Trusts generally form a major part of any California estate plan. You may be unaware that, as explained by U.S. News, these stand-alone legal entities and the assets in them are separate and apart from you and what you own personally. In addition, trusts contain legally enforceable provisions.
You can choose to create as many revocable and irrevocable trusts as you desire for your various purposes. You can later change or even revoke your revocable trusts should you wish, but once you execute your irrevocable trusts you cannot later change or revoke them. Therefore you should be very sure that your irrevocable trusts are set up exactly the way you want before you sign them.
Flexibility and control
Whichever type of trusts you establish, revocable or irrevocable, you have a great deal of flexibility when setting them up. For instance, you can choose the following:
- The trust’s beneficiary or beneficiaries, including yourself
- The trust’s trustee, i.e., the person or entity that will manage the trust’s assets and disperse them and the income they produce as instructed by the trust’s provisions
- The assets you place in the trust
Should you desire to retain control over the trust assets yourself, you can name yourself as the trustee. You should, however, also appoint an alternate or successor trustee who will assume those duties in the event you become ill, incapacitated, disabled or die.
Various trusts; various purposes
A trust can serve any number of purposes, and the number of them in your estate plan is limited only by your wishes and the needs of yourself and your family. For example, your estate plan may include the following:
- A special needs trust benefitting your disabled child or other family member
- A charitable trust benefitting your church, favorite charity, alma mater, etc.
- A generation-skipping trust benefitting one or more of your grandchildren
- An asset protection trust that protects your assets from creditors
- A pet trust benefitting your pets
This educational information is not legal advice, but it can help you understand the importance of revocable and irrevocable trusts in your estate plan.