Many California residents think that establishing a valid will can eliminate their concerns regarding protecting family assets in the event of their untimely death. However, this is not always the case. Even a seemingly valid will can be contested by a potential beneficiary who thinks they have standing to inherent property designated to others in a will. While a will is sufficient in many situations, a family trust may be more effective at accomplishing any asset protection goals of an asset grantor.
Weaknesses in wills
Some wills can serve as effective advance directives for those who are conducting estate planning, but wills can be questioned from several directions when a potential beneficiary wants a court ruling on the matter. While a will can be a clear indication of wishes for the grantor upon death, the truth is that California state law may preempt the will under certain circumstances. This can especially apply concerning the disposition of minor children with respect to potential guardianship when a parent dies.
When trusts are more effective
There are indeed several instances where a family trust is more protective than a will. One instance is when a grantor needs to qualify for Medicaid in providing continuous care nursing facility insurance coverage. Another situation is when protecting assets from tax collectors and creditors is needed in avoiding probate process exposure. Family trusts can also help protect assets for divorced grantors in some cases when estate planning.
It is always advisable to reevaluate a personal estate plan annually. This is typically a practice for many individuals with significant financial holdings when they are preparing their tax filings in the first quarter of the year. However, the concept that trusts are only useful for wealthy people is flawed thinking, and especially with a family trust. This also applies to both revocable and irrevocable trust designations.