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How to choose a trust

On Behalf of | Apr 24, 2023 | wills and trusts | 0 comments

Assets that remain in your California estate may be subject to probate. However, you may be able to avoid probate by putting your assets inside of a trust as these items are generally considered to be held outside of your estate. Trusts are considered to be either revocable or irrevocable depending on what you want or need them to do.

The revocable trust

A revocable trust is one that can be altered at any time assuming that you are of sound mind. In many ways, it functions like a will since you can name a guardian for your child and dictate where assets go. However, one of the key differences between wills and trusts is that a will doesn’t take effect until after you die. You are allowed to name yourself as the trustee, which means that you retain control of trust assets. A living trust becomes irrevocable on the date of your death, but it can remain in existence indefinitely depending on how it was written.

The irrevocable trust

An irrevocable trust generally cannot be altered or revoked unless you have the permission of all beneficiaries to do so. In most cases, you cannot name yourself as trustee, which means that you lose a significant amount of control over anything inside of it. However, it also means that trust assets have superior protection against being seized by creditors or from being subject to property division rules in a divorce.

In addition to helping avoid probate, a trust may ensure that your affairs are in order in the event of a medical or other type of emergency. As trusts are not a matter of public record, it may protect your privacy both now and after you pass.