When it comes to estate planning, some California parents ignore the benefits of the choices available to them. One example is using a trust to make sure that assets pass to intended parties. Using a trust can give parents more control over their estate versus leaving it up to a court or in the hands of an executor. Some parents might be concerned about privacy and do not want their will publicly available in probate court. A living trust could be the answer due to the fact that such a trust is not subject to probate.
When using an irrevocable trust, it is important to make sure the right trustee is selected as the trustee is the one who actually controls access to the assets in trust. To avoid any potential unpleasant situations, some experts recommend that the trustee be bonded. Grown children of aging parents often want to be named trustee of an irrevocable trust so that they can shield their future inheritance from medical bills the parents are likely to incur.
Parents who have accumulated significant assets may want to use an irrevocable trust because of its tax advantages. In certain situations, it is even possible for California parents with modest assets to benefit from an irrevocable trust. However, the disadvantage of an irrevocable trust is that the parent loses control of the asset.
When planning their estate, parents need to educate themselves on various topics that include trusts, living wills, beneficiary designations and powers of attorney. A person dealing with complicated inheritance documents may want to consult an estate planning attorney. An attorney may be able to help draft certain documents and might be able to assist in filing documents with the court.
Source: NBR, "A matter of trusts: Benefactors, heirs and their advisors", Maureen Niven, August 04, 2014