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Trusts and Estates – Page 2 – Global Estate Blog

Category: Trusts and Estates

Key Features of an Asset Protection Trust

In order for a Trust to effectively provide asset protection against potential creditors or claimants, it should contain the following key elements:

  • The Trust is Irrevocable (and not Revocable)
  • Contains a Spendthrift Clause
  • Discretionary Distributions (vs. mandatory and/or period payments)
  • Third Party Beneficiaries (i.e. not self-settled for own benefit)

If the settlor wishes to reserve additioanl oversight and reservation of rights, an impartial Trust Protector or Advisor can be appointed.

Another variation of an Asset Protection Trust is a foreign Trust with friendly and flexible laws for the Trust and Trustee, while possing legal obstacles for the Creditor.

Disclaimer

What is a Trust Protector

A Trust Protector is a fourth participant in a trust arrangement. The others include the Settlor (or Grantor), the Trustee, and the Beneficiary.

A Trust Protector advises on limited but fundamental and important trust decisions. The Trust Protector is not a fiduciary like the Trustee.

Common powers entrusted to the Trust Protector include: removing and replacing the Trustee, amending Trust terms for tax purposes, removing and adding Beneficiaries, and amending distribution provisions.

A Trust Protector should not be the settlor, the beneficiary, or the trustee, or an agent thereof, but an impartial fourth party.

A Trust protector can be added to a Revocable or Irrevocable Trust.

A Trust Protector can become important within the context of an irrevocable trust where the Settlor does not wish to totally relinquish all important rights, but instead entrusts the Protector as a check and oversight on the Trustee.

For more questions or inquiries please contact the Law Offices of Hanlen J. Chang

Disclaimer.


Don’t Put Your Estate in the Hands of a Machine

Recently there has been a lot of discussion and predications about the impact of automation and artificial intelligence on the legal profession.

While technology has made administrative repetitive tasks more efficient, it is still far off from substituting the counsel of an experienced attorney.

In terms of Estate Planning, the use of document providers such as Legal Zoom has gained in popularity. The most touted benefit is the cheaper cost.

However, you get what you pay for. Translation: What is the value, quality, and assurances provided?

Value Factors

Fiduciary

Tax Advice

Legal Advice

Court Experience

Translations

Trust Funding

Insurance

Trust Administration

 

Attorney

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

 

Document Provider

No

No

No

No (Represent Yourself)

No (Own Comprehension)

No (Do it Yourself)

No

No (Do it Yourself)

 

Issues Not Likely Addressed by Document Provider

  • How to transfer and effectuate ownership of specific assets (e.g. real estate) into the the Trust.
  • How to relate financial assets to the Trust only held in the name of an individual (e.g. Life Insurance and Retirement Accounts.)
  • Tax planning and management of each specific asset. (Assets have differing tax characteristics, application to beneficiaries, and the method and sequencing of distribution.)
  • Cross-border considerations and International Tax implications.
  • Advice regarding scenarios that are more likely to cause disputes, legal actions or delays.
  • Insights regarding the Trust or Estate administration. When you die what is required of those in charge to effectuate your testamentary wishes? Common tasks include tax valuations and tax returns, legal notices, legal filings, and distributions.

In conclusion, technology is a great thing, but it is still a tool that is only as good as the operator and the person providing the input. Savvy customers should ask themselves if they want to hire someone to delegate responsibility for complex and sophisticated matters, or rely on their own education, skill, and capability.

Disclaimer

Trusts – Medi-Cal Planning

As of January 2017 a regular revocable trust can now defer a Medi-Cal estate claim if there is a surviving spouse or surviving child with a disability.

Professional counsel is still strongly recommended in navigating the savings and costs of the various estate planning options, e.g. Special Needs Trust.

The best option is still having “little assets” at the time of death, by planning in advance.

For more information please contact the Law Offices of Hanlen J. Chang.

Disclaimer

What is a Pet Trust?

A Pet Trust is usually a Subtrust built into the regular Revocable Trust.

The Pet Trust can nominate its own set of Trustee(s) or depend on the parent or Revocable Trust’s Trustee(s).

The Pet Trust will usually be funded with a lump sum of money sufficient for the lifetime care of the Pets.

Other common provisions include designating a veterinarian, a request to keep your Pets together if more than one, and a designating Pet Sanctuary as fail-safe contingency.

An alternative to the Pet Trust involves gifting your pet to the preferred individual or organization along with a lump sum of money for the care.

Under California Law, a pet is considered the personal property of the owner.

For more information please contact the Law Offices of Hanlen J. Chang.

Disclaimer