Are you curious about the different kinds of trusts that you can use in California to pass on assets and to achieve greater control in the estate planning process? You might have concerns about a testamentary bypass trust that can be answered by a Pasadena estate planning attorney.

Whether you are a business owner thinking about your succession planning needs or someone who has amassed a high volume of wealth from sources outside of a business, a testamentary bypass trust could be valuable in your estate planning process if you are married. This is a form of an irrevocable trust in Pasadena that is commonly used to pass assets from parents to children at the time the second parent passes away.

The purpose of a California testamentary bypass trust is so that the children will not have to pay estate taxes on those assets higher than the current estate tax exclusion. A testamentary trust is a bypass trust, meaning that it is created upon the death of the first spouse as provided for under a joint trust that both spouses have created. One of the key aspects of your Pasadena testamentary bypass trust is that the surviving spouse has to have restricted rights to withdraw the principle.

The spouses who create the trust have to specify exactly how much money can be taken out from the bypass trust on behalf of the surviving spouse and for what purpose those withdrawals can be taken. The spouses can also indicate in their living trust how the assets inside will be distributed to the beneficiaries on the death of the surviving spouse.

There are several different benefits to a California testamentary bypass trust, including protecting growth on the deceased spouse’s estate tax exclusion, providing for some creditor protection, preserving credit against estate tax of the deceased spouse, and protecting against the deceased spouse’s testamentary intentions. Schedule a consultation with a Pasadena estate planning lawyer today to learn more.

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