Many Americans are familiar with the necessity of drafting a will in the event of their death but there are other legal options to consider when determining how to distribute your estate to your beneficiaries. Depending on the size of your estate, establishing a trust with a savvy Folsom estate planning attorney could ensure your assets are distributed to your beneficiaries as you intended.What is a Trust?
A trust is a legal arrangement that allows for a trustee to hold or maintain assets such as property, cash accounts, stocks and bonds, business interests or in some cases, life insurance, on behalf of a beneficiary or beneficiaries. Trusts are often a means to avoid the time-consuming, costly process of probate and minimize estate taxes. Establishing a trust safeguards your assets.
When you establish a trust in California, it is important that you determine who the trustee(s) will be as trustees have a considerable amount of authority and responsibility for your wealth. This position will not be monitored by the courts, therefore, it is pressing that you choose a trustee who will have your best interests in mind while they make decisions. Many people that establish living trusts name themselves as trustee while they are alive. Others appoint a corporate trustee, which is a licensed individual or bank that is licensed to work in California. Others opt to name a successor trustee which is an individual or organization you appoint to manage you trust after you have passed.
Benefits of Establishing a Trust:
- You Control Your Fortune – When you establish a trust, you are able to set the terms exactly to your liking. You may determine exactly when and to whom your assets are distributed.
- Maintain Your Privacy – If you utilize a will to distribute your estate to your family, you should know that probate is a matter of public record. When you set up a trust, it allows for your assets to remain private.
- Medicaid Asset Protection – If you wish to achieve Medicaid benefits in the future, establishing a trust can help you accomplish that goal. Additionally, a meticulously constructed trust can provide financial advantages in affording extra needs outside of what Medicaid covers.
There are two of trusts are revocable and irrevocable trusts.
A revocable trust enables a grantor to retain the right to manage the assets held in the trust during their lifetime and can be altered, changed, modified or revoked at their own discretion. Also known as a living trust, it is essential in avoiding probate. If ownership of assets is transferred to a revocable trust during the grantor’s lifetime so that it is owned by the trust when the grantor passes away, the assets will not be susceptible to probate.
An irrevocable trust cannot be altered, changed, modified or revoked once it is created. The grantor can decide who will manage the trust, who possesses access to trust assets during their lifetime, and how the property will be assigned once the grantor passes away. Irrevocable trusts are a vital component of Medicaid planning.Let Our Charlotte Legal Team Help You Protect Your Assets and Property
At Thomas G. Black & Associates, we are deeply invested in providing our clients with estate planning options that are tailored to fit their needs and easy to understand. Our knowledgeable estate planning attorney can help navigate you through any legal obstacles you may face and provide you with the tools to build the future you envision.