While planning for the end of your life may be morbid and unpleasant to consider, it is essential to care for your loved ones after you pass. However, with many estate planning assets available, you may not know which option is the best for you, specifically when deciding how to leave your wealth to your loved ones. For many, the choice between a trust and inheritance is not clear. The following blog explains what you need to know and explores how a Woodland Hills trust attorney can help you through this process.
Is There a Difference Between a Trust and Inheritance?
Though many think these two terms mean the same thing, there are differences between trust funds and inheritances. One of the most significant differences is how the asset is left to the intended recipient or beneficiary. If you have a small amount of wealth, sentimental items, or other assets you wish to leave to someone, you may be better off creating an inheritance. Unfortunately, setting up a trust can be expensive, so leaving an inheritance is a more cost-effective option for many. Similarly, inheritances are beneficial for those who believe that removing assets from the estate will reduce tax liability later.
However, if you have a large number of assets or funds that you wish to distribute, it is better to place them in a trust fund. This is an estate planning tool that holds your wealth for the beneficiaries. You will appoint an agent, known as a trustee, who manages the assets held in the fund. They are responsible for distributing the assets according to the terms and conditions you created. As previously mentioned, a trust can be expensive but provides additional security for your wealth. Also, the assets inside a trust fund do not have to undergo the probate process and are not subject to estate taxes.
What Should I Do if I Want to Create a Trust?
If you decide to create a trust to store your assets until the beneficiary is ready to receive them, you’ll need to invest in the assistance of an experienced attorney to help you through the process. Unfortunately, failure to set these documents up correctly can make them nullified. As a result, the court may determine that the fund is invalid. Most commonly, people will attempt to create these documents on their own and include terms that directly conflict with the law in California. Instead, an attorney can help you navigate this process to ensure your assets are distributed according to your wishes.
At the Law Offices of Yacoba Ann Feldman, you can trust that the documents you’re creating will be in accordance with the law. Our dedicated legal team will work to ensure that the terms outlined in your estate plan are legally valid, which can provide the necessary peace of mind. Contact us today to learn more about how we can help you through this process.