As California residents address their estate planning options, the question of whether or not a trust is beneficial is common. The concept may seem extreme or inappropriate to those who don’t have a high net worth, but trusts may be equally beneficial to someone whose net worth is a minimum of $100,000 if certain additional conditions are true.

Real estate, businesses, and art collections may be best handled through trusts. A trust can also be beneficial for managing the manner in which payments are made after one’s death. For example, a trust might be structured to support a surviving spouse while leaving the majority of one’s estate to heirs after that individual dies. A trust might be structured to allow partial payments to heirs at various points in life such as reaching an age of majority or completing a college education. A trust is an excellent option for someone who wants to be able to support a surviving loved one who is disabled so that there isn’t an impact on that person’s eligibility for government assistance.

Tax implications associated with an inheritance can be significant, making a trust an option for limiting the tax consequences after an individual dies. Trusts can also minimize the cost and time that would otherwise be spent to deal with probate. Assets tend to be less vulnerable to creditors when included in a trust as well. It is important to note that in order to protect assets, they must be titled in the name of a trust.

Those who are unsure of whether trusts are appropriate may want to begin by formulating goals for the management and distribution of their estate upon their death. An estate planning attorney can be helpful in providing direction for the most appropriate options based on these goals.

Source: CNN Money, “Estate planning: Is a trust beneficial?“, December 02, 2014