You work your entire life to save and have enough money to comfortably retire – and ideally, leave something for your loved ones when you pass away.

During your life, you pay all kinds of taxes: income taxes, property taxes, sales taxes, and so on. And at the end, the government still wants to tax you on the assets you have left at your death.

This is known as the estate tax – sometimes called the “inheritance tax” or “death tax.” The best way to protect your assets and your family’s future from excessive taxation is to hire an attorney who has experience in estate tax planning. We can help you reduce – if not entirely avoid – the federal estate tax burden. At Cava and Faulkner, our team of legal professionals can help you create an estate plan that will minimize your tax liability and help ensure that your loved ones are taken care of after you’re gone.

How Does the Estate Tax Work?

Estate tax is totally separate from federal tax, property tax, sales tax, and every other type of tax you’ve paid during your lifetime.

Estate tax is a tax paid on the net value of all your assets owned at your death.

However, there are fairly sizable exemptions to the estate tax so it is primarily a high net-worth individual or family who is affected.

This said, the estate tax rate is a whopping 40% on your net estate, so if you do have an estate tax problem, we are talking about potentially massive sums of money your estate will owe to the government before a single heir would enjoy a single penny.

Is The Estate Tax Really My Problem?

President Trump’s Tax Cuts and Jobs Act of 2017 nearly doubled the allowable exemptions to the estate tax that existed prior to 2017. This ensured that even fewer families would be affected.

The estate tax exemption for individuals increased from $5.4 million to $11.2 million, and the estate tax exemption for married couples increased from $10.9 million to $22.4 million.

Unless your estate is valued at more than $11.2 million, you do not have to worry about the estate tax at this time. But for those who are affected, there are numerous estate planning strategies available that can greatly reduce the amount owed. We can advise you on the best options for your family.

What are Advanced Estate Tax Planning Strategies?

Families with high-value estates face several complex legal and tax issues – estate tax is only one of them.

There are a number of advanced estate planning strategies that are aimed primarily at reducing a family’s tax burden. In addition to minimizing or eliminating the estate tax liability, an estate tax planning attorney can help you leverage the advantages of estate and gift taxes and generation-skipping trusts to pass assets on for successive generations without the risk of a tax liability decimating your estate at each generation. Some of the most advanced estate planning tools and strategies include:

• Life insurance trusts
• Qualified personal residence trusts
• Grantor retained annuity trusts
• Asset protection trusts
• Land trusts
• Gift tax planning
• Bypass trusts
• Dynasty trusts
• Charitable planning
• Family limited partnerships or limited liability companies
• Asset gifting

Utilizing these strategies can help clients optimize and reduce liability when it comes to estate taxes. It is important to note that every situation is different. Your estate tax planning attorney should focus on creating estate plans that can not only optimize your tax situation now but after you pass away.

Call Our Elk Grove Estate Tax Planning Lawyers Today!

You have worked hard to build your family’s wealth and legacy, so it makes sense to put similar effort into protecting those assets after you are gone.

This includes protecting your assets against excessive taxes.

A good estate tax planning lawyer can go into detail about how you can minimize the potential tax burden faced by your family so that you can maximize the inheritance you pass on to your loved ones. By hiring an estate planning lawyer in California, you are setting yourself up for success. Our firm can help your family through the trust administration process in the future. Give us a call at 916-685-1225 to learn more about how we can help.

Making Decisions for When You Can’t Make Decisions

Most people understand the importance of having a will in place – even if they (inaccurately) believe they cannot afford one. Far fewer individuals understand how critical incapacity planning is for their future. If a time comes when you can’t make decisions for yourself, crafting comprehensive health care directives can ensure your wishes are honored.

Unfortunately, this isn’t as simple as saying, “I want this person to make decisions for me” or “I don’t want machines keeping me alive.” Healthcare decisions are complex, and two individuals in seemingly similar situations could have very different outcomes. This is why you should take health care directive planning seriously by utilizing the following strategies.

