LEARN WHAT IS A WILL AND TRUST, KINDS OF TRUST, AND WHAT IS THE MOST BENEFICIAL FOR YOU..
Why Do I Need a Will?
A Last Will and Testament is a legal document that lets you decide exactly who inherits your belongings (like your house, car, and savings) after you pass away, here in the San Francisco Bay Area and anywhere in California. Without a will, the state’s inheritance laws dictate who receives your assets, which may not align with your wishes.
It’s important to understand that a Will itself doesn’t eliminate probate. Some assets may avoid probate, but a Will is still crucial for all your other belongings. This includes things like real estate, personal property, and any remaining financial accounts.
What is a Trust?
A Trust is a contract between the grantor (the person who creates the trust), the trustee (one who controls the trust) and the beneficiaries (those entitled to benefit from the trust). You, as grantor, determine how the trust will be operated by the trustee and who benefits, how they benefit and when they benefit. You can create a trust that permits you to be trustee and give you the right to receive full benefits from it.
What is a Revocable Living Trust?
A Revocable Living Trust is the most common and often used as a substitute to your will. It permits you to keep total control and access to all your assets during your life, and provides for the distribution of your assets to your beneficiaries at your death without the intervention of the courts.
We often refer to a revocable living trust as your rule book of Instructions. The truth about trusts is that they have changed. They no longer are only used to avoid taxes. They have become a means of protecting and providing for you and your loved ones. They can also help with long term care expenses.
Very few revocable living trusts provide all these benefits. Only a qualified estate planning attorney will know how to incorporate these protections into your plan. As you can see due to changes in the law, trusts are for much more than tax avoidance for the rich, they keep you in control! Remember not all trusts are created equal.
What is an Irrevocable Trust?
An Irrevocable Trust is a contract between the grantor (the person who creates the trust), the trustee (one who controls the trust) and the beneficiaries (those entitled to benefit from the trust). You, as grantor, determine how the trust will be operated by the trustee and who benefits, how and when.
A typical income only irrevocable trust permits you to receive the income on your assets, but you must give up your right to your principal. In some irrevocable trusts, you can retain the right to change who gets your assets during your life and after your death, and maintain 100% control of your assets until your mental disability or death (asset protection trusts).
Tax reduction trusts are much more restrictive than asset protection trusts. Typically, you cannot retain any right to control or access any of the assets in an irrevocable tax reduction/avoidance trust.
It is a common misconception that irrevocable trusts, once created, cannot be changed. While that is true of many irrevocable trusts created to avoid taxes (tax reduction trusts), it is not true of all irrevocable trusts. There are many irrevocable trusts available that are quite flexible and grantor-friendly. Not all Irrevocable Trusts/Asset Protection Trusts are created equally
If you are not sure what your trust provides for you, call us for a document review of your trust at 415-905-0215 or fill out the contact form at the bottom of this page to send us an email.