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Encino Trust Lawyers

Helping Families Protect Their Inheritance

A Heritage Trust (HT) can protect your family’s inheritance from creditors, spouses, and future estate or property taxes. In a typical estate plan, you will leave a portion of your estate to your child with them receiving the assets either at the time of your death or at a future date, which is typically related to the child’s age. For example, your child may receive their inheritance in portions, at ages 30, 35, and 40.

If you are looking for an alternative method for distributing your assets to your children’s benefit that provides more advantages than the traditional distributions to beneficiaries and avoids probate, then you may want to consider setting up a heritage trust. At Tisser Law Group, APC, we bring with us over 40 of experience to help you properly establish a heritage trust. We have helped countless individuals and families throughout the San Fernando Valley and Los Angeles, and we stand ready to do the same for you.

Contact Tisser Law Group, APC online or call (818) 528-5553 to get started. Our Encino heritage trusts attorney work closely with clients in helping them achieve specific needs and goals.

What is a Heritage Trust?

In a heritage trust, assets are placed in a trust for your child to be used throughout their lifetime. Your child can be the trustee and handle the trust's administration. However, a heritage trust has a Distribution Trustee who is responsible for the distribution of the trust's assets to your child.

The purpose of the Distribution Trustee is to provide asset protection to your child. Your child, however, will have the right to remove and replace the Distribution Trustee at any time, provided that the replacement is not, in general, a person related to them.

At your child’s death, the assets remaining in the trust will then continue to be held in trust for their children. If your child has not reached the ages at which you want them to be in control of the assets, you would name a trustee, usually the same person as the trustee in your family trust, to be in control of the assets until your child reaches the designated ages to take over their Heritage Trust.

Benefits of a Heritage Trust

There are three primary benefits of establishing a Heritage Trust for your child including:

  • At the child’s death, the assets should pass to their descendants without being subject to death taxes. For example, if the assets put in the Heritage Trust for your child are worth $500,000 when you die and $4,000,000 when your child dies, the entire $4,000,000 can pass estate tax-free to your grandchildren. This makes the Heritage Trust a Generation-Skipping Tax Trust.
  • Assets in the Heritage Trust should not be subject to your child’s creditors. In California, a person cannot, in general, gain protection from creditors by creating this type of trust and putting their own assets into it. By establishing a Heritage Trust for a child, you can provide your beneficiaries with significant asset protection they would not otherwise have.
  • A Heritage Trust can help protect a child’s inheritance from their spouse. If a child has a Heritage Trust that owns the assets inherited from you, he or she will not be able to commingle them with community funds since they are kept separate in the Heritage Trust. This ensures that a portion of the assets would not be treated as community property and divided between the spouses upon a divorce.

To set-up a heritage trust for your child today, contact Tisser Law Group, APC at (818) 528-5553. Our Encino heritage trusts attorney can guide you through the entire process and ensure proper trust administration.

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