You can put a lot of different assets into a trust. People often consider simply putting in financial assets, but you can also add real estate and things of this nature.
You want to set up a trust to control your life insurance. You know that the irrevocable life insurance trust (ILIT) can help with your estate taxes, and you have a substantial policy to consider. You think a trust is the best way to pass that asset on to your children.
An incentive trust is, in many ways, quite a simple idea. You want to give your heirs an incentive to live a certain way, so you put their inheritance in a trust and they only get it if they follow the rules you set. For most parents and grandparents, they just want the heirs to have a productive life with gainful employment, rather than living off of the money. The incentive, then, can be that they only get the money if they're employed or that the trust pays out the same amount that they earn every year, giving them incentive to work harder and move forward in their career.
One reason to use a living trust, rather than a will, is simply that it can save your heirs a lot of time after you pass away.
The term "living" in a living trust means that the trust is created while the grantor -- or trust creator -- is alive. In the case of many living trusts, the grantor can change or alter the trust and remain in control of the assets within the trust while he or she is still alive. The grantor can do this by making him or herself the trustee.
An "express trust" is a convenient way to incorporate a trust into your last will and testament. This kind of trust, also known as a "testamentary trust," goes into effect at the time of your death. It does not affect your finances while you're still alive.
Do you have a house, investment or some other kind of property that has increased significantly in value? Do you want to liquidate this property and reinvest the money to start generating an income from it, but you don't want to pay the tremendous capital gains taxes? You're facing a fairly common dilemma -- but a charitable remainder trust might allow you to accomplish all of those goals.
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.