Living Trust Lawyer in California
If you live in California, and you die without a will – and even if you die with a will – but your property is not held in a revocable living trust, your loved ones are going to go through a mandatory court process called probate. Probate in California is slow, messy, expensive, frustrating, and public. And those are the good points. Probate in California is best described as a living hell.
Even people who don’t know what probate is know that it’s something they want to avoid. A living trust can avoid probate, which is why the use of a revocable living trust has become such a popular estate planning tool. Living trusts also offer the benefit of privacy and protection in case of incapacity.
While a living trust is a good idea for many families, before recommending a trust, I always want to be sure my clients understand how these trusts operate. Knowing what to expect and how to handle a trust allows you to get the most benefits and avoid unexpected surprises.
Basic Info About Trusts
Trusts can be confusing for many people because they are an abstract and complex legal entity. A trust is a legal creation set up to hold property for someone else. The person who creates the trust is called the grantor because they grant property into the trust. The person who manages the property in the trust is called the trustee. And the person who receives the funds or other property from the trust is the beneficiary.
When we create a trust for you, we’re creating this entity to hold your property. You still maintain complete control over your property. You can buy property, sell property, refinance your house, etc – you give up zero control. What you gain though, is the ability to pass potentially hundreds of thousands of dollars more down to your loved ones, faster and more privately than with just the use of a will alone.
People also often set up trusts for children or others who are not yet ready to manage their own money, or who might have mental health issues, substance abuse issues, or who might simply not be good decision-makers with money. A parent or grandparent might be the grantor, a financial professional might serve as trustee, and the beneficiary would be the child who receives payments for education or other purposes.
The arrangement is quite different when it comes to a living trust set up to avoid probate.
Operation of a Living Trust
When you set up a living trust, you are the “grantor.” But you also serve as your own trustee and receive the benefits of your trust as the beneficiary. You transfer property into the trust, but then manage and use it just as you did before.
Why would anyone go to this much trouble? The benefits of a living trust become apparent when the grantor passes away or becomes incapacitated and unable to manage their own financial affairs. When either of those situations occur, a successor trustee then steps in to manage the trust property. There is no need for approval by the court, so the transition is quick and easy.
The successor trustee pays any bills left behind by the grantor and then distributes the remaining property in the trust to the alternate beneficiaries. Again, this happens without court approval or long delays.
By creating the trust, the grantor has saved their loved ones from dealing with the long, expensive probate process. If the trust did not exist, property would instead become part of the deceased person’s estate. Then the executor of the estate would need to follow all the California probate rules before distributing property to any beneficiaries.
A living trust saves time, money, and legal confusion for the family. In addition, property passes privately, unlike the situation with a will which becomes public when it is filed in court. This type of trust is revocable, so it can be changed or revoked at any time.
Find Out if a Living Trust is Right for You
Living trusts help many families in California prepare for the future in a way that reduces worry and unnecessary expense. But you need to take certain steps to transfer property into the trust to make it work.
I can draw up a trust for your situation, and help you transfer assets into the trust so that it will function the way you want it to. Please schedule a free peace-of-mind planning session to get started.