Who Needs a Will or a Trust?

Everyone needs either one or the other. These documents make sure that your property is passed to your spouse, children, or other loved ones in the way that you wish they were passed on. It also often cuts down on arguments because your loved ones know what your true wishes were with your property.

Estate planning with either a will or a trust will ensure that many of the digital documents that are precious to you and will be important for generations are also preserved. Wills and trusts can give guidance and instruction as to what happens to these very important "digital assets."

But which is best? Which is best for you, a will or a trust, is based on your situation. The answer can differ from state to state and based upon the age of the beneficiaries and the amounts and types of assets held in the estate.

Here in California, where I practice, typically we recommend that if you own your home or you have minors that need to receive life insurance that you have purchased should the worst happen, you should create a trust. Any estate with complexity above and beyond this threshold should also consider creating a trust. If you do not have a trust in the state of California, your assets may have to pass through probate. California probate is one of the most dreaded because it is often considered much more complex than in any other state.

Further, if your children are to receive proceeds from a life insurance policy and they are under age, your assets will be monitored by the court adding unnecessary expense to the administration of your estate. If you pass early, your children will undoubtedly need every penny to help support them.

Estate planning may be even more necessary to those estates that are of moderate means because a greater portion of the estate goes to administrative fees if not properly planned and it is often necessary to stretch the benefits that the estate left as much as possible.

Most clients who visit with me choose a trust rather than a will also because there is greater control over the assets that pass through a trust. For instance, if the trust will be for the benefit (again) of minor children, you can restrict the inheritance so they do not receive all of it at the age of eighteen, which is the age of majority here in California. This ensures that the children do not "blow their inheritance" as soon as they are "adults."

If you would like to discuss your options with your estate plan, please call (951) 516-2292.