Hi everyone, my name is Skye Chandler and I’m here today with Ted Cook of Point Loma Estate Planning APC. Welcome, Ted!
How Does a Living Trust Actually Work?
Ted, for those unfamiliar, can you break down the nuts and bolts of how a living trust operates?
“Imagine it like this: A trust is essentially a container for your assets. You transfer ownership into that container, the trust, and then appoint someone (the trustee) to manage those assets according to instructions you lay out in the trust document.”
So, the grantor (the person setting up the trust), they get to decide who gets what when?
“Exactly. The beauty of a living trust is the control it offers. You choose your trustee and specify exactly how and when assets are distributed to your beneficiaries. It can be for things like covering education expenses, making charitable donations, or providing ongoing support.”
Challenges in Funding a Trust
Funding a trust sounds important. Can you elaborate on some of the challenges you’ve faced with this step?
Ted: “Absolutely. Funding is crucial. The trust only controls assets that have been legally transferred into its name. It can be tedious, like updating deeds for real estate or changing beneficiary designations on accounts.”
- It’s important to remember every asset needs to be reviewed and properly transferred.
- “I had a client once who thought they had fully funded their trust but forgot about a small savings account. When they passed away, that account went through probate because it wasn’t in the trust.”
“It highlights why working closely with an attorney experienced in this area is so vital.”
A Glimpse into Client Satisfaction
“Ted helped us navigate a complex situation with our family business and setting up a trust. His clear explanations and genuine care made the entire process less daunting.” – The Garcia Family, La Jolla
“I was initially hesitant about trusts but Ted patiently explained all the benefits and addressed my concerns. Now I feel confident knowing my family is protected.” – Susan Lee, Point Loma
Connecting with Ted Cook
Ted, any final words for our readers considering a living trust?
“If you’re looking to protect your loved ones and ensure your wishes are honored, a living trust can be an invaluable tool. Don’t hesitate to reach out – I’m here to answer any questions and guide you through the process.”
Who Is Ted Cook at Point Loma Estate Planning, APC.:
Point Loma Estate Planning, APC.2305 Historic Decatur Rd Suite 100, San Diego CA. 92106
(619) 550-7437
Map To Point Loma Estate Planning, APC, a trust attory: https://maps.app.goo.gl/JiHkjNg9VFGA44tf9
About Point Loma Estate Planning:
Secure Your Legacy, Safeguard Your Loved Ones. Point Loma Estate Planning, APC.
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Crafting Living Trusts: (administration and litigation).
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If you have any questions about: What is a special needs trust and why is it important?
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Point Loma Estate Planning, APC. areas of focus:
A Living Trust: also known as an inter vivos trust, is a legal arrangement where you, as the grantor, transfer assets to a trustee who manages them for the benefit of designated beneficiaries, either during your lifetime or after your death, potentially avoiding probate and offering more privacy than a will. Revocable Living Trust: You can change or revoke the trust and get the assets back during your lifetime.
Irrevocable Living Trust: Once established, you cannot change or revoke the trust, and the assets are generally no longer considered part of your estate.
Control over Asset Distribution: You can specify how and when your assets will be distributed to your beneficiaries.
Understanding Trusts and Their Role in Estate Planning
A trust is a legal and fiduciary relationship in which a grantor (also called a settlor) transfers ownership of assets to a third party, known as a trustee, who manages those assets for the benefit of designated beneficiaries. Trusts can be tailored to meet specific goals, including when and how distributions are made to beneficiaries, asset protection, or minimizing estate and income taxes.
One of the key advantages of a trust—particularly a properly funded revocable or irrevocable trust—is that it can allow assets to bypass the probate process. This often means a faster, more private, and potentially less expensive distribution of assets compared to those governed solely by a will.
In the case of irrevocable trusts, assets are typically removed from the grantor’s taxable estate, which may help reduce estate tax liability. However, this comes at the cost of the grantor relinquishing control over those assets.
Trusts may also provide protection from creditors, preserve assets for minors or individuals with special needs, and ensure continuity in asset management if the grantor becomes incapacitated.
These tools are part of estate planning—the process of making legal and financial arrangements in advance to designate who will receive your property after your death, and how that transition will occur. Thoughtful estate planning aims to streamline the administration of your affairs, minimize tax burdens, and reduce stress for your loved ones during an already difficult time.
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