Individuals in the process of creating their estate plan may be considering the various options they have at their disposal to do so. Many people may look into creating a trust. Simply put, a trust is an agreement between the creator of the trust (a trustor) and a third-party trustee. This individual will manage the trustor’s assets on behalf of their beneficiaries until they can do so themselves. While this can be beneficial for some, it is not always necessary. Continue reading below to learn about the pros and cons of creating a trust in California.
What are the Pros of Setting up a Trust?
There are a variety of reasons as to why a person may benefit from setting up a trust, depending on their goals for their estate. With a trust you can do the following:
- Plan for how your estate’s property and wealth will be distributed. This may be to individuals or organizations. By transferring assets through a trust, individuals have more control over how their assets are given away. Either the entire amount can be paid out at once or the payments can be staggered.
- Allow beneficiaries with special needs to receive their inheritance from the estate without being barred from receiving government assistance.
- Help manage assets while the individual is still living.
What are the Cons of Setting up a Trust?
It is important to note that there are also certain disadvantages to setting up a trust in the state of California. Generally, trusts have higher preparation costs than other estate planning tools. They require the individual to retitle their assets in the name of the trust. This can take both time and money. If a person fails to retitle their assets, they will not pass through the trust and they will instead go through probate. In addition to this, trusts do not offer special estate tax benefits or special asset protection. In the event that it is necessary, creditors can still obtain access to assets in a trust without certain provisions put in place.
Using an Estate Planning Attorney
Trusts are just one tool that can be used in estate planning. There are a variety of other elements that can be used as well to create a comprehensive plan. It is because of this that it can be beneficial to utilize the services of an experienced California estate planning attorney, as it can provide you with guidance regarding which tools may be best put to use for your estate plan.
Contact our Firm
Working with an experienced estate planning attorney, such as Jaci Feldman of the Woodland Hills, California, Law Office of Yacoba Ann Feldman, will ensure that you are taken care of when you need it most. Contact The Law Offices of Yacoba Ann Feldman to schedule a consultation today.