Generally, you could create two types of trusts for your estate plan: Revocable living trusts and irrevocable living trusts. With both types of trusts, the trust creator must designate a trustee who will manage the contents of the trust once created or after the trust creator’s death.
A revocable living trust is more flexible than an irrevocable living trust, but it does not provide the same level of protection from estate taxes. Essentially, a revocable living trust only takes effect once the trust creator dies, at which time the contents of the trust pass into the ownership of the trustee. Until their death, the trust creator has the right to adjust the trust, including adding more assets to the trust. The downside to this type of trust is that it does not shield the contents of the trust from estate taxation at the federal or state level. The revocable living trust is also unshielded from creditors because the contents still qualify as the trust creator’s property.
An irrevocable living trust is more rigid than a revocable living trust but provides additional tax-shielding benefits. Once created, the contents of the trust immediately pass into the ownership of the trustee, even though the trust creator is still alive. The trust creator cannot change or alter the contents of the trust in any way, but because the contents no longer qualify as the trust creator’s property, there is no need for their beneficiaries to undergo probate at all.
A trust is a fantastic addition to any estate plan that can provide you and your loved ones with peace of mind and financial security. The Law Office of Christopher P. Walker has years of experience assisting clients in Brea and throughout California with their estate planning needs, and we can help you create the ideal estate plan for you. We understand that discussing end-of-life planning is difficult for some, and we want to help you make informed decisions about your estate plan. If you are ready to discuss your trust creation options with an experienced and compassionate Brea trusts attorney, contact The Law Offices of Christopher P. Walker today and schedule a consultation with our team.