Understand the Components of a Health Care Directive

Unlike a will, health care directives are typically not single documents that cover all potential outcomes. Instead, a comprehensive directive includes a variety of legal documents and agreements. Overlooking even one of these can result in “blind spots” when it comes to planning for your future medical care in the event of incapacitation: 

• Living will: Outlines your preferences for medical treatments, such as life support, resuscitation, or artificial nutrition and hydration 
• Medical Power of Attorney (POA): Names a trusted individual who can make healthcare decisions on your behalf if you become incapacitated 
• HIPAA release: Grants access to your medical information for designated individuals 
• Do not resuscitate (DNR) order: Optional document that indicates whether you want CPR if your heart stops

Clearly, these components of a comprehensive health care directive cover a variety of potential situations. Some of these can be more important than others based on your wishes, and some may be unwarranted entirely. For instance, a DNR is not necessary if you want life-saving CPR in the event of an emergency. 

Simply put, your directive has many different aspects – and you should consider all of them to ensure you’re making your wishes known. 

Clarify Your Medical Preferences

The underlying goal of a comprehensive health care directive is to ensure your medical preferences are known and respected. Due to the complexity of medical conditions, this means planning for a multitude of situations. For instance, what if you can breathe on your own but cannot wake up? What if you can’t breathe on your own, but your heart is beating? 

These scenarios barely breach the surface of medical possibilities. That’s why you should clarify your wishes regarding the following medical issues: 

• Life-sustaining treatments: Do you want mechanical ventilation, dialysis, feeding tubes, or other support care 
• End-of-life care: What are your preferences for comfort measures, hospice care, or palliative care 
• Pain management: How aggressive would you like pain treatment to be 
• Organ and tissue donation: Do you want to donate organs or tissues if you pass 
• Religious or cultural preferences: Include any practices that are important to your care decisions

These are the most important decisions you’ll make when crafting a comprehensive health care directive to ensure your wishes are honored. Such advanced care planning will help you maintain control over your life and well-being while removing some of the burdens faced by loved ones. If for no other reason, this is why such directives are critical for estate planning. 

Choose a Trustworthy Health Care Agent

When you create a health care directive, it’s not just a list of your wishes. You also need to include someone who can make your wishes known and who will advocate for your decisions. This person may be referred to as a healthcare agent, surrogate, proxy, representative, or attorney-in-fact. Regardless of the terminology, there are certain traits you should look for:

• Trusted individuals (e.g., close family member, friend) 
• Someone who shares your beliefs and values 
• Strong-willed and assertive individuals 
• An individual willing to put in the time and energy

In addition to choosing a health care agent, you should also select a backup agent in case your primary agent is unavailable. Crafting a comprehensive health care directive to ensure your wishes are honored involves more than just selecting an agent. You also need to discuss your preferences with them in advance so they can faithfully carry out your wishes. 

Make It Legally-Binding and Accessible

Like all other estate planning strategies, specific legal requirements must be met when crafting a health care directive. Every jurisdiction has different laws, so you need to understand the rules in your state. In many cases, you’ll need to sign your documents in the presence of a witness — perhaps even multiple witnesses or a notary in some jurisdictions.

You’ll also want to ensure that your directive is easily accessible to those who need access. Do this by providing copies to your health care agent, physician, and close family members. You should also store a copy in a secure but accessible location (e.g., a digital vault) and consider carrying a wallet card that contains key information.

Finally, revisit your documents every 3-5 years or when a significant life change occurs.

Work With an Estate Planning Attorney

Estate planning attorneys handle more than just wills and trusts. These professionals assist with just about anything regarding making plans for the future – ranging from financial to medical. Don’t make the mistake of using do-it-yourself online services. These DIY legal websites cannot account for your unique circumstances and frequently don’t include updated legal information.

In fact, most legal professionals warn against using these services – particularly for matters as important as health care directives and other forms of estate planning. Many law firms offer these services for a flat fee, so you won’t have to worry about hourly charges stacking up. This can grant you peace of mind and certainty that your wishes will be honored.

At Cava & Faulkner, our dedicated legal team can help you craft a comprehensive health care directive that is valid under the law. Contact us at 916-831-7565 to schedule your free consultation.

