The Next Generation

Occasionally clients ask, "What will a living trust do for me?" The answer is not a whole lot. But it will help your children and other beneficiaries by keeping your estate out of probate. For larger estates, a trust can also avoid the federal estate tax (I'm assuming that it is coming back some day.)

A trust, or a simpler estate plan, can make a huge difference for your children. For one thing, it can prevent your children from inheriting your estate at age 18. That's the age of adulthood in California, and if there is no estate plan, that's when young people will receive their inheritances. A living trust, or a testamentary trust included in a will, can specify that the children won't receive the bulk of their inheritances until an older age, such as 25. The trust can also make funds available for the child's education, medical expenses, and support.

Your estate plan can also nominate guardians for your children if they lose both parents before age 18. It is important that you nominate guardians to ensure that the child's adoptive parents are someone who you believe can do a good job. The person who is nominated will need to petition the court to become the guardian, and your nomination will provide helpful guidance to the court.