court permission.

THE JOINT HUSBAND AND WIFE LIVING TRUST (THE A-B TRUST)

Often a husband and wife will settle jointly (create) a Living Trust, which is often called an A-B Trust.

Upon the death of the first spouse, the Living Trust breaks in to two (2) distinct and separate trusts.

The Survivor’s Trust (Trust A) is also named the Marital Trust. This Trust is revocable during the Surviving Spouse’s lifetime. The Surviving Spouse has unlimited use of Trust A’s Principal and Income during their life, and is free to add or subtract the Beneficiaries of Trust A.

The Bypass Trust (Trust B) is also known as the Credit Shelter Trust. If planning is done properly, Trust B should distribute without being subject to Estate Taxes.

At this time, Trust A can either be (1) Folded into Trust B and distributed according to the terms of Trust B, or (2) Distributed to the beneficiaries that the Surviving Spouse has chosen during their lifetime.

THE CRITICAL REQUIREMENT OF TRUST SETTLEMENT

The procedure of dividing the Living Trust into Trust A and Trust B is commonly referred to as the Trust Settlement process. This is a critical process that can not be bypassed.

When the first spouse dies, and a fully-funded Living Trust is in place, there is still work that will need to be done. While the properties funded to the Living Trust should not have to be subject to Probate, ignoring this Trust Settlement until the Surviving Spouse dies can have terrible outcomes for the beneficiaries.

Failing to properly divide the Living Trust upon the death of the first spouse may (in some cases) cause you to lose the Estate Tax exemptions that might otherwise be available. It can also cause major headaches when property is distributed to the Beneficiaries.

It is crucial to remember that while a Living Trust has numerous benefits, it is crucial to use it in the manner it was designed.

CONCLUSION

A correctly funded Living Trust is the cornerstone of a comprehensive Estate Plan. It helps Avoid Probate, Provides greater flexibility than a simple Will, and helps streamline the Estate Administration process, while keeping costs to a minimum.

Contact a Living Trust Attorney at Ainer and Fraker to discuss your Estate Planning needs in greater detail.

Husband And Wife Trust 101

Ever since the Middle Ages, families with properties have made use of the “Trust” idea to pass real property and personal property to the next generation. In the previous half-century , the “Living Trust” became the de facto foundation of all estate planning resources.

But the question persists in many people’s minds: What exactly does a Living Trust do?

It is helpful to think about a Living Trust as a vessel (such as a glass) that one person successfully passes to another person. Everything inside of the glass (liquids, ice cubes, etc.) will be successfully given to the other person. Everything that remains outside of the glass will not be given on to them.

Funding is the process of adding your real and personal property– the “water” and “ice cubes”– to the Living Trust, so that they successfully make it to your named beneficiaries.

See our article I’ve Got My Living Trust Now What Do I Do?

Three Essential Roles

The Living Trust has Three Indispensable Roles:

1. The Grantor/ Settlor/ Creator– This is the person who establishes the Living Trust;

2. The Trustee– This is the Person who manages the affairs of the Trust for the benefit of a third party; and

3. The Beneficiary– this is the ultimate recipient of the benefits of the Trust.

During your lifetime, when you set up a Trust, you serve all three roles. You are the Grantor– you set up the Trust. You are the Trustee. And you are the Beneficiary during your lifetime.

During Incapacity– If you are lack capacity, but still alive, then you are still the Grantor and the Beneficiary. Someone else will need to be your Successor Trustee, to handle your affairs for your benefit– if you can not do so.

After Death– Once you have passed on, your Living Trust is then handled by your Successor Trustee, for the benefit of your heirs or children (Beneficiaries).

REVOCABILITY

During the Settlor’s life, the Living Trust is completely revocable. This means that the person who developed the Living Trust can alter, amend, or revoke the Living Trust.

Upon the Disability or Death of the Settlor, the Living Trust becomes irrevocable. This means the Living Trust can no longer be altered, amended, or revoked without court permission.

THE JOINT HUSBAND AND WIFE LIVING TRUST (THE A-B TRUST)

Often a married couple will settle jointly (create) a Living Trust, which is typically referred to as an A-B Trust.

Upon the death of the first spouse, the Living Trust splits in to two (2) distinct and separate trusts.

