Establishing an estate plan is a good way to be proactive for your California beneficiaries and their future. A trust is one of the most important legal tools you can use. These are some of the major benefits of such a document.
Avoiding probate
Although having a valid last will and testament as part of your estate plan can help the probate process move faster, it doesn’t prevent it. By contrast, if you have a trust and hold assets within it, those assets can bypass probate, which gives your beneficiaries the chance to receive them faster.
Tax benefits
Assets held in a trust can provide tax benefits. If you establish a revocable trust, you can make changes and potentially reap tax advantages depending on its terms. With an irrevocable trust, you can’t make any changes after signing the agreement, but once you fund it with assets and property, those items are able to bypass estate taxes.
They can help if you’re incapacitated
If you ever become incapacitated, a revocable trust can help you and your family by holding your assets. The trustee overseeing things can then pay your bills, file taxes on your behalf and manage your assets in other ways. Choosing someone you completely trust to fill this role ahead of time can protect you.
Protect assets from creditors
If you’re in debt and creditors look for ways to collect it from your estate, any assets held in trusts are protected. Creditors cannot seize anything funding an irrevocable trust because property within that type of trust is no longer considered yours. This allows those assets to eventually transfer to your heirs instead.