One of the primary reasons why most people create an estate plan is to ensure that their estate assets are distributed according to their wishes after they are gone. To achieve that goal, most people initially choose to use a Last Will and Testament. While a Will certainly does allow you to decide how your estate assets are distributed after your death, a Will is a rudimentary estate planning tool that has limited functionality. Consequently, you may wish to consider using a trust as your primary tool to distribute your estate assets. The Los Angles living trust lawyers at Collins Law Firm offer five reasons why using a living trust to distribute your estate may be desirable.
- Trust assets bypass probate. Probate is the legal process that is required following the death of an individual. Probate serves several functions, including the identification, valuation, and eventual distribution of estate assets, notification and payment to creditors of the estate, and payment of any taxes due from the estate. Probating even a relatively small and uncomplicated estate typically takes months. For a larger estate with complex assets, probate can be costly, both in terms of time and money. Moreover, all assets that are required to go through probate are inaccessible to the intended beneficiaries until the end of the probate process. For all these reasons, probate avoidance is a common estate planning goal, and a living trust is a common tool used to reach that goal. Assets held in a trust are considered “non-probate” assets and bypass the probate process altogether, meaning they can be distributed at any time according to the terms of the trust.
- A trust is private. There are many reasons why you may prefer the details regarding the distribution of your estate remain private. Unfortunately, your Will becomes public information the minute it is submitted to the court for probate. A living trust, on the other hand, remains private because it is never submitted for probate.
- A trust allows you to control and/or stagger the distribution of an inheritance. Once a gift is made from your Will, the beneficiary of that gift may do with the gift as he/she wishes. In addition, gifts made using your Will cannot be made in small distributions. If the intended beneficiary is young, known to be a spendthrift, has an addiction problem, or the inheritance it just too large to hand someone all at once, a living trust offers an excellent alternative to a Will. The terms of a trust, created by you, can distribute assets in small sums instead of one large lump sum. Those terms can also be used to dictate what the funds can be used for by the beneficiary along with providing continued oversight and control over the assets long after you are gone.
- A trust can also be used to protect the inheritance of a minor child. If you are the parent of a minor child, you undoubtedly want your assets to be used to provide for your child if something happens to you. Your minor child, however, cannot legally inherit directly from your estate. A living trust can be used to protect your child’s inheritance until such time as your child is old enough to begin receiving that inheritance directly.
- Unlike a Will, a trust also covers incapacity. Death is not the only concern when creating an estate plan. The possibility of incapacity also looms – and not only when you reach retirement age. A tragic accident or debilitating illness could result in your incapacity at any time. A Will, however, cannot help you plan for incapacity because the terms of a Will only apply after the death of the Testator. A living trust, on the other hand, can be used very effectively as an incapacity planning tool by allowing you to appoint yourself as the Trustee and someone you wish to take over control of your assets as your Successor Trustee.
Contact a Los Angeles Living Trust Lawyer
If you need more information about using a living trust to distribute your estate, consult with an experienced Los Angeles living trust lawyer. Contact Collins Law Firm by calling (310) 677-9787 to register for one of our FREE estate planning workshops.