A trust is one of the many forms of estate planning available. Many estate plans can benefit from including a trust. There are two main types of trusts to choose from. These options include a revocable trust, which can be modified, and an irrevocable trust, which cannot be modified. There are advantages to both, and what is best for you depends on the type of assets you have and how you want your estate handled.
The experienced California estate planning attorneys at Galanti and Copenhaver have handled all kinds of estate planning issues over the years. Our attorneys have helped set up many trusts, and we can help you set up a trust as part of your estate planning. You can schedule a consultation to discuss your estate planning needs by contacting our office today.
1. A Trust Can Protect Your Assets
By creating a revocable living trust, you can protect your assets from creditors for the beneficiaries of your trust. If you have your assets in a revocable living trust, you can still modify the trust to have access to the assets, so they cannot be completely protected from creditors in this way since they are still yours. If you use an irrevocable trust, then the assets are owned by the trust, not by you. Since an irrevocable trust generally cannot be modified, creditors cannot access it on your behalf since these funds are not available to you.
2. A Trust Can Allow You to Avoid Probate
If your estate must pass through probate, there are a few different drawbacks. One of these is that you may risk your privacy. If your estate has to go through the probate process, your finances may become public. If you do not wish to have your financial details become public knowledge, you may want to consider creating a trust. A trust gives you more privacy, as a trust does not have to go through probate and thus, does not automatically become public.
An additional reason you may want to avoid probate is that it can be a long and expensive process for your beneficiaries. It often takes some time to resolve an estate through probate, and with time, attorney fees can add up. By creating a trust to begin with and avoiding the probate process, an investment now can save your beneficiaries time and money down the road.
3. With a Trust, You Can Control Distributions
Another reason to create a trust is that with a trust, you have a lot of control over the distributions to your beneficiaries. For example, if your beneficiaries are minors, you may not wish to give them a lump sum of money if you are not sure that they would handle it responsibly. You can also create what is called a spendthrift trust. A spendthrift trust is designed to distribute assets to a beneficiary generally over time so that the assets cannot be squandered right away. With a spendthrift trust, you can ensure that some of the property of the trust is made available to the beneficiary, but not all at once.
4. Creating a Revocable Trust Gives You More Control and Flexibility Over Trust Assets
When you create a revocable trust in California, you are able to retain some control over the assets. With a revocable trust, you can modify the trust and its terms as needed throughout your lifetime. This can come in handy if you get married or divorced or have additional children or grandchildren. You can modify the trust as needed so that all of your beneficiaries benefit from the trust in the way that you want them to.
5. Having a Revocable Trust Can Allow You to Avoid a Conservatorship
Another benefit to creating a trust is that by doing so, you may be able to avoid having a conservatorship. If you have a living (revocable) trust that you have made with your spouse or partner and you become unable to handle your finances either for a physical or mental illness, your spouse or partner would automatically have authority over the trust property. If you have an individual trust set up, then whoever you have designated as your successor trustee will be able to step in and manage the property in the trust in the event you become incapacitated. This way, someone you trust will be handling your financial decisions for you, rather than someone chosen by the court which could happen in the case of a conservatorship.
If you are considering creating a trust, our attorneys at Galanti and Copenhaver can help you. We can help you determine what type of trust best suits your needs, and then we can help you create it. Contact our office today so we can help you with your legal needs.