A trust allows you to place your assets in the hands of other parties. You can still continue to use the assets and, after your death, the assets pass to the beneficiaries you’ve selected. While trusts aren’t legally required, they can be made to ensure that your assets and estate go to those you designate when you pass away. Not having a trust can result in challenging legal matters that your family and other loved ones will have to navigate through.
Our team of knowledgeable attorneys at Fishman, Larsen & Callister has worked with hundreds of clients who wanted to ensure that their assets went to the right people. Creating a trust can be a complex process that requires legal assistance, and we can help.
How a Trust Works
As part of an estate plan, you can create a trust to let another party manage your assets. A trust is a legal document detailing what happens to your estate, property, and assets when you die. The beneficiaries, or the people you choose to receive your assets, will inherit said assets after your death. The trust includes two main parties, including:
- Trustee: The person making the trust is considered the trustee. You have full control over the trust and the assets in question until your death. You can also name a “successor trustee” if you don’t want to distribute your assets after death. Instead, the successor will then begin managing the assets you left behind.
- Beneficiaries: Beneficiaries can include anyone you wish to give your assets to after your death. If you want to give certain assets to a loved one at a specific time, you can elect to do that in your trust.
By legally detailing how you want your assets distributed after your death, it can prevent legal matters from occurring over who is entitled to what.
Is a Will the Same as a Trust?
Those who have heard of a will may wonder if it is the same as a trust. These are two separate legal documents, and the will has different pros and cons than a trust does. For example, a will allows you to determine who the guardians of your children will be if you die. Any assets put into a trust are not subject to probate, which is a process where the court determines the validity of a will. This is usually lengthy and requires careful analysis, which is why many choose to create a trust instead.
The Steps in Creating a Trust
Creating a trust can be difficult, and some aspects of it require legal professionals to get involved. In a general sense, here are the steps involved in the trust creation process.
- Evaluate Your Assets: You’ll want to make sure that you’re accounting for all relevant assets before proceeding with a trust.
- Choose the Trustee: This is usually going to be yourself, but you can elect someone else to manage your assets for you, as well.
- Choose Your Beneficiaries: This can be loved ones, friends, or whoever you’d like. When you die, your assets go to your beneficiaries according to your instructions.
- Create the Trust: Once you’ve determined all the details, you can begin creating the official document, hopefully with the help of an attorney.
- Sign the Trust and Transfer the Assets: Once you’ve made every part of the trust clear, sign it to begin transferring assets.
You can also have your trust notarized, but it isn’t required in California. This can be difficult to do alone, but with the help of an experienced attorney, you can make the process simpler and more understandable.
FAQs
Q: How Much Does It Cost to Set Up a Trust in California?
A: In most cases, you’ll spend at least $2,000 to create a trust. This amount can increase if you also choose to hire legal assistance, although doing so can save your heirs money by allowing your estate to bypass probate. While these are most often more expensive than crafting a will, a trust allows you to better protect and distribute your assets after your death.
Q: What Is Required for a Trust in California?
A: You only need to assign a trustee and beneficiaries, then sign the legal document detailing how your assets will be distributed. You don’t have to notarize the document in California, nor does it need to be witnessed. You’ll also need to pay all the necessary legal fees to make the trust valid and secure.
Q: What Are the Disadvantages of a Trust in California?
A: Trusts are more expensive to create than a will, despite a trust being a stronger document overall. Also, trusts take a lengthy amount of time to compose, as a lot more is involved in this type of document versus a will. Additionally, you must retitle your assets in a trust, which can be a time-consuming and complex process.
Q: What Assets Should Not Be in a Trust?
A: There are a few assets you may want to avoid placing into your trust, the main one being any retirement accounts you have. These accounts trigger income taxes during the year the transfer of assets takes place, which is why you should avoid placing them into a trust. Life insurance policies, motor vehicles, and medical savings accounts are some other assets to avoid placing into a trust.
We Can Help You Create a Trust
Creating a trust doesn’t have to be as difficult and lengthy as it can sometimes be. There are a lot of legal issues you need to deal with when trying to create and validate a trust, and you may gloss over specific details on your own. When creating a trust in California, have our team at Fishman, Larsen & Callister help.
We can ensure that your assets are going where they need to, and we can uphold the document after you pass away to ensure that your assets are properly distributed. If any step of the trust creation process seems complicated, or if you have concerns about anything regarding it, we can use our knowledge and experience to streamline the process.
Contact us today with any questions you have.