What is a Trust and is it Right for You?

A trust agreement is a great option to help protect your assets.
When most people consider a “trust,” they think of a revocable living trust, which spells out how you ultimately want your assets distributed. However, there are varieties of trusts available to fit the needs of you and your family:

•    Revocable trust. Can be modified throughout your lifetime as your personal circumstances change, and it allows your estate to be settled without court supervision.
•    Irrevocable trust. This type of trust can’t be modified after it’s created and is most appropriate for individuals with an estate value that’s higher than the federal tax exemption.
•    Asset protection trust. This kind of trust is designed to protect your assets from future creditors. But once it’s created, you can’t change the terms for an established period of time and you won’t have access to the assets in the trust, while it’s in place. All distributions and changes to the terms of the trust are at the discretion of the trustee.
•    Charitable remainder trust. You can allocate all or a portion of your assets to the charities of your choice with this type of agreement.
•    Special needs trust. If one (or more) of your beneficiaries receives Supplemental Security Income (SSI) or Medi-Cal, this type of trust distributes assets from your estate, so your beneficiaries aren’t disqualified from receiving government benefits.

Determining whether you need a trust and the type that’s right for you depends on your personal circumstances and financial goals. In California, assets under $150,000 can be distributed without a trust. But, if you own property or have liquid assets above that amount, a trust may be worth considering.

For more information on establishing a trust, join us for one of our free Estate Planning Workshops.

For information on upcoming workshops, please visit PremierAmerica.com/workshops.


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