Considering the work that goes into building your California estate, you understandably want it protected. A great way to achieve this critical goal is with estate planning. For many, setting up a trust is a vital part of the estate planning process. However, establishing a trust can feel confusing.
The purpose of a trust is to provide asset protection. Therefore, you’ll need assets to place in your trust. What people place in trusts varies but typically includes cash, stocks, business interests, homes and other types of investments. Some individuals place all assets into one trust or split it among various types of trusts.
The next step for proper estate planning through trusts is choosing beneficiaries. Some prefer to designate family members, including spouses, children, siblings or parents as a trust’s beneficiaries. People aren’t the only parties qualifying as beneficiaries. Certain individuals leave the assets in a trust to a company or charitable organization.
Selecting a trustee
You’ll also need a trustee to manage your trust after you pass away or become incapacitated. Typically, people name a reliable person they know as a trust’s trustee. If that’s not an option, you can hire a professional trustee or have your financial institution manage your trust.
There’s no rule stating that a trustee has to be one person or a close relative. If you have no family or strained familial relationships, a professional trustee can manage your trust. One advantage to this option is that a professional has no emotional ties to family members or beneficiaries and can’t be pressured into making decisions contrary to your intentions.
Setting up a trust takes time and the ability to make sometimes difficult decisions. However, a trust is a reliable way to ensure that your loved ones are provided for after you die.