One common misconception about trusts is that only people of means set them up. That’s not the case with revocable living trusts, though.
There are many reasons why individuals set up revocable living trusts. There are a few common approaches owners use to fund this asset protection tool as well.
Why do individuals set up revocable living trusts?
Most people set up trusts because they want to leave something, such as money, property or other assets behind for their loved ones that they can tap into once they’re gone.
They also set them up to protect any assets contained in them from a creditor’s reach. They do so because a trust can afford its owner and beneficiaries many tax-savings benefits as well. It also helps avoid the probate process, making it easier for beneficiaries to receive a property transfer following the trust owner’s passing.
What type of assets do owners place into living trusts?
It’s not uncommon for individuals to fund their living trust by placing valuable assets such as investment portfolios, stock dividends, loose cash, bank accounts, insurance policies or their homes into it.
You can also fund it by placing items of less monetary value, such as books, clothing, jewelry, cameras and sports equipment, that you’d typically bequeath to others via a will into the trust as well. You may even be able to fund the living trust with foreign oil or gas assets, notes payable and intellectual property rights.
Is a living trust right for you and your assets?
There are many options to choose from when your goal is to preserve the value of the assets you own for use by future generations. An attorney will want to know more about your financial goals and expectations before advising you what asset protection or other California estate planning tool is best for you here in Danville.