Revocable Living Trusts

In California, any person owning real estate or having even moderate assets or account holdings, will benefit from a Trust Estate Plan. In a typical situation, a husband and wife, or a single person, may own a house or other real property parcels, and also have other investments. The Plan might be to leave the estate to children. Upon death, title to these properties does not automatically pass to children. A court process, or “probate”, is required to officially change title and distribute assets to the children. Probate typically takes nine months or longer to complete and involves significant executor and attorney fees totaling $46,000 even for a $1 million estate. The costs go up from there. The court appoints the person who is in charge. Without an Estate Plan, the court must apply state intestacy law contained in Probate Code § 6400, to determine who the beneficiaries will be, generally the next of kin. Even with a Will, which designates the beneficiaries receiving the estate, the Will itself must be probated through the court system.

People think that they may be able to avoid probate by simply adding their children's names onto their assets or properties as joint owners. They don't realize that by doing this, they lose control of those properties, and even expose these properties to lawsuits, creditors, divorces or judgment issues brought on against those children.

Preparing a Revocable Living Trust provides safety and certainty. Your Trust provides for specific distributions to your spouse and family. You transfer title of your properties and accounts into your Trust (not with the children), and this eliminates the need for the court to transfer in probate after your death. Your children’s financial issues do not affect your Trust property. You specifically name the trustees who are in charge of managing the Trust. During your lifetime you are the trustee and manager, and you name trusted successors to manage things after your death or incapacity. If any beneficiaries happen to be young or immature, you can protect them by having their share managed for their care and education until they reach a threshold age, such as 21 or 25 years old. You can direct who acts as guardian for minor children, avoiding the need to have a judge make this choice.

These days, we see many blended families with spouses each having children from prior relationships. How can you ensure that you take care of your spouse and that your children will receive their proper share? A good Trust plan addresses this.

Every family is unique and has their own concerns, cares, and issues. The way to properly address each of these is with a properly designed Trust Plan.