Estate planning looks different for every California family. While some families’ estate planning needs are covered by just a last will and testament, other families might need more.
Families in those situations most often turn to trusts. Trusts are a great way to easily transfer assets to beneficiaries – known as a trustee, in relevance to the trust.
What are the advantages of using a trust?
Using a trust as an estate planning tool allows you to transfer assets to beneficiaries without needing to go through probate court. Oftentimes, probate can take a long time and a trust allows beneficiaries to have almost instant access to those assets.
You can also establish rules or requirements for the trustees to follow. While you can leave instructions in a last will and testament, a trust ensures those instructions will be followed to the letter.
What are the types of trusts?
Trusts can either be revocable or irrevocable. Revocable trusts allow you to make changes right up until the point of your death, and it also allows your family to make changes after you’ve passed.
Irrevocable trusts do not let you make changes or modifications. Once you place assets into the trust, they can’t come out unless certain rules or requirements are met.
There are advantages to both. Passing along assets in a revocable trust might allow your beneficiaries to blow through their inheritance at an alarming rate, while irrevocable trusts prevent that from happening.
Which is right for me?
The type of trust you choose will depend entirely on the needs of your family. For example, you might need a special needs trust or a trust that is specifically designed to take care of minor children.
Choosing the right trust can be an intimidating process. However, they are still one of the best estate planning tools available to families.
