OC Wills & Trust Attorneys help clients design trust-based estate plans. An irrevocable trust can help you achieve several objectives: protect your assets, plan for incapacity, leave a charitable legacy, and preserve your wealth. You can trust us to provide you with informed representation and dependable service.
We have comprehensive knowledge of the California Trust Code and the skills to guide you through the process. Contact our office today to speak with an experienced irrevocable trust attorney. We serve clients in Irvine, Huntington Beach, and Orange County.
What Are Irrevocable Trusts?
Generally, there are two types of trusts: revocable and irrevocable. A revocable living trust takes ownership of your property but allows you to continue managing it while you are alive. Probate becomes unnecessary because you no longer own the assets.
An irrevocable trust becomes effective during your lifetime but cannot be amended or modified. Assets transferred into the trust must remain there permanently. The person making the trust, the “grantor,” no longer owns the assets. The trust appoints a trustee to manage the assets on behalf of the beneficiaries. Assets in an irrevocable trust are not subject to estate taxes, probate, or creditors’ claims.
Types of California Irrevocable Trusts
There are various irrevocable trusts, including:
A Marital or “Bypass” Trust helps married couples with substantial estates reduce estate taxes upon the death of a spouse. In this arrangement, the property of the spouse who dies first is transferred into an irrevocable trust for the benefit of the surviving spouse. That individual can use the income from the trust property; it does not become part of their estate, and, therefore, it is not subject to estate taxes.
Trusts for Minors
This irrevocable trust protects the welfare of minor children until they reach adulthood. Some trusts for minors provide for a child’s health, education, maintenance, and support during childhood. Others only distribute funds when the child reaches a specific age or achieves a particular goal, like graduating college.
Special Needs Trust
A special needs or supplemental trust provides for a disabled child or adult who receives public benefits such as Social Security Disability or Medicaid. A large inheritance could disqualify that individual from these vital benefits. With a special needs trust, assets are used to cover the beneficiary’s day-to-day expenses while preserving their eligibility for government benefits.
A spendthrift trust protects a beneficiary who cannot manage their finances, is at risk of creditors’ claims, or has a problem with alcohol, drugs, or gambling. Trust assets are managed by the appointed trustee who can either provide funds to the beneficiary on a scheduled basis or pay the beneficiary’s monthly expenses.
Medicaid is the single largest payer of skilled nursing care, but many individuals do not qualify based on their income and assets. Our trust attorneys can help to create an Irrevocable Medicaid Trust. Assets held by this type of trust are not counted as resources for Medicaid eligibility limits.
One way to leave a charitable legacy is by creating a charitable trust, which minimizes taxes by combining gifting with charitable donations. In a charitable remainder trust, the property is transferred into the trust, a designated beneficiary such as a spouse receives income from the trust for a set period, and the remainder goes to a named charity.
Life Insurance Trust
Life insurance with a designated beneficiary passes outside of an estate; however, the proceeds of a life insurance policy are included in the total value of the estate, which may have estate tax implications. An Irrevocable Life Insurance Trust (ILIT) owns the policy and appoints a trustee to distribute the proceeds to the designated beneficiaries when the grantor dies.
Also referred to as a generation-skipping trust, this estate planning vehicle is created to avoid or minimize estate and generation-skipping taxes when transferring wealth from one generation to children, grandchildren, and great-grandchildren.
Why Choose Us For Your Irrevocable Trust?
At OC Wills & Trust Attorneys, we advise clients from all walks of life on irrevocable trusts. We are not only astute trust attorneys but compassionate people genuinely concerned about our clients’ needs. When you meet with us, we will take the time to understand your circumstances and tailor a trust to your unique objectives. Above all, we will work in your best interests and help protect your assets, loved ones, and legacy.
Contact Our Experienced Orange County Irrevocable Trusts Attorney
A common misconception is that trusts are only for the wealthy but many estate planners can benefit from creating an irrevocable trust. When you work with OC Wills & Trust Attorneys, you will have comfort and confidence with our legal team at your side. Contact us today to get started.