When many Californians create their estate plan, their attorney will recommend setting up a revocable living trust. There are a number of advantages to having this document, both for you, while you’re still alive and well, and for your heirs and beneficiaries after you’re gone.
First, it’s important to understand what a trust is. It involves a grantor who gives property and other assets to a trustee to manage for beneficiary. One person can assume all of these roles. That’s what happens with a revocable living trust.
If you’re setting up one of these trusts, you are the initial beneficiary because the property is still yours, but will name subsequent beneficiaries who will receive the property in the trust when you die. Those beneficiaries will be able to avoid probate. Many people use this type of trust so that their family won’t have to deal with that often arduous and costly process required for any estate over $150,000.
You can also name an alternate trustee. That way, if you (the initial trustee) become incapacitated, your alternate trustee is authorized to manage it, but according to the instructions you’ve provided.
When you die, your named co-trustee or successor trustee (who may or may not be the same person you name as your alternate trustee) is in charge of distributing the assets as you’ve designated to heirs and beneficiaries. By having a revocable living trust in place, you’ve made the process much easier for that trustee than it would be otherwise.
Those who set up revocable living trusts continue to maintain control over the assets in the trust while they’re alive, and they can change the terms at any time. That’s why it’s “revocable.” However, the trust details how they want those assets to be distributed or handled after they die.
Many people place all of their assets, including their home, other property, bank accounts, retirement and investment accounts in their trust. When you do that, you’ll need to retitle any asset with your name on it, such as the deed to your home and your accounts, to the trust name. Your attorney will advise you on how to do that correctly.
While this all may sound overwhelming and complicated, an experienced California estate planning attorney will walk you through it. He or she can also be there to assist those whom you’ve chosen to carry out your wishes after you’re gone.
Source: FindLaw, “Revocable Living Trusts in California,” accessed June 03, 2016