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What are some reasons for setting up a trust?

When a will does the job, why would you go the extra mile and set up a trust in California? The quick answer is that a will doesn't always do the job, and there are some benefits of setting up trusts that can be important depending on your situation.

One of the most popular trust benefits touted by individuals is that a trust can help you or your heirs reduce tax burdens. While this is true, the benefits are limited to certain types of trusts and certain situations. If you are using trusts to seek tax shelters, it's important to consult with a legal professional to keep everyone above board and ensure you get the best possible benefit in this regard.

Another benefit of a trust is that it helps you avoid the probate process. There are two reasons you might want to do so. First, some types of trusts don't have to be entered into probate, which means that you avoid the public record. This can be important if you want to keep family estate matters private. Second, the probate process can be long, reducing the chance for family members to seek closure and move on after a death. Trusts can help avoid that issue.

Finally, a trust lets you exert a bit more lasting control over your assets than a will might. You can set up a trust with specific goals and instructions. You might set up a trust to pay for an heir's college education, for example, or create a trust to ensure the care of your minor children. These trusts make it more difficult for others to abuse your assets or use them for purposes you didn't intend.

Source: Dummies.com, "Benefits of Setting Up a Trust," N. Brian Caverly and Jordan S. Simon, accessed March 18, 2016

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