When you put together a California estate plan, you may create a will that allows you to stipulate who you want to take ownership of certain assets after your death. While a will plays an important role in any estate plan, there are certain things a will does not do that you may be able to do using other estate planning tools or documents.
For example, Kiplinger notes that many people choose to establish trusts when creating their estate plans. A trust is a type of fiduciary arrangement that sees you appoint someone trustee over the assets you place inside the trust. It then becomes this party’s job to oversee distributions from the trust once you die. What are some of the things you might do through a trust that a will does not enable you to do?
Keep heirs from blowing their inheritance
You maintain a lot of control when you create trust in terms of when your beneficiaries may access what you leave them. To prevent one or more beneficiaries from wasting their inheritances, you may wish to leave those beneficiaries assets in a trust they may only access under certain conditions, such as when they reach a certain age.
Protect trust assets from creditors
If one or more of your beneficiaries has outstanding debts and you leave that person assets in your will, his or her creditors may be able to take ownership of those assets, rather than your beneficiary. When you enter those assets into a trust, though, you protect them against creditors.
Many people also create trusts to protect public beneficiaries’ public benefits eligibility or avoid probate, among other common reasons.