Palm Springs Law Blog

Wednesday, December 18, 2019

What Is a Living Trust?

When heirs wait on an estate to move through the probate process after a loved one passes, it can be both expensive and time-consuming. In order to avoid this, a living trust is often created.

A living trust is an estate-planning tool, a legal document that allows you to grant the ownership of your various assets to your beneficiaries of choice. A trustee will be appointed, who will oversee the management of your assets for your beneficiaries. This individual is also responsible for overseeing that your assets within the trust are properly distributed to the correct beneficiaries per your orders. You can appoint someone as a trustee or even appoint yourself.

Types of Living Trusts

There are two different types of living trusts: irrevocable and revocable. An irrevocable living trust is one that is permanent, with any asset going into it staying in it unless all parties named in the trust provide their express permission. Alternately, a revocable living trust is one that is much more flexible and allows for the removal of property and/or beneficiaries by your control. While you maintain control of a revocable living trust, you relinquish control of an irrevocable one. Since you relinquish control of an irrevocable trust, the taxes on assets belong to the trust – not you.

Reasons for a Living Trust

