A trust is an important estate planning tool. And you do not need to be super rich and famous to have one.
On a basic level, a trust is a legal arrangement that allows you (the Settlor) to transfer the legal control of specific assets to another person or entity (trustee). The trustee is then tasked with managing the property held in the trust on behalf of the beneficiaries.
Here are two reasons why you should consider including a trust in your estate plan.
Protect inheritance for the minor children
If you have minor children at the time of creating your estate plan, you should strongly consider setting up a trust. This is because minors do not have full contractual capacity, and this can complicate matters if you directly bequeath any assets to them. To prevent the state from stepping in to administer your minor child’s inheritance should something happen to you, consider including testamentary trust in your estate plan with clear instructions on how you want their inheritance to be administered and handed over to them when they become adults.
Avoid the costly probate process
Probate is the process of verifying and distributing the deceased’s assets according to their wishes (if they have a will in place) or California law (if they die intestate). Probate tends to be a long and costly process since it involves the court. And this is not all. Probate is a public process, meaning that your family’s financial matters will become accessible to the public.
Trusts, on the other hand, do not go through probate. This can save your loved ones time and money that they would otherwise spend dealing with the lengthy probate process. Additionally, a trust can help protect your family and assets from public scrutiny.
If you have specific wishes concerning how and when you want your assets to be distributed to your loved ones, you should consider having a trust. Find out how setting up a trust can give you more control over your estate.