It sounds simple. You want to create a trust so that you can minimize the taxes paid on your property when it passes to other people or organizations. However, not all trusts are the same. There are different types of trusts and one may be better than another to help meet your specific goals.
Here Are Some Choices
California law allows different types of trusts to be set up for different purposes. A few of those trusts include:
- Trusts for your pet. These trusts can be used for the benefit of your pet(s) if your pet(s) outlive you.
- Special needs trusts. These are used if you are establishing a trust to benefit a person with a disability or special need.
- Generation skipping trusts. These trusts are specifically designed for grandchildren or great-grandchildren so that the generation skipping tax is minimized.
- Revocable and irrevocable trusts. As the terms suggest, a revocable trust may be changed by you during your life time but it has potential tax consequences that irrevocable trusts do not have.
- A-B trusts. This is actually two trusts. The “A” trust is for the benefit of your surviving spouse and the “B” trust is for other beneficiaries.
This list is not, however, all inclusive. Other types of trusts also exist. If you have questions about creating your own estate plan that is individualized to meet your unique needs then it is important to learn more before you begin the process of establishing a trust. Request a copy of our free report, Understanding the Revocable Living Trust – In Language That Anyone Can Understand in 8 Minutes, and browse our free library of articles to find out more.