Those who are unfamiliar with trusts should get the basics of trust law clarified before diving into specific types and their benefits. Understanding how the system works will make it easy to find a good living trust Fairfield CA attorney for creating a rock-solid structure. This will safeguard the family wealth while enabling a safe and tax-beneficial transfer of wealth to the next generation.
Trusts are basically registered entities wherein the trustee holds property that belongs to another party (the settlor). It's usually created as a better alternative to wills, and primarily intended to transfer benefits to a named person or set of people (beneficiaries). This structure separates the ownership and control of the property from the benefits it generates.
There are different types of trusts, but the most relevant classification here is whether it becomes active during the settlor lifetime or only after their death. The latter type, which works as nothing more than a vehicle to execute a person's last will and testament, is called a testamentary trust. Consider it as the legal entity that will control part or all of the estate after the settlor's death.
If it is created to become active while the property owner is still alive, that's called a living or inter-vivos trust. This type can be revocable or irrevocable. As the name suggests, the structure and beneficiaries of the revocable type may be modified after it has been created.
Trusts that are created to be irrevocable don't allow the owner to retain this kind of control. The main reason inter-vivos trusts are so popular is because they help families avoid probate. While the rest of the estate faces the delays and costs associated with the probate process, the property held in the trust skates free because it does not fulfill the definition of being under the deceased's ownership.
It must be obvious by now that these trusts are highly efficient when it comes to handing over an inheritance to beneficiaries without having to pay a large part of the estate in taxes and costs. It's also an excellent way for controlling how property is used without the headache of managing and growing it. The trustees will take care of it all, including investments, tax strategies, benefit distributions, etc.
The property owner doesn't have to be bothered by all this. Despite this lack of personal involvement, the well-defined structure of these trusts and the duties of their trustees ensure that the property is taken care of and benefits provided in the exact manner the settlor demands. If it is revocable, it affords even more control since the owner may add or remove beneficiaries and make other changes as required.
There's a common misperception that only high-wealth individuals need or are able to afford a living trust. But as any good Fairfield CA attorney will be able to explain in a free consultation, it's an affordable and highly useful tool even for ordinary people who simply want to pass on their home and life savings, insurance benefits and other such assets to their children. Not to mention the fact that wills can be challenged in court and are often overturned, but trusts are virtually impregnable.
Trusts are basically registered entities wherein the trustee holds property that belongs to another party (the settlor). It's usually created as a better alternative to wills, and primarily intended to transfer benefits to a named person or set of people (beneficiaries). This structure separates the ownership and control of the property from the benefits it generates.
There are different types of trusts, but the most relevant classification here is whether it becomes active during the settlor lifetime or only after their death. The latter type, which works as nothing more than a vehicle to execute a person's last will and testament, is called a testamentary trust. Consider it as the legal entity that will control part or all of the estate after the settlor's death.
If it is created to become active while the property owner is still alive, that's called a living or inter-vivos trust. This type can be revocable or irrevocable. As the name suggests, the structure and beneficiaries of the revocable type may be modified after it has been created.
Trusts that are created to be irrevocable don't allow the owner to retain this kind of control. The main reason inter-vivos trusts are so popular is because they help families avoid probate. While the rest of the estate faces the delays and costs associated with the probate process, the property held in the trust skates free because it does not fulfill the definition of being under the deceased's ownership.
It must be obvious by now that these trusts are highly efficient when it comes to handing over an inheritance to beneficiaries without having to pay a large part of the estate in taxes and costs. It's also an excellent way for controlling how property is used without the headache of managing and growing it. The trustees will take care of it all, including investments, tax strategies, benefit distributions, etc.
The property owner doesn't have to be bothered by all this. Despite this lack of personal involvement, the well-defined structure of these trusts and the duties of their trustees ensure that the property is taken care of and benefits provided in the exact manner the settlor demands. If it is revocable, it affords even more control since the owner may add or remove beneficiaries and make other changes as required.
There's a common misperception that only high-wealth individuals need or are able to afford a living trust. But as any good Fairfield CA attorney will be able to explain in a free consultation, it's an affordable and highly useful tool even for ordinary people who simply want to pass on their home and life savings, insurance benefits and other such assets to their children. Not to mention the fact that wills can be challenged in court and are often overturned, but trusts are virtually impregnable.
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