You don't have to be a television, movie or music legend in Los Angeles to want control over inheritances you leave for heirs. If you think your estate plan is fine without a trust, you might be right. Then again, you might be missing something.
Trusts are legal workhorses designed for particular purposes. More than one kind of trust is available, depending on how you'd like your estate administration to be handled.
What can a trust do that other estate planning instruments cannot? No attorney will suggest that a trust replace a will, living will or power of attorney. Those documents form the foundation of an estate plan. Trusts elevate the power an individual has over asset distribution and protection from probate, taxes and creditors.
Federal estate tax worries are not a problem for the majority of California residents. At least for this year, the IRS won't become interested unless an estate's value is at least $5.25 million. So, why bother with a trust when taxes are no problem?
Wills are public records and trusts are not. Assets placed in a trust no longer belong to an individual, although a grantor - person who establishes the trust - can maintain control over the parked assets during life as a trustee and beneficiary.
A revocable living trust allows a grantor to change his or her mind about the trust's contents or the trust itself. A manager is designated to take control the trust when the grantor becomes incapacitated or dies.
Trusts are helpful for parents who wish to control the flow of assets to children by staggering distribution over years or decades. Single individuals may benefit from the establishment of a trust as well as people with complicated relationships, like multiple marriages and children from previous relationships.
Trusts aren't necessary for everyone but can be useful for anyone, rich or not-so-rich, depending on estate planning goals.
Source: miamiherald.com, "Age-old question: Do I need a trust?" Julie Landry Laviolette, Aug. 23, 2013