The Elder and Disability Law Firm, APC
The right type of trusts
People in California can use a trust to protect their legacy and to lessen the tax assessments on their estate. However, it is important that they designate the right person to administer the trusts.
Trusts can be used to incorporate tax planning into one's estate so that the beneficiaries of assets in the trusts are not overly burdened with taxes issues. Assets, such as IRAs, life insurance policies or annuities, that are placed into trusts can grow while being assessed no taxes or having their taxes deferred. There are a multiple options individuals can consider when choosing what type of trust to use for the assets they want to give to their heirs.
With a trust, individuals can dictate how the assets are to be managed. There can be a legally binding mandate requires that assets be managed and used for specific purposes. An attorney might draft provisions that can require the distributions to be issued when the beneficiaries reach a certain age or achieve specific milestones. Grantors can stipulate almost any type of provisions for the trust they create as long as the distribution schedule and trust structure comply with IRS regulations.
The person chosen to be trustee should be competent and able to efficiently assume the duties the position entails. While it may be enticing to designate someone who is close to the family, it is important that that person also is able to handle all of the administrative, legal and fiduciary tasks of trustee.
An attorney who practices estate planning law may offer a range of trust and trust administration services. The attorney may assist with drafting provisions of a trust according to the goals of the clients. Advice may be provided regarding which type of trust is most suitable for specific asset types.