People often create estate plans during their lifetime. Doing so allows them to prepare for what will happen to their assets when their life is over. One way this can be done is by setting up a trust. The person who creates a trust is called a trustor, while the person receives it is known as the beneficiary. A trustee is a person who handles the trust for the beneficiary. The trust itself is essentially an arrangement that gives a trustee the right to manage the assets on behalf of the beneficiary.
When a person wishes to create a trust, it is important that they are aware of the different types available to them. Each type of trust has a different purpose so that it may suit the needs of a certain situation. This allows an individual to create a trust that is geared towards the person or entity that will inherit it. During this process, an experienced attorney can assist you to ensure that you are forming the right trust for the right beneficiary.
One of the more popular trusts that are formed is a revocable trust. This trust can be modified, changed, or terminated at any moment. This can be done without the permission of the beneficiary, as long as the trustor is of full mental capacity to do so on their own.
Another frequently made trust is an irrevocable trust. This type of trust requires the trustor to nullify their rights to it when once it is created. This means that when the trust is made, the creator no longer has any rights to the trust. They are unable to change or terminate it at any time throughout their life.
Irrevocable Life Insurance Trust
This trust allows the trustor to remove their life insurance from their estate. In doing so, the beneficiary to the estate may be free from any taxes that are placed on the trustor’s life insurance policy.
A testamentary trust is created as a part of a will. This only becomes effective after the individual passes away.
In California, people can choose from two types of charitable trusts. A charitable lead trust allows charities of the individual’s choice to receive interest from their financial gift for a set period of time. When it ends, whatever is left of the trust may go to their family or other non-charitable beneficiaries. A charitable remainder trust allows charities to receive the trust’s assets at the end of the trust term. Until it ends, the donor will receive interest on the gift.
Special Needs Trust
A special needs trust can be created for a loved one with a disability. With this, the trustor can make sure they receive any necessary financial support throughout their life.
Contact our Firm
Working with an experienced estate planning attorney, such as Jaci Feldman of the Woodland Hills, California, Law Office of Yacoba Ann Feldman, will ensure that you are taken care of when you need it most.Contact The Law Offices of Yacoba Ann Feldman to schedule a consultation today.