Imagine you don't have any children who can inherit your estate, except you do have a niece who happens to have a serious spending problem. As soon as she has any amount of money in her hands, she spends it on something irresponsible. Considering that this is your only heir, it's understandable that you're concerned. Fortunately, you and your niece might benefit from a "spendthrift" trust.
Many California estate planners have benefited greatly from incorporating a trust into their estate plans. In fact, some individuals have saved their personal assets from certain depletion through a strategically-crated trust document.
While most people think of good luck as finding a good parking spot at the store or avoiding an accident on the freeway, some people find their lives turned upside down by good luck when they win the lottery or come into some other sort of windfall of good fortune. Of course, with every stroke of luck, there is always the possibility that the blessing can become troublesome and cause more problems than it alleviates. For those who find themselves suddenly on the receiving end of lottery winnings, it is wise to consider a lottery trust.
When you begin considering all the estate planning options available these days, it can seem overwhelming. It may even keep you from creating a plan at all.
Establishing a charitable trust is an excellent way to preserve important resources and support causes that you value, allowing you to still benefit financially. If these trusts are properly constructed and thoughtfully planned, they may serve as a strong component of any estate plan. They can help you establish a legacy that may last long after you are gone, helping to tell your story and furthering the issues that you care about deeply.
When many people think about establishing a charitable trust, it seems like the kind of thing that only the super-rich do, and even then, mostly for the tax advantages. It is true that charitable trusts offer significant tax advantages. However, they are not only a tool for those with a considerable amount of money. In fact, even moderately sized estates may benefit considerably from using a charitable trust as part of an estate plan.
Here in California, owning a home is an expensive proposition, and in almost all cases it pushes the owner past the relatively low estate threshold of probate. In very simple terms, if a person owns real estate in California at all, their estate is almost certainly subject to probate upon their passing. While this is a frustrating reality, especially considering the high taxation that Californians already bear, there are some ways around this issue, including placing a home in a trust.
As our parents and others we love grow older, their needs may change dramatically. Without careful planning for the future, even those who saved for a rainy day or who own significant resources may see all that they worked for drained away by the high costs of late-in-life care. To help cushion these costs, the government offers programs like Medicaid to those who qualify, but what if your parent has too high an income or owns too large an estate to use government assistance?
When one sets out to create a sound estate plan and protect assets for beneficiaries, careful planning is critical. It is important to consider the recipient of a particular asset and the difficulties he or she may face that could pose a threat to the asset itself. This is especially true for those who wish to leave assets to a beneficiary who already carries a great deal of debt or deals with creditors using collection tactics.
For many people who realize it's time to put together some estate planning documents to protect their assets, a living trust provides both protection and flexibility. While there are many kinds of trusts, most offer protection at the expense of flexibility, or vice versa.