Law Office of Stephen W. Penn and Associates

How does a living trust benefit you?

As a reasonably well-to-do California resident, you may be thinking about your financial situation and what things you can do to enhance it. One of the things you may wish to consider is establishing a living trust. Per RBC Wealth Management, a living trust is one you set up during your lifetime. You retain total control over all the assets you place in this trust.

You can designate yourself and/or someone else as the trust beneficiary, and you also can designate yourself as the trustee if you so desire. In addition, you can revoke this trust or change any of its provisions whenever you wish.

Additional benefits

Bear in mind that your living trust owns all the assets you transfer to it, such as your home, your investment accounts, your retirement accounts, etc. Despite the fact that you no longer own these things yourself, you continue to manage them just as before if you designated yourself as the trustee. Likewise, you and your other designated beneficiaries continue to receive the income and other benefits of these assets just as before.

Still other benefits of your living trust include the following:

  • You could substantially lower the amount of your income taxes.
  • If you designate a successor trustee, (s)he can manage the trust assets and distribute them and/or their income if you are too ill or disabled to do this for yourself or simply no longer wish to do so.
  • You can choose when the trust terminates, such as at your death or at the death of your last surviving designated beneficiary.
  • Your probate estate will be considerably smaller when you die because your living trust and its assets do not need to be probated. This reduces your probate expenses.
  • Unlike your will, your living trust is a private document. This means that your trust maintains your financial privacy.

All in all, establishing a living trust gives you the peace of mind of knowing that your financial life is in order and you have provided for yourself and your other beneficiaries in virtually any and all circumstances. This knowledge can make your golden years even more golden.

While this information is not legal advice, it can help you understand living trusts and how they work.

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  • SCBA | Santa Clara County Bar Association | EST 1917
  • State Bar Of California | California Board Of Legal Specialization | Stephen W. Penn
  • Henry P. Collada Memorial Award 2012