Some of the benefits of living trusts are:
- Properly funded trusts will avoid the cost associated with probate . The legal fees associated with probate are provided for by California law and are based on the size of the estate. A relatively small estate with a gross value of $200,000, for example, will typically cost approximately $8500 to administer.
- Trust assets can typically be distributed much more quickly than assets passing through probate. In general, the assets of a living trust can be distributed within 6 – 8 months of the settlor’s date of death, whereas a typical simple probate administration will take around a year to complete.
- Trusts can be drafted to minimize or eliminate possible estate tax.
- Trusts can be used to transfer control over one’s assets if the settlor becomes unable to manage his or her own finances. This is a potentially useful tool that avoids the need for a court- supervised conservatorship.
Trusts, while potentially excellent estate planning tools, are not without their disadvantages, however. The initial cost of creating a trust is typically much higher than the cost of creating a Will, trusts tend to be difficult to fully understand, and trust administration is not court-supervised. Whether a living trust is appropriate for a given situation is a question that should be discussed with a qualified estate planning attorney.