Creating a trust is crucial to financial planning and asset protection. There are two common types – revocable and irrevocable. As the name suggests, they differ in nature, but once the grantor or the owner of the trust dies or becomes incapacitated, the trust cannot be changed or revoked anymore.
You can fund your trust by transferring your assets to it. Also, if you want to retain control of your assets, learn more about revocable trust and its purpose. Also, this article will discuss other assets you can include in your revocable trust and what to do if you have minor children.
What Is A Revocable Trust & Its Primary Purpose?
A revocable trust is a legal entity that allows you to control the assets you place in it during your lifetime. It is a flexible and powerful estate planning tool that lets you decide how your assets will be managed and distributed upon death.
The primary purpose of a revocable trust is to avoid the probate process, which can be time-consuming, expensive, and public. Additionally, a revocable trust can help protect your assets from creditors and use it to plan for incapacity or disability during your lifetime. It can also provide for the care of minor children or other beneficiaries.
A revocable trust allows you, the grantor, to be the trustee and beneficiary during your lifetime. In effect, you can still control and benefit from your assets while alive. Upon death, it can determine how and when your assets will be distributed among your beneficiaries without going through probate court.
Creating a revocable trust allows you to retain the right to change or revoke it while alive. A revocable trust is an excellent way to ensure that your wishes are followed upon death while benefiting from your assets in the trust before your death. Getting the advice of a trust lawyer can be beneficial to know what best suits your situation.
Do You Need A Trust Only For Your House?
There’s a common misconception that a trust only applies to real property, such as a house, apartment, or condo. Yes, you can create a trust solely for your house. But you can also transfer other assets to your trust aside from your real property. Hire an estate planning lawyer to identify the assets you can transfer to your trust.
Despite this prevalent misconception, a revocable trust is often used as an estate planning tool in California because you can use it not only for your house or any real property but also for assets that can potentially go through the probate process. Protecting these assets from probate by setting up a revocable trust can lessen the stress your loved ones may experience upon your passing.
What Other Assets Can You Include?
Trusts are a great way to ensure that your assets will be managed and distributed according to your wishes after you pass away while still avoiding probate. But, many people don’t realize just how versatile trusts can be. While most trusts include real property, there are other assets you can have in your trust as well, such as bank accounts, investment accounts, real property, business interests, tangible property, intellectual property, and digital assets.
Bank Accounts
Bank accounts such as checking and savings can easily be transferred into a revocable trust and it is recommended to own those accounts under the name of your trust. Doing so allows the successor trustee to access and manage the account immediately when you pass away.
Additionally, it makes it easy for the trustee to pay off debts and distribute the remaining funds according to your wishes among your beneficiaries. Consult your trust attorney on how to open a trust bank account and the options you have to distribute its fund.
Investment Accounts
You can transfer investment accounts such as shares of stocks, bonds, mutual funds, and other securities into a revocable trust. The trustee will manage the accounts according to the trust’s terms. They provide flexibility and access to tax-advantaged savings plans, making them attractive options for individuals and families looking to pass down financial wealth.
Investment accounts are great additions to trusts because they offer opportunities for growth with the potential of higher returns than bank accounts or certificates of deposit. They also allow for more control over how money is managed, as trustees can actively select investments that fit their goals and objectives. This can help create a well-diversified portfolio while managing risk levels to maximize returns on investment.
Real Property
Houses, condos, and vacant land can be transferred into a revocable trust. This gives the trustee the legal authority to manage the property and sell it if necessary. Real property typically has long-term growth potential and provides stable income streams. When held in an irrevocable trust, properties can have increased protection from creditors.
Creating a trust is an effective way for you to protect your wealth and pass it on to future generations. Additionally, when taxes are due on properties held within the trust, they may be treated differently than those held outside of one, potentially saving money on taxes over time.
Business Interests
Business interests, such as ownership in a corporation or partnership, can be transferred into a revocable trust. This allows the trustee to manage the business interest following the trust’s instructions. Business interests can include shares in companies you own or have invested in, businesses you operate yourself, or any other form of interest that generates income for you.
