Many of our California based clients have heard that having a living trust can benefit them, but often don’t understand why it is beneficial to have a living trust. Below are some of the more common ways a living trust can aid in achieving your estate planning objectives.
1. Avoid probate.
Avoiding probate is a common goal of many clients in California since the cost of preparing and administering a trust is typically a fraction of the expense involved in probating a will. It is important to note, however, that simply having a living trust is not enough. The trustees of the trust must fund the trust by transferring assets into the trust. Pursuant to the California Probate Code Section 13100, if assets valued at more than $150,000.00 remain outside of the trust on the grantor’s death, then full probate is still required.
2. Avoid conservatorship.
Avoiding Conservatorship is also a commonly stated goal of our clients. Together with a durable power of attorney, clients can predetermine who will manage their assets in the event of their incapacity, as well as how they will be managed, saving thousands of dollars in court and administrative costs.
While a will is capable of devising assets at death through probate, only a living trust has the flexibility to provide for delayed distribution, protection of beneficiaries from creditor claims, as well as other objectives, all without the need for probate. A trust can be administered for years following the grantor’s passing for the purpose of ensuring that the trust beneficiaries reach a certain age or milestone before receiving a distribution from the trust, or allow for periodic distributions to beneficiaries.
A living trust can include provisions such as a no-contest clause, spendthrift clause, and governing law provisions, which preserve the distribution provisions and protect against the potential for disgruntled beneficiaries. Such provisions aid in ensuring the grantor’s wishes are carried out under a variety of possible scenarios without court intervention.
A living trust, unlike a Will, does not typically become part of the public record, which aids in maintaining the grantor’s privacy in many respects. Rather than requiring court oversight, a living trust is administered by a trustee appointed by the grantor, often a capable and trusted friend or family member.
A living trust can be created by anyone, but licensed attorneys draw up trust documents that are specifically tailored to unique family situations. Providing for a family’s future is one of the most important tasks a father, mother, husband or wife will ever undertake. A living trust drafted by an estate planning attorney is an excellent way to retain asset control and provide uninterrupted financial continuity. Contact our experienced living trust attorneys for a free evaluation. For more information, see our Estate Planning Fee Packages or browse our Estate Planning related blog articles.