A trust provides additional flexibility that can supplement or even replace wills. One of its main distinguishing factors is its ability to reduce the tax burden that an estate is subject to before being inherited by its heirs.
Additionally, a trust provides greater flexibility in stipulating how the inheritance can be used by its heirs, and the timing of distributions of that inheritance. For example, trusts can be used to ensure that a child with special needs is taken care of with regular distributions from the trust that are managed by a trustee.
Types of Trusts
There are two main types of trusts: living trusts and testamentary trusts.
Like its name suggests, a living trust is created during the life of the grantor. However, it can be structured to continue after the death of the grantor.
A revocable living trust can be used to avoid the time and cost of the probate process and can be revoked by the grantor at any time.
An irrevocable trust leaves the grantor’s control upon creation of the trust and cannot be changed by the grantor after creation. However, irrevocable trusts usually have more tax advantages than revocable trusts.
Testamentary trusts are created after the death of the grantor. Unlike living trusts, a testamentary trust does not avoid the probate process.
How to Create a Trust
A trust is created when the property owner, or grantor, transfers ownership of that property to a trustee, who can be either a person or an institution. The trustee then manages the property of the trust for the benefit of the beneficiaries of that trust, and is legally obligated to act in the best interests of the beneficiaries. The trustee is often compensated for managing the trust.
How The Turbo Advocate Can Help
Because trusts provide more flexibility and a greater tax advantage than wills, they are considerably more complicated than wills to do properly. The Turbo Advocate has extensive experience creating trusts for its clients in San Francisco and California as a whole. Call 510-414-8117 to speak with an experienced attorney about planning your estate.