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Why a trust may be a better choice than a will

On Behalf of | Apr 22, 2019 | Estate Planning |

Some California parents may assume that a will is sufficient for passing assets to their children, but there may be some good reasons to consider a trust. A trust is a very different instrument. While a will only takes effect on a person’s death, a person may set up and control a revocable trust while still alive. An irrevocable trust is also a possibility although it offers its creator, or grantor, less control.

Many people prefer the privacy of a trust. A will has to pass through probate and is a public document as a result. Assets cannot be distributed until the probate process is over. With a trust, people can get assets immediately. However, one of the reasons parents may want to set up a trust is so they can control when beneficiaries receive assets. They may have an adult child who is still too young to receive a large lump sum and manage it responsibly. With a trust, distribution can be delayed, or it can be done in small amounts.

Trusts can also help loved ones who have special needs and who are receiving government benefits. Since an inheritance can cause the person to become ineligible for receiving benefits, a special needs trust can be set up. This makes the inheritance the property of the trust. Trusts may also pay for nursing homes and other care.

One issue with people who attempt to do an estate plan on their own is that they may not realize what options and solutions are available to them. In addition to trusts, powers of attorney may be an important element of an estate plan. These appoint people to take care of health care and financial issues if the person is incapacitated. Without them, the family might have to go to court to have someone appointed for these roles.