The Survivor’s Trust (Trust A) is also known as the Marital Trust. This Trust continues to be revocable during the Surviving Spouse’s lifetime. The Surviving Spouse has unrestricted use of Trust A’s Principal and Income during their life, and is free to add or remove the Beneficiaries of Trust A.

The Bypass Trust (Trust B) is also known as the Credit Shelter Trust. If planning is done properly, Trust B should distribute without being subject to Estate Taxes.

At this time, Trust A can either be (1) Joined into Trust B and distributed according to the language of Trust B, or (2) Distributed to the beneficiaries that the Surviving Spouse has named during their lifetime.

THE CRITICAL REQUIREMENT OF TRUST SETTLEMENT

The process of dividing the Living Trust into Trust A and Trust B is commonly referred to as the Trust Administration process. This is a critical process that can not be bypassed.

When one spouse dies, and a fully-funded Living Trust is in place, there is still work that will need to be done. While the properties funded to the Living Trust should not need to be subject to Probate, skipping this Trust Settlement until the Surviving Spouse dies can have tragic outcomes for the beneficiaries.

Failing to appropriately divide the Living Trust at the time of the death of the first spouse may (in some cases) cause you to lose the Estate Tax credits that might otherwise be available. When property is distributed to the Beneficiaries, it can also cause major headaches.

It is very important to remember that while a Living Trust has numerous advantages, it is vital to use it in the manner it was designed.

CONCLUSION

A correctly funded Living Trust is the cornerstone of a successful Estate Plan. It helps Avoid Probate, Provides greater flexibility than a simple Will, and streamlines the Estate Administration process, while keeping costs to a minimum.

Contact a Living Trust Attorney at Ainer and Fraker to discuss your Estate Planning needs in greater detail.

Fundamental Petition To Determine Succession To Real Estate In California 101

The Trust Administration Attorneys with Ainer and Fraker discuss how the Petition to Determine Succession to Real Estate in California may replace the full probate process for Estates less than $150,000.

In our previous posts, we went over why Avoiding Probate is an excellent idea.

We likewise talked about how specific Assets Not Subject to Probate can prevent the Probate process, in particular scenarios.

An earlier post talked about the California Small Estate Affidavit procedure, whereby {personal {property| personal effects| possessions less than $150,000 might be disposed of without court supervision.

Since January 1, 2012, the California Probate Code was amended to consist of property less than $150,000 in the California Small Estate process. This new policy applies retroactively to all Estates filed after January 1, 2012, no matter when the Decedent passed away.

California Probate Code Section 13150 et seq. enables a Petition to Determine Succession to Real estate (and Personal Property) for estates of $150,000 or less.

Unlike the California Small Estate Affidavit Procedure, noted in California Probate Code Section 13100 – which is an affidavit-based process that is totally without court supervision, the procedure for Real Estate identified in this Area does require submitting a Petition with the Court of probate.

However, the process explained in California Probate Code Section 13150 et seq. is NOT a complete probate, and is far cheaper and normally far quicker than a full probate.

Reach out to an Estate Planning Lawyer with Ainer and Fraker 800-775-7612 www.AinerFraker.com right away to talk about the Probate Code requirements for the Petition to Determine Succession to Real Estate in California.

Important Petition To Determine Succession To Real Estate In California 101

The Estate Administration Lawyers here at Ainer and Fraker talk about how the Petition to Determine Succession to Real Estate in California might change the complete probate procedure for Estates less than $150,000.

In our prior posts, we went over why Avoiding Probate is an outstanding concept.

We likewise discussed how certain Assets Not Subject to Probate can avoid the Probate procedure, in certain conditions.

An earlier post went over the California Small Estate Affidavit procedure, wherein property less than $150,000 could be disposed of without court supervision.

As of January 1, 2012, the California Probate Code was amended to consist of property less than $150,000 in the California Small Estate procedure. This new policy uses retroactively to all Estates filed after January 1, 2012, no matter when the Decedent passed away.

California Probate Code Section 13150 et seq. permits for a Petition to Determine Succession to Real Property (and Personal Property) for estates of $150,000 or less.

Unlike the California Small Estate Affidavit Procedure, listed in California Probate Code Section 13100 – which is an affidavit-based procedure that is completely devoid of court supervision, the process for Real Estate enumerated in this Area does require submitting a Petition with the Probate Court.

