Not every person requires a trust to complete an estate plan. Sometimes a will and powers of attorney cover everything necessary for an estate. In other circumstances, trust instruments are needed to ensure assets and heirs are protected from probate and, sometimes, even from an inability to manage inheritances.
All trusts are not the same. Their use in California estate planning depends on an individual's needs and desires during life and following death. The most widely used trust is a revocable living trust, which can be altered as long as its author is alive.
The trust is stocked with assets and contains instructions about property distribution to heirs. The assets used to build a living trust are varied, from cash to stocks to real estate.
Estate planners recommend that assets are retitled when the switch to a living trust takes place. Making the change before death avoids the time and expense of a court action to move the assets.
Many people have estate plans that cover what happens to what they own after death. Revocable living trusts also give individuals the chance to secure finances and assets before death.
Illness, accident or age can cause incapacity. A revocable trust allows an individual to name a trusted person to step in when the ability to handle finances is lost during a lifetime. The trust also allows its creator the chance to assign a trust administrator to handle after-death affairs.
Privacy is a good reason for some estate planners to choose a revocable trust. Trust actions are not open to public inspection the way probate actions are. Only people affected by a trust are informed of its contents.
Finally, control of asset distribution comes with the establishment of a revocable trust. An assigned trustee can guide assets for an heir who is a minor child, unreliable or inexperienced with finances. The trustee manages assets for heirs who may not be able capable of doing the job themselves.
Source: fresnobee.com, "Revocable living trust has benefits," Claudia Buck, Nov. 26, 2012