Residents of all ages in California can benefit from an estate plan, but the process may be more complicated than you realize. There are many choices and different routes you can take to protect your estate and make sure it gets to the appropriate heirs at the desired time. One of the options you have it to choose a living trust, and there are several benefits for doing so.
According to Investopedia, a living trust is a fiduciary relationship created when you are still alive where a trustee is designated and given responsibility for handling your assets to benefit the eventual beneficiary. There are two types of living trusts: revocable and irrevocable. Revocable trusts allow you to make changes when necessary, while an irrevocable trust requires that you relinquish many of your rights over the trust.
A living trust can help you to reduce estate taxes and protect minor children. If something happens to you before your children are to manage their own money or assets, the trust is controlled by someone you trust until the designated age you set. Many people set up a living trust to be dispersed in chunks throughout the life of the beneficiary rather than giving them a large chunk immediately.
Parents rarely have control over the choices of their adult children, and a living trust allows you to protect them from themselves. Those beneficiaries who have problems with drugs, alcohol, gambling or any other addictive, expensive behavior are likely to blow through the money quickly. If the money is controlled by someone with their best interests in mind, they will receive the money when they need it but not when they can waste it.
This information is intended for educational purposes and should not be interpreted as legal advice.