A Wealth Transfer Lawyer Roseville, CA Trusts Discusses Revocable Trust Vs. Irrevocable Trust
Put simply, a living trust is a contract that you make with yourself. It is a foundational estate planning document and the idea behind it is to make sure that while you are still alive and have the capacity and mental ability to manage everything, everything in your life can stay the same. However, should you become incapacitated, disabled, or pass and not be able to manage your finances, you will have a plan in place that will allow someone to do that for you.
A Roseville, CA wealth transfer lawyer can evaluate your situation and determine what type or types of trusts would benefit you the most. There are two different kinds of trusts:
- Revocable Trusts: Revocable trusts allowed you to take out your assets with ease. This is usually the case in marital, because of the threat of divorce. Imagine a box. With a revocable trust, you are free to take out your money, your house, your cars and anything else that you have not yet designated to a beneficiary. However, this means that creditors and the court (in late alimony missed child support payments cases) can also dip into your revocable trust without your authorization.
- Irrevocable Trusts: With irrevocable trusts (most common in parent-child relationships), you cannot touch your assets once they are placed in your irrevocable trust. This also means that it is not open to creditors or the court. You may only take things out of an irrevocable trust to gift them to a beneficiary, but under no circumstance may you take them back for yourself. If you would like to gift your house to your eldest daughter, for example, you may take the house out of the irrevocable trust and do so. But, if you want to take back a car you have placed in the irrevocable trust for yourself, you may not do so.
Which Should I Choose?
The right type of trust depends on several different factors, which your wealth transfer lawyer can discuss with you. Having the right type of trust will ensure that everything gets transferred to your loved ones or rightful heirs after you die. If you have no children, regardless of your relationship status, a revocable trust is typically recommended. If you wish to leave behind something for your partner, place the asset into a revocable trust in the event that you two split up.
You can always get divorced from your partner, but not from your children; so if you have children, an irrevocable trust will be recommended so that you can leave behind something for them that cannot be tampered with by any court or creditor until you pass. Even if you are divorced or your partner is deceased, an irrevocable trust will always be beneficial for your children.
Contact a Wealth Transfer Lawyer