A trust is a document put in place to protect your property for your beneficiaries, with the objective to reduce the liability of estate tax and avoid going through probate. Having a trust with a Folsom living trust lawyer lets your assets be transferred in a more timely manner than through the use of a will. A trustee is a person you select to administer the conditions of your trust exactly as it is specified.
There are several different types of trusts, but for the purpose of this article our Folsom living trust lawyers will explain the differences between a revocable and an irrevocable trust.
Revocable Trust
It is called revocable because your assets are under your control while you (also known as the ‘grantor’) are alive. Another name for a revocable trust is a living trust. It allows for more flexibility, and can be changed or eliminated should something occur to change your circumstances. A revocable trust generally becomes irrevocable once the grantor (you) dies because you are no longer alive to make changes to it.
While you are alive, a revocable trust acts like your other assets, meaning you are still liable to pay estate taxes. Revocable trusts do not protect you against lawsuits that may be filed against you. A Folsom living trust lawyer will tell you that these factors need to be considered when deciding to create a revocable or irrevocable trust.
Irrevocable Trust
If the main objective of your trust is to decrease the tax liability on the income you receive from certain assets, an irrevocable trust may be the way to go. Your Folsom living trust lawyer will assist in helping you to carefully consider which assets should go into an irrevocable trust. The irrevocable trust takes assets out of your estate to avoid probate and estate taxes; however, you will be unable to change anything once the trust has been executed. Unless under certain rare conditions, you will not be able to terminate the trust.
Once your assets reside in an irrevocable trust, you are no longer the owner of these assets – the trust is the owner. Creditors or anyone that may file a lawsuit against you cannot take property that is in an irrevocable trust. A Folsom living trust lawyer wants you to know that an important reason to consider an irrevocable trust is that because your assets are in the trust, they do not count against you when qualifying for government benefits. If a long-term care facility is in your future, these assets are protected from being depleted.
To learn more about which trust to create and for qualified, trusted assistance to help you maneuver through it all, please contact the Yee Law Group Inc. a Folsom living trust lawyer you can trust.