Wills and Trusts Questions and Answers
Having a will or trust in place gives you the piece of mind to know that if something happens to your, your loved ones will be taken care of. At the Law Offices of Lawrence Nemirow, our Orange County trusts attorneys can handle all of your estate planning needs. Call us today at 562-799-1377 for more information or to schedule a consultation.
- What is a will?
- A will is a written legal document with instructions for distributing an individual's assets after his or her death. A will must be formally executed as required by state law to be legally valid and enforceable.
- How can a person change his or her will?
- A will is typically valid and effective until it is revoked, destroyed, or invalidated by writing a new will. Alterations to an existing will, such as crossing out language or adding a new provision, do not usually meet the legal requirements for executing a valid will and do not affect the terms of an existing will; however, changes or additions to an existing will can be made by codicil. A codicil is a document executed in compliance with applicable state law that modifies an existing will or codicil.
- What is a trust?
- A trust is a legal entity created to hold assets for the benefit of another person or entity. There are many types of trusts that can be used to achieve a person's or entity's estate planning objectives.
- What is a living trust?
- A living trust, also called an inter vivos trust, is a trust which becomes effective during the lifetime of the person who created the trust. The person who created the living trust, called the creator, may change the terms of the living trust during his or her lifetime. Because a living trust typically contains instructions for managing trust assets during the creator's lifetime as well as instructions for distributing trust assets upon the creator's incapacity or after his or her death, a living trust usually eliminates the need for conservatorship or probate proceedings.
- What is the unified credit?
- The unified estate-and-gift tax credit, sometimes called the unified credit or applicable exclusion credit, is the amount of an individual's estate that is exempt from federal estate taxes. Under current law, the rate of tax and the exempt amount of an individual's lifetime transfers (gifts) and gross estate at death are determined by the same schedule. The unified credit is applied to lifetime gifts and then to the gross estate at death.
- What is a conservatorship?
- A conservatorship is a court procedure to take care of you or your estate in the event you become incapacitated. If you become incapacitated, another person can usually step in and make decisions if his or her name is listed on your assets. The need for a conservatorship can often be eliminated with a durable power of attorney, a healthcare power of attorney, or both. These documents can also avoid costly and time-consuming court procedures to establish a conservatorship.
- What is an asset protection trust?
- An asset protection trust, sometimes called a self-settled trust, is a trust created by a person for his or her own benefit and usually for the purpose of protecting his or her assets from creditors. The laws governing asset protection trusts vary by state, and some states have enacted statutes providing that "a trust created by a person for his own benefit shall be void as against his creditors." Restatement 2d Trusts 156, Illustration b.
- What is an irrevocable trust?
- An irrevocable trust is a trust in which the creator transfers assets to a trust with no power to alter, amend, or revoke the terms of the trust at a later date. Unless the creator retains certain powers or benefits, income generated by the trust and distributed to a trust beneficiary is taxed to the beneficiary; all other trust income (undistributed or accumulated income) is taxed to the trust's fiduciary.
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