Trusts are an important part of a California estate plan. There are many types of trusts that can help you accomplish your goals, and it’s vital that you discuss your options with a qualified estate planning attorney. Whether you want to protect your estate from taxes or provide for a child with special needs after your death, your attorney can design the right trust for you.
Understanding Your Options in California
A trust can either be revocable, meaning it can be changed or even terminated by you during your lifetime, or irrevocable, meaning you can’t change or terminate it once it is created. Depending on the goal of the trust, it will fall into one of these categories. Some options for specific trusts include:
- Testamentary trusts are created in your will and do not take effect until you die. These trusts can include any property you acquire during your lifetime, as well as assets, such as life insurance proceeds, that are payable after your death.
- Bypass trusts, also known as married a-b trusts, protect the property of spouses. When one spouse dies, the trust divides into two trusts so that the surviving spouse benefits from estate tax exemption.
- QTIP trusts, or Qualified Terminable Interest Property Trusts, allow property to pass with an unlimited marital deduction for the surviving spouse.
- Special needs trusts are established to provide financial resources for someone with a physical or mental disability. A trustee is appointed to manage the financial aspects of the trust.
- Charitable trusts allow you to create a trust for the benefit of a charity and to realize estate and gift tax benefits.
- QPRTs, or Qualified Personal Residence Trusts, allow you to set up a trust for your home for a beneficiary to use during the beneficiary’s lifetime. As with other kinds of trusts, there are tax benefits to a QPRT.
- Generation-skipping trusts are typically used for the benefit of grandchildren. There could be tax benefits if you create a trust for the benefit of your grandchildren rather than your children.
- Pet trusts allow you to set aside money for the care of your pet if something happens to you.
Comprehensive estate plans typically have more than one trust associated with them. An experienced trust lawyer can help you identify which trusts you need and how they will fit into your overall estate plan. Contact San Diego Legacy Law today to start talking about your legal options.