As you begin the estate planning process for the first time, or if you’ve reached a juncture at which you desire to make changes to your estate plan, you may be wondering what benefits might exist to establishing a trust. There are indeed some primary benefits to establishing a trust that might be helpful to you as you formulate a new estate plan or revise an existing one.
You Can Create a Trust Just About Any Time
If you’re like many people, you understandably think that a trust is a “thing for rich people.” Yes, people who have accumulated a good amount in the way of assets are regularly on the lookout for ways to protect that property and lower their tax burden. This includes focusing on such issues when it comes to their estate planning.
However, as you begin to accumulate assets in your adult life, you are wise to take steps to optimize their value, including when you die. Moreover, even if you aren’t “swimming in gold” today, you can create a trust now as part of your overall estate planning strategies. As time goes by, you can add property to the trust you create. You can also establish a trust in such a way that additional beneficiaries legally can be added over time. For example, if you have one child today, you can add future children as beneficiaries of a trust as they come into being.
Avoid the Probate Process After Death
A second significant benefit associated with the establishment of a trust is the ability to avoid the probate process after you die. The probate process can prove to be time-consuming and expensive in California and across the United States. If a formal probate process becomes necessary because you didn’t take steps before your death like create a trust, your estate very well may end up paying what ultimately amounts to a considerable amount of money in attorney fees.
There are instances in which the probate process moves along a decent pace. However, probate courts are filled with examples of cases that are dragging on to a conclusion. A trust is a vehicle to deal with your assets after death and allows you the ability to avoid getting stuck in the morass of a probate case that drags on and on.
Avoid Paying Estate Taxes
There is a worn-out cliché that only death and taxes are unavoidable. The fact is that you can at least avoid estate taxes through proper planning which can include the creation of a trust. Another benefit of creating a trust is that it allows the legal avoidance of estate taxes after you die. Establishing a trust is very useful when it comes to avoiding taxes when an estate is particularly large.
If you are like a considerable segment of the population, you are more concerned about protecting your privacy – and the privacy of your loved ones – not that you may have been previously. Yet another of the primary benefits associated with establishing a trust is that you are able to maintain a level of privacy that is not available is your assets are distributed to others after your death through the probate process. This is true whether you have a will or don’t have one.
The formal probate process is a matter of public record. With very few exceptions, items presented to a probate court are matters of public record. This includes the inventory of an estate, which is a comprehensive enumeration of your assets that becomes part of the probate court public record.
Don’t Go It Alone – Get Legal Representation
Some people take advantage of will forms or templates that are available online. In some cases, when a person needs only a simple will, such a strategy can work decently. However, there are a myriad of cases in which people used a simple standard form will which ultimately proves to be invalid.
A trust instrument (technically called a trust agreement or declaration of trust) is a far, far more complicated legal matter. If one part of a trust agreement is inappropriately prepared, the entire trust could be deemed to be invalid. For this reason, if you are serious about establishing a trust, you need to consult with a skilled, experienced estate planning attorney or trust lawyer. A legal professional with this experience and background has the ability to draft an effective trust agreement for you that will accomplish your objectives.
The first step in the process is scheduling an initial consultation with a qualified attorney. During the session, an overall estate planning strategy can be mapped out with you. As a matter of general practice in California and elsewhere in the United States there is no charge for an initial consultation with an estate planning lawyer or trust attorney.