When many people consider trusts, they may think this estate planning tool is only for the wealthy. However, middle-class Californians may also benefit from setting up a trust for their loved ones.
Although some people may want to leave their assets to their children, they may not always want their children to inherit everything at once. According to The Motley Fool, one of the benefits of a trust is that people can dictate when assets are distributed, regardless of how much money they have. If people have young children, a trust can help them ensure that children use their inheritances in a certain way. If a couple has set money aside for college, this money can be usually be given to the children when they reach this educational milestone.
Some people may also prefer to keep their affairs private. In this situation, a trust can be ideal. Trusts are typically exempt from the probate process, so they usually stay out of the public record. Additionally, skipping probate means that family members can receive the assets sooner. If some family members may be dependent on receiving certain assets, such as money or a home, then a trust may appeal to people.
A trust can be a good idea if a family owns a home in a different state. Forbes says that assets usually need to go through probate in the state where they are located. Even if a family does not consider themselves wealthy, a small cottage in the mountains or at the beach can sometimes make it more difficult to settle the estate if this home is not in California. In some situations, people may want to leave a certain portion of their estate to a favorite charity. Charities can typically receive the donation faster and with fewer complexities if the money is in a trust.