Common Issues in a Trust Administration

Counsel from an Oakland Trust Lawyer

One major misconception people have regarding trusts is in thinking they'll save taxes by putting money into a trust. Trusts can be legitimately used to save estate tax, but that only comes into play for estates above $5.4 million (that's the amount for 2015 calculating inflation). If you have an estate in that neighborhood, you can set up a trust with certain provisions that can minimize or even eliminate federal estate tax, but you can also do the same with a will, so the trust isn't necessarily better.

When people come to me and ask if they should set up a trust, I tell them yes, if they want to avoid probate. Frankly, if they're going to go to the trouble of setting up a will sophisticated enough to save estate taxes, they should know it doesn't cost much more to set up a trust that can do the same thing. I don't think I've ever drafted a will to avoid estate tax.

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How Often Do You Clean Up a Trust?

It's not uncommon for a trust to be set up and then for the beneficiaries, typically the children of the person who set up the trust, to have a dispute either with each other or with the trustee regarding how the terms of the trust will be carried out. That happens fairly frequently and that's when attorneys get involved.

Sometimes that could have been avoided if the trust had been drafted a bit differently. So if you are considering setting up a trust, you should hire an experienced trust attorney with substantial insight to guide you through the process.

What Else Should You Know About Trusts?

If the trust agreement does not specify that the trustee is not to get a fee, then the trustee will be entitled to a reasonable fee. Financial institution trustees will charge a substantial fee, so this is something to consider; it's one of the most common disputes about trusts. Sometimes, they'll have one child serving as the trustee and the other children frequently dispute how much the trustee is entitled to.

The main thing to understand is there is incredible flexibility with trusts and if you are either interested in or thinking about a trust, or you have a life situation that involves finances and you're not sure how to deal with it, you should contact an Alameda County trust attorney who is experienced in dealing with trusts to discuss your case with them.

For more information on misconceptions about trusts, a free initial consultation is your best next step. Get the information and legal answers you're seeking by contacting me.

Using a Trust to Avoid Probate and Conservatorship

The probate process is expensive, time-consuming, and public. In addition, probate is a burden borne by the people you leave behind at a time when they are already grieving. With a living trust, you can take care of everything yourself and know that your death won't place the burden of probate on your loved ones.

There are some other benefits to a living trust, including the fact that you can set up a plan for what happens to your assets if you become incapacitated. This is important; if you became disabled or are no longer competent to manage your assets and you don't have a living trust, someone will have to go to court and set up what's called a conservatorship, which is a very expensive and time-consuming process that is possibly even more burdensome than probate. But if you have a living trust, if something like that happens to you, the successor trustee can step in and manage your assets for you according to the guidelines that you established. That's the second major advantage of setting up a living trust.

For more information on the basic requirements for trusts, schedule a free initial consultation.