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Why should you have a living trust in California?

On Behalf of | May 20, 2024 | Living Trusts & Estate Planning

Many adults in California worry about the kind of legacy they’ll leave when they die. As people get closer to retirement age, they may worry about their comfort and financial stability later in life. Many people don’t know how to protect themselves from the challenges of living on a fixed income or the best way to optimize the inheritance they intend to provide for loved ones.

People might overlook living trusts and choose a simpler estate planning tactic, such as using a will to identify their beneficiaries. Living wills intimidate many people, but they can be incredibly useful estate planning tools. They take effect during someone’s life and continue to manage their resources after their death.

What benefits can California adults derive from adding a living trust to their estate plan?

Living trusts bypass probate

One of the biggest advantages of establishing a living trust is to keep certain resources out of probate court. An individual’s property becomes the property of their estate when they die. Those resources are subject to creditor claims, and their distribution can be slow due to the length of probate proceedings.

Assets that do not become part of someone’s estate are at less risk than the resources that pass through probate court. Transferring certain assets to a trust can significantly reduce what fees the courts impose for probate proceedings. Those assets are eligible for transfer to or use by beneficiaries at any time that conforms with trust instructions. There is no need to wait for the probate courts as there is with a traditional inheritance.

A living trust can protect someone’s legacy from collection activity. It can help reduce estate tax concerns and can give someone more control over the use of their property after they die. They can limit how or when beneficiaries use trust assets, and the trustee they name helps enforce those rules. Living trusts help preserve people’s privacy by keeping the full extent of their personal holdings and their trust instructions confidential.

Living trusts offer a variety of benefits for people in numerous different personal circumstances. Choosing the right tools for an estate plan can make a major difference for those preparing for retirement or thinking about their long-term legacies.