On the surface, a last will and testament and a trust are both estate planning documents that are used to bequeath assets to designated beneficiaries after a person has passed on. In the state of California, there are distinct advantages, however, to using a trust instead of the more traditional last will and testament.
Benefits of a Trust Over a Will
Trusts Can Avoid Probate
When a trust is in place, assets that are owned in the name of the trust can be immediately passed on. Probate is the process of changing the name on a deed or title from the name of the deceased to that of the new owner. In order to make this happen, the family of the deceased must file an appeal with the California courts and wait for the court to approve the will.
While the family is waiting on this legal process nothing can be done with any of the assets, including any bills that need to be paid with money that was listed in the last will and testament.
Trusts Can Provide Credit Protection
Sadly, it is not at all uncommon for the inheritance left by parents for their children to be pecked at by credit card companies, bankruptcy courts, or even an old lawsuit. A trust can prevent this from happening because the money is not in the name of the deceased, but rather under the name and protection of the trust.
Ownership of the assets will remain in trust while still allowing the beneficiary access to their inheritance in accordance with the wishes of the deceased. Leaving your assets to your family this way ensures that what you have worked for your entire life is dispersed in the way that you wish.
Trusts Can Protect Governmental Benefits For A Person with Disabilities
If you leave assets through a last will and testament to a family member who receives any type of income-based government benefits, your gift could potentially cause your loved one to lose those benefits based on the sudden influx of money.
Unless the amount you are leaving is so substantial that the person will no longer have any use for those benefits, putting them into a trust will ensure that they get all of their inheritance and are able to keep the benefits that they need.
Trusts can Administer Assets for Minor Beneficiaries without Court Intervention
Trying to leave money to a minor can create a legal bottleneck. According to the law, minors cannot legally receive assets. If you leave money to a minor via a will, the court will have to appoint a Conservator to be in charge of the money.
The Conservator must then report to the courts annually and deal with an overseer in order to make sure that the money is not being misused in any way. This often means substantial costs and long delays when it comes to getting anything done. Creating a trust ensures that the courts will not be involved in the matter.
California Probate and Estate Planning Attorney
The differences between a last will and benefit and a trust are numerous. These are just some of the major differences that affect the majority of the people trying to decide between the two for the purposes of estate planning.
A qualified Los Angeles will and testament attorney can you help make an informed decision when it comes to the best thing to do with your assets so that your loved ones will receive them as intended. For a free consultation regarding your estate planning, contact the Levia Law Firm by calling us at (818) 703-1777 today.