Everyone has heard of a will or a trust and you have probably heard of estate litigation and problems with the distribution of assets after a person passes on, but you might not have considered drawing a will or setting up a trust for yourself. Even if you don’t have a ton of money, assets or property, having a will or a trust can help guide and direct your loved ones once you are no longer able. While you might not know where to start, it is important to know the basics before beginning. You probably are familiar with what a will is, but let’s look at the basics of a trust and why it is important for estate planning.
What is a Trust?
A trust is a fiduciary arrangement that allows a trustee to obtain and hold assets on behalf of the beneficiary. Basically a trust allows you to set up who should be legally in charge of holding all of your assets and distributing them accordingly. Generally a trustee is a bank or law firm specializing in estate litigation. A trust is different from a will in that a trust can be used to distribute assets before death, at death and after death. A will only goes into effect after death. A trust can be set up with two beneficiaries, the first to distribute assets while a person is still living and a second to receive the remainder upon their death.
Why Do You Need A Trust?
While it might seem easier to just obtain a will, a trust allows for a quicker distribution of assets. Trusts minimize the court’s ability to access and dictate where and when your property and assets are distributed. A trust and it’s terms can be kept private. Once a trust is is placed into probate it becomes public record. A probate is the legal process which determines validity and authenticity of a will or trust. Basically once the probate process is started, it becomes lengthy and costly and allows for the addition of estate taxes. Keeping your estate and assets out of probate is the easiest way to ensure a smooth and seamless process once you have passed.
How to Set Up a Trust
First off, you should obtain a lawyer. A lawyer can help you set up a trust while insuring all of the processes and procedures of a trust are handled appropriately. Setting up a trust ahead of time will also insure that your estate is handled smoothly without the court’s involvement and without probate. Your trust assets can be distributed by your trustee (usually an estate litigation law firm) quicker than if you had a will. In addition, lawyers can set the trust up as an irrevocable trust, meaning the trust assets cannot be included in your taxable estate—meaning fewer estate taxes due when you pass on.
Finding a Los Angeles law firm that specializes in trusts and estate litigation is the first step in setting up a trust. Once the setup is complete, your lawyer can assist throughout grout the process and act as your trustee when required to distribute your trust assets. Estate litigation can be overwhelming, and legal processes can layer stress on top of an already stressful situation for your family members and friends once you pass. Hiring a law firm in Los Angeles to manage your estate litigation is the best choice to wisely manage your assets.
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