March 21, 2014 by generationsprobate
One of the harsh realities of death is that you can’t take all the wealth you’ve accumulated over the years with you when you pass on. If you want your loved ones to inherit your assets, or if you want them transferred to a charitable foundation, you may consider setting up a trust fund. This can help ensure your wishes will be carried out. Trust funds, however, also have purposes other than transferring ownership of properties to the chosen beneficiaries.
Trust funds are also a good way to protect your wealth from creditors or even a divorced spouse. An irrevocable trust, in particular, may be very effective for these purposes as the terms in this type of trust can no longer be changed. Similarly, a property or properties covered in an irrevocable trust can no longer be considered marital property, and thus can be shielded from a divorced spouse. Divorce courts in California, however, may still have the authority to decide which properties are transferrable and which are not.
A family trust fund qualifies you and your spouse for federal tax exemptions. In the event of your death, a portion of your wealth can be sent to a family trust fund where it will be protected from taxes up to the extent that the state can allow. Meanwhile, the rest of your wealth can be transferred to a marital trust fund, which protects them from estate taxes that previously applied to you.