Estate planning with a revocable trust gives you tremendous benefits in California. The revocable trust, however, shouldn’t be confused with an irrevocable trust. In some cases, it’s best to have a trust that no one, not even the creator of it, can change once the trust is binding. For estate owners who need more flexibility, revoking their trust might be the best solution at some point in their lives. A revocable trust gives you freedom in areas an irrevocable one does not.
Sheltering from uncertainty
Tax is a type of uncertainty for estate owners. Assets that grow in value or produce separate income are exposed to future taxes. Even without knowing now how much assets will appreciate, a trust can keep you from paying taxes. A revocable trust can even be a temporary shelter from creditors, but you need to confirm that the trust has a beneficiary.
Management from a trustee
Trusts are convenient because their creators entrust their assets to an asset manager. This manager is called a trustee and, when assigned correctly, will manage how assets appreciate, are taxed and transferred to your beneficiaries. The convenience that a trustee’s work creates gives you time to enjoy life now while having hope in how your estate is managed after death.
With a revocable trust, you can make withdrawals and not be penalized for spending your trust’s funds. To give yourself even more authority over a revocable trust, you can name yourself as the trust’s beneficiary. This gives you the right to inherit the trust, direct the trustee and even be subject to the trustee’s advice. Even more, as the owner of the trust, you can revoke it at any time.
Estate planning in California
In some cases, a revocable trust won’t have the legal support your strategy needs. An irrevocable trust, for example, being that its status is somewhat immovable, offers more security for your assets. Trusts are secure in general, but you can’t hedge your assets in a revocable trust in the same way you can with an irrevocable trust.