Do you need a living trust? Why do you need a living trust? What is a living trust?
Living trusts are created for many reasons, including (1) avoiding probate; (2) maintaining privacy; (3) planning “trust funds” for beneficiaries who need assistance managing their inheritance; and (4) incapacity planning.
In California, probate is required if the value of your estate exceeds $166,250.00. Assets titled in the name of a living trust are not included when determining your estate’s value and are not subject to probate. Avoiding probate is the main reason to create a living trust.
Once you create a living trust, you can change or revoke it during your lifetime. After you pass away, your trust becomes irrevocable and cannot be changed. At this point, assets held in your living trust will be distributed under the terms of your trust without the need for probate.
When you create a living trust, it is important to properly title your assets in the name of your living trust. Unfortunately, many people create a living trust but do not properly transfer their assets to their trust, usually due to using an online do-it-yourself trust, or working with a document preparation service (who are not attorneys). When this happens, a court proceeding similar to probate will likely be necessary in order to move assets into the trust and distribute them under the trust, thus costing your estate additional expenses that could be avoided.
Another reason you should consider a living trust is that trusts are more private than a probate proceeding.
Probate proceedings are public, so anyone can access your court probate file, which may include your last will, and they can find out about your estate plan and your assets. With a living trust, the only people who receive a copy are your legal heirs, named beneficiaries, and your trustee, thus significantly protecting your privacy.
You may also need a living trust if you have a family member or other beneficiary who needs help managing their inheritance, including minor children or irresponsible young adults.
In your living trust you can create a “trust fund” provision which names a trustee to manage assets for certain beneficiaries, thus protecting their inheritance from being wasted due to inexperience or foolishness.
And a living trust is useful for incapacity planning.
Trusts can designate someone to assist you with managing your property and your financial affairs if you become incapacitated. However, you likely will need a durable power of attorney for financial matters and an advance health care directive for medical decisions as part of a complete estate plan.
Living Trusts FAQs
Do you have questions about Living Trusts? Visit our Living Trust FAQ page and read frequently asked questions about living trusts and estate planning. If you have additional questions or would like to schedule a consultation, please contact us.
Creating a Living Trust
If you would like to set up a living trust, or if you would like to learn more about your estate planning options, contact us today. We have been preparing living trusts for over ten years and have the experience and knowledge needed to help you. Please call us at (760) 673-7600 or schedule a consultation on our website.
