Bay Area Estate And Tax Planning Law Firm

Learn the basics of estate planning

On Behalf of | Dec 2, 2022 | Blog, Estate Planning |

California estate planning usually starts with you creating a will that establishes what each beneficiary will receive from your estate as their inheritance. Wills help families avoid the confusion, anger and hurt feelings that might otherwise arise. An income-earning trust, on the other hand, can continue to provide benefits to your beneficiaries long after you die. These are not mutually exclusive approaches. In fact, they work very well together.


Drafting a will is an excellent first step for ensuring that your beneficiaries receive what you intended. Unfortunately, individuals can step in after your death and contest a will. Claims might cite various reasons to invalidate the document, including beliefs that one or more of the beneficiaries unduly influenced you or that you were not of sound mind when you signed the will. You can proactively eliminate some unwanted consequences of a successful challenge by including an irrevocable trust in your estate planning.

Irrevocable trusts

When you create an irrevocable trust in California, you can fund it with any valuables you choose. These can include money, cars, artwork, jewelry, real estate and endless additional possibilities. Once you do that, you transfer ownership of these assets to the trust, and you name a trustee, other than yourself, who is responsible for carrying out your wishes as stated in the trust’s agreement documents. You lose control of the assets, and the trust’s directives are usually unchangeable without complete agreement from all the legal-age beneficiaries.

There are two primary benefits derived from an irrevocable trust. First, because you can shift assets from an estate to the trust, you can lower the estate’s value. The 2023 federal estate tax applies to all estates worth more than $12.92 million. If this applies to you, you can transfer enough of your possessions to the trust and eliminate potential tax complications that your representative would have to resolve after you’re gone.

The second advantage applies to creditors. Because the trustee can only distribute assets as directed in the original paperwork, the trustee cannot legally redirect that money anywhere else. That protects this part of your estate from garnishments.

Don’t wait to start your estate plan. You never know what the future holds.