Regular Updates Ensure Your Wishes Are Respected

People frequently make the mistake of thinking that creating an estate plan is a “one-and-done” process. In reality, periodically reviewing and updating your documents is essential. Failing to do so could lead to disputes and even partial intestate succession during the probate process. Fortunately, there are legal and practical tips for updating estate plans regularly.

These tips offer a variety of advantages. Most importantly, they ensure that your estate plan reflects your current circumstances and wishes. Regular reviews will also help avoid the common mistake of not including newer properties and accounts in your estate documents. With a few simple strategies, you can minimize the likelihood of surprises.

Review Your Estate Plan After Major Life Events

Periodic reviews of your estate plan are an important aspect for securing your future. However, there are certain events that should trigger an immediate review and update. These events are so life-altering that it would be surprising if a change in your plans wasn’t warranted. Such changes include, but are not limited to: 

• Marriage or divorce 
• Birth or adoption of a child 
• Death of a family member or beneficiary 
• Significant changes to your financial situation (e.g., newly acquired/sold assets) 
• Relocation to a different state 
• Changes in tax laws 

All these situations will likely warrant a change to your estate documents. Some of these might seem obvious – such as a divorce, birth, or death. However, others might not be as clear. For instance, you may wonder why relocating would warrant a change. As it turns out, every state has different laws. This means a will that’s fine in one state may be invalid in another. 

These events are significant, so always review your plans when they happen. 

Conduct Periodic Reviews

Imagine a scenario where your life is fairly set in stone. Perhaps you’re married, living in your dream home, and have no plans to move or have children. Certain events could still trigger the need for an estate plan review, but even if such events never occur, conducting a thorough review of your plans every 3-5 years is still important.

During this review, you should check that all key documents remain legally valid and reflect your current intentions. If your financial situation is particularly complex, you should consider conducting these reviews yearly. The simple fact is that seemingly insignificant changes in your life could warrant an update, and changes to state law could make such an update critical.

Don’t think everything is fine just because your current circumstances have not changed much.

Updating Key Legal Documents

All the legal and practical tips for updating your estate plan regularly mean nothing if you don’t update all relevant documents. Many people who do conduct regular reviews only focus on their will. While this document is certainly important, it’s far from the only essential estate plan document. Each of the following needs to be updated in specific ways: 

• Will: Ensure asset distribution and executor choices are current
• Trusts: Modify trust terms to account for life changes
• Power of Attorney: Verify that your appointed agent is still capable and trusted
• Healthcare directive: Ensure your preferences and emergency contacts are current
• Beneficiary designations: Review retirement accounts, insurance policies, and payable-on-death accounts

Many people are surprised to learn just how complex their estate plans truly are. They believe that creating a will and incapacity planning are straightforward processes that require minimal maintenance. However, the breadth of estate planning requirements should make it clear that having an attorney draw up these documents is only the first step in the process. 

Updating your estate plan regularly might not require 24/7 monitoring, but being thorough is an absolute necessity when the time comes for a review. 

Include Digital Assets

Up until recent years, digital assets were not even a major concern for most people. However, this has certainly changed in recent times. You can now handle everything from banking to buying and selling stocks online. What once would’ve taken hours of phone calls or visits to local institutions can now be done almost instantaneously via smartphone apps.

For those who didn’t think of this or who created their estate plan before accruing digital assets, an update is certainly in order. You should document usernames, passwords, and access details for all your online accounts. Specify who you want to have control over these accounts and how you want them to be managed.

Explain Your Choices to Family and Beneficiaries

The best legal and practical tips for updating your estate plan regularly can ensure your wishes are known. However, they can’t prevent disputes from arising. If someone is unhappy with your estate plan after you die, it’s possible that they can challenge its provisions. This potentiality becomes far more likely when a lack of communication exists.

The simple fact is that family dynamics are complicated. If you make changes to your estate plan, it could result in certain individuals feeling favoritism or left out. This is why all estate planning decisions should be discussed with loved ones who will be directly affected. Let them know your reasoning, and this could make them more comfortable with your decision.

