Trusts

The Campbell Law Offices assist clients throughout the Bay Area with comprehensive estate planning, including the creation of trusts and trust administration.

What is a Trust?

A trust is an interest in property held and managed by one person (the trustee) for the benefit of another (the beneficiary).  In technical terms, the trustee holds legal title to the asset, while the beneficiary holds an equitable title.  The grantor is the person who creates the trust and transfers assets into the trust.  These assets are then managed by a trustee for the benefit of the beneficiaries named in the trust.  Initially, the trustee can be the grantor, although a successor trustee should be named to manage the trust in the event of the grantor's death or incapacity.  A trustee can be a family member or friend, or may be a bank or professional money manager, who can manage the assets to maximize wealth accumulation.

Trust assets can be distributed to the beneficiaries upon the grantor's death, or the trust may continue for an extended period, with the trustee continuing to manage the assets for the benefit of the beneficiaries, who may receive periodic payments of income or trust principal.  This method allows the estate to continue to be managed long after the grantor's death.

There are many different types of trusts which can be created for very different purposes.  Some of the most commonly-created trusts include:

• Revocable living trusts
• Generation-skipping trusts
• Irrevocable life insurance trusts
• Special Needs trusts
• Spendthrift trusts

Why do I need a Trust?

There are many reasons why you may want to create a trust.  The two of the most common reasons are probate avoidance and tax minimization.  When a trust is created, title to the assets in the trust passes to the trustee, and the asset is not included in the grantor's estate for purposes of probate.  Moreover, different trusts offer certain tax advantages, a significant consideration given that the under current law, federal estate taxes will return in 2011 at the same levels which were in effect in 2002.

At the time you are making your estate plan, you may have minor children or grandchildren whom you wish to provide for but who are not ready to handle an inheritance on their own.  Through a trust, the trustee can manage and control the estate for the benefit of the beneficiaries until the beneficiaries reach a certain age at which time you feel they will be ready to handle the trust assets responsibly.

If you wish to maintain personal control and management over your assets, you can appoint yourself as the trustee.  You can even name yourself as the beneficiary, with the rest of the trust passing on to other beneficiaries after you die.  Of course, with a revocable living trust, the designation of trustee and beneficiary can be changed at any time.  Certain trusts can also be valuable tools for asset protection.

Seek Experienced Legal Representation

Estate planning matters require experienced legal counsel.  Contact the Campbell Law Offices for help in the creation or administration of a trust.