858.792.5988

Serving San Diego for over 35 Years

Clients, Colleagues, and Friends,

I retired on Dec. 31, 2019, and officially closed my office, after 42 years of practicing law. I thank you all for your confidence in me and your friendship over the years. My colleague David Dufek who has shared the suite with me for the past two years is taking over my practice and will have all client files. Not only will David be taking over the practice, he remains in the suite and is taking over my fax and phone lines. You are free to leave your files with David or pick them up. David's practice like mine includes will, trusts, and probate, as well as personal injury work. He also does landlord - tenant work and debtor - creditor matters including bankruptcy.

I wish you all the best.

Alex

What do Trusts do?

Trusts are an essential part of a California resident’s estate planning. It is recommended that you set up a trust to avoid probate and to save estate taxes. Married couples can set up joint trusts. Also, trusts are private documents.  Your assets and beneficiaries are not made public, because probate has been avoided.  Keep in mind that the current personal federal estate tax exemption through December 31, 2012 is $5,120,000 and is set to change to $1,000,000 as of January 1, 2013, unless there is an extension passed by Congress prior to the expiration date.

If you die without having a trust in place, your family will spend additional legal fees and costs hiring a probate attorney to file a petition with the probate court to transfer the estate assets to your beneficiaries. Your estate may also wind up paying more in estate taxes, which means a smaller inheritance for your beneficiaries.  Probate proceedings can be lengthy and delays occur.  Trusts may be distributed in a much more quickly with greatly reduced expense.

How a Trust Works?

Basic trusts are either revocable or irrevocable. A revocable trust means that you are in control of managing the assets, and you can change or revoke the trust. After your death, the assets pass to your heirs and the estate avoids probate because the trust owns the assets not you.  Therefore there is no need for probate.  Like a will the trust states who will get what. With an irrevocable trust, your assets are also held by the trust, but you cannot change, revoke, or transfer the assets once the trust has been set up.  After your death, or at certain predetermined times, the assets pass to your beneficiaries

Another variation of a revocable trust for married couples is to set up an AB Trust. With an AB Trust, a married couple may reduce or eliminate estate taxes by splitting up their estates into Trust A and Trust B after the death of the first spouse. The surviving spouse’s share of the community property and his/her separate property is placed in Trust A, and the rest of the assets are placed in Trust B, for the benefit of the surviving spouse. The surviving spouse receives the income from the assets in Trust B during the spouse’s lifetime and may use the principal if necessary.  After the death of the surviving spouse, the assets in each trust pass to the beneficiaries tax free as long as they are within the estate tax exemption.

There may be large monetary consequences if you make the wrong decision on using a trust.  The best advice is to talk to an experienced California wills and trust attorney who can answer your questions and prepare the appropriate will and trust documents that best meet your estate planning and financial needs.   Please feel free to contact our San Diego offices at 858-792-5988 for a consultation.