As a resident of California, your estate plan can legally consist of a diverse number of trusts. Trusts are flexible by nature, yet there are specific trusts for special needs, medical care or life insurance policies. Since you can write up a trust for any strategy you have, you need to start with a better understanding of the options, how they work and benefit you.
Testamentary trusts
This trust is unique because its directives are stated within your will. Typically, a trust is a private asset that’s only disclosed to those named within it. With a testamentary trust, family, friends and bystanders get to hear what your wishes are pertaining to the assets in this trust.
Living trusts
Living trusts are also known as revocable trusts. With these, you have the right to update directives, change trustees or name yourself as a beneficiary. This trust also holds directives for your estate in the case that you become incapacitated.
Life insurance trusts
Since this trust can own property, one asset it can hold is a life insurance title. With this option, you won’t incur tax liabilities because the insurance belongs to the trust. This is ideal when you want to protect annuities until someone can receive them.
Charitable trusts
Estate planning through a charitable trust ensures that the assets of your trust go to any charities you choose. You can even give orders regarding what’s to be done with your money. This trust will also help you to lower your taxable income.
Trust writing in California
Being unchangeable makes the irrevocable trust part of a long-term strategy for your estate. Due to its immovable directives, an irrevocable trust is also the best tax shelter you have. A special needs trust, which helps those with disabilities, is an example of an irrevocable trust.
