A trust may be a worthwhile estate planning tool for many people who live in California. As a general rule of thumb, anyone with a net worth of $100,000 or more may benefit the most from a trust. They may be even more effective for those who also own a business, want to care for a disabled family member or want to delay distribution of assets to children or other heirs.
Many people choose trusts because they may enable an estate to bypass the probate process. With a generation-skipping trust, it may be possible to shield a large amount of money by giving it to grandchildren instead of immediate children. Having a trust offers an additional benefit of naming a trustee who can manage assets after the grantor dies or if the grantor becomes unable to do so while still alive. In a properly-drawn trust, assets may be protected from creditors.
The cost of establishing a trust varies depending on the complexity of the trust. Assets that are included in the trust must be retitled in the name of the trust. Any assets that are not retitled in the name of the trust run the risk of being subjected to the probate process and being distributed in another manner.
Creating one or more trusts may make it possible to protect assets now and retain greater control over how they are distributed in the future. Anyone who is thinking about creating a as part of the estate planning process may wish to talk to an attorney who has experience in this area and who can tailor the document to the client’s particular needs and desires.
Source: CNN Money, “Estate planning: Is a trust beneficial?“, November 16, 2014