Why the Wealthy Use Family Trusts (and Why You Should, Too)

Image of safety deposit boxes. Photo by Tim Evans on Unsplash.

Most people want to take care of their loved ones regardless of how much money they may have. Those who are wealthier than others often use Trusts to distribute money to their loved ones in a way that:

  1. Avoids the expense, hassle and time of probate;
  2. Maintains their privacy; and
  3. Helps them avoid paying certain taxes.

If you were to leave this earthly experience tomorrow having more than $166,250 in certain assets, your loved ones would most likely need to probate those assets in order to get them. To avoid probate, your assets need to be ones that are not subject to probate, such as Trust assets.


Assets Included in this Calculation (PROBATE)
Bank accounts in your name only Investment accounts in your name only Vehicles in your name only
Real estate in your name only Real estate held as tenants in common Retirement accounts without a designated Beneficiary
Your personal possessions (such as jewelry, furniture, collections)


Assets Included in this Calculation (NO Probate)
Anything owned by a Trust Bank or investment accounts in 2 (or more) names Bank or investment account with a Beneficiary designation
Real estate held in Joint Tenancy (or Transfer on Death) Vehicles in 2 (or more) names Retirement accounts with a designated Beneficiary


The probate process is expensive and can take several years to complete. Your loved ones will most likely need to hire a lawyer to help them with the process, and they will not get your assets until the probate process has been completed. Probate documents are available to the public, and they include your Will (if you have one), an inventory of the probate assets with appraised values, and an order for the distribution of those assets.


On the other hand, a Trust is private. No one except for your family and other loved ones will see your Trust. Typically, it takes less time to administer a Trust than to administer a probate, so your loved ones get to enjoy your gifts more quickly.


If you were to leave this earthly experience tomorrow having more than $12,060,000*, your loved ones will probably have to pay federal estate taxes on the amount over $12,060,000. Certain types of Trusts can help your loved ones avoid paying these taxes, but because California Trusts Online is designed to help those who own less than this amount, you will not find those types of Trusts here. If you own $12,060,000 or more, we recommend that you consult with an attorney to give you personalized legal advice.


In short, if you have more than $166,250 in assets included in the above calculation, but less than $12,060,000, and you want to avoid probate, a Trust through California Trusts Online may be right for you. Click here to begin yours today!


*Note: This number is for 2022 and changes every year.