There are many different things you might be able to do when you put together your California estate plan, and you may need to use different estate planning tools to achieve your goals. While a will is a fundamental and important component of any estate plan, there are limits to exactly what a will enables you to do.
According to Kiplinger, a trust is another type of estate planning component that may help you accomplish several specific tasks that a will does not do. What are some of the things you might be able to do with a trust that a will does not enable you to do?
Protect public assistance eligibility
If any of your beneficiaries undergo means-testing to use government benefits or assistance programs, leaving that party’s assets in a trust may hurt their eligibility moving forward. Leaving those individual assets in a trust protects them against means-testing, because the assets do not count as your beneficiary’s property, but rather, your trustee’s.
Protect assets from spendthrift beneficiaries
A trust may also be a good idea if you question whether one of your beneficiaries is fiscally responsible enough to inherit money or assets from you. Say you have a child who abuses drugs, gambles too much or is just plain irresponsible with money. You may leave that child’s assets in a trust on a conditional basis to help control and manage his or her spending.
Many people create trusts to control a beneficiary’s spending or protect public benefits eligibility. However, there are many other estate planning goals you may be able to accomplish through creating a trust.