Estate planning assigns your personal assets to certain beneficiaries and inheritors. Your privacy in California, however, isn’t established solely by having an estate. Holding high-worth assets in your portfolio often calls for privacy. Keeping the exact worth of your assets private ensures that whoever receives them is protected. Assets that are exposed to the public get contested, and their owners come under question. Here are a few reasons why privacy is ideal when owning an estate.
The risks of a will
Creating a will as part of your estate planning is recommended, but this document is limited and lacks sufficient privacy. Wills are only honored in a court of law, so public courts must inquire into a will when you die. Once you die, a will is also contestable, giving almost anyone the right to make claims for assets therein. These issues happen because wills are public.
The risks of probate hearings
Even without a will, you endure the risks of a probate hearing. This process is the default method of disbursing your assets. Without a will or a developed estate, your assets become public, and a local municipality temporarily seizes them. What you own is then publicly debated through a court system that focuses on your closest relatives.
The living trust
A living trust is the safest option estate owners have in keeping their assets private. With a trust, there’s the trustor, who is you; the trustee, who manages your assets upon your death; and the beneficiary, who receives your assets. The conditions of a trust make it private, being only accessible by the trustor, trustee and beneficiary. The assets within a trust, therefore, aren’t up to debate and can’t be contested.
Whether to go with a trust- or will-based estate is a decision you must make. Maintaining the privacy of your assets is possible when an estate and its assets are built in a trust.