When I begin counseling a new client as a trusts lawyer California, I oftentimes need to take a bit of time to do a “Trust 101” lesson. Trusts can provide huge advantages to those who utilize them, but I find that they are often misunderstood. So, I thought I would take a bit of time to simplify the subject and explain the general protection trusts.
Revocable Trust and Irrevocable Trust
There are two basic types of trusts; revocable trust and irrevocable trust. The most common type of trust is a revocable trust. (Some people refer to this as a living trust.) Simply put, revocable trusts are just that, revocable, meaning the trust can be cancelled at the request of the trust maker. This means that the assets in the trust are fully in control of the trust maker. Irrevocable trusts, on the other hand, are not revocable by the trust maker.
Revocable trusts (living trusts) can be excellent for disability planning, privacy, and probate avoidance. They also provide the added benefit of being able to cancel the trust which means the assets can be put back in the name of the person making the trust if needed.
At this point you may be wondering why anyone would ever create an irrevocable trust. Well as a trusts lawyer California, I can say one reason someone might choose an irrevocable trust is that assets would be protected against the claims of creditors. By protecting your assets with a well-drafted trust, you can protect your heirs from claims by creditors by keeping them in a trust over the heir’s lifetime.
This brief explanation of trusts is just the tip of the iceberg as far as what trusts can do to protect your family. To ensure that your planning meets your unique family situation and your objectives, talk to a competent trusts lawyer california who will help you sort through all the options available to you.
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