Did you know that gifts can be taxed once they reach a certain value in a calendar year? That’s why gifting trusts exist. By sending gifts that exceed the exclusion amount to a gifting trust, you add to a beneficiary’s trust and don’t get hit with a huge tax penalty. Here are four types of gifting trusts that each have specific benefits.
- Gift Trust with Annual Exclusions – This is how you get around the gift exemption amount. You put anything that you gift above the exclusion amount into a trust for the individual. The money isn’t immediately available, but it also doesn’t get taxed into oblivion.
- Intentionally Defective Grantor Trust (IDGT) – This trust can be used to transfer a family business to another member of the family and offer protection from creditors for the beneficiary.
- Charitable Remainder Trust (CRT) – Are you looking to leave money to a charity rather than family? This is a form of gift trust that is specifically designed to gain tax benefits for the estate when you leave money to the charity of your choice.
- Qualified Personal Residence Trust (QPRT) – This is a way to transfer a home to your children at a value that is far lower than the current market value. It provides tax benefits as well as asset protection for the house.
More Generous Gifting Solutions in California
If you are making generous gifts to your beneficiaries or you want to plan for your future in other ways, the estate planning attorneys at Petrov Law Firm are happy to help. Contact us today at 619-344-0360 to get started on your estate plan.Read More
Unfortunately, there are a number of ways that a shady trustee can get away with no liability under California Law. What are a few things that you need to know in order to cover yourself? Here are some ways to keep from getting scammed if your trustee goes rogue.
Full-Disclosure Is Your Best Friend
The fact is that unless the trustee fully discloses the details of a transaction, you can’t provide valid release or consent. That’s the good news. The bad news is that if you do receive full disclosure, it is up to you to catch a bad transaction before providing consent or release. If the disclosure was made to you in writing, you don’t even have to consent in order for your trustee to be free from a lawsuit. And there is a timeframe to think about as well. You only have 3 years to file your lawsuit after the transaction is disclosed to you in writing.
By the way, this does not include things like exculpation, which basically allows a trustee to get away with negligence, and equity, which allows a probate court to side with the trustee even if the trustee is at fault. So how can you keep a trustee accountable for how the trust is handled?
If You Need to Call a Trustee to Account
The Petrov Law Firm is ready and willing to help you defend your trust and hold a trustee accountable for his or her actions. The fact is that equity can work for you as well. You just need to convince the courts that siding with you over the trustee is fair and just. That’s where having an experienced law firm in your corner comes in. Give us a call at 619-344-0360 today to set up a consultation.
Legally, of course, there are no differences anymore in estate planning or asset control. (However 200 years ago, women in the US had virtually no rights to own property or assets.) Practically speaking, however, woman in the US are poised to inherit a significant amount of money and property over the next thirty years.
Women live longer than men. For many women in the 60s and 70s they have already inherited money from their parents. And because women live longer than men, these same women are set to inherit yet another estate from their husbands.
Because of gender role assignments in the 1950s, some of these women have not been exposed to significant financial planning throughout their lives. And while no one is ever too old to learn about asset management, trying to understand complex estate issues would be difficult for anyone in a time of grieving.
Women also tend to make different spending and estate planning choices from men. Women tend to travel more and are more likely to donate to charities. An estate planner can include charitable donations as part of an estate plan, frequently helping make the financial contribution higher given forethought and planning.
Women are frequently living into their 90s. And while inheriting money from parents and husbands will help make those years easier financially, an estate planner can ensure a continuous stream of income to account for that longevity.Read More
Trusts are a common way to pass assets along without worrying about probate court and probate costs. Generally, your lawyer will use a trust to legally hold your assets (like your house and your major investment accounts). Every trust has a grantor (also known as a settlor or trustor), a trustee, and (one or more) beneficiaries.
The grantor, settlor, or trustor is the person who created the trust by contributing assets. This person will never change. Even after death, the grantor of the trust remains the same.
The trustee manages the assets. When you create the trust, you can name yourself as the trustee of the trust. At any point, you can change the person who is named as the trustee. As part of your estate plan, you and your lawyer should name a primary and secondary successor. As soon as you become incapacitated or die, the primary trustee will take over administration of the trust.
The beneficiary or beneficiaries of the trust receives the benefits of the assets. Again, you can be the beneficiary of the trust when you create it and while you are alive. You can name as many people as you’d like to be beneficiaries of your trust, and one of these beneficiaries can also be a trustee of the trust.
At any point, you can hold all three positions of a trust you created. Your trust can exist forever and you can structure the trust so that there will always be a trustee to manage the funds for whomever you or the trustee see fit.Read More
One of the most important parts of an estate plan is something we call a living will. While most of us hope that we will not need one, the fact is they are needed to ensure that your life-sustaining wishes are met. According to a recent poll done by Findlaw.com, only 38% of Americans have a living will. Popular cases like the Terri Schiavo case often make it on the news and show just how important a living will be.
Is it anyone’s wish to have their loved ones fight each other to determine whether to pull the plug or pull a feeding tube? A living will allows an individual to make that decision on their own. It is a simple document and one that should come in any living trust that you make. If you had a living trust done and a living will (or health care directive) was not part of it, please contact your attorney and make sure that he or she writes one up for you.Read More
As stated in previous blog posts, there are many different trusts that can be used when creating an estate plan. One such trust is an Irrevocable Life Insurance Trust or an ILIT. The main benefit on an ILIT is to help avoid paying estate taxes
upon your death. Life insurance is an asset that is taxable as part of your estate at death. Whether it is taxable, however, depends on ownership of the policy and payment of the proceeds. An ILIT is a trust that is usually made for the benefit of another person and uses a life insurance policy to fund itself. An ILIT does not have an “owner” and therefore it does not become part of one’s estate upon death and is therefore not taxable in that estate. The main disadvantage of an ILIT, however, is that it
is “irrevocable” meaning that once it is created, it can never be changed. If your estate is large enough that paying estate taxes will be necessary, please call our office and we can discuss if an ILIT trust is good for you and your family.Read More