When it comes to estate planning, you may assume that your will can cover all of the assets you wish to leave behind. This is not the case. In many situations, it is important to leave certain assets in a trust. Read on to learn more about the different types of trusts you can create in California.
What is a trust?
A trust is an agreement between a third party and an estate that allows the third party to manage assets before the assets are inherited by the beneficiaries.
The parties involved in a trust include:
- Trustor: This is the person who creates the trust.
- Trustee: This is the person who manages the trust until its contents are distributed.
- Beneficiary: This is the person who receives the contents of the trust.
What are the different types of trusts in California?
Different situations require the creation of different trusts. Some of the most commonly used trusts include:
- Revocable Trust: This is one of the most common choices because it can be modified, changed, or terminated at any time without the approval of the beneficiary.
- Irrevocable Trust: This needs a trustor to revoke their rights when it is created, indicating they have no more rights to the trust and cannot change or terminate it.
- Irrevocable Life Insurance Trust: This permits a trustor to remove their life insurance from their estate so that a beneficiary is free from any taxes placed on the policy.
- Testamentary Trust: This is designed as part of a will and only is effective after the trustor passes away.
- Charitable Trust: There are two types of charitable trusts. A charitable trust provides the individual’s choice of charity to receive interest from their financial gift for a period of time. After it ends, the leftover may go to family or other beneficiaries. A charitable remainder trust allows charities to receive the trust’s assets at the end of its term. Until the end, the donor will receive interest in the gift.
- Special Needs Trust: This can be created for a loved one with a disability to ensure they receive the financial support they need throughout their life.
If you have any questions or concerns about creating a trust in California, our firm is here to help. We will walk you through the process every step of the way.
Contact our Firm
Working with an experienced estate planning attorney, such as Jaci Feldman of the Woodland Hills, California, Law Offices of Yacoba Ann Feldman, will ensure that you are taken care of when you need it most. Do not delay. Estate planning is a more urgent matter than you may think. You never know what the future holds. Contact The Law Offices of Yacoba Ann Feldman to schedule a consultation today.