If you are a reasonably well-to-do Californian who has already done some estate planning, you likely know that the types of trusts you can incorporate into your estate plan are almost limitless. Regardless of their specific type, however, all of them fall into the same two categories: revocable and irrevocable. You can alter any of the provisions of your revocable trusts, or even revoke them, any time you wish after originally establishing them. Once you establish an irrevocable trust, however, you cannot make any changes to it in the future.
In addition, all trusts have the same three parties: the grantor (you), the trustee (the person or institution you designate to manage the trust assets and disburse them per your wishes), and the beneficiary or beneficiaries (the person(s) who or entity/ies that you designate to receive the trust income and ultimately its assets).
Common kinds of trusts
Most people have one or more of the following trusts as part of their estate plan:
- Asset protection trust
- Special needs trust
- Charitable trust
- Spendthrift trust
- Generation-skipping trust
- Tax by-pass trust
Less common kinds of trusts
Other kinds of trusts exist as well, such as Totten trusts and constructive trusts, with which you may not be familiar. All in all, if you have a specific estate planning need, there likely is a trust by which you can fulfill that need, all according to your personal goals and objectives. Do not hesitate to ask your estate planning attorney to describe them to you. This is general educational information and not intended to provide legal advice.