Work With a Legal Professional

Reviewing and updating your estate plan is almost as important as creating the plan in the first place. If you want to simplify each of these processes and minimize the potential for problems, it’s typically advisable to work with an estate planning attorney. A legal professional can review the entirety of your situation and create a plan that protects your wishes.

When creating a will or any other estate document, a legal professional can ensure its validity and advise you on when updates may be necessary. An experienced attorney can also conduct periodic reviews and let you know how certain updates will affect your overall estate plan. Since some law firms charge flat fees, you can have peace of mind without “sticker shock.”

At Cava & Faulkner, our team of legal professionals provides the legal and practical tips you need for updating your estate plan. Contact us at 916-831-7565 for your free consultation.

Estate Planning Failures Make Tragedies More Tragic

Proper estate planning is one of the most important decisions a person can take in their lifetime. From creating a will to placing assets into a trust, these steps can minimize the likelihood of disputes after you’re gone. Sadly, simple mistakes can lead to major issues. That’s why utilizing strategies for avoiding family conflicts over wills and trusts is absolutely critical.

While many people believe having these estate plan documents is enough, the reality is that disputes can still arise. In some instances, this can lead to litigation — and even result in your estate documents being declared invalid. This can make a tragic situation even worse. Fortunately, there are ways to minimize the likelihood of such outcomes.

Engage in Clear and Transparent Communication

Some of the biggest problems in life are caused by a lack of communication. This is just as true in estate planning as it is anywhere else. You should discuss your plans openly and set clear expectations for when you’re gone. No beneficiary or legal heir should be blindsided by what’s in your will or trust documents.

Explain to your beneficiaries and anyone who qualifies as a legal heir exactly why you’ve made certain decisions. If they understand your motivations and thought process, they’re less likely to have feelings of favoritism or resentment. Additionally, being open about your plans means you’ll have more witnesses of your intent should disputes arise.

Create a Detailed Estate Plan

One of the most important strategies for avoiding family conflicts over wills and trusts is to ensure your estate plan is clear and unambiguous. You should clearly outline how you want all assets distributed. If there’s any room for interpretation, it opens the door for disputes. You want there to be no chance that your intentions could be misread.

You should also address sentimental items and heirlooms. Many people forget to do this since these items often only have emotional value. Unfortunately, these constitute some of the most highly disputed items when a person dies. Make sure you leave specific instructions for who you want to receive your family’s most important items.

Choose a Trustworthy Executor or Trustee

Executors and trustees play vital roles when it comes to minimizing family disputes over wills and trusts. You want to choose someone trustworthy and impartial. This person should also be capable of managing family dynamics. You can choose family members, friends, trusted colleagues, or estate planning professionals to serve in these roles.

There are certain qualities you should look for in a trustee or executor:

• Integrity
• Organizational skills
• Financial literacy
• Communication skills
• Availability
• Impartiality

Each of these qualities is integral when choosing someone to carry out your wishes. Making the right choice can help you avoid family conflicts over wills and trusts when you’re gone. You should check state requirements since rules for who can serve in these roles vary by jurisdiction, and make sure to select alternates in case a problem arises.

Regularly Update Your Documents

Regularly updating your estate documents is an absolute necessity. Failing to do so could lead to intestate succession – where the state decides who gets assets. This could happen if there are updates to state law that render portions or the entirety of a will invalid. Partial intestacy is also a common outcome when new properties are acquired after the completion of a will.

Unfortunately, failing to update estate documents can also lead to disputes among family members. Your will should be updated after major events — such as births, deaths, marriages, or divorces — to ensure they reflect your current wishes and circumstances. Make sure to communicate any changes and their reasoning to your loved ones.

Include No-Contest Clauses

Even the most well-planned and best-intentioned estate plans are at risk of dispute. The simple reality is that certain individuals can contest your estate documents no matter what. Bad faith challenges are common. A solid estate plan minimizes the likelihood of such challenges succeeding, but no-contest clauses can reduce their occurrence altogether.

