If you were to survey California residents about their end-of-life plans, most would probably admit they’re unprepared. And if asked if they know what they should be doing to prepare, chances are good that many would respond with a blank stare and perhaps some mumbling about a will. Of course, there are many Californians who have been proactive about estate planning. But if you’re not among them, you may be wondering what the best options are for you.
Many people assume they don’t have enough income or assets to warrant a full-fledged estate plan, but this is rarely true. It simply means you have different considerations than someone who is wealthy. One good place to start is with a revocable living trust, which is a fairly standard estate planning tool for people of moderate income. Whereas a will addresses what happens to your assets when you die, a living trust offers more flexibility and control over your estate.
For example, a trust enables you to plan for the event that you’re injured or become ill to the point of incapacitation. You can name a trusted friend or family member to handle your estate while you’re still living; by communicating your wishes beforehand for those circumstances, you can ensure that they’re carried out.
If you have minor or young-adult children, a living trust gives you more control over how your assets are distributed to them. You can set provisions for the assets and/or name a trustee to manage them. This is especially helpful if you’re not confident your children are able to manage their inheritance responsibly on their own.
A major reason many Californians opt for a living trust is to avoid probate, a court process to distribute your assets that can take months or even years. Whereas probate proceedings are public and allow anyone to learn the details of your estate, a living trust is private. Only your trustee, your beneficiaries and other heirs are able to see your trust.
There are lots of other reasons to consider a trust, but because everyone’s situation and needs are different, the best way to ensure you’re adequately prepared is to consult an experienced estate planning attorney.
Source: The Sacramento Bee, “Do I need a revocable trust?” Claudia Buck, Nov. 5, 2012