When you start planning your estate in California, you could create a trust along with your will. You don’t necessarily have to create a trust, but it could make it easier for you to dispense certain assets. Trusts could also reduce the length of time that your estate remains in probate.
What’s the difference between a trust and a will?
Writing a will is the most important part of the estate planning process. The will divides up your assets, chooses a guardian for your children, names an executor for your will and much more. You could also use your will to make funeral arrangements and spell out how you want to pay your estate taxes. Essentially, no estate plan can exist without a will.
A trust also distributes your assets, but it doesn’t simply name your beneficiaries. Instead, a trust holds your assets and transfers them directly to your beneficiaries after your death. You don’t have to make a trust, but your estate planning lawyer might recommend it to make the process easier on your loved ones. You can place assets in the trust, name your beneficiaries and choose someone to manage the trust on their behalf. If you don’t want to leave your beneficiaries a massive windfall, you could instruct the trustee to distribute the assets over the course of several years.
Should you make a trust?
A trust has a lot of advantages, but it can also be harder to maintain than a will. An attorney could tell you if making a trust is right for your estate. If you decide to make a trust, you can fund it with cash, investments, properties and other assets that have value. You could also write a will and leave trusts out of it completely. This could be better for small estates, but it might also lengthen the probate process.