Should Parents of Young Children Create a Living Trust?

As a young parent, you’re busy helping your children with homework, cooking dinner on weeknights, and planning fun weekend activities for the whole family. Estate planning may not be a top priority for you right now. However, you should consider creating a living trust to benefit your children if something suddenly happens to you. But what will a living trust attorney tell you about California living trusts?

What Is a Living Trust?

A living trust is one you create during your lifetime and usually manage as the trustee in a revocable living trust. You can also create an irrevocable living trust and name a third party to act as trustee and manage the trust property. However, by transferring ownership of your assets to an irrevocable trust, you no longer have control over those assets.

So, why would you choose an irrevocable trust if you can’t alter, cancel, or amend the terms or trust property? If you or your spouse has a high-income job or is at increased risk for a lawsuit, an irrevocable trust can protect your assets from liens and judgments. The state sees assets in a revocable trust as belonging to the grantor (trust creator) and can pursue those assets to repay your debts to the court.

Whether you choose a revocable or irrevocable trust for your estate planning, there are some things most trusts have in common, including:

• Allowing you to create specific instructions for asset management and how to distribute assets to each beneficiary
• Bypassing the probate process and keeping your beneficiaries’ inheritances off the public record
• Safeguarding assets until your children come of age or meet the distribution conditions in your trust agreement

You can also name your children as “remainder beneficiaries” rather than “income beneficiaries,” meaning that while you and your spouse or domestic partner are alive, your children won’t inherit. However, when you pass away, the trustee must follow the trust agreement to distribute your assets according to your instructions.

Benefits of Creating a Living Trust for Your Children

When you pass away and only have a will, your will and assets must go through probate, which can take 12-18 months in California. During probate, your executor or administrator must take inventory of your assets and get a valuation. The court will use your assets first to pay any outstanding debts, taxes, and final expenses.

Additionally, court records are public, meaning your children’s creditors can find out what they inherited if your assets pass to them through probate. However, trusts bypass probate, and your trustee can administer the trust shortly after you pass away. This also prevents your beneficiaries from learning what each of the others inherited.

An experienced living trust attorney can also help you create a pour-over will, which transfers assets into the trust you might have forgotten to transfer earlier or purchased shortly before passing.

Other Important Estate Planning Documents for Parents of Minor Children

Your children may still be minors if you pass away suddenly from an accident or early-onset disease. What estate planning documents do you need outside of a living trust? A knowledgeable estate planning attorney can help you prepare all necessary documents, including:

• Pour-over will
• Living will or advance healthcare directive
• Power of attorney
• Nomination of guardian

Contact an Experienced Living Trust Attorney in Woodland Hills, CA

When you need a living trust attorney to help you plan for death or unexpected catastrophic injuries while you have minor children, reach out to the Law Offices of Alice A. Salvo. Call today at (818) 676-9572 or contact us online to schedule a consultation with an estate planning attorney.