The office of DeCarli Law is located in the beautiful coastal vacation town of Mendocino. Attorney DeCarli can assist clients anywhere in California, and is happy to conduct virtual and telephone meetings.
A trust is a type of financial account that is set up using a legal document. The document names a person or institution as the trustee. It is the trustee’s responsibility to administer the trust and disburse the trust assets in accordance with the terms in the trust document. The individual or organization that receives distributions from the trust is called the beneficiary of the trust. Trustees act in a fiduciary capacity in administering the trust, which means they are held to a very high legal standard in fulfilling their responsibilities to the beneficiary.
There are two basic types of trusts: revocable and irrevocable. As the name implies, a revocable trust can be revoked or changed by the creator—also referred to as the grantor. In contrast, when an irrevocable trust is created, the creator of the trust permanently relinquishes all rights to the trust assets, and the trust cannot be revoked, terminated, or changed.
Trusts are created for many different reasons. They are an important tool in estate planning and often are created as part of a comprehensive estate plan. Some of the more common types of trusts are:
One type of trust that many people are familiar with—or have at least heard of—is called a living trust, sometimes also referred to as an inter vivos trust. Assets that are transferred to a living trust during the grantor’s lifetime are protected from probate, which refers to the formal court-supervised process of administering and distributing an estate after someone dies.
A living trust is a revocable trust, so it can be terminated, changed, or revoked during the grantor’s lifetime. It becomes irrevocable on the grantor's death. Most often, the grantor names himself or herself as trustee during his or her lifetime. The trust also names a successor trustee to become responsible for administering the trust for the benefit of the grantor's heirs after his or her death.
A living trust is usually created in conjunction with a will. Northern California attorney Debra DeCarli can help you decide whether a living trust is right for you.
A testamentary trust is a trust created by a will, which goes into effect and becomes irrevocable on the death of the person making the will.
AB trusts—or A-B trusts—are made by married couples as part of their estate plan to maximize the use of the federal estate tax exemptions for both spouses. The trusts can be set up under a will or as revocable living wills. Other terms sometimes used for these trusts are marital trust, QTIP trust, marital deduction trust, bypass trust, or family trust.
A special needs trust is set up to improve the quality of life for a person with special needs or disabilities, without affecting the beneficiary’s eligibility for government benefits. Special needs trusts can be revocable or irrevocable, depending on the specific circumstances, but in most cases they need to be irrevocable to be effective.
A charitable trust is an irrevocable trust that benefits one or more charitable organizations. The trust can be set up during the donor’s life or as a testamentary trust that takes effect on the donor’s death. There are several different variations on charitable trusts.
There are a number of different reasons for setting up a trust. Avoiding probate and saving estate taxes are the primary reasons they are used in estate planning. A trust also protects your privacy. When an estate goes through probate, all of the information about the estate is available to the public. In contrast, a trust keeps the information private. Using a trust can also avoid significant probate expenses.
If you are considering a trust as part of your estate plan or for other reasons, schedule a free initial consultation with Northern California attorney Debra DeCarli. After discussing your situation and wishes, Attorney DeCarli will work with you to determine what options are available and best-suited for your circumstances. She also provides a full range of estate planning services for clients throughout California. Use the DeCarli Law online contact form or call (707) 937-2701 or (800) 402-4720 to set up a no-cost telephone, in-person, or virtual consultation.