A while back we shared some unusual questions about divorces that our customers asked us in the last few months. We now go over some questions about Living Trusts and estate planning documents that don’t come up too often.
We start today with part one. Here is the list of topics we will touch in this four part series about Living Trusts, Wills and Estate Planning Documents:

• Special gifts in a Joint Living Trust
• Can a Deed of Trust be filed when the property that secures the debt is in a trust?
• Holographic Wills
• Incapacitated Settlor in a Living Trust

SPECIAL GIFTS IN A TRUST

Q: My wife and I have an AB trust. Our main asset is the company in Woodland Hills we own and operate. We are planning to gift it to a specific beneficiary. What happens to that gift if I predecease my spouse? Can my spouse delete that gift and change the beneficiary? Or shall the beneficiary still be entitled to half of the value of the company at the time of my passing?
A: Technically that half of the value of the business cannot be modified. But in reality, here’s how it works: the surviving settlor can continue to run/manage the business and is able to use all income generated from the business for his/her own benefit. The value of the half of the business at the time of the first death is what is at stake. So if the business is sold, the proceeds equivalent to half of the value at that time should be set aside for the decedent’s trust. And even those proceeds can be reachable by the surviving spouse, if he/she has exhausted all other means of providing for himself/herself.
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The information contained in this blog – including information of a legal nature – is provided for informational purposes only, and should not be construed as legal advice on any subject matter.