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How can a living trust protect you and your estate?

On Behalf of | Nov 23, 2023 | Estate Planning, Probate

A living trust is a legal financial planning tool you can use to merge your property and assets into a single sheltered entity. Although several types of trusts exist, a living trust can allow you to maintain control over your trust assets while you are alive. At the same time, you can determine the management and distribution of your trust assets after death. As the creator or grantor of the trust, you name yourself as the trustee and designate a successor trustee.

The beneficiaries you include in your trust document will receive the trust assets when you die, according to your terms and conditions. A living trust helps your beneficiaries bypass the probate process in California and keep your estate affairs private. You can also structure your trust to protect your loved ones from creditors.

Establishing a living trust

The first significant step when creating a trust is to inventory all your assets and choose which you want to put in the trust. Funding a trust involves transferring assets and ownership documents into the trust. The titles of the property you wish to move to the trust must reflect that you own the property as the trustee. After deciding what properties to include, you must decide who to name as the beneficiaries.

Setting up a trust allows you to be very specific about when and how your beneficiaries will receive the assets. Your successor trustee should be someone you trust will oversee the distribution process precisely as you intended with the utmost loyalty and honesty. A trust is particularly important when you have children with special needs or want to monitor your beneficiaries’ spending habits.

Living trusts are complex

A living trust is a means of passing wealth from one generation to the next while preserving the grantor’s ownership and best interests. While most people could benefit from a trust, it could be exceptionally valuable in California, where probate is time-consuming and expensive. A living trust is more challenging to create than a simple will. It would be best to get the guidance of an estate planning professional.