As you’ve considered your options with regards to estate planning, you may have accumulated a number of questions about trusts. There are many different types of trusts, and some are very complicated. If you’ve wondered who to turn to help you determine the best options for you and your loved ones, it’s a good idea to consult and an experienced Los Angeles estate litigation lawyer who will take the time to understand your unique situation and offer personalized guidance.
Trusts come in two basic varieties: testamentary trusts and living trusts. Testamentary trusts are written into wills, and put into place in the event of the person’s death. Living trusts, also known as inter-vivos trusts, are arranged to take effect during someone’s lifetime.
There are two types of living trusts. Revocable trusts permit you to control every asset within the trust. You may change or revoke the terms of such a trust as you see fit. Irrevocable trusts transfer the assets to another party. Once the transfer takes place, you cannot usually alter the terms of the trust unless the beneficiary consents. One benefit of irrevocable trusts is that the assets in them are not affected by estate taxes.
In addition to the types of trusts described above, there are a large number of more complex kinds of trusts. One example is the credit shelter trust, which is also known as the family or bypass trust. In these trusts, a will is drawn up which bequeaths a certain sum to the trust that may meet, but not surpass, the limitations imposed by estate taxes. The remainder of the estate in question may be granted to the spouse of the deceased, and that money is not ever taxable, even if the assets in it grow.
Another example is the dynasty trust, or generation-skipping trust. These allow you to give large assets, which are not taxable, to beneficiaries who are separated from you by at least two generations: your grandchildren or great-grandchildren.
Yet another type of trust is the qualified personal residence trust. These trusts will take the value of your residence away from your estate. This is beneficial in instances of homes whose values are expected to increase.
Of course, it would be not just unwise but also impossible to thoroughly explain a topic as complicated as trusts in a brief blog post. For a more detailed understanding of how trusts can protect your interests and those of your family, visit an expert Los Angeles estate litigation lawyer.