REVOCABLE TRUSTS AS PART OF AN ESTATE PLAN
A revocable trust is not the only kind of estate planning document that California residents need. A will and powers of attorney that appoint people to manage health care decisions and finances if a person is unable to do so are also important. However, a revocable trust is a powerful document that can perform a number of different function as part of an estate plan.
When the trust creator dies, the trust becomes irrevocable. It does not have to pass through probate, and this means its provisions remain private. The estate plan can be created so that assets not placed in the trust while a person is alive become part of the trust at the person's death.
Distributions can be made in a number of different ways and to different people. For example, if a family member is likely to be irresponsible with money, that person may only receive distributions without ever being able to access the assets. Assets may be distributed unequally to beneficiaries. Beneficiaries do not have to be family members and may be friends or charitable organizations. While a revocable trust cannot offer asset protection to the grantor, it can protect assets for beneficiaries from creditors or in case of a divorce. In a blended family, a trust can be designed to support a surviving spouse and then pass to adult children when that person dies.
Another use of trusts is to assist relatives who have special needs. An inheritance could jeopardize benefits that the relative receives, but if the inheritance is placed in a trust, it becomes the property of the trust. The person's rent or other needs could then be paid for directly from the trust. A person who has questions about trusts, including how to choose a trustee, may want to consult an attorney.