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Will AND Trust

Clients always ask which is right for them, a will or a trust.  In California the answer is generally BOTH!

The centerpiece of an estate plan is one of three choices:

1) DO NOTHING – Use the state sponsored plan… if you dare!  The state plan generally distributes assets to next of kin and/or your spouse. This can lead to confusion as the treatment of community property and separate property are different.

2) A WILL – Using  a will as the centerpiece of an estate plan makes especially good sense for young couples with young children. It’s a way to establish a guardianship after death and establish a “testamentary trust” to protect assets for your children so they don’t get everything at age 18.

3) A TRUST – A California revocable “living” trust is the third option and is really appropriate for the majority of clients I meet with.  When the trust becomes the centerpiece there should ALSO BE A “pour over” will to act as back-stop.

The advantages of a living trust are many but here are just a few:

1) Avoid Probate – This is a costly beast after death and many like to avoid it.  The combination of attorney fees, executor fees, and Court costs can be up to 7% of your GROSS estate.

2) Keep your affairs PRIVATE – Probate is a very public process where documents are available for all to see. In fact, in some counties documents are accessible on-line for FREE to the general public. This includes the Sacramento probate Court where all documents, including your will after death, will be viewable by all!

3) Protect Your Assets BEFORE death – A trust is not just for after death. It can have someone appointed to protect your assets before death should you become incapacitated as well as to protect you from scam artists who prey on the elderly.

4) Make things EASIER for your loved ones – This is probably the #1 reason clients give me for doing a trust. They want to make things as easy as possible after death. A living trust is that hands down!

5) Speedy Distribution after death – Probate ties up your assets for a minimum of 7 months. A living trust makes money available immediately upon death.

There are many more reasons why a trust is advantageous over a will as the centerpiece of a California estate plan. However, there are other documents including powers of attorney, general transfer, certified extracts, deeds, and other documents that complete a proper estate plan. Don’t cut corner!  Do everything to protect your assets and make things easier for your loved ones!

Read more Estate Planning Articles here

-John

Ratings and Reviews

10.0John Bernard Palley
Wealth Counsel Member
2015 Best of the Best Badge