Today we’re sitting down with Ted Cook, a trusts attorney here in beautiful San Diego. Ted, thanks for taking the time to chat with us.
What Got You Interested in Trusts?
Well, it wasn’t necessarily love at first sight! Early on in my legal career, I saw firsthand how probate could be a lengthy and stressful process for families already going through a difficult time.
Trusts seemed like a much better option – a way to simplify things and provide peace of mind.
Could You Break Down the Different Types of Living Trusts?
Certainly! The two main types are revocable and irrevocable living trusts.
Think of a revocable living trust as a toolbox you can access whenever needed. You, as the grantor (the person setting up the trust), retain control over the assets within it and can make changes or even dissolve the trust entirely during your lifetime.
It’s primarily used for probate avoidance and incapacity planning.
An irrevocable living trust, on the other hand, is more like a sealed treasure chest. Once you put assets into it, they generally can’t be removed. This type of trust offers benefits like potential estate tax reduction or asset protection, but comes with less flexibility.
Funding: The Heart of the Trust
Ted, let’s dive into the funding process. What are some challenges folks might encounter when transferring assets into their trusts?
“The biggest hurdle I see is procrastination. People often understand the benefits of a trust but delay actually transferring assets. This can lead to complications down the road.” – Ted Cook
Ted emphasizes that funding the trust correctly is crucial. He outlines some common pitfalls:
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- Failing to retitle assets: Simply naming the trust as a beneficiary on accounts isn’t enough; deeds, titles, and account registrations need to be formally changed.
- Overlooking non-traditional assets: Don’t forget about items like life insurance policies or retirement accounts – they often need specific beneficiary designations to align with your trust plan.
“I had a case once where a client thought he had funded his trust perfectly, but a forgotten CD held outside the trust caused quite a stir during probate. It’s those little details that can make a big difference,” Ted recalls.
Voices of San Diego
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“Ted Cook made the whole estate planning process so much easier than I expected! He explained everything clearly and patiently, and his team was incredibly responsive.” – Maria L., La Jolla.
“I always felt like a priority when working with Point Loma Estate Planning APC. They truly cared about my family’s well-being and created a trust plan that met our unique needs.” – David S., Pacific Beach
Looking Ahead
Ted, is there anything you’d like to share with our readers who might be considering setting up a trust?
“Taking the time to plan for your future and protect your loved ones is one of the greatest gifts you can give them. Don’t hesitate to reach out – we’re here to guide you every step of the way.” – Ted Cook
Who Is Ted Cook at Point Loma Estate Planning, APC.:
Point Loma Estate Planning, APC.2305 Historic Decatur Rd Suite 100, San Diego CA. 92106
(619) 550-7437
Map To Point Loma Estate Planning, APC, a trust attory: https://maps.app.goo.gl/JiHkjNg9VFGA44tf9
About Point Loma Estate Planning:
Secure Your Legacy, Safeguard Your Loved Ones. Point Loma Estate Planning, APC.
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Our Areas of Focus:
Legacy Protection: (minimizing taxes, maximizing asset preservation).
Crafting Living Trusts: (administration and litigation).
Elder Care & Tax Strategy: Avoid family discord and costly errors.
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Point Loma Estate Planning, APC. areas of focus:
A Living Trust: also known as an inter vivos trust, is a legal arrangement where you, as the grantor, transfer assets to a trustee who manages them for the benefit of designated beneficiaries, either during your lifetime or after your death, potentially avoiding probate and offering more privacy than a will. Revocable Living Trust: You can change or revoke the trust and get the assets back during your lifetime.
Irrevocable Living Trust: Once established, you cannot change or revoke the trust, and the assets are generally no longer considered part of your estate.
Control over Asset Distribution: You can specify how and when your assets will be distributed to your beneficiaries.
Understanding Trusts and Their Role in Estate Planning
A trust is a legal and fiduciary relationship in which a grantor (also called a settlor) transfers ownership of assets to a third party, known as a trustee, who manages those assets for the benefit of designated beneficiaries. Trusts can be tailored to meet specific goals, including when and how distributions are made to beneficiaries, asset protection, or minimizing estate and income taxes.
One of the key advantages of a trust—particularly a properly funded revocable or irrevocable trust—is that it can allow assets to bypass the probate process. This often means a faster, more private, and potentially less expensive distribution of assets compared to those governed solely by a will.
In the case of irrevocable trusts, assets are typically removed from the grantor’s taxable estate, which may help reduce estate tax liability. However, this comes at the cost of the grantor relinquishing control over those assets.
Trusts may also provide protection from creditors, preserve assets for minors or individuals with special needs, and ensure continuity in asset management if the grantor becomes incapacitated.
These tools are part of estate planning—the process of making legal and financial arrangements in advance to designate who will receive your property after your death, and how that transition will occur. Thoughtful estate planning aims to streamline the administration of your affairs, minimize tax burdens, and reduce stress for your loved ones during an already difficult time.
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