Protecting Clients’ Assets Through Trust Creation and Administration
When most people think of an estate plan, they assume the most important document is the will. However, there is another even more effective estate planning tool that can help you and your loved ones achieve your goals when passing on an inheritance. This tool is the trust. Trusts are often associated with the ultra-wealthy. However, any family can benefit from the many advantages of having trust in your estate plan.
Trusts offer a great deal of flexibility and personalization that other estate planning documents do not allow. For example, the trust creator or grantor may indicate not only who their beneficiaries are but how and when the inheritance will be distributed. These benefits make it possible to avoid giving a family member prone to overspending a large inheritance all at once. A grantor can also benefit from tax advantages and keep their assets out of creditors’ hands before death in an asset protection trust.
If you want to minimize estate taxes, give back to the community, or pass on the inheritance to your heir in a personalized way that matches your needs, you may want to consider creating a trust. Our skilled, caring legal team is prepared to help protect your property by analyzing what kind of trust is right for you. We can also help you select a trustee and set up your documents to give the maximum protection and flexibility. Call our law firm right away to learn more at 510-984-2390.
What Is a Trust?
A trust is a legal document that dictates how the property is held. In other words, when you place an asset into a trust, it is no longer considered your property but is legally the property of the trust. A trust is managed by a trustee, who should be someone you trust with this crucial fiduciary duty. Many people choose a spouse, a child, or a close friend to administer the trust. With a living trust, you may even select yourself as the trustee.
When the grantor passes away, leaving behind a trust in the estate plan, the trustee administers the document with the best interest of the beneficiaries in mind. They inventory the trust assets and distribute them according to the grantor’s wishes. Using a trust can help your family members avoid the long and expensive probate process. Many trusts also have tax advantages that you can take advantage of while you’re alive and that will benefit your family after you pass on.
Contact a trusts attorney like those at our law office right away to learn more about how to set up a trust and if this sort of document makes sense in your personal estate plan.
How Are Trusts Different from Wills?
Differentiating between trusts and wills can be confusing because they appear to do the same thing. While the trust and will both indicate how to distribute the estate assets after the grantor or testator passes away, each legal document performs distinct functions. In fact, many people use both wills and trusts in their estate plans.
Wills
A will is essential to an estate plan because it names several important people who will perform critical functions after you die. Some examples include the estate administrator, who must handle the probate process on your behalf, and a guardian for any minor children. Wills dictate which beneficiaries will receive what assets from the estate. Having a will is critical for California residents who want to simplify the probate process for their loved ones.
Trusts
Trusts also play a role in distributing assets following your death. However, having a trust can bring added benefits while you’re still alive. For example, living trusts allow you to control your assets until you pass away and still take advantage of tax benefits after you die. Trusts also give additional flexibility in how and when the assets are distributed to beneficiaries.
What Kinds of Trusts Are There?
Before creating a trust, it is critical to understand that there are various forms of trusts, including:
- Testamentary trust – These trusts come into effect when you pass away, as indicated by the will.
- Irrevocable trust – An irrevocable trust, including an irrevocable life insurance trust and other forms of irrevocable trusts, offers excellent protection. However, these trusts are extremely difficult to change once created.
- Revocable trust – A revocable trust may be adjusted while you are still living and still offers some protections.
- Spendthrift trust – This trust allows you to give an inheritance a little at a time to a family member prone to overspending, such as a child.
- Special needs trust – These trusts allow a loved one with special needs to receive an inheritance without affecting their qualification for government assistance.
- Charitable trusts – A charitable trust allows you to donate part of your inheritance to a worthy cause.
Reach out to a trusts lawyer before choosing a trust. Your attorney can help determine which trust is right for your unique situation.
Should You Hire Our Trust Attorneys in Alameda County?
Having a trust in your estate plan can make all the difference in protecting your property now and after you pass on. However, deciding whether a trust is right for you can be complicated, especially with the various trusts available. Reach out to our qualified legal team for help determining which type of trust you need and for help setting up the ideal trust in your estate plan.
Our talented attorneys are ready to help as you make essential decisions about your future. We can also assist you if you are the trustee administering a trust on behalf of a loved one. Call today to see if you qualify for a free 30-minute consultation at 510-984-2390.