Dear Liz: You’ve written about trusts recently, but I’m confused. What are the benefits of creating a trust and putting all of your assets in it? Does it make sense for someone in their 30s and without any major assets, such as a house, to create a trust? Will I need to create a new trust if I get married?
Answer: There are many different types of trusts, but they’re typically designed to protect assets in one way or another. If you don’t have a lot of assets, you may not need a trust — at least not yet.
One of the most common types of trusts is a revocable living trust, which is designed to avoid the potential costs and delays of probate, the court process that otherwise follows death. In some states, probate is not that big a deal, while in others, including California, probate can be lengthy and expensive.
It’s often possible to avoid probate using beneficiary designations on financial accounts and, in some states, on property including vehicles and real estate. That may be sufficient for small estates or people just starting out. Once you have a home and some assets you’ll want to investigate whether a living trust makes sense.
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