At Roybal-Mack & Cordova, PC, they know no two clients or cases are alike. They believe that legal solutions must be tailored to each client’s unique circumstances, goals and budget. That is why their services and approach are different. Darren Cordova stopped by to give some insight into trust and estate planning.
What is a trust?
A trust is a legal document that creates a means for assets to be held in trust for the benefit of a trustor (also called a grantor or settlor)—the person creating the trust. Upon the death of the trustor, a successor trustee—the person managing the trust—oversees the process by which the assets are distributed as the trustor intended, not according to the rules governing probate and intestate succession.
There are different types of trusts that may be created, including:
- Asset protection trust
- Charitable trust
- Irrevocable trust
- Revocable (living or inter vivos) trust
- Special needs trust
Irrevocable trusts cannot be changed once they are created. To understand the implications of placing assets in an irrevocable trust, it may be best to consult with an experienced attorney.
Why consider creating a trust?
The creation of a trust affords trustors a number of benefits over a will, including:
- Probate avoidance
Assets in a trust are distributed by the trustee in accordance to the terms established when the trust was created. Probate is not required and intestate succession does not apply.
- Loss protection
Trusts can be Divorce Protected, Creditor Protected, Tax Protected, and Spendthrift Protected as well as have provisions to ensure the responsible use by beneficiaries with disabilities or addictive behaviors.
- Enhanced control over estate distribution
Trusts allow trustors to name specific beneficiaries of specific assets—including contractual assets—and outline provisions or conditions under which those assets can be released.
Trusts can prevent costly disputes that often arise when distributing an estate.