While living trusts are a great estate planning tool, there are some misconceptions concerning California living trusts held by some people.  The following attempts to set the record straight.

Income Taxes: living trusts have no effect on the income taxes of the trust makers – the people creating the living trust.  Anyone who thinks otherwise is incorrect.

Medi-Cal Qualification:  A lot of people used to think that having a living trust would make it easier to qualify for Medi-Cal.  Not true.  In California it is of no benefit.

Protection from Lawsuits: A revocable living trust in California will not provide any protection from a lawsuit because the trust maker has complete control of the assets in the revocable living trust.  On the other hand, an irrevocable trust might!  The reason for that is that under an irrevocable trust the person who has set it up, has given up control of the asset.

Refinancing: In California, when people refinance their house, they are often required to sign a deed taking the home out of the trust.  This is fairly easy to do and usually the mortgage broker or lender will cause the paperwork to be prepared.  The problem comes after the refinancing is complete and the lender has failed to create a deed transferring the home back to the trust.  Now it is outside the trust and quite possibly is subject to probate.

Amending the Trust: People often want to change their trust.  This is fine as long as it is done properly.  Many people attempt to self-amend the document.  This can ultimately lead to problems as there may be a dispute as to what the amendment is attempting to accomplish and/or whether it was properly executed.  In California, it is best to go to an attorney and have the attorney prepare the amendment.

Most problems concerning living trusts are not really problems.  It is always best to speak with a qualified living trust attorney and if you live in the Los Angeles area it is very easy to find such an attorney.

The frequency of review of estate planning is like going to the doctor for a check-up or to the dentist for a tooth cleaning.  It needs to be done on a repetitive basis.  This is true because circumstances in life can change and certainly the law can change.  Even if you do not think that much has changed in your life, an estate planning attorney can frequently point out some options that you might have missed.  What follows is a list of life changing events or activities, in no particular order, that should cause you to consult a Los Angeles estate planning attorney: a. marriage or divorce; b. birth or adoption of a child; c. significant change in size of estate; d. serious illness in the family; e. marriage or divorce of an heir or beneficiary; f. change in career including retirement; g. death of your spouse; h. purchasing real estate in another state; i. moving to another state; j. maturity (or irresponsibility) of a child; and k. more than a couple of years since the review of your plan with an estate planning attorney.

The message is that California estate plans should be reviewed regularly.  Otherwise, there is a risk of unintended consequences and probate litigation.  To have your estate plan reviewed, please contact a Los Angeles Estate Planning Attorney.

What is the authority for a Pet Trust in California?  Would you believe the California probate code?  Section 15212 of the California Probate Code provides as follows:

“A trust for the care of a designated domestic or pet animal may be performed by the trustee for the life of the animal, whether or not there is a beneficiary who can seek enforcement or termination of the trust and whether or not the terms of the trust contemplate a longer duration.”

Thus, in California you may create a trust, whether within your will or your living trust, for the care of your pet for the remainder of its lifetime.  The length of time of the trust will only be for the lifetime of the pet – no longer.

Pet trusts are becoming more and more popular as evidenced by there being written about in many major newspapers.  Plus, everyone has heard or read about Leona Helmsley’s provisions for her dog.

There are two major types of pet trusts in California – testamentary trusts and inter vivos trusts.  A testamentary trust provides care after you die; while an inter vivos trust provides care for your pet while you are living but are unable to provide the care for yourself.

Under either type of trust, you provide a caretaker to care for your pet.  You may also provide a separate trustee to ensure that the caretaker is undertaking his/her job with the necessary skill and passion.

What are the issues with pet trusts?  More than any other is that of relatives who believe you have left too much for your pet.  While you can never stop someone from being upset, working with an experienced California estate planning attorney/lawyer will make it very difficult for an heir to successfully challenge your bequest to your pet.  In the event that you are located near Los Angeles, please contact a Los Angeles trust and wills attorney to assist you.