Estate Planning and Trust Services
 Trusts are legal instruments that ensure your assets are protected and managed in strict accordance with your wishes. They are powerful estate planning tools because they can provide protection from time delays and unfavorable taxation often associated with probate. The full benefit of trusts is in their ability to be customized to your personal circumstances. Attorneys, authors, banks, financial investment firms, and trust companies offer estate planning and trust services, with fees ranging from negligible to expensive; yet some estates might not warrant associated costs. Accordingly, it’s important to understand when trusts are beneficial and how to be wise consumers of trust services.
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In keeping with our commitment to serving the financial needs of our members, Point Loma Credit Union makes trust services available through our investment services partner, UVEST Financial Services. Before making an appointment for a free consultation with a professional advisor, we recommend review of the following information and resources.
Getting Started
For a comprehensive introduction to trusts and related services read the American Bar Association’s publication “The ABA’s Guide to Wills & Estates.” Access this free guide by:
Establishing a Trust — Checklist
No single checklist can suffice because trusts serve so many purposes. However the following steps are common to most trusts:
- Determine whether an attorney is necessary – How do I find a good attorney?
- Identify assets and liabilities – What should be included in a trust?
- Determine the best type of trust – What benefits am I seeking?
- Identify beneficiaries – Who should get what and when?
- Identify executors, trustees, successor trustees – Who should manage and distribute my estate?
- Draft the trust – Creating legal trust documents
- Fund the trust – When should I transfer ownership of my assets into the trust?
Are Attorneys Necessary?
While books and Do-it-Yourself kits can direct consumers through the process of establishing trust accounts, many people find the guidance provided by attorneys to be especially helpful. Point Loma Credit Union does not endorse attorneys nor refer members to attorneys. It does however, recommend careful consideration of the advantages in retaining the expertise of qualified, specialized attorneys. Attorneys experienced in estate planning, tax law, and trusts can help you describe precisely what outcomes should be achieved. These attorneys can assist you in structuring your trust to achieve your desired outcomes. They may also advise you on related concerns such as Advance Medical Directives and other end-of-life issues.
How to Find Good Attorneys
Should you opt to hire an attorney, start by asking trusted friends and colleagues for personal recommendations. Alternatively, contact the local Better Business Bureau at http://www.sandiego.bbb.org or 858-496-2131 to request a list of attorney referral services. Use an attorney referral service to obtain the name and contact information of a local estate planning attorney. Then follow up by confirming with the State Bar of California the attorney’s status regarding:
- Current licensing
- Membership-in-good-standing with the State Bar Association
- Certification specific to estate planning
State Bar of California
180 Howard Street
San Francisco, CA 94105
415.538.2000
www.calbar.org
State Bar of California, Office of Certification
415.538.2118
http://members.calbar.ca.gov/search/ls_search.aspx
The State Bar Association also publishes pamphlets on a number of related topics. They are free of charge and may be obtained by calling the Consumer Education Pamphlet Hotline at 888-875-LAWS (888-875-5297). Or download copies at http://calbar.ca.gov/state/calbar/calbar_generic.jsp?cid=10581
“Legal Facts of Life” pamphlets:
- How Can I Find And Hire The Right Lawyer?
- How Can I Resolve My Dispute Without A Trial? (ADR)
- What Should I Know If I Am Arrested?
- What Should I Do If I Have An Auto Accident?
- How Do I Use The Small Claims Court?
- What Can I Do If I Can't Pay My Debts?
- What Should I Know About Divorce And Custody?
- Can The Law Help Protect Me From Domestic Violence?
- What Should I Know Before I Rent?
- Can The Client Security Fund Help You?
- How Is Your Client Security Fund Request Handled?
- What Should I Do If I Am A Crime Victim?
- What Can I Do If I Have A Problem With My Lawyer?
- Do I Need A Will?
- Do I Need Estate Planning?
- Do I Need A Living Trust?
- What Are My Rights As An Employee?
- What Can a Lawyer Referral Service Do For Me?
- What Do I Need to Know About Serving on a Jury?
- How Do I Become A Lawyer?
- What Should I Know About Elder Abuse?
Here's a Tip
Being prepared for attorney appointments might save time and money. Bring written lists of targeted questions to your meetings. For example, review the ABA’s “Guide to Wills & Estates” before your initial meeting so that you can consider the various types of trusts against your personal circumstances, then focus your questions on the most suitable type.
What Should be Included in a Trust?
While complete inventories should be made, it may not be advantageous to include all assets and debts in a trust. There should be a specific benefit for each included asset and debt. Assets could include real estate, tangible personal property such as automobiles, jewelry, art, furniture, and intangible personal property including sources of income, certificates of deposit, insurance policies, social security, 401K and pension funds, and anticipated sources of assets such as inheritances. Liability or debt inventories could include all debts such as credit card balances, mortgages, student loans, etc. Attorneys can advise on this issue.
Appendix A of the American Bar Association’s “Guide to Wills & Estates” is a comprehensive inventory checklist. Access the checklist here: http://www.abanet.org/publiced/practical/books/wills/appendix_a.pdf
The Right Type of Trust
In many cases revocable living trusts will deliver estates to heirs as intended, and reduce or protect against taxation that might otherwise be imposed on estates without trusts. But in general, customized trusts more effectively meet objectives and deliver further value. If you are unsure of the type or structure that would best suit your needs, consider legal consultation. Attorneys can provide analyses of options and their associated savings to assist in decision making.
