The Benefits Of Getting A Revocable Trust In California
Trusts can be used for various objectives, including asset protection, charity, and even providing for a dependent family member. While there are many different types of trusts, they fall into two categories: revocable and irrevocable.
This post will discuss revocable living trusts as they are often handled by one of our prescreened Palmdale Estate Planning Attorneys in California.
Living trusts are revocable trusts that are created while the trustor is still alive and can be modified at any moment throughout their lifetime. The trustor has the power to revise and restate the trust at any time during their lifetime to make any number of modifications, including:
The trust's assets
Beneficiaries of the trust
The terms of distribution
Revocable trusts are ubiquitous, but they're also complicated. They need to be carefully constructed to be valid under California law. That said, consult with a prescreened Palmdale Estate Planning Lawyer to help you create a thorough revocable trust.
Why Is It Important to Create A Revocable Trust?
Revocable trusts are a vital aspect of any estate plan, and they do so much more than just keep your assets out of the time-consuming and costly probate process. The following are just a few of the many advantages of revocable trusts:
1. Asset Management
If your circumstances change after you place assets in a revocable trust, you maintain the ability to revoke those assets. This means you can update your trust depending on your current circumstances.
Because you can determine the parameters of the trust distributions to give the beneficiary a continuous stream of income, revocable trusts are also frequently used to care for loved ones who struggle with money management. This is especially important if the trust beneficiary is a minor you want to give ongoing support to.
Ask your Palmdale Estate Planning Lawyer for more comprehensive advice on how you can manage and control how you distribute your assets.
2. Taking Care of Yourself
Revocable trusts can be utilized to provide oneself with a consistent stream of income when you become incapacitated.
Rather than going through the time-consuming and costly legal procedure of having a conservator appointed by the courts, your revocable trust can begin covering your expenses right away.
3. Keeping Your Privacy
During your lifetime, revocable trusts are usually not made public. This implies that the trust's terms and funding mechanisms remain fully confidential until your death, at which point they may become public information.
This helps you avoid possible disagreements with the distribution of your assets.
That said, the trust needs to be written so that it's clear and organized to minimize the chances of conflicts and challenges after you pass. You need to closely work alongside your Palmdale Estate Planning Attorney to create a trust that reflects how you want things to go.
4. Avoiding Probate
In more complicated circumstances, probate in California can take years and be exceedingly expensive.
When you put assets in a revocable trust, they pass straight to the trust beneficiaries. They are managed by the trustee after your death, bypassing the probate process entirely.
5. Making It Easy
Because revocable trusts can be altered at any time during your life, they are extremely simple to set up.
Despite this, California has a lot of restrictions, so consult a Palmdale Estate Attorney before presuming your revocable trust is legal.
6. Managing Out-of-State Assets
Property owned in other states can be held under revocable trusts. This can save your beneficiaries the trouble of administering their assets via probate in various states.
Bottom-line
Despite the numerous advantages of the revocable trust structure, it is crucial to remember that these trusts are not appropriate for all planning reasons.
In addition, you will continue to be liable for income taxes on the trust property because you retain authority over the trust assets. Those assets are generally included in determining the value of your gross estate for estate tax purposes.
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