“Julie” came in to our Oakland office to get more information about creating a Living Trust. She and her husband headed a blended family, and theirs was a complex scenario. Wanting to avoid going to an attorney, she was hoping we could help her. She and her husband, “Jerry”, had both been previously married, and each brought children and assets to their relationship.
Julie and Jerry owned two properties together, and they agreed that these properties would go to Jerry if she passed away first; after he died, they would be divided among their collective five children. Julie also owned four properties that were in her name only, and she wanted these properties to go directly to her three children when she died–not to Jerry or his two children.
After carefully reviewing her estate and options, she decided to prepare two Trusts:
- A Joint Trust would be created to hold their community assets, including the two properties that Julie and Jerry owned together. They agreed that the surviving spouse would inherit these assets. After he the surviving spouse died, these assets, including the properties, would be equally distributed among the couple’s five children.
- An individual Trust would be created just for those four properties Julie owned as her separate property; upon her death they would be distributed among Julie’s three children only.
This was a clever way to separate assets, allowing for different distribution strategies
- We would help Julie and Jerry transfer title of their jointly owned properties into the Joint Trust, and these assets would go to the surviving spouse. After the death of the survivor, these would go to the beneficiaries they named in their Joint Trust.
- We would also help Julie transfer title of her separate properties to her Individual Trust. Since their Joint Trust can be amended by the surviving party, Julie took the extra precaution of segregating these properties because her Individual Trust becomes irrevocable and unamendable after she dies. Julie wanted to avoid any confusion about wanting to distribute the four separate properties among her three biological children.
While Julie and Jerry could have stated in the Joint Trust that these properties were to be given upon Julie’s death (rather than after the death of both of them), sometimes spouses worry that circumstances may change after their deaths and their wishes won’t be followed. These Trusts are now structured so that Julie’s wishes will be carried out.
Creating a Living Trust is an important part of end-of-life planning
Contact California Document Preparers at one of our three Bay Area offices today to schedule an appointment. We’re helpful, compassionate and affordable.