Tangible Personal Property
You can transfer tangible personal property such as furniture, artwork, jewelry, collectibles, and other valuable items into a revocable trust. The trustee will be responsible for managing and selling the property if necessary. By including tangible personal property in the trust, you can guarantee that these items won’t be subject to taxes or creditors’ claims if something happens to you or your family.
Life Insurance
You can transfer life insurance policies into a revocable trust. This allows the trustee to manage the policy and distribute the proceeds according to the trust’s instructions. Placing life insurance into a trust can help protect it from creditors and probate court. It allows the beneficiary to receive the total amount of their inheritance without legal complications.
Intellectual Property
Intellectual property such as copyrights, trademarks, and patents can be transferred into a revocable trust. The trustee will be responsible for managing and selling the property if necessary. By setting up a trust, intellectual property owners can ensure that their works will continue to generate income even after they are gone.
The structure of trust allows intellectual property owners to transfer ownership of their works without any tax implications, which makes it even more beneficial when used to protect this type of asset. Intellectual property rights trusts hold assets such as patents and copyrights.
Digital Assets
You can transfer digital assets such as social media accounts, websites, audio, videos, and online accounts into a revocable trust. Having digital assets included in a trust offers many advantages for those who wish to protect their digital holdings.
For one, It gives the trustee authority over access to certain accounts, as well as control over how those accounts may be used. This makes it easier to keep track of digital assets and ensure they are used responsibly. Additionally, including digital assets in a trust can help make sure they are passed on according to the instructions given by the grantor.
What Will Happen If You Have A Minor Child?
Through the process of naming a beneficiary, you can secure assets such as retirement accounts or life insurance. Upon your death, this property typically bypasses probate proceedings and goes directly to whomever you have designated as your beneficiary.
If you designated a minor child as a primary or contingent beneficiary on your life insurance, there’s a risk that one’s account may go through probate. In such instances, you should name the trust as the beneficiary for any life insurance or retirement accounts rather than designating your minor child. It is a nuanced issue that you must carefully analyze in every situation.
Why Consult An Estate Planning Attorney?
An estate plan is vital for protecting your assets for you and your loved ones. It can be challenging to create an effective estate plan on your own. It’s important to consider consulting with experienced estate planning attorneys. They can help you ensure that your wishes are carried out after death or disability while protecting your assets.
An estate planning attorney can provide personalized advice to help you understand the best options available to fit your individual needs and objectives. This includes informing you about different types of trusts and other documents that may be right for you. Your attorney can also help guide the process by ensuring all paperwork is completed correctly and filed before any changes take effect.
Seek An Experienced Estate Planning Lawyer
Weiner Law has decades of experience in the field, and its team of lawyers is competent and highly knowledgeable in providing sound advice on how best to protect your house and other assets through your trust. With their help, you can rest assured that your wishes regarding your estate will be respected after you pass away.
Trust attorneys at Weiner Law are experienced in helping clients create a trust and other important documents related to it. They can review existing records periodically and ensure they are up-to-date and compliant with state laws to keep the trust valid. Also, they are well-equipped to set up trusts for individuals or families who wish to ensure their assets remain secure over time.
Also, they offer comprehensive tax advice on how best to minimize it. Most importantly, your trust attorneys at Weiner Law can guide you so your assets can avoid the probate process. In this way, you can secure your estate and leave a legacy for your loved ones.
Summary
When it comes to estate planning, many people consider setting up a trust for their house. In the trust, you may include real estate and other assets such as furniture, jewelry, bank accounts, stocks, and bonds. Additionally, if you have minor children or grandchildren, you may use the trust for their benefit.
A trust can help protect your home and other property from creditors, lawsuits, high taxes, and other claims. It also allows you to manage the distribution of your assets after you are gone. So creating a trust can give advantages for you during your lifetime and to your loved ones when you pass away.
Get in touch with a San Diego trust attorney to obtain further details.
