Estate Planning 101: Trusts vs. Wills, Protecting Assets, and Avoiding Probate
In this interview, we discuss the essential differences between a will and a trust, explaining how each impacts your assets, the associated costs, and the importance of proactively protecting your family's inheritance. Learn how a living trust can help you avoid California's time-consuming and costly probate process, offering you peace of mind. Discover common misconceptions and hear real-world examples that highlight why estate planning is crucial.
What Is a Trust, and How Is It Different from a Will?
Christina explained that a trust, specifically a living trust, is a legal document that determines who will inherit your assets and manages those assets if you become incapacitated. A will, on the other hand, specifies who will receive your assets but requires a court process called probate to validate and enforce it. Probate can be time-consuming and expensive, whereas a trust is designed to bypass probate entirely, saving time, money, and added stress for loved ones.
The Probate Process: A Lengthy, Costly Journey
In California, probate is known for being both expensive and lengthy. Christina noted that even without disputes, probate can take upwards of 18 months, depending on the county. Along with a prolonged timeline, the costs of probate can be substantial. For instance, a million-dollar property in probate could rack up attorney fees around $23,000, executor fees equal to that amount, and court-related fees of approximately $50,000 in total.
Without a trust, families risk losing thousands in fees—money that could otherwise go directly to beneficiaries. As Christina shared, families already dealing with loss are further burdened by delays and fees. This financial and emotional toll makes the proactive step of setting up a trust well worth it.
Common Objections to Setting Up a Trust
One reason people hesitate to set up a trust is the perception that it requires significant effort and decision-making. Many people avoid the process because they don't want to think about uncomfortable topics, like potential guardians for their children or distribution of their assets. However, as Christina pointed out, most attorneys provide guidance to simplify these decisions. The brief upfront work pales compared to the lengthy process that families would otherwise face through probate.
How a Trust Helps Avoid Probate
Christina offered a helpful analogy, comparing a trust to a "box" where you place assets. When you create a trust, you're essentially establishing this box and transferring ownership of your assets into it. Should you pass away, the trust still legally "owns" these assets, meaning there's no need to go to probate. This simple but powerful setup ensures that assets are managed according to your wishes, without court intervention.
Misconceptions About Trusts
Many people believe a trust provides complete protection from lawsuits, but a typical living trust does not shield assets from legal claims. For true asset protection, additional structures like corporations or LLCs are required. The primary purpose of a living trust is to simplify asset transfer, avoiding probate and ensuring management in the case of incapacitation—not to act as a safeguard from lawsuits.
Final Thoughts
Setting up a trust may seem daunting, but the peace of mind it provides is invaluable. As Christina emphasized, the benefits of avoiding probate, saving on potential fees, and easing the process for loved ones are worth the upfront effort. She encourages anyone considering a trust to consult with an attorney to get a sense of comfort and confidence in the process.
If you'd like more information or to discuss your estate planning options, Christina Gentelini and her firm are a fantastic resource in the Long Beach area. Making these decisions now can prevent much larger challenges down the road, helping ensure that your assets go exactly where you intend—without the hurdles of probate.
How to Contact Christina Gentilini
562-431-1956
christina@wgestateplanning
