There are many people in the Irvine area who have taken the time to complete their estate plan. Although estate planning doesn’t seem to be the most exciting thing in the world to complete it is actually very important. Most people have heard about wills and trusts but what is the difference between them?
Will
A will is a basic estate planning document that expresses a person’s wishes, from naming guardians of minor children to assigning objects and cash assets to family and friends. A will becomes active upon a person’s death and their estate must go through probate where an authorized court representative examines them. They can also be contested if someone thinks there is a problem.
Revocable trust
A revocable trust is a trust created during a person’s life that can be changed or terminated at any time. A revocable trust allows the grantor an orderly way to distribute their assets upon their death along with maintaining privacy. A revocable trust avoids probate at the time of the grantor’s death. In order for a revocable trust to be effective it needs to have the assets placed into it.
Irrevocable trust
An irrevocable trust is a trust where the grantor transfers all ownership of assets into the trust and legally removes all of their rights of ownership to the assets and the trust. The trust cannot be modified or terminated without the permission of the beneficiary or beneficiaries. The benefits of an irrevocable trust is that it removes assets from the grantor’s taxable estate. The trust is also exempt from any legal settlement against the grantor making it useful to individuals who work in professions that make them vulnerable to lawsuits such as doctors or attorneys.
Estate planning attorney
It is important for everyone to have an estate plan in place. A legal professional who is skilled in estate planning can help their client create an estate plan that makes sense for their unique situation.