There are many entities that you may use in estate planning. The following are only some of the estate planning tools you may use. Trusts of many varieties must be considered and then some may be used. Last Wills must be considered. Corporations are often used in estate planning. This article however focuses on revocable Trusts. Irrevocable Trusts. Supplemental Trusts. Spend thrift trusts and more.
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Wills
Wills are documents that allow a person to have their estate managed and distributed under court supervision through a process called probate. Probate has an undeservedly bad name, because at times it is extremely beneficial. It can be time consuming and it can be expensive but sometimes the cool and impartial head of a judge prevents many problems. You should not rule out the benefits of proceeding under probate until you have discussed your particular situation with an attorney. More often than not a Revocable Living Trust based plan will provide you with greater flexibility and will be the option of choice, however if the family likes to feud probate may make administration much easier
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Trusts
There are many different kinds of trusts and they have many different uses. The most common elements of trusts are flexibility and utility during life. A Will is only effective at death. A trust can be effective the moment that you sign it. The trust may be understood as serving two functions. First it is an entity that is used to hold title Second it is a set of instructions.
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Irrevocable Trusts
Give away property and it can not be taken from you. You can make outright gifts but then the property will not be there for you. But when you settle your property in a trust which can not be revoked and fund it with property that can not come back to you, as the owner, you have a vehicle which will allow for your exclusive use and enjoyment. Would you rather own something that can be taken from you or use something that can’t.
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Charitable Trusts
Most inherited money is spent within two years of its receipt. It doesn’t matter if the inheritance is large or small, the inheritor, old or young, male or female, educated or not. Found money burns holes in people’s pockets. So if it will all be gone in less than twenty-four months would skimming 20% for a favorite philanthropic cause hurt anyone? We think not. Charity in fact benefits not only those who receive but those who share the community and the giver herself. There is a great variety of vehicles for charitable giving. Finding the one that suits you best, is very important. We can explain each of your options and show you how they fit into your estate plan.
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Special Needs and Supplemental Needs Trusts
The miracles of modern medicine have made staying alive more possible then ever, but being alive and being able to manage your estate are two entirely different things. A special needs trust is the vehicle of choice for use when a person, man or woman, adult or child can not manage their estate due to injury, illness, or disability. The special needs trust provides, while allowing the disabled person to receive government services.
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Trusts within Trusts: Subtrusts
A revocable living trust [RLT] can be drawn so that it creates sub-trusts as needs arise. For the children there are separate trusts, education trusts, pot trusts, special needs trusts and more. The married couple can have individual trusts, joint trusts, separate property trusts, etc. A joint RLT can split into marital deduction trusts, bypass trusts, survivors trusts, family trusts and more.
Additional Resources
Cornell’s Legal Information Institute (LII) for: California Probate code California Civil Code California Code of Civil Procedure Internal Revenue Service Web Site (IRS) for Internal Revenue Code Internal Revenue Code
Legal Information Institute
The Internal Revenue Service
