FAQs

A revocable living trust is a legal entity designed to avoid probate, plan for incapacity, lay out the framework for distribution of assets, and plan for reduction of estate taxes. Ownership of assets transfers to the trust during your lifetime while you maintain control as trustee and can modify or terminate it. A successor trustee manages assets if you become incapacitated. Since the trust owns assets rather than you individually, they avoid probate upon death.

This irrevocable trust activates upon the first spouse's death. The deceased spouse's estate portion up to the tax exemption amount enters this trust. The surviving spouse may receive income and principal distributions but doesn't own the assets. This structure prevents bypass trust assets from being included in the surviving spouse's taxable estate and preserves the deceased spouse's distribution wishes. Couples use this when combined estate value likely exceeds tax exemptions or to "lock-in" their distribution structure.

A QTIP trust is an irrevocable trust created on the passing of the first spouse to die. It typically pairs with bypass trusts for assets exceeding the exemption amount. Income flows to the surviving spouse for life, and transfers qualify for the unlimited marital deduction. After the surviving spouse dies, principal passes to beneficiaries the first spouse designated. This protects assets from remarriage situations or prior marriage children.

This revocable trust activates after the first spouse dies, funded with the surviving spouse's portion and potentially the deceased spouse's assets depending on other trust provisions. Configurations vary based on disclaimer trust, bypass trust, or QTIP trust arrangements within the overall estate plan structure.

This trust keeps life insurance policy proceeds out of the insured's estate for estate tax purposes. Annual gifts fund premium payments, and after death, the trust receives proceeds for distribution per its terms. Insurance proceeds remain outside the taxable estate, reducing overall estate taxes while potentially funding larger bequests.

A CRT transfers appreciated assets — typically low-basis property — to a tax-exempt trust. The trust sells without capital gains taxes and reinvests 100% of the proceeds. You receive an immediate charitable deduction and distributions carrying income and gains. Remaining principal passes to charity after termination, with payments structured for lifetime or specific years.

You place your primary or vacation residence in this irrevocable trust while retaining the right to live in the home for a specified number of years. Ownership transfers to beneficiaries when it terminates. Gift tax valuation uses present value calculations of the remainder interest, leveraging your lifetime exclusion.

Probate is the legal process by which property owned by someone who has died is transferred to heirs. It determines asset distribution based on wills or intestacy laws. California probate is a time consuming, expensive, and public court proceeding. Our firm typically plans to avoid probate through revocable living trusts.