A common part of estate planning in California involves people placing some or all of their assets into a trust. Though many people know of this option, there are many misconceptions around it that can sometimes lead people to make a choice that is less beneficial to themselves and their heirs. Fortunately, experts have answers for those who have questions about trusts and what they can and cannot do as part of an estate plan.
First, many people assume that if their assets are in a trust that their estate will not have to go through probate. The truth is that the assets not in the trust will still be subject to the probate process. While assets in a trust are not subject to probate, it doesn’t mean that putting all of one’s assets into a trust is the right choice for that person. Many people find that a combination approach, with appropriate assets in a trust and others simply following certain specified ownership rules, is the best way to handle their estate.
Another misconception is that assets in a trust are safe from creditors. Experts say that since the creditors of an heir cannot automatically attach a trust’s assets this may have led to that false belief. However, the creditors of the person who originated the trust may still be able to attach to it, meaning the assets in the trust may have to satisfy certain debts before the remainder is distributed to heirs.
Even with these warnings, a trust may still be the right choice for certain people in certain circumstances. Those who want to know more about how trusts may work for them and their heirs here in California may want to consult an estate planning attorney. It could be the best choice they ever make for the futures of those that they care about.