Intro CASE #1: Getting even for being tied up to a tree Payback for traumatic childhood prank! There were three sisters who were trust beneficiaries of their dad’s trust. One of the sisters was the trustee and administered their dad’s trust after he passed away. When the trustee sister was…
Intro BE CAREFUL WHO YOU TRUST WITH YOUR TRUST Trust terminology basics A trust is created by a written document known as a declaration of trust, and is then funded by transfer of money into trust bank accounts and/or deeding or transferring of properties to the trust. The creator of…
My Sister is the Trustee and She Refuses to Pay My Share Trust terminology basics A trust is created by a written document known as a declaration of trust, and is then funded by transfer of money into trust bank accounts and/or deeding or transferring of properties to the trust. The creator…
Wills benefiting the attorney or caregiver are suspect Abuses in formation of wills and trusts In California over the last few decades there have been some situations whereby attorneys or caregivers have had wills or trusts prepared that benefit them. There was a famous case of a 95-year-old lady whose…
Cut out the heirs who challenge the will using No Contest Clauses Challenges can occur If a will or a trust does not make an equal division of the estate then an unhappy heir might want to make a challenge. The law does not require you to equally divide your…
BULLETPROOF YOUR KIDS’ INHERITANCE What is a spendthrift trust? A spendthrift trust is a trust that is created for the benefit of a person who is often unable to control his or her spending and gives an independent trustee full authority to make decisions as to how the trust funds…
Subtitle: Pull out tax free gain while downsizing INCOME TAX “GAIN” CONCEPT Under our system of federal and state income tax, if your personal residence is sold before death for more than what was paid for it then there is a capital gain. For example, if you purchased your home…
Partners pay tax on income earned even if it is not paid out to them The taxation of Family Limited Partnerships should be carefully considered in advance of setting up and rolling out your new FLP. FAMILY LIMITED PARTNERSHIP DEFINED State laws have provisions allowing people to establish limited partnerships. …
Purposes of Family Limited Partnerships People form family limited partnerships (FLP’s) to (i) transfer ownership of properties or assets to family members while still maintaining control; (ii) to save on estate and gift taxes; (iv) to shift income from parents’ higher tax brackets to children’s lower tax brackets; (iii) to…
Taxation of Irrevocable Trusts – Tax rates can be high on permanent trusts IRREVOCABLE TRUST DEFINED The term “irrevocable trust” is commonly used by estate lawyers and financial planners to describe a trust which is permanent and cannot be changed or revoked. An example would be where you establish a…