When a person in California sets up a trust, they create a fiduciary agreement that lets a trustee hold assets on behalf of a beneficiary or several beneficiaries. Trusts get structured in various ways, specifying exactly when and how beneficiaries receive assets. A major benefit of a trust is that it can usually avoid probate. This means that beneficiaries get access to the assets left for them quicker than they might with assets transferred via a will.
Greater control over your wealth
A person can use a trust to establish specific terms that control when and to whom financial distributions will be made. For instance, they could set up a revocable trust that grants them access to the assets during their lifetime while allowing them to choose the beneficiaries who will receive them after their death. Trusts can simplify complex inheritance situations. For example, it is beneficial where there are children from various marriages.
Increased privacy and savings
Probate is recorded publicly. However, a trust may make it possible to sidestep probate, keeping beneficiaries and the amount of money they receive private. A trust is an estate planning tool that can reduce the amount of money spent on taxes and court fees.
Protect your estate
When constructed correctly, a trust can help a person protect their estate from creditors, other heirs or beneficiaries who might not be the best at money management. A trust can be beneficial for families with a high value worth, but a person does not need to be exceedingly wealthy to set up a trust to make sense.
It can be challenging for people to think about planning for their death. However, proper estate planning can give people peace of mind now and simplify the transfer of wealth after their passing.