Legal Tips and Resources
When anyone plans their estate, there are two primary options they can choose from: a will or a trust. This guide will explain the latter. Learn what a trust is, what benefits one provides over a will, and what power a trust grants you. Remember, it is always best to speak with an estate planning lawyer to get more detailed information. This guide only acts as an introduction to what a trust is.
What Is a Trust?
The way a trust essentially works is your estate is transferred to a trustee, and then distributed according to your wishes. If you choose to set up a trust for your estate, you will become the benefactor and whomever receives portions of your estate become beneficiaries. The benefactor puts certain conditions on the trust, which determine when, who, and how each beneficiary receives parts of the estate.
Irrevocable Vs. Revocable Trusts
There are many different types of trusts, but one distinction that is especially important to make is whether your trust is irrevocable or revocable. In an irrevocable trust, you set it up and then you cannot undo what you have done. The trust is complete and it will remain inaccessible to you until the conditions you set are met. In a revocable trust, you can make changes or access your property at any time. You can think of this as how tightly locked up you want your estate to be. If you choose to set up an irrevocable trust, it almost is as if you do not own the contents of the trust anymore.
The Benefits of a Trust
There are three primary benefits that a trust offers over any other kind of estate planning option:
Because you get to set whatever conditions you want, you have control over how your estate is distributed. For example, you can choose to leave a granddaughter $2,000 at the time she finishes college, or your nephew your car when he gets married, or any other condition you want. You can even put a condition on what an individual receives.
Another benefit is savings. Trusts are not subject to estate taxes, which means more of your estate will go to the people you love. Finally, trusts do not go into probate like wills do. As such, it is more convenient for all the beneficiaries because they do not need to wait to receive what you left them. If you think a trust might be the right option for your estate, the first step is to talk to an estate planning lawyer in Roseville, CA.
Thanks to the Yee Law Group for their insight into estate planning and trusts.