If you are in the process of drafting your will, you are most likely considering creating a trust as well. Doing so will usually help you protect your wealth from taxes and pass on as much as possible to your children. Essentially, you, the trustor, will apply third-party trustee who will help manage your assets on behalf of a beneficiary, who may be your children, for example. If you are considering creating a trust, here are some questions you may have:
What are the main types of trusts?
- A testamentary trust: While this type of trust may help manage assets for children or others who will inherit through your will, but this type of trust also does not avoid probate. This trust comes into existence and is funded during the administration of the probate of your will.
- An inter vivos trust: More commonly known as a family trust, this trust is created and funded during your lifetime. The main difference between an inter-vivos trust and a testamentary trust is that the testamentary trust goes into effect upon your death, and an inter-vivos trust will go into effect in your lifetime.
What is the difference between revocable and irrevocable trusts?
The main difference between revocable and irrevocable trusts is that revokable trusts will usually keep your assets out of probate upon your death, however, you will most likely not be able to avoid estate taxes. However, the benefit to a revocable trust is that you may retain control of your assets while you are still alive. With an irrevocable trust, however, you cannot alter its terms after its creation, and you therefore lose control of the assets you put in. The main reason people choose irrevocable trusts is that it may protect their beneficiaries from probate and taxes.
Are there other types of trusts?
Yes, there are. Some of the other possible trusts you may choose are:
- Marital trusts
- Bypass trusts
- Life insurance trusts
- Charitable remainder trusts
- Charitable leads trusts
- Special needs trusts
- Generation-skipping trusts
- Credit shelter trusts
Contact our California firm
If you are in the process of writing your will, setting up a trust may be something you should consider. Setting up a trust will usually help give both you and your beneficiaries the peace of mind you deserve. If you believe this is something you are interested in, then you should not hesitate to contact one of our trustworthy and knowledgeable attorneys today.
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.