Vanguard Legal Group is a CA Law Corporation licensed with the State Bar of California. We are a team of experts specializing in Estate Planning – Wills and Trusts – throughout California. As one of California’s largest and most prestigious firms, we are a leader in the preparation of Trusts with office locations in 51 cities throughout the State. We have over 27,000 clients who depend on us to protect everything they’ve worked so hard for.
Estate Planning Services
Revocable Trust
A revocable trust, also known as a living trust, is a legal arrangement where an individual (the grantor or settlor) transfers their assets into a trust during their lifetime. The trustor remains the owner of these assets and can amend, modify, or revoke the trust at any time while they are still alive.
- The trust document outlines how the assets will be managed and distributed both during the grantor’s lifetime and after death.
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Who manages the trust after you pass away? A Successor Trustee
Every Trust names a Successor Trustee. This individual or entity you’ve chosen as your successor trustee will take over responsibility for your estate if you are incapacitated or deceased. This person or entity is required by law to act on your behalf, not their own. Your Successor Trustee should be competent, organized, trustworthy, and highly ethical.
Three key advantages of a revocable trust:
- A revocable trust allows for the seamless transfer of assets to beneficiaries without probate, the legal process of validating a will.
- A revocable trust is a private document allowing you to maintain privacy and address your affairs outside of the court system.
- A revocable trust allows for continuous access and maintenance of your trust assets during your incapacity.
Because the grantor can alter or revoke the trust, they retain control over their assets during their lifetime. During the trustor’s incapacity, the successor trustee can continue using trust assets for the trustor’s benefit. Upon the grantor’s death, the trust and its terms dictate how the assets are distributed to beneficiaries.
A revocable trust provides flexibility, privacy, and efficient asset distribution while avoiding the hassle, cost, and waiting period associated with Probate. At Vanguard Legal Group, most trusts we draft are revocable trusts.
Irrevocable Trust
An irrevocable Trust is a legal arrangement where the grantor, or person creating the trust, relinquishes control and ownership of the assets placed into the trust. Once established, the terms of the trust generally cannot be altered or revoked without the beneficiaries’ consent.
For most of our clients, save for unique circumstances, an irrevocable trust is not the best Estate Planning tool to meet their needs. Here are some key reasons a client might want to reconsider an irrevocable trust:
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- Loss of control – Once an irrevocable trust is formed and funded, the grantor no longer owns the assets in the trust.
- Permanence – Once formed, an irrevocable trust may not be amended except with the express permission of all trust beneficiaries.
- Tax reporting – An irrevocable Trust will have its own tax identification number (TIN) and require separate tax reporting on an annual basis.
Here are several circumstances when an individual might utilize an irrevocable trust:
- Asset protection – Because the grantor no longer owns the assets in the trust, the trust may shield them from certain creditors and legal claims. Therefore, these assets could be out of reach for the MediCal/Medicaid lookback period or protected from future litigation.
- Tax benefits – Irrevocable trusts can be used strategically to minimize estate taxes, potentially conferring these benefits upon a grantor’s heirs
- Charitable giving – Some irrevocable trusts, like a charitable remainder trust, allow for the donation of assets to a charitable cause while providing income to beneficiaries during their lifetime.
Special Needs Trusts
A Special Needs Trust SNT is a legal instrument designed to provide financial support for individuals with disabilities without jeopardizing their eligibility for government assistance programs. A special needs trust allows families to set aside funds for the care and well-being of a person with special needs, ensuring they have access to essential resources while qualifying for means-tested benefits.
There are two main types of SNTs: First-party and third-party trusts. First-party SNTs are funded with the individual’s assets, often through an inheritance, legal settlement, or other financial windfall. Third-party SNTs are established by family members and funded with their own assets, providing for the needs of the individual with special needs.