Remember that once a trust has been created, it should be reviewed periodically to account for changes in:
- Tax law
- Assets and liabilities
- Beneficiaries
- Desired outcomes
Identifying Beneficiaries and Distribution
The choice of beneficiaries may seem obvious, but there are common psychological and familial concerns regarding inheritances, such as appropriate ages for beneficiaries to receive trust funds. Additionally, the flexibility of trust accounts provide for non-traditional or alternative uses. For example, “incentive” trusts use stipulations to bring about desired behaviors such as graduating from college or carrying on the family business. Trusts can also be used to fund care for beneficiaries unable to care for themselves, support favorite causes, and ensure continued care of pets. Many outstanding books deal with these and similar issues and attorneys may offer further insight. The important point is to devote adequate thought to exactly what your trust should deliver, to whom, and under what circumstances.
Consultation with attorneys or reference books can help. Two book choices include:
- Beyond the Grave: The Right Way and the Wrong Way of Leaving Money to Your Children (and Others), revised edition. Gerald M. Condon, Jeffrey L. Condon. HarperCollins Publisher, 2001.
- Best Intentions. Colleen Barney, Victoria Collins. Dearborn Trade Publishing, 2002.
Tip
Make a beneficiary list. Include full names, ages, social security numbers, current addresses and contact information and notes regarding any special needs. Bring the list with you to attorney meetings.
Creating Trust Documents
There is a continuum of options for creating trust documents. On one end are Do-It-Yourself books that include generic trust documents that can be self-completed. On the other end of the spectrum is complete representation by attorneys who will work closely with you to provide a comprehensive trust plan. Attorneys using boiler plate trust documents with little customization and trust documentation services found on the Internet are typical mid-continuum choices.
Fees obviously correspond with the extent of professional expertise required, but fees also vary significantly within similar trust documentation services. Smart consumers will get price quotes from competing sources and carefully analyze exactly what is included. Whatever the level of expertise required and fees paid, the hallmark of a strong, comprehensive trust plan is that its owner has a clear understanding of, and is fully satisfied with, the exact outcomes the trust will engender.
Tip
Good questions to have clear and complete answers for:
- Do I need a living will or advance health care directive as part of my trust?
- Under what circumstances might I need durable powers of attorney?
- Which of my assets should be included in trust?
- When and how do I transfer assets into trust (also known as funding a trust)?
- Do I need professional asset management of trust funds?
- Should I name a family member, a friend, or a commercial service provider as trustee?
Tip
A well respected source for do-it-yourself legal advice is Nolo Press. Access the Website at www.nolo.com.
Resources for more information on living wills and advance health care directives:
Naming Executors, Trustees and Successor Trustees
Achieving trust objectives depends heavily on the actions of executors, trustees, and successor trustees. For this reason, it is important to choose trustworthy, mature persons to serve in these capacities. Executors are responsible for actions related to wills. Trustees are responsible for the actions required to administer trusts. Successor trustees serve when trustees have died or are otherwise unable to fulfill their responsibilities.
Family members, including beneficiaries, may serve in any or all of these capacities, as can non-related persons. Professional services are available for hire for each of these functions. Professional executors, trustees, and successor trustees have legal responsibility to act in the best interests of you and your estate. The same is true for family and friends. For detailed descriptions of executor and trustee duties, refer to chapter 10 of the American Bar Association's Guide to Wills & Estates.
Tip
In some cases your choice of trustee can affect taxation. Attorneys with certification or other credentials in estate planning are usually qualified to advise on matters of taxation. However, for large, complex trusts additional consultation with a certified public accountant may be useful.
Kiplinger's Personal Finance magazine, has a helpful "Frequently Asked Questions" section on trusts. It can be accessed through the link below.
http://www.kiplinger.com/columns/fitness/archive/2001/ff20010829.htm
Funding Trusts
Assets must be legally transferred from private ownership to the trust. This is frequently called funding the trust. For example, the deed to your home will need to be changed from your name to the trust, at the time of funding. Timing for funding trusts will vary but is relatively straightforward because your objectives, the type of trust used, the type of assets to be held in trust, and taxation goals will determine when assets should be transferred. Oftentimes trusts are funded after the trust holder's death.
A Final Word About Trusts
When trusts are created from highly specific objectives, they are, perhaps, the most effective legal tool in estate planning. Some people feel comfortable using do-it-yourself methods of trust creation; others seek advice from professionals with specialized expertise. Attorneys are often much better equipped to ensure alignment between your objectives and the outcomes specified in your trust.
Once your trust has been created and funded, the assets need to be managed. Many people want their trust assets invested in accordance with their objectives. Here too, professional expertise may be more beneficial than a do-it-yourself approach because investing and growing assets in trust can be more complex than managing routine investments. Point Loma Credit Union, in partnership with UVEST Financial Services, is your trusted partner. To make your appointment for a free, no obligation consultation, please call 1-888-495-3400, option 5.
Securities are offered by, and Investment Consultants are registered with UVEST Financial Services, member NASD/SIPC. UVEST is independent of any financial institution. Securities (1) are not deposits of this institution; (2) are not insured or guaranteed by the NCUA or any other government agency; (3) are not obligations of, or guaranteed by, any financial institution; and (4) involve investment risks, including the potential for fluctuation in investment return and the potential loss of principal.
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