When it comes to leaving an inheritance for your family members in California, you have three options: do nothing and hope everything works out, state your intentions in a will, or create a revocable living trust. If you do nothing, you still have an estate plan – the state of California will determine how your assets will be distributed under California probate law. These laws require your assets to be inventoried and appraised, all debtors to be paid, and any remaining assets distributed to your closest blood relatives through the court probate process, which is public.
A will allows you to determine who receives your assets, however in California, a will is also required to go through the probate process. For many Californians, a revocable living trust is the best option for leaving assets to beneficiaries. Trusts might seem complicated at first, but they ultimately make it easier and more efficient to protect your assets, state your wishes for how and when your beneficiaries should receive their inheritances, and provide privacy for your loved ones during a difficult time.
What are the benefits of creating a trust?
Forming a trust can give you more control over your assets even after you’re gone. Here’s why you should talk to your estate planning attorney about creating a trust:
- You can add a wide range of financial assets to a trust, including cash, jewelry, properties, bank and investment accounts, real property, and other assets.
- When you die, the beneficiary will receive the contents of the trust without having to navigate the probate process.
- You can include language in your trust that dispenses assets over a period of months or years instead of overwhelming your beneficiaries with one huge payout.
- Unlike regular assets, creditors can’t seize your beneficiary’s trust assets if they file for bankruptcy.
- If you have minor children, the trustee can look after their inheritance until an appropriate age of your choosing.
How do you form a trust?
If you’re interested in creating a trust, talk to a qualified attorney. A legal professional will help you determine which assets to include in the trust, choose appropriate people or institutions to serve as successor trustee, and what provisions may be required to address your unique family situation.