Estate planning can feel overwhelming, filled with complex legalities and emotional decisions. Kudos to you if you have taken the steps to create a will but you should realize its limitations. Trusts offer several advantages that can significantly benefit your loved ones during a difficult time.

We sell real estate and specialize in estate home sales. It is not uncommon that the home left behind by a loved one is one of, if not the, most valuable asset in the estate. So, we’d like to share several advantages to having a trust as a powerful tool in your estate plan.

Establishing a revocable trust, a “Living Trust,” makes you the trustee during your lifetime and the assets remain in your control. When you pass, the trust provisions define how the assets will be distributed. You will likely also create a “pour over will” to capture any assets that were not properly transferred into your trust before death.

1. Avoiding Probate: A Streamlined Process:

Probate, the state legal process of distributing estate assets after death, can be lengthy, expensive, and public. This process is required whether the deceased left behind a valid will or not. Alternatively, a trust transfers assets outside of probate, allowing assets to be transferred directly to the trust beneficiaries according to the terms of the trust. This means the estate will see:

  • Faster distribution: Trust beneficiaries receive their inheritance quicker, alleviating financial stress during an already challenging time.
  • Reduced costs: Avoiding probate fees and court costs saves money thus maximizing the value of the estate assets that will actually be left to your loved ones.
  • Privacy: Trusts are private documents, unlike wills which are filed with the courts and become public during probate proceedings.

2. Flexibility and Control:

Trusts offer greater flexibility in how you distribute your assets allowing you to define some allowed controls over the estate assets. You are able to:

  • Set conditions: Specify conditions for when and how beneficiaries receive their inheritance, ensuring responsible use of funds, especially for younger beneficiaries. A will does not allow such conditions.
  • Have continuous management: If you become incapacitated during your lifetime, a successor trustee that you have previously named can step in and manage the trust assets on your behalf.
  • Maintain control over assets: You are able to change the terms of your trust as your wishes evolve over time by amending or restating your trust. You can also name a corporate trustee to manage the trust during your lifetime, ensuring your assets are managed according to your desires with little effort by you.

3. Avoiding Challenges with Blended Families:

Yours, mine, and ours has become quite common in today’s families providing many opportunities for happiness. However, wills can encounter complications when dealing with blended families. Trusts allow you to:

  • Protect assets for specific beneficiaries: You can ensure assets are distributed as you intend, even if you have children from previous marriages.
  • Minimize potential conflicts: Clear instructions within the trust can prevent confusion and avoid potential disputes among beneficiaries.

4. Managing Assets for Special Needs Beneficiaries:

If you have a beneficiary with special needs, trusts can offer significant advantages:

  • Qualify for government benefits: Assets held in a properly structured trust can protect a beneficiary’s eligibility for government assistance programs.
  • Ensure responsible management: You can designate a trustee to manage the trust funds strategically, ensuring the beneficiary’s needs are met over their lifetime.

Remember: This is not offered to you as legal advice. Our goal is to suggest ideas that prompt you to consult with an experienced estate planning attorney to determine the best solution for your unique circumstances.

While wills serve a purpose, and are better than noting, it is important to explore whether of not a trust would better serve your purposes.

BONUS TIP: It is important to point out that selling a home in probate can be much more difficult and expensive as compared to a home held in trust (see #1 above). As noted, trust administration is a quicker process since permission to sell is not needed from a probate court. And it is less costly since there are no court required fees to a Probate Administrator or Probate Attorney. See (Cal. Probate Code § § 10810, 10811.) A trust document may provide for fees to the successor trustee(s) or the estate attorney but it is not mandated by a court.

Team Plunkett is a Certified Probate Specialist putting the “estate” in real estate. Contact us today for a free consultation to get started on a sale of real estate in, or out, of an estate.