It might be easier to start with the basic concept of trust law, and then move to the types and their specific benefits. Knowing how it works will be helpful when it comes to finding a professional living trust Fairfield CA attorney who can create rock-solid structures for trusts. This process safeguards a family's wealth and facilitates its transfer to the next generation while reducing the tax burden and other costs in many ways.
Trusts are basically registered entities wherein the trustee holds property that belongs to another party (the settlor). It's usually created as a better alternative to wills, and primarily intended to transfer benefits to a named person or set of people (beneficiaries). This structure separates the ownership and control of the property from the benefits it generates.
Trusts come in many different forms, but the classification that matters most in this case is whether it becomes active upon the death of the settlor or before. If it kicks in after death, then it's just a testamentary trust for executing the last will and testament. In this case, it will be the entity controlling a part or all of the deceased's estate.
Trusts that become active while the owner is still alive are called inter-vivos or living trusts. They can created as either revocable or irrevocable trusts. The structure, beneficiaries and other aspects of revocable trusts can be modified after creation.
Irrevocable trusts may not be modified, so the original property owners will not have the ability to change the terms afterwards. One of the biggest advantages of inter-vivos trusts is that they can be used to avoid probate when the settlor dies. The remaining estate will be subjected to the probate process and its attendant costs and delays, while property inside the trust gets a pass because it is technically in the trustee's custody and not owned by the deceased.
These trusts are obviously efficient vehicles for transferring wealth to beneficiaries without being subjected to the usual taxation and regulatory hurdles. They're also an excellent way for a settlor to retain control over property without all the associated hassles. The trustee manages the investments, implements tax strategies, handles the distribution to beneficiaries, etc.
The original owner of the property does not have to be involved in all this. However, the structure of these trusts ensures that the actions taken are exactly as intended by the settlor. If it is revocable, the owner may also step in to remove or add beneficiaries and further modify the structure.
There's a common misperception that only high-wealth individuals need or are able to afford a living trust. But as any good Fairfield CA attorney will be able to explain in a free consultation, it's an affordable and highly useful tool even for ordinary people who simply want to pass on their home and life savings, insurance benefits and other such assets to their children. Not to mention the fact that wills can be challenged in court and are often overturned, but trusts are virtually impregnable.
Trusts are basically registered entities wherein the trustee holds property that belongs to another party (the settlor). It's usually created as a better alternative to wills, and primarily intended to transfer benefits to a named person or set of people (beneficiaries). This structure separates the ownership and control of the property from the benefits it generates.
Trusts come in many different forms, but the classification that matters most in this case is whether it becomes active upon the death of the settlor or before. If it kicks in after death, then it's just a testamentary trust for executing the last will and testament. In this case, it will be the entity controlling a part or all of the deceased's estate.
Trusts that become active while the owner is still alive are called inter-vivos or living trusts. They can created as either revocable or irrevocable trusts. The structure, beneficiaries and other aspects of revocable trusts can be modified after creation.
Irrevocable trusts may not be modified, so the original property owners will not have the ability to change the terms afterwards. One of the biggest advantages of inter-vivos trusts is that they can be used to avoid probate when the settlor dies. The remaining estate will be subjected to the probate process and its attendant costs and delays, while property inside the trust gets a pass because it is technically in the trustee's custody and not owned by the deceased.
These trusts are obviously efficient vehicles for transferring wealth to beneficiaries without being subjected to the usual taxation and regulatory hurdles. They're also an excellent way for a settlor to retain control over property without all the associated hassles. The trustee manages the investments, implements tax strategies, handles the distribution to beneficiaries, etc.
The original owner of the property does not have to be involved in all this. However, the structure of these trusts ensures that the actions taken are exactly as intended by the settlor. If it is revocable, the owner may also step in to remove or add beneficiaries and further modify the structure.
There's a common misperception that only high-wealth individuals need or are able to afford a living trust. But as any good Fairfield CA attorney will be able to explain in a free consultation, it's an affordable and highly useful tool even for ordinary people who simply want to pass on their home and life savings, insurance benefits and other such assets to their children. Not to mention the fact that wills can be challenged in court and are often overturned, but trusts are virtually impregnable.
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