However, the procedure described in California Probate Code Section 13150 et seq. is NOT a complete probate, and is far more economical and usually far quicker than a full probate.

Reach out to a Probate Lawyer at Ainer and Fraker at 800-775-7612today to discuss the Probate Code requirements for the Petition to Determine Succession to Real Estate in California.

Foundational Family Trust Advantages

Since the Middle Ages, families with properties have made use of the “Trust” idea to pass real property and personal property to their children. In the past half-century , the “Living Trust” has become the de facto foundation of all estate planning tools.

The question persists in many people’s minds: What exactly does a Living Trust do?

It is helpful to think about a Living Trust as a container (such as a glass) that one person passes to another. Everything within the glass (liquids, ice cubes, etc.) will be successfully passed to the other person. Everything that remains outside of the glass will not be given on to them.

Funding is the process of putting in your real and personal property– the “water” and “ice cubes”– to the Living Trust, so that they successfully make it to your beneficiaries.

See our post I’ve Got My Living Trust Now What Do I Do?

Three Critical Roles

The Living Trust has Three Essential Roles:

1. The Grantor/ Settlor/ Creator– This is the individual who sets up the Living Trust;

2. The Trustee– This is the Individual who manages the affairs of the Trust for the benefit of another person; and

3. The Beneficiary– this is the final recipient of the benefits of the Trust.

During your lifetime, when you set up a Trust, you serve all three roles. You are the Grantor– you created the Trust. You are the Trustee. And you remain the Beneficiary during your lifetime.

During Incapacity– If you are incapacitated, but still alive, then you are still the Grantor and the Beneficiary. Someone else will need to be your Successor Trustee, to deal with your affairs for your benefit– if you can not do so.

After Death– Once you have passed away, your Living Trust is then managed by your Successor Trustee, for the benefit of your heirs or children (Beneficiaries).

REVOCABILITY

During the Settlor’s lifetime, the Living Trust remains totally revocable. This means that the person who developed the Living Trust can alter, amend, or revoke the Living Trust.

Upon the Incapacity or Death of the Settlor, the Living Trust is irrevocable. This means the Living Trust can no longer be altered, amended, or revoked without court permission.

THE JOINT HUSBAND AND WIFE LIVING TRUST (THE A-B TRUST)

Often a husband and wife will jointly settle (create) a Living Trust, which is frequently called an A-B Trust.

Upon the death of the first spouse, the Living Trust breaks in to two (2) distinct and separate trusts.

The Survivor’s Trust (Trust A) is also known as the Marital Trust. This Trust is revocable during the Surviving Spouse’s lifetime. The Surviving Spouse has unlimited use of Trust A’s Principal and Income during their life, and is free to add or subtract the Beneficiaries of Trust A.

The Bypass Trust (Trust B) is also known as the Credit Shelter Trust. If planning is done properly, Trust B should distribute without being subject to Estate Taxes.

At this time, Trust A can either be (1) Folded into Trust B and distributed according to the language of Trust B, or (2) Distributed to the beneficiaries that the Surviving Spouse has chosen during their lifetime.

THE CRITICAL REQUIREMENT OF TRUST SETTLEMENT

The process of dividing the Living Trust into Trust A and Trust B is commonly referred to as the Trust Administration process. This is a critical process that can not be bypassed.

When the first spouse dies, and a fully-funded Living Trust is in place, there is still work that needs to be done. While the properties funded to the Living Trust should not have to be Probated, ignoring this Trust Settlement until the Surviving Spouse dies can have disastrous results for the beneficiaries.

Failing to properly divide the Living Trust upon the death of the first spouse can (in some cases) cause you to forfeit the Estate Tax credits that might otherwise be available. It can also cause major headaches when property is distributed to the Beneficiaries.

It is crucial to remember that while a Living Trust has numerous advantages, it is vital to use it in the manner it was designed.

CONCLUSION

A correctly funded Living Trust is the cornerstone of a comprehensive Estate Plan. It helps Avoid Probate, Provides greater flexibility than a simple Will, and helps streamline the Estate Administration process, while keeping costs to a minimum.

Contact a Living Trust Attorney at Ainer and Fraker to discuss your Estate Planning needs in greater detail.