estate planning

THE ESSENTIALS OF ESTATE PLANNING

EXPLANATIONS OF WILLS AND TRUSTS WHAT IS A WILL? A will is quite simply a legal declaration that enables you to direct the disposition of your assets upon your death. You can divide your assets any way you want, as long as guidelines are presented clearly in writing. The portion of your estate covered by a will includes both tangible assets such as your home or your car, and intangible assets, such as bank accounts and mutual fund shares. Other rights and benefits, like pension rights and life insurance proceeds, are normally handled outside of your will. In most cases, those benefits are paid directly to your designated beneficiaries. While the cost of creating a will can vary depending on the complexity of your estate, most range in price from $150 to $500. WHAT IS A TRUST? A trust is a three-part agreement in which the owner of an estate, or the trust’s “grantor”, transfers the legal title to that estate to somebody else (the trustee) for the purpose of benefitting one or more third parties (the beneficiaries). Trusts may be revocable or irrevocable and may be included in a will to take effect after death. Revocable trust’s can be changed or revoked at any time. For this reason, the government considers the specified assets to still be included in the grantor’s taxable estate. Therefore, you must pay income taxes on revenue generated by the trust and possibly estate taxes on those assets remaining after your death. Irrevocable trusts cannot be changed once they are set up. The assets placed into an irrevocable trust are permanently removed from the grantor’s estate and transferred to the trust. Income and capital gains taxes on assets in the trust are paid by the trust. Upon a grantor’s death, the assets in the trust are not considered party of the estate and are not subject to estate taxes. Most revocable trusts become irrevocable at the death or disability of the grantor. BENEFITS OF A TRUST Although trust can be used in many ways for estate planning, they are most commonly used to: • provide expert management of estates • provide security for both the grantor and the beneficiaries • protect real estate holdings for a business • provide for beneficiaries who are minors or require expert assistance managing money. • avoid estate or income taxes • avoid probate expenses • maintain privacy COMPARING DIFFERENCES BETWEEN WILLS AND TRUSTS WILLS • Allow you to determine how your assets are distributed • Provide specific direction for the care of minor children • Must go through probate TRUSTS • Preserve assets for beneficiaries • Manage taxes • Provide expert management • Maintain privacy • Avoid probate For more information on my services as an Orange County Estate Planning Attorney and a Los Angeles County Estate Planning Attorney, contact me. My contact information can be found on my website by clicking here.

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ABOUT OUR FIRM

We Specialize In Estate Planning, Probate, Wills And Trusts, Insurance Law And Business And Corporate Law.

I was licensed to practice law in the State of California on June 6, 1996. I then formed The Law Offices of Lawrence H. Nemirow, PC to serve communities of Los Angeles County and Orange County with their legal needs. I am licensed to practice before all of the Superior Courts in the State of California, the U.S. District Court for the Central District of California, the U.S. District Court for the Southern District of California, and the United States Court of Appeals for Veterans Claims.

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