925.244.1185
San Ramon, CA

Horizon Elder Law & Estate Planning Blog

Wednesday, March 16, 2022

Debunking 4 Myths About California Trusts

There is so much misinformation going around about trusts and other estate planning topics that we thought we would clear up a few things. You do not want to rely on what your friend’s uncle’s brother’s neighbor’s coworker’s golf buddy supposedly said about California trusts.

A California trusts attorney can talk to you about the best type of trust for your situation. There are so many different kinds of trusts available that you will want to explore the benefits that meet your needs and goals. Here is some information on debunking four myths about California trusts

MYTH: Only Rich People Need to Set Up Living Trusts

There are many reasons to set up a living trust, and few of them have anything to do with being wealthy. Here are a few examples of situations in which it could be beneficial to have a living trust:

  • You want to provide for a loved one with special needs, but you do not want to make that person ineligible for government benefits. If you leave money for your disabled grandchild in your will, for example, the child might fail the asset limit requirement and lose eligibility for Medicaid, the healthcare services that come with Medicaid, and other public assistance. Setting up a special needs trust properly can prevent this unwanted outcome.

  • Your spouse needs to go into a long-term care facility. Paying for a nursing home would use up all of your life savings. You would be living in the family home but be destitute. A Medicaid trust can help your spouse become eligible for Medicaid to pay the long-term care expenses and leave you with enough money to live in the community.

  • You want to provide for a loved one who has challenges with money management, mental health, addiction, or other issues. A spendthrift trust can protect your loved one from being taken advantage of by others or making unwise expenditures that quickly deplete the assets you worked so hard to provide.

  • You want to protect yourself in the event that you become disabled to the point of incapacity by creating a trust that provides for you during your lifetime when certain contingencies get met. You could be the initial trustee and maintain control over your assets and expenses until you no longer want to or can do so. The person you chose as your successor trustee would then step in and manage things for you according to the instructions that you created in your trust.

  • You do not want to see your assets get taken by divorce, creditors, or someone who sues you after a car accident. The right kind of trust can shield your assets.

These are but a few examples of reasons that people who are not necessarily rich choose to set up a living trust.

MYTH: Living Trusts Cost a Fortune

While the typical living trust tends to cost a little more than a simple will, you can get a living trust at a reasonable price from a knowledgeable attorney. Most of us do not need a 100-page document for our living trust. You will want to discuss prices with your estate planning attorney upfront.

MYTH: Your Living Trust Does Not Benefit Anyone Until After You Die

As we already discussed, a living trust can provide extraordinary benefits for you during your lifetime. Another useful function of living trusts is to allow you to take an extended break from your work. Let’s say that you decide to serve for a year with a charitable organization in a remote location. You own a business that you do not want to collapse during that time. You could set up a living trust that will instruct the trustee on how to run the business in your absence and give the individual the legal authority to do so, along with powers of attorney.

MYTH: Once You Have Your Estate Plan, You Can Set It and Forget It

Sticking estate planning documents in a drawer and not looking at them again for years is a common mistake. Sadly, this practice could result in your estate assets getting distributed in a way you did not intend. For example, if some of the beneficiaries of your living trust predecease you and you did not update the trust to add other beneficiaries, the ones who survive you might receive a disproportionate amount of your bounty than you wanted.

When you sit down and talk to a California estate planning attorney, you’ll be pleasantly surprised at how easy it is to set up a living trust and estate plan that benefits you and your loved ones. Contact our office today, we offer a free consultation.


Archived Posts

2022
2021
December
November
October
September
August
July
June
May
April
March
February
January
2020
December
November
October
September
August
July
June
May
April
March
February
January
2019
December
November
October
September
August
July
June
May
April
March
February
January
2018
December
November
October
September
August
July
June
May
April
March
February
January
2017
December
November
October
September
August
July
June
May
April
March
February
January
2016
2015



© 2022 Horizon Elder Law & Estate Planning, Inc. | Disclaimer
2333 San Ramon Valley Blvd., Ste. 145, San Ramon, CA 94583
| Phone: (925) 244-1185

Elder Law | Estate Planning | About

Law Firm Website Design by
Amicus Creative