When you think of estate planning, your will, and terms like medical guardianship, and Medi-Cal probably come to mind. However, having a trust is also an essential part of planning for the future. Here is why you should consider having a trust as part of your California estate plan:
- Having a Trust Keeps Your Assets Out of Probate
When property, funds, or other assets are placed into a trust, they become the trust’s legal property. When the former owner passes away, the trust assets remain in the trust and are not considered part of the probate estate. This means that trust beneficiaries do not have to wait through a lengthy probate case to continue receiving trust disbursements or payments.
- Having a Trust Allows You to Direct How Payments are Used
Trusts allow their creators or grantors to establish a purpose for the device and conditions for disbursements to beneficiaries. Some are support trusts and are for the care and maintenance of others. Trusts can be limited to specific purposes, such as for a beneficiary’s educational costs or housing expenses. They can also be defined so that funds will not be released until the intended recipient reaches a specific age. If you want to set up a trust to benefit an organization or non-profit instead of a person, that can also be arranged.
- Having a Trust May Can Keep Assets Safe from Creditors
Depending on how a trust is created, assets may be safeguarded from the beneficiaries’ and grantor’s creditors. Generally, if a settlor establishes an irrevocable trust, future creditors may not be able to reach the trust property. Therefore, his or her creditors may not be able to access the trust assets to satisfy unpaid debts. However, there are exceptions under California law, such as creditor claims for child support spousal maintenance, and federal and state taxes.
- Having a Trust Can be to your Benefit During Life
With a living trust, you create a trust while you are alive. This instrument can benefit you and your named beneficiaries. A living trust’s grantor can be a named beneficiary and the trustee. With a revocable living trust, the grantor can make changes to the trust during his or her lifetime. Once the grantor dies, the trust will become irrevocable, and it will operate according to the trust’s terms.
- Having a Trust Keeps Estate Matters Private
A California will must go through a public probate proceeding. However, a trust administration is a private matter. The terms of a trust, its beneficiaries, and disbursement schedule and requirements are not public information. For those who prefer to keep their estate details confidential, trusts allow for discretion.
- Having a Trust Allows You to Use a Will Too
Having a trust is part of an overall estate planning strategy. Your last will and testament is a crucial component of that plan. Your will identifies your property, assets, and heirs. This essential instrument also lets you nominate your personal representative and express your preferences regarding final arrangements. For parents, your will can identify potential guardians for minor children. If you have a living trust, you can also have a “pour-over” provision in your will that will move assets into your trust upon death.
Having a trust can be a valuable part of your overall estate plan. At the Law Offices of Alice A. Salvo, we are trust and estate planning attorneys with experience helping clients prepare for the future. We can help you review your situation and determine the best measures to put in place for your needs and goals. Please contact us online or by phone to schedule an appointment today. /contact/