How Does a Trust Work for Estate Planning?

December 20, 2019

Estate planning may sound like the sort of thing only super-wealthy people need to worry about. However, anyone who expects to leave any financial assets to their heirs when they die needs to seriously consider this. Many LA families could benefit from contacting a Los Angeles accounting firm for help. Read on to learn about trusts, one of the key tools for effective estate planning.

What Is a Trust?

A trust is a fiduciary agreement that lets a third-party hold your assets on behalf of a beneficiary. There are many types of trusts, but they all can simplify the process of transferring assets to another person at a later time. There are some significant advantages of setting up a trust for both you and your heirs.

What Are The Benefits of a Trust?

If, for example, you have your Encino accountant help you set up a trust for your estate, you could achieve some significant benefits. Trusts avoid probate, the legal process of proving and distributing a will, which means they are helpful tools for estate planning.

• Save Time: One of the most significant benefits of a trust is that your heirs can receive assets promptly. They don’t need to wait for probate to finish before benefitting from your estate.
• Control Your Money: There are many types of trusts and you can specify the terms of them. This gives you a lot of control over who gets what, when they get it and if there are any stipulations.
• Keep Things Private: Unlike probate, trusts are private. So, you can transfer assets without needing a public record. Many people prefer this level of privacy.
• Save Money: In many cases, people save by using trusts. There is less of the estate lost to court fees and taxes compared to a probate transfer.

Get Started on Your Estate

If you are ready to work on your estate or to set up a trust, find an accountant service Los Angeles residents can rely on. You’ll be glad you took the time to understand your estate.