Why You May Consider Establishing A Trust For Your Estate
Among the many tools at your disposal throughout the estate planning process is the option to establish a trust. Despite common perception, trusts are valuable tools for estates of all kinds, both large and small.
At The Law Offices of C. Lee Hewitt, we have decades of experience working with clients across California and managing estates of all kinds. We work within the legal system to create a personalized estate plan and work with you to ensure that your estate plan and trust achieve your goals. Come into our office and tell us about how you envision your estate.
How Trusts Protect Your Hard-Earned Assets
A trust places parts of your estate, like your home or savings, into trusted hands and often relieves your loved ones of the burden of administering your property. A trust creates a more formal structure than a will, and it establishes a structure that your loved ones must follow. Trusts also can reduce time in probate, manage property in very specific ways and minimize unnecessary tax burdens.
Among the most common property placed into trusts are houses, but they also can include larger savings, businesses and other complex assets. Find out more about how a trust can benefit your estate planning needs at your first appointment.
Understanding The Difference Between Revocable And Irrevocable Trusts
When considering a trust for your estate, it’s essential to understand the difference between a revocable trust and an irrevocable trust.
A revocable trust, often referred to as a living trust, allows you to retain control over the assets placed within it during your lifetime. You can modify, amend or revoke the trust at any time, providing flexibility as your needs or circumstances change. Revocable trusts are popular for avoiding probate, as they help ensure assets are distributed according to your wishes without court involvement. However, since you maintain control, the assets in a revocable trust are still considered part of your estate for tax purposes.
On the other hand, an irrevocable trust cannot be changed or revoked after it is established. Once assets are transferred into an irrevocable trust, you relinquish control over them, which offers potential tax benefits, such as reducing your taxable estate. Irrevocable trusts can also provide asset protection, shielding your property from creditors or lawsuits. However, they are less flexible than revocable trusts and should be used carefully, especially when considering how assets may need to be accessed in the future.
Types Of Trusts And Their Uses
There are several specialized types of trusts, each tailored to meet specific estate planning goals:
- Living trusts (revocable trusts): These are the most commonly used type of trust. They are created during your lifetime and allow you to retain control over your assets while providing the benefit of avoiding probate.
- Charitable trusts: Charitable trusts allow you to leave part of your estate to a charitable cause while reaping certain tax benefits. These trusts can be designed to give the charity a portion of your estate upon your death or can be set up as a lifetime arrangement.
- Special needs trusts: Designed for individuals with disabilities, special needs trusts allow the beneficiary to maintain eligibility for government benefits like Medicaid or Supplemental Security Income (SSI) while still receiving assets from the trust.
- Generation-skipping trusts: These trusts are used to pass wealth directly to grandchildren or even great-grandchildren, bypassing your children in the distribution process.
- Marital trusts: These trusts are designed to provide for your spouse during their lifetime, with assets passing to your children or other beneficiaries after their death.
Understanding the various types of trusts and how they fit into your estate plan is essential for ensuring that your assets are distributed according to your wishes.
When You Are Ready To Get Started, We Are Here
From our offices in Fremont, The Law Offices of C. Lee Hewitt is proud to offer comprehensive estate planning services based on the principles of honesty, transparency and integrity. We focus on giving you all the information you need to make the decisions that work best for you and your family. Call us today at 510-936-6714 to schedule a consultation.