Benefits of a Living Trust
Some of the benefits of living trusts are:
- Properly funded trusts will avoid the cost associated with probate. The legal fees associated with probate are provided for by California law and are based on the size of the estate. A relatively small estate with a gross value of $200,000, for example, will typically cost approximately $8500 to administer.
- Trust assets can typically be distributed much more quickly than assets passing through probate. In general, the assets of a living trust can be distributed within six to eight months of the settlor’s date of death, whereas a typical simple probate administration will take around a year to complete.
- Trusts can be drafted to minimize or eliminate possible estate tax.
- Trusts can be used to transfer control over one’s assets if the settlor becomes unable to manage his or her own finances. This is a potentially useful tool that avoids the need for a court-supervised conservatorship.
Trusts, while potentially excellent estate planning tools, are not without their disadvantages, however. The initial cost of creating a trust is typically much higher than the cost of creating a Will, trusts tend to be difficult to fully understand, and trust administration is not court-supervised.
Whether a living trust is appropriate for a given situation is a question that should be discussed with a qualified estate planning attorney.