The two most important components of the estate planning process are a trust and a last will and testament. Most of us know about the structure and purpose of a will, but California trusts are a little harder to understand.
Trusts have a more complicated legal structure, especially when compared to wills. Plus, with the different trusts available, it’s hard to know which one is right for your purposes.
Still, there are several benefits of a trust. Contact your trust attorney in Rocklin, CA, to learn more about them. In the meantime, this guide will take you through them and help you better understand this essential tool.
Why Have a Trust?
In estate planning, a trust attorney in Rocklin, CA, recommends creating a trust when individuals have over $200,000 in assets. This includes homeowners.
A trust is also a crucial tool for parents who need to control the distribution of their assets to their children. This is challenging when there are young children involved and if there are children from previous marriages to consider. But these aren’t the only reasons to get a trust.
Some of the reasons to set up a trust include the following:
1. Probate Court Avoidance
One great reason to undertake the estate planning process is it prevents your loved ones from going through lengthy probate court proceedings. This will save your loved ones from dealing with the courts at an already challenging time of passing.
There are also several expenses that come with probate, like court and attorney fees. A comprehensive estate plan will help your family avoid this headache.
2. Reduction of Estate Taxes
The establishment of a trust is a fantastic way to reduce and/or eliminate expensive estate taxes. This works because when you transfer your assets into a trust, it reduces the size of your overall taxable estate.
3. Keep Control of Your Assets
Sometimes, trusts are better than wills. They give you a certain level of control over your estate that wills just cannot.
The structure of your trust allows you to set it up how you want. You decide when and how to distribute your assets.
If your children are young, this is a good way to make sure they don’t get their inheritance in one lump sum. You can create a trust with certain life milestones in mind. For instance, you can specify it, so your children receive their inheritance after high school or college graduation. You could even wait until after they’re married.
4. Improve the Estate Planning Process
Once you’ve done the work of creating a trust, the challenging part is over. Trusts are very low maintenance. For instance, you might have to update your estate plan when certain life events, like the purchase of a new asset, occur. A trust, on the other hand, rarely needs changes.
5. Preparation for Worst-Case Scenarios
Life can sometimes impede our best-laid plans. Estate planning is an essential step in protecting you and your loved ones. A trust will make sure your loved ones are in excellent hands in case you become incapacitated.
Help make sure you make special accommodations for children with special needs.
If your children have long-term medical challenges or special needs, creating a trust is an excellent idea. It’ll offer them extra protection once you die. For instance, you can set up a trust to provide your child with long-term financial help.
6. Fair Division of Assets
When you begin the estate planning process, you might notice certain assets are harder to split up between your beneficiaries. Trusts are a great way to designate how to distribute the more complex assets after your death.
Let’s say you have a family business or vacation home that you need to split up. Trusts are a good way to do that because they let you specify what goes to who.
7. They Guarantee Family Protection
Trusts are a great way to make sure your children and spouse continue to live good lives after you’re gone. For instance, the distribution of assets becomes more complicated after marriage or divorce.
Creating a trust will ensure your children or spouse get their rightful inheritance. It doesn’t matter if their family structure changes later in life or if they remarry.
Common FAQs Concerning Trusts
After discussing the various reasons to get a trust, you might still have some questions. This list of common facts and their answers will provide you with more insight:
If I have a will, do I need a trust?
Even if you have a will, you may need a trust attorney in Rocklin, CA, to help you create a trust. It all depends on your financial and legal needs. All a will does is name your beneficiaries and discuss how to distribute your assets.
A trust, on the other hand, gives you more control over these factors. A trust can also make it so that you can create a more complex estate planning structure. This is particularly helpful for those with blended and other types of large families.
Why do I, a California resident, need a trust?
In many cases, if you’re a homeowner in California, you need it. Property values are so high in the state you’ll need extra protection and control over the distribution of your assets when you die. When you create a trust, it’ll make sure that your property stays within your family or goes to another loved one.
It’s more common than you think for people to create a last will and testament and never think about estate planning again. Unfortunately, this may make your estate vulnerable to various estate taxes and issues in probate court.
When you create a trust, contact a trust attorney in Rocklin, CA. They will help you get more control over your asset distribution. There are even tax benefits to going through with this process.
With that in mind, there are several reasons to create a trust that you should consider when coming up with an e0state plan. Thankfully, your Rocklin, CA, trust attorney will help you get started.
Do you need a lawyer to make a living trust?
Yes. The good news is, if you are in California, the team at Filippi Law Firm, P.C. will be by your side to guide you through every step of the process. We are proud to be your Rocklin, CA, trust attorney and will ensure all your assets receive the protection they deserve.