With a certain amount of uncertainty involved, many individuals may be hesitant to put a plan in place for the future. However, chances are, you may have preferences as to the distribution of your assets and how you wish to provide for loved ones after you are gone.
Perhaps in your desire to form a strategy for the future, you wish to know more about the benefits of setting up a trust. Even in this area of estate planning, there are numerous available options, and you could be feeling somewhat overwhelmed and in need of guidance.
Types of trusts and their benefits
When setting up a trust, you may choose a trustee to oversee the assets within, as well as the beneficiaries who will receive the benefits thereof. Trusts come in numerous forms, each of which may offer its own advantages, and some of the available options concerning trusts include the following:
- Revocable: One of the benefits of placing assets in a revocable trust is the fact that you, as the trustee, can alter or modify the trust at your discretion. This type of trust can also assist your loved ones in avoiding probate, but it may offer less protection from creditors than other options.
- Irrevocable: Once formed, you cannot modify an irrevocable trust, even as the trustee. In placing assets within the trust, you relinquish ownership rights, which can also act as a form of protection against potential creditors.
- Charitable: Perhaps you wish to donate a portion of your assets to charity. A charitable trust can offer numerous benefits, and may even assist in reducing your estate and gift taxes while you live.
- Special needs: If you have a loved one who has a disability, you may wish to provide for their needs after you are gone. You can do so by setting up a special needs trust, which can provide support without disqualifying him or her from receiving government aid.
While these are a few examples of the options available, there are numerous types of trusts available. Before deciding on a path, it may be in your best interests to speak with someone with extensive knowledge in this area of estate planning.
You might consider estate planning to be of the utmost importance, but with little to no experience in the area, perhaps you are uncertain how to proceed. You could choose to seek guidance from someone with knowledge in California estate planning laws for advice on every available option, as well as their potential outcomes. Obtaining advice early on could help you overcome any previous hesitation and assist you in preparing to choose a plan that is in keeping with your wishes for the future.