Including a no-contest clause in a will or trust means that anyone contesting the document may lose their inheritance. Before including such a provision in your will or trust, though, it’s important to understand state law. There are frequently specific requirements that must apply to such a challenge in order for it to trigger disinheritance.

Document Everything

In a perfect world, simply writing up an estate plan would be the best strategy for avoiding family conflicts over wills and trusts. Of course, this isn’t the case. However, documenting everything can help minimize such disputes. Maintain detailed records of your intentions and decisions, and document conversations where you explained your plans to others.

It’s also a good idea to write a letter of intent. This is a personal letter that accompanies your will or trust and clarifies your wishes and the reasoning behind your decisions. This will not have the legal force of your actual estate documents, but it does allow you to explain in non-legal terms what your intentions are. This can greatly minimize the risk of misunderstandings and disputes.

Hire an Estate Planning Attorney

The wide availability of do-it-yourself legal websites has led many people to attempt complex legal tasks by themselves. Unfortunately, this often leads to unexpected outcomes. Boilerplate forms online cannot account for your unique circumstances. Attempting to create an estate plan without professional assistance is a recipe for familial disputes.

Luckily, estate planning isn’t like other areas of the law. In many cases, you can secure asset protection for you and your loved ones on a flat fee basis. This means one of the most essential strategies for avoiding family conflicts over wills and trusts will minimize potential disputes and come with no financial surprises.

At Cava & Faulkner, our estate planning attorneys are here to guide you through this essential process. Contact us at 916-831-7565 to schedule your free consultation.

Trust administration is often overlooked. Depending on the size of the estate, it can be complex and overwhelming for a trustee or successor trustee to navigate the process. An experienced lawyer in California from our distinguished law firm can ensure your trust is administered properly. If you have lost a loved one and need help administering their trust, a trust administration lawyer can be of vital assistance.

What is Trust Administration?

Trust administration is the process of managing and distributing the assets of a trust. This can include overseeing the investments of the trust, paying out benefits to beneficiaries, and managing taxes and other legal obligations.

The trust administrator, or trustee, is responsible for ensuring that the trust is run in accordance with the wishes of the creator of the trust, and must act in the best interests of the beneficiaries. They must also keep accurate records of all transactions and dealings related to the trust.

The role of a trustee can be quite complex, and it is important to have a good understanding of both financial and legal matters. The trustee must be able to work with other professionals such as accountants and lawyers, as well as communicate effectively with beneficiaries. Depending on how expansive an estate is or how many trust assets need to be settled, the task can be daunting. Our law firm provides comprehensive services to trustees and families in need of assistance.

If you have been named as the trustee of a trust, or are thinking of setting up a trust, it is important to seek professional advice to ensure that you understand all of your obligations. They can help you with every aspect of trust administration, from setting up the trust to managing it on an ongoing basis, as well as provide advice and assistance if there are any disputes between beneficiaries or other interested parties.

What Are My Duties as a Trustee?

A trustee has a number of specific fiduciary duties, which are set out in the trust instrument and by law. These duties include but are not limited to:

• Act in good faith and in the best interests of the beneficiaries – The trustee must always act in good faith and in the best interests of the beneficiaries. This means that the trustee must make decisions that are in the best interests of the beneficiaries, and not in his or her own self-interest.
• Manage trust property prudently – The trustee must manage the trust property prudently and carefully. This includes investing the trust property in a way that will preserve its value and using it only for purposes that are in line with the terms of the trust.
• Keep accurate records – The trustee must keep accurate records of all transactions involving the trust property. These records should be kept in a safe place and made available to the beneficiaries upon request.
• Comply with the terms of the trust – The trustee must comply with all of the terms of the trust. If there is anything that the trustee does not understand, he or she should seek legal advice before taking any action.
• Avoid conflicts of interest – The trustee must avoid any conflicts of interest. This means that the trustee cannot use the trust property for his or her own benefit, or for the benefit of any other person or entity with which the trustee has a personal or financial relationship.
• Keep beneficiaries informed – The trustee must keep the beneficiaries informed about all matters affecting the trust. The trustee should provide regular updates and accountings, and be responsive to any questions or concerns that the beneficiaries may have.

