Irrevocable Trusts

San Jose Irrevocable Trusts Attorney

Exploring Estate Planning Methods That Can Provide Asset Protection, Minimize Estate Taxes, and Look After Future Generations

While most people in California understand the importance of wills or distributing money, real estate property, and other assets to beneficiaries after death, other legal documents may be worth considering adding to your estate plan. Depending on unique circumstances and estate planning needs, our law office may recommend the benefits of an irrevocable trust.

There are several different types of irrevocable trusts, each uniquely tailored to other goals and specific types of family units. With the help of an estate planning lawyer who has a sound understanding of state and trust laws, a well-constructed trust document and properly orchestrated trust administration can help you avoid probate, protect your legacy, ensure distribution to loved ones with special needs without risking their eligibility for government benefits, and more.

Our law firm represents clients across California in various estate planning matters, including creating, funding, managing, and litigating trusts. As your legal representative, our attorney will explore the various legal options to ensure your wishes are fulfilled and your family members are cared for. To learn more about the benefits of retaining professional legal counsel, please contact our San Jose law office to schedule an in-depth case evaluation with our legal team.

What Are Different Types of Irrevocable Trusts Available in California?

Many different types of trusts and irrevocable trusts are available for California estate plans. Your unique personal and financial situation depends on what kind of irrevocable trust is most well-suited to you. In a case review, our trust attorney will evaluate your goals and needs to help determine the correct type of trust for you.

The various types of irrevocable trusts available in California include the following:

  • An irrevocable living trust is created and funded while the trust grantor is still alive. This formation of irrevocable trust can benefit the grantor and beneficiaries during life and after the grantor’s death
  • A qualified personal residence trust (QPRT) is an irrevocable trust used to remove personal residences from an individual’s estate to reduce the size of the taxable estate and the gift taxes owed when passing trust assets to beneficiaries and heirs. The individual who creates the QPRT agreement shall retain the right to continue living in the real estate property for the terms specified in the trust agreement
  • Charitable trusts allow you to leave assets behind to nonprofit organizations and philanthropic causes. With a charitable remainder trust, property is transferred into the trust, and a designated beneficiary receives some assets from the trust while the remainder goes to a designated charity
  • A testamentary trust is often created in conjunction with a last will. This type of trust only goes into effect after the grantor’s death. As this type of trust only goes into effect after the death of the grantor, it is inherently irrevocable
  • Dynasty trusts, also sometimes referred to as generation-skipping trusts, are long-term trusts that provide significant tax advantages while preserving wealth and leaving assets behind across multiple generations
  • An irrevocable life insurance trust (ILIT) is created to take ownership of life insurance policies. Transferring a life insurance policy into the trust is permanent. The designated trustee would then manage the distribution of proceeds from the policy to trust beneficiaries upon the death of the trust grantor
  • Qualified domestic trusts (QDOT) are helpful for estate planning for married couples, particularly those marriages between United States citizens and non-US citizens. This type of trust helps minimize estate tax consequences
  • Retirement trusts allow some control over how trust assets of a retirement plan are distributed after the individual retirement account (IRA) owner passes
  • A special needs trust looks after the best interests of a disabled loved one while ensuring that they still qualify for needs-based government assistance programs
  • Spendthrift trusts help protect beneficiaries who cannot be trusted to manage their finances, are at risk of claims from creditors, or have gambling issues
  • And more

What Are the Key Differences Between an Irrevocable and a Revocable Trust?

As its name suggests, a revocable living trust can be revoked. Revocable trusts are flexible, easily modified, and easy to terminate whenever the trust grantor wishes, with or without the consent of trust beneficiaries.

An irrevocable trust, by contrast, is not so easily modified or revoked. To amend an irrevocable trust, you would need the permission of every trust beneficiary.

Irrevocable trusts provide more asset protection from lawsuits, divorce settlements, and creditor claims, as the trust assets are no longer considered your property but rather the trust’s property. Meanwhile, assets in a revocable trust are still considered your property and may be subject to taxation, lawsuits, etc.

What Are the Benefits of Creating an Irrevocable Trust?

An irrevocable trust can benefit both the creators of the trust and the trust beneficiaries. Irrevocable living trusts help avoid or minimize estate taxes on trust property passed to beneficiaries upon death. These types of trusts can also save money on taxes, as the taxes will be imposed on the trust assets, not the grantor.

Any revocable living trust also shields trust assets from creditors and liability. Creditors cannot hope to seize the trust’s assets through judgments or claims until those assets are dispersed to beneficiaries.

Assets locked up within a trust do not have to go through the probate process when the estate owner dies. While a will is a valuable estate planning document, assets named in a will still need to go to the probate court, which can be lengthy and expensive.

The primary benefit of creating an irrevocable trust as opposed to a revocable one is that the grantor releases their ownership rights over the trust and its assets. As they are no longer responsible for the trust assets, they will have significantly lowered estate tax liabilities and save money.

How Can Our Law Firm Assist You Throughout the Estate Planning Process?

When you retain the professional legal representation of our estate planning attorney, we will work tirelessly to ensure that you obtain the desired results for your estate plan.

We provide the following estate planning services:

  • To start with, we provide a personalized consultation with our legal team to go over your unique circumstances and help you determine the right path forward for you and your family members
  • After thoroughly understanding your estate planning goals, we can draft the trust documents according to your wishes. This process includes defining the terms of the trust, appointing a trustee (and potentially successor trustees), and establishing the responsibilities of all parties involved
  • We provide legal guidance in the asset distribution process, with a keen eye for high-value assets like real estate or business investments. We will assist you throughout the process, ensuring that all necessary documentation is included and in compliance with California law
  • Once the trust is established, our legal services extend to trust administration, which can be a complex undertaking for the trustee
  • Even though irrevocable trusts are designed to be permanent and not easily amended, some situations may warrant notifications, and we will explore potential legal options
  • If disputes arise among beneficiaries, we can represent either the beneficiary or the trustee in court, should the case result in trust litigation
  • And more

Schedule Your Initial Consultation with an Experienced San Jose Irrevocable Trusts Lawyer Today

Our California law firm is a proud community member and wants to see its neighbors succeed in their estate planning endeavors. We provide dedicated and compassionate legal assistance to individuals and families going through the estate planning process and considering the different types of irrevocable trusts to add to their estate plans.

To discuss the benefits of professional legal counsel, please contact our San Jose law office to schedule your no-obligation case review with our legal team today.

Call us at 408-443-2397.