People in the Bay Area try to plan for many different aspects of life. For many unpredictable types of events people will obtain insurance such as car insurance for car accidents or homeowners’ insurance for potential damage to their homes. Similarly to how people plan for those unpredictable events, people should also plan for their death. However, they should do more than simply take out a life insurance policy.
When people pass away they cannot take their property with them. It is important to plan for who will receive their property as people may not agree with the intestate laws in the state. Estate planning also can have benefits while people are living too. By choosing to create a trust, people actually transfer their assets to the trust while they are living and therefore no longer own the property which can have its advantages even while people are living.
Differences between irrevocable and revocable trusts
The main difference between revocable and irrevocable trusts is that people can change revocable trusts during their lifetime. This means they can add or remove property, change the beneficiaries, change trustees and make other changes. Irrevocable trusts cannot be changed after they are created. The creator of the trust can receive money from the trust for their needs while they are living, but cannot remove any property from it.
Both allow people to avoid probate for any property transferred to the trusts, which is the main advantage of creating a trust as opposed to a will. They can also help couples avoid paying estate taxes twice. However, irrevocable trusts have some added benefits for people while living. It can shield the assets from creditors and also be useful for Medicare planning since the creator loses control over the assets unlike a revocable trust.
Trusts may be beneficial for many people in the Bay Area. However, choosing the right trust for their particular situation can be complicated. Experienced attorneys understand the different types of trusts and may be able to guide one through the process.