By following these duties, a trustee can help to ensure that the trust is administered properly and that the beneficiaries receive the full benefit of the trust property. If you breach any of your fiduciary duties, you may be held personally liable for any losses suffered by the trust or its beneficiaries. For this reason, it is important to seek legal advice before undertaking any actions as a trustee.

What If I Don’t Fulfill My Duties as a Trustee?

If you break your duties as a trustee, there are a few different things that could happen.

Trustee Removal

The first is that the court might remove you as trustee and appoint someone else in your place. If this happens, you might have to pay damages out of your own pocket for any losses that occur because of your breach of trust.

Court Ordered Modifications

The second possibility is that the court might modify the terms of the trust. For example, if you were supposed to distribute assets equally among beneficiaries but you gave more to one beneficiary than another, the court could order you to redistribute the assets so that everyone gets an equal share.

Contempt of Court

The third possibility is that the court could find you in contempt of court. This could result in a fine or even jail time.

Of course, the best thing to do is to fulfill your duties as a trustee so that none of these things happen. But if you do find yourself in a situation where you have breached your trust, it’s important to seek legal help right away so that you can try to minimize the damages. However, it is best to hire help from the start to ensure accuracy.

How Can A Trust Administration Lawyer Help?

Estate planning lawyers provide comprehensive support throughout the entire trust administration process, ensuring that your trust is managed in line with the grantor’s wishes. They can handle everything from reviewing trust assets, such as investment accounts, to addressing estate taxes, including filing the necessary federal estate tax returns. Although a trust can help avoid probate court, there are still legal obligations to meet, such as paying estate taxes and settling any outstanding debts with creditors. Trust administration lawyers can actively assist you in navigating these tasks and more, making sure nothing is overlooked.

Our services include:

• Filing Estate Tax Returns: We handle the process of preparing and filing federal estate tax returns to ensure compliance with tax regulations.
• Reviewing Trust Assets: Whether it’s investment accounts, real estate, or other valuable assets, we meticulously evaluate and manage them to meet the terms set by the grantor.
• Settling Debts with Creditors: We ensure that all outstanding debts are properly paid, minimizing complications for beneficiaries.
• Managing Real Estate: From selling to managing real estate properties held in the trust, we assist in overseeing these important assets.
• Distributing Trust Assets: We carefully distribute the trust’s assets to the appropriate beneficiaries, ensuring that the grantor’s instructions are followed precisely.
• Handling Financial Accounts: We review and manage bank accounts, retirement funds, savings accounts, and other financial holdings within the trust to ensure smooth administration.
• Settling Income Taxes: We assist in paying off any outstanding income taxes, avoiding penalties or legal complications.

By working with an attorney to handle the complex tasks involved in settling debts, managing assets, and paying taxes, they can enable you to focus on carrying out the grantor’s wishes and protecting the interests of all beneficiaries.

If you are looking for assistance with estate planning needs, contact us today by calling 916-685-1225 and get started.

California Estate Lawyers Giving You the Representation You Need to Protect Against Creditors and Lawsuits

Everyone wants to ensure that their family and loved ones are taken care of after they’re gone. Wills and other estate planning measures are meant to ensure that money, property, and other assets go to the people we want them to go to. This not only ensures that our worldly possessions end up where we want them but also that the people who matter most to us are being taken care of.

Sometimes, our assets may be at risk from creditors and lawsuits. This could prevent your intended heirs from inheriting certain assets. This is why if you’re planning your estate, you must consult an experienced attorney. They will be able to help you take the appropriate steps to protect all of your assets from potential creditors and ensure your heirs end up with everything you want them to end up with.

What Can Creditors Take in California?

