When you think about the future, you naturally consider how to protect your assets and provide for your loved ones after you’re gone. Estate planning comprises all decisions and actions you take to make sure your property is well-managed, preserved and eventually transferred to beneficiaries.  One powerful and versatile tool you may consider using is a family trust. 

A family trust is a legal entity you create to hold your assets, such as real property, investments and cash, for the benefit of your designated family members. You, as the grantor, transfer ownership of your assets to the trust, which is then managed by a person or institution you appoint, known as the trustee. You may name yourself as the trustee and name a successor who will take over upon your death. The trustee's responsibility is to manage the assets and distribute them to beneficiaries according to the specific instructions laid out in the trust document.

The primary function of a family trust is to provide a private way to pass on your wealth without legal proceedings. Unlike a will, which must go through the public, time-consuming and often costly process of probate, a trust allows for direct and immediate transfer of assets without public scrutiny. This generally eliminates the possibility of other parties challenging how your estate is handled. 

Beyond avoiding probate, a family trust offers several other key benefits. If the trust is made revocable, you have full control over the trust assets during your lifetime, allowing you to add, sell or remove assets from the trust. You can set specific conditions for how and when your beneficiaries receive their inheritance. For instance, you could stipulate that funds are to be used for educational expenses, a down payment on a home, or distributed in installments once a child reaches a certain age. This ensures your assets are used wisely and in line with your wishes. If the trust is made irrevocable, it can offer protection for your assets from creditors and may help reduce estate taxes, preserving more of your wealth for your family.

Family trust creation is not a do-it-yourself project. The type of trust you establish will depend on your unique situation and long-term goals. An experienced estate planning lawyer can help you understand the trusts options, weigh the pros and cons of each and draft a legal document that accurately reflects your wishes and complies with all applicable laws. An attorney can advise you on properly funding your trust and structuring it to provide the maximum benefit and protection for your family.

Favaro, Lavezzo, Gill, Caretti & Heppell, PC helps clients in Solano, Contra Costa and Napa counties establish reliable and effective estate plans. Call us at 707-674-6057 or contact us online to schedule a consultation.