A question that often comes up in estate planning is “How much money do you need to get a Living Trust?” The question is a fundamental misunderstanding, but a common one. Although there would not be much point in doing so, you can put as little as a single penny into a Living Trust.
The question is based on the premise that Living Trusts are designed for rich people. It’s a false premise. Living Trusts are designed for anyone who either wants to give something for one person to manage for the benefit of someone else or who wants to have their estate avoid Probate. Imagine that you have a minor niece that you want to leave money to. Leaving lots of money outrignt to a minor will inevitably cause the need to go to court to establish a guardianship for the child. Even young adults (those 18 and older), who will not qualify for a guardianship, may not have sufficient maturity to handle a large cash gift. Instead of giving it to your niece directly, you can put it into a Testamentary Trust (one created at your death) established either in a Will or Living Trust. It can earn interest and be made available to your niece when she comes of age.
Trusts are also a great way for everyone to avoid having their estate pass avoic Probate. In California, estates larger than $150,000 will likely be subject to probate. If you put all of your assets into the Trust, those assets will be divided according to the terms of the Trust without court intervention.
Effective tax planning strategies can also be included in a Living Trust.
Is a Living Trust best for you? Consult with an experienced and qualified estate planning attorney to explore the planning option that is best for you.
Latest posts by Timothy P. Murphy (see all)
- Use Trust Protectors for Added Protection and Flexibility - October 13, 2019
- How Will You Obtain the Care You Need? - October 11, 2019
- Income Tax Basis in Estate Planning - October 9, 2019