In California, you cannot inherit someone else’s debt. This ensures that friends and family members are not left with someone else’s financial responsibilities after they are gone. However, California is still a community property state. This means that for married couples, certain assets are considered the joint property of both parties. That means if one spouse dies, the other spouse may be responsible for their partner’s debts. In California, creditors may attempt to collect from:

• Joint Bank Accounts
• Life Insurance Benefits
• Retirement Benefits
• Jointly-Owned Property

When someone dies, the executor of their estate must inform all of that person’s creditors. Creditors have one year to collect any debts owed to them from the deceased. Under the law, debts must be paid in a specific order. If, at any point, money runs out, the lower-priority debts do not have to be paid. The order that debts must be paid in is:

• Debts Owed to the State of California or the United States
• Administrative Expenses
• Secured Debts (Mortgages, Loans, etc.)
• Funerary Expenses
• Medical Bills
• Family Obligations
• Unpaid Wages up to $2,000
• General Debt (Credit Cards, etc.)

Many individuals accrue debt as they age, particularly medical expenses. This can mean a spouse is left with heavy debt after their partner passes, which can potentially impact a surviving spouse’s quality of life if the debt is very high. Fortunately, there are steps individuals can take to ensure their assets are protected from debtors and lawsuits.

How Can I Protect My Assets from Creditors and Lawsuits in California?

Multiple legal strategies are available to people wanting to protect their assets after they are gone. The law offers several opportunities to make sure your family and loved ones are cared for and do not lose out on potential assets due to creditors and lawsuits. Some of these legal strategies include but are not necessarily limited to:

• Asset Protection Trusts
• Transfer-on-Death
• Beneficiary Designations

A trust is a legal arrangement in which you transfer ownership of money and property to another person while you are still alive. This person is called a trustee. The trustee becomes the legal owner of any assets you place into a trust. When the guarantor of the trust passes away, the trustee is then designated to distribute the assets in the trust according to the guarantor’s wishes. Because the assets in the trust legally belong to the trustee, they can be exempt from potential debt collection. Asset protection trusts are generally irrevocable. This means the assets you transfer into them cannot be transferred back out. This is why it is vital to ensure the trustee is someone reliable and that they will be responsible in distributing your assets.

Transfer-on-death documents are legal documents stating that, when a person dies, certain assets automatically transfer to the person named in the documents. This exempts the assets named in the transfer-on-death from the probate process and can also exempt those assets from potential debt collection.

Another key strategy is naming beneficiaries for specific assets. If assets are not explicitly assigned to a beneficiary in your will, they can enter probate. This is a legal process determining who will inherit unassigned assets. Creditors can claim assets that enter probate. If you name a specific beneficiary for assets, those assets will not enter probate. This can protect those assets from potential creditors.

These are only a few potential strategies available to protect your assets from creditors and lawsuits. If you think creditors may pursue your estate and want to protect your heirs from possible lawsuits and debt collection, it’s essential to consult an experienced attorney. A lawyer with experience in estate planning will be able to help make sure your assets are protected and will transfer to your heirs.

What Should I Do to Protect my Assets from Creditors and Debtors in California?

Everyone wants to ensure their family and loved ones are cared for once they’re gone. No one wants to leave the people most important to them behind with lawsuits and complex debt. This is why it’s essential to consult an attorney when estate planning. An experienced attorney can review your specific assets and help determine how to protect them from creditors and potential lawsuits. If you or a loved one are estate planning and want to protect your assets, don’t hesitate to contact the attorneys at Cava & Faulkner at 9070 Elk Grove Blvd, Elk Grove, CA 95624.

The attorneys of Cava and Faulkner are highly experienced in California estate planning law. They know multiple legal strategies to protect your assets and ensure your loved ones are cared for. They know no one wants to leave behind a legacy of debt and lawsuits. They understand the loss of a loved one is a difficult time and that no one wants to spend it dealing with bills and debts. Cava and Faulkner’s attorneys can help ensure all of your assets are protected and go to the people you want them to go to, not anonymous debt collectors.

Leaving behind financial responsibilities is an unpleasant thought. With the proper estate planning steps, you can ensure your loved ones are left with happy memories, not debt. If you or a loved one are estate planning and want to ensure your assets are protected from creditors and lawsuits, call the attorneys at Cava and Faulkner now at 916-831-7565 or email them for a free consultation.