LAW OFFICE OF CHRISTOPHER R. TWINING
Estate Planning, Probate & Trust Administration, and Elder Law (310) 492-5990
Estate Planning, Probate & Trust Administration, and Elder Law (310) 492-5990
Your Subtitle text
Los Angeles Estate Planning Attorney
The West Los Angeles Law Office of Christopher R. Twining can take care of all your estate planning needs including but not limited to:
- Wills
- Revocable Living Trusts
- A-B Trusts
- Qualified Terminable Interest Trusts (QTIPs)
- Qualified Domestic Trusts ( QDOT's)
- Durable Powers of Attorney for Financial Matters
- Powers of Attorney for Health Care /Advance Health Care Directives
- Advising you on how to hold title to certain assets (eg. 401Ks, IRAs)
- Irrevocable Life Insurance Trusts ( ILITs)
- Qualified Personal Residence Trusts
- Charitable Remainder Trusts
- Family Limited Partnerships / Family Limited Liability Companies
WHY DO I NEED A WILL?
There are many reasons you will want to have a will rather than rely on the state of California and the Superiour Court of Los Angeles to determine things. First of all. everyone with kids should have a will to be able to get first say as to who will be appointed to be guardian of their minor children. Ordinarily, a surviving spouse retains custody of surviving minor children; however, in the event that you are a single parent or that both you and your spouse perish in the same event this will ensure that you get your say as to who would be best to raise your children. Second, you may not be happy with the way the State says your assets should be distributed. Executing a will allows you to disinherit heirs as well as ensure that you get to provide for whomever is important to you, not the State of California!
A will usually contains a pour-over provision ( making it a so called Pour-Over Will) that will pour over any assets into a pre-existing living trust. This does not avoid Probate and its large fees based on a percentage of the gross value of the estate. But this does serve as a way to ensure that any property you acquire before your death and don't have a chance to re-title into a trust will be distributed according to the terms of the trust. Generally I advise clients to not leave more than $100,000 in assets total outside of a trust in order to avoid full blown probate.
WHAT IS A REVOCABLE LIVING TRUST?
A revocable living trust ( aka an intervivos trust) is a device which separates legal title from beneficial title. It establishes a trustee or trustees to act as fiduciary over the assets of the living trust for the benefit of the income and/or principal beneficiaries. The person or persons who set up the trust are known as its “trustors” , “settlors”, or “grantors.” The trustees are the persons vested with legal title.Trustees are subject to stringent fiduciary duties under California Law. The beneficiaries are the ones who will benefit from income or principal left in trust. They are said to have beneficial title.
There are various advantages to using a trust. First and foremost is the avoidance of the lengthy and costly process of Probate. The cost of an average home in West Los Angeles makes a trust especially desirable. Additionally, a revocable living trust covers the situation in which you and your spouse both die in the same event (Joint Tenancy cannot avoid probate in that situation). A revocable living trust can also be useful in sheltering a beneficiaries' assets from creditors by use of a spendthrift clause. A trust can also maintain family privacy by avoiding court proceedings. Finally, a trust provides for some built in incapacity planning for all assets transferred to the trust.
Ordinarily, a revocable living trust is utilized to hold your principal residence and various other assets which will be distributed according to a single plan. The trust document will contain all the provisions for how your estate is to be distributed or administered upon your death.
WHAT IS AN A-B TRUST?
An A-B trust is a revocable living trust which divides into two trusts upon the death of the first spouse. This type of trust makes use of both the estate tax exemption ($3.5 million per person in 2009) and the marital deduction to make it so that no estate taxes are due upon the death of the first spouse. The B Trust is also known as the Bypass trust and it contains the amount of that years applicable exclusion amount. The A trust is the marital deduction trust which will typically contain both the surviving spouse's separate property and one half community property interests but also the residue of the deceased spouse's estate after the estate tax exemption has been utilized by the B trust. The use of an A-B trust ensures that both spouse's applicable exclusion amounts are effectively used, thereby doubling the amount of property which can pass to heirs free of Federal Estate Taxes.
WHAT IS A QUALIFIED TERMINABLE INTEREST TRUST (QTIP )?
A qualified terminable interest trust is a subtrust that is funded upon the death of the first spouse. It is normally utilized in conjunction with a survivor's trust and a bypass trust. The unique feature of the QTIP trust is that it restricts the surviving spouse's ability to alienate the principal of the trust and it still qualifies for the unlimited marital deduction available to United States Citizens. However, the surviving spouse is entitled to income for life from this trust but he or she cannot change the remainder beneficiaries. The QTIP can be especially attractive to spouses with children from previous marriages or relationships.
WHAT IS A QUALIFIED DOMESTIC TRUST (QDOT)?
A qualified domestic trust is a subtrust funded at the death of the first spouse where the surviving spouse is not a U.S. Citizen. Non U.S. Citizen's are not entitled to the unlimited marital deduction that surviving U.S. Citizen spouses can utilize. The QDOT must meet several requirements set out in the internal revenue code. The funds in the QDOT will then qualify for the marital deduction ( i.e. no estate tax will be due for transfers into the QDOT).
WHAT IS AN IRREVOCABLE LIFE INSURANCE TRUST (ILIT)?
An irrevocable life insurance trust (ILIT) is a trust set up which when properly structured and maintained can own a life insurance policy on an individual or a couple and ensure that the proceeds of the policy pass estate tax and generation skipping transfer tax free to beneficiaries. It is often used to provide liquidity to pay administrative fees and estate taxes upon the death of the insureds or to provide a surviving spouse with replacement income.
WHAT IS A DURABLE POWER OF ATTORNEY FOR FINANCES AND WHY DO I NEED ONE?
A DPAF ( Durable Power of Attorney for Finances) is a document in which a person gives a different person ( the attorney-in-fact) the power to conduct his or her financial affairs. The power of attorney will apply to assets not held within a trust. This device can save you thousands of dollars in attorneys fees in the event that you become incapacitated. It will avoid the lengthy, expensive and administratively burdensome process of conservatorships of the estate. Additionally if a financial institution or some other individual refuses to honor it your attorney-in-fact can bring a summary court proceeding to order them to comply with it. If this happens your attorney-in-fact is entitled to his or her reasonable attorney fees. There is no way to get attorneys fees back for a conservatorship.
The DPAF (Durable Power of Attorney for Finances) is durable in that is survives your incapacity. A DPAF (Durable Power of Attorney for Finances) can be springing ( i.e. it isn't effective until such time as you are incapacitated) or immediately effective.
Ordinarily clients will execute a DPAF(Durable Power of Attorney for Finances) in the name of his/her spouse with perhaps an adult child as a successor attorney-in-fact. In any case it is extremely important that you choose someone you can trust to handle your finances. Normally a revocable living trust will govern control of trust assets should the settlor become incapacitated. However, a DPAF (Durable Power of Attorney for Finances) remains useful for any assets outside of the trust.
WHAT IS AN ADVANCE HEALTH CARE DIRECTIVE?
An advance health care directive is a document in which you appoint an attorney-in-fact for medical decisions as well as specify what kind of life ending and or life sustaining medical treatment you want in the event that you are unable to make your own medical decisions. These advance health care directives can be registered with the California Secretary of State. An advance health care directive can also prevent disputes by making it clear to loved ones what your desires are with regards to the level of efforts you want made to keep you alive.
