5 Ways Establishing a Trust Can Benefit You & Yours

4:10 pm California Trusts, Estate Planning

Trustpic 150x150 5 Ways Establishing a Trust Can Benefit You & Yours1.  Avoid estate taxes.  If you have significant assets or own property in a state that has an estate tax, an irrevocable trust can enable you to remove appreciating assets from your estate at a discount.  This means most of what you leave behind over and above the current $5.25 million exemption (which is indexed each year for inflation) can go to your heirs.

2.  Protect your privacy.  Generally, assets are distributed in two ways after you are gone – via a will or through a trust.  A will must pass through the probate process, and is made public record.  Trusts are private, so how much and to whom you bequeath your assets will remain private as well.

3.  Asset protection.  Trusts are especially effective at protecting assets against creditors, divorce or other unexpected life events that may plague your heirs.  You can add a spendthrift clause in a trust if you want to protect assets for future generations from being spent all at once, and you can also use a trust to protect assets for children from previous marriage or a special needs child.

4.  Provides control.  Trusts give you the power to control how your assets will be distributed, which can be especially useful if you are concerned about the money management abilities of your direct heirs.

5.  Avoid probate.  One of the main reasons to create a revocable trust is to avoid the delay and expense of probate, which can take anywhere from a year to several years depending on the size and complexity of your estate.  The cost of establishing a revocable trust is far less than the cost of probate in California.

Trusts are an essential part of a good estate plan; for more information on trusts, contact our Costa Mesa law firm.

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