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The primary advantage of a Special Needs Trust is that it helps protect the individual’s eligibility for government benefits such as Supplemental Security Income (SSI) and SSID. Complex rules and regulations govern these trusts, and if this type of trust could be useful to you, it’s crucial to work closely with one of our attorneys to ensure compliance and the best fit for the individual. A principal benefit to working with Vanguard Legal Group is that we focus specifically on Estate Planning law and provide custom-crafted solutions to your estate planning needs with straightforward, flat fee billing.
Estate Planning Checklist
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Trust Administration // Death Administration
When someone creates a trust, they are the Trustor or Grantor. When they die, their named Successor Trustee would take control of trust assets and administer the trust’s terms. The Successor Trustee must take several legal steps to transfer assets to the beneficiaries. In estate planning, these legal steps are called Trust Administration or Death Administration.
Trust Administration is the settling of one’s estate, retitling property, and finalizing the decedent’s affairs. When someone dies, a designee must promptly address specific legal requirements to distribute the Trust assets legally.
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Trust Administration with Vanguard Legal Group includes:
- Filing the original Will with the probate court in the county where the death occurred
- Providing proper notification to the Department of Health Care Services
- Notification to Franchise Tax Board if necessary
- Preparation of Affidavit of Death for the transfer of real estate assets
- Preparing a new Certificate of Trust for the Successor Trustee
- Preparation and mailing statutory notices
- Obtaining a unique Tax ID for the Trust when neccesary
- Creating a small estate affidavit, when necessary
If you have a loved one who’s passed away and you choose Vanguard Legal Group to complete these steps on your behalf, we make the process simple & straightforward so you can have peace of mind that everything is completed accurately. Your attorney will provide you a one-on-one consultation, review the Trust documents, and answer any questions. We will then complete the necessary steps to allow the successor trustee with access and control of the assets.
Heggstad Petitions
A Heggstad petition is a legal action filed in California Probate court to validate the intent of a decedent who failed to transfer an asset into their Trust. If someone you know had a trust but forgot to fund an asset into the Trust before their death, we can help!
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All Trusts written by Vanguard Legal Group include a Pourover Will. This states that the Trustor intended for all major assets to be included in their Trust. If a client has forgotten to title an asset correctly and it’s now subject to Probate, we can file a Heggstad petition to have the asset recognized as part of the Trust. The name “Heggstad” comes from a legal case in CA (Estate of Heggstad – 1993) where the court ruled that a written declaration of Trust, combined with evidence of the decedent’s intent to include an asset, was sufficient to establish the inclusion of that asset in the Trust, even if the formal transfer didn’t occur before death. A Heggstad petition can streamline the Administration of the Trust by avoiding the need for Probate, which is time-consuming and extremely expensive.
Successor Trustee Responsibilities
When a Trustor names a Successor Trustee, this individual will assume responsibilities when the trustor is incapacitated or dies.
During the Trustor’s incapacity, the Successor Trustee will continue to use all trust assets for the Trustor’s benefit, thus ensuring they remain at the same standard of living and comfort. This can include:
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- Payment of bills
- Management of investments to ensure a sustainable income stream
- Contracting and coordinating ongoing medical care, treatment or services
- Ensuring adequate and comfortable living arrangements
Once a Trustor dies and the Successor Trustee assumes administrative control of the Trust, there are numerous responsibilities that the Successor Trustee must assume. Below is a non-exhaustive list of the duties a Successor Trustee assumes upon the death of the Trustor:
- Fill out and submit all life insurance claims
- Pay all outstanding debts
- File an annual tax return for the Trust
- Change the homeowner’s and auto insurance policies
- Review mail and respond appropriately
- Make all notifications of death
- Appraise primary residence and all other Real Estate
- Change the title on all assets
- Obtain written date-of-death valuations for all assets
- Determine if any Medi-Cal claims exist against the estate
- Meet with the CPA to understand all outstanding and expected upcoming tax issues
- Mediate any ongoing family disputes
- Vet and hire a realtor to sell the home/real property
- Determine what assets exist and meet with a financial advisor to determine if those should be liquidated, distributed, or invested for the benefit of beneficiaries.
- Manage any ongoing investments owned by the Trust.
- Evaluate personal effects and determine distributions
- Cancel ongoing subscriptions
- Organize and pay for needed home repairs
- Securing the home and changing locks & codes
- Notify insurance and retirement account holders of Trustor’s death
- File applicable parent/child exemption forms with the county assessor to avoid property reassessment.
- Communicate with beneficiaries about the administration process.
Trustee Services w/ Vanguard Legal Group
When a Trustor has died and the Trust is properly administered, the Successor Trustee must complete the responsibilities mentioned above. Failure to do so is a violation of the terms of the Trust and can result in litigation. Litigation is a sophisticated way to say that another beneficiary on the Trust files a lawsuit. If this occurs, the Successor Trustee can lose the power to act on behalf of the Trust. Further, litigation can be as lengthy and costly as a Probate, resulting in a significant loss of Trust assets.
In cases when a Successor Trustee lacks the organizational, ethical, or practical abilities to administer the estate, a Trustor (before they die) or a Successor Trustee (after the Trustor has passed), may name a third party fiduciary to act on behalf of the Trustor.
A fiduciary is a person or entity required by law to act on your behalf, not their own. When you name a third-party fiduciary, this must be an individual or entity licensed with the State of CA to provide fiduciary services. All professional fiduciaries serve in their capacity for a fee.
Due to client demand, Vanguard Legal Group recently began offering Trustee Services exclusively to our existing clients. In this role, Vanguard Legal Group serves as a CA-licensed fiduciary and will execute the Trust requirements and distribute assets per Trust language. Vanguard can navigate the intricacies of family relationships as an objective third party. We can distribute assets when they should legally occur based on CA Bar licensed interpretations of the Trust.
Probate
Probate in California is a legal process for all estates valued over $184,500 when the property or assets are not in Trust. This total includes the total appraised value of any real property and doesn’t account for outstanding debt. Simply put, a court case must be initiated for the State of California to determine several factors, including, but not limited to:
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- Does a Will exist? Is it valid?
- Who are the rightful heirs and beneficiaries to the deceased?
- How much is the decedent’s property worth?
- What financial obligations must be addressed?
The State Court investigation is time intensive, requiring research and resources to determine these answers. The estate of the deceased pays for the costs. A state court determines the costs, assigning the estate an administrator. Once the court has addressed all these matters AND decided who the rightful heirs are, only then does it allow for the distribution of these assets. Here are several key facts about probate:
- Probate cases often take several years to settle. Meanwhile, ALL PROPERTY AND ASSETS ARE FROZEN. No one can sell any real estate still titled to the Deceased until the Probate is complete.
- Probate costs approximately 6% or more of the estate’s total value, and that’s if there are no disagreements or other issues that frequently arise. In a straightforward example, if an individual owns a home valued at $1,000,000 and has $100,000 in liquid assets, the cost to the estate would exceed $65,000.
- Probate is a public court case where all your personal and financial affairs are made available to the general public.
If this sounds like a nightmare, it is. At Vanguard Legal Group, we’ve never written a Trust that went to Probate. Contact us today for a Will & Trust package to protect you, your loved ones, and everything you’ve worked so hard for.
Transfer Deeds and Property Retitling
When a Trust is created, all real property must be held inside the Trust to avoid a Probate. This is especially important if you own property in multiple states, as each state would have its own Probate court. As part of the Estate Planning process, Vanguard Legal Group specializes in the drafting and filing of deeds to properly retitle property.
Have you recently refinanced your home, bought or inherited real property? We also perform property research to confirm whether or not your property is correctly titled. The most common cause of Probate is improperly titled real estate. If you need a Transfer Deed to your Trust, send us a message HERE and someone from Client Services will reach out.
Transfer Deeds and Property Retitling
Holding property in Joint Tenancy outside of your Trust? Click HERE to read about the tax consequences of Joint Tenancy and the dangers of holding your property in such an arrangement.
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