Trusts

  • A trust is a legal relationship in which the legal title to property is entrusted to a person or legal entity of your choice who has a duty to hold, guard, and use it for another's benefit. Trust may provide liability protections, tax benefits, and the avoidance of the probate of your assets in the event of your death.

Revocable/Irrevocable  

  • A revocable trust may be revoked by creator but lacks the tax benefits of an irrevocable trust, whereas an irrevocable trust cannot be revoked by the creator without permissions of the beneficiaries. 

Living/Testamentary  

  • A living trust is made during the creator's lifetime, while a testamentary trust is created after the death of the creator by a will. 

Special Needs Trust 

  • A special needs trust is established to meet the financial requirements of a dependent with special needs.  

  • It funds the beneficiary’s medical or day-to-day needs while retaining the dependent’s entitlement to government benefits. 

  • There are two main types of special needs trusts: first-party and third-party. 

Asset Protection Trust 

  • An asset protection trust (APT) is a trust vehicle that holds an individual's assets with the purpose of shielding them from creditors.  

  • Asset protection trusts offer the strongest protection against creditors, lawsuits, or any judgments against your estate.  

  • An APT can even help deter costly litigation before it begins influence outcomes of settlement negotiations favorably.  

  • These are not fully available under California Law, instead an offshore APT is the best option. 

Personal Asset Trust 

  • A personal asset trust is a special kind of trust derived directly from your living trust document. It is designed to help you put certain protections in place for your money once it gets passed on to your beneficiaries. 

IRA Inheritance Trust 

  • This is when a trust is named as beneficiary of the IRA and inherits the funds. The IRA is then maintained in a separate account as an asset of the trust. 

Life Insurance Trust 

  • A life insurance trust is a trust that owns the eventual proceeds of your life insurance policy. Once you create such a trust, you are no longer the legal owner of the life insurance policy. This mean the trust owns the policy, and when you die, the proceeds will not be part of your estate. 

Qualified Personal Residence Trust 

  • This is a form of irrevocable trust that allows its creator to remove their home from their estate with the intent to lower the amount of gift tax that is incurred when transferring assets to a beneficiary.  

Medi-Cal Asset Protection Trust 

  • Is an irrevocable trust created with the intent to take on assets (such as a home and savings accounts), such that the creator will be able to qualify for Medi-Cal Long Term Care Benefits and will also prevent the State of California from pursuing “Medi-Cal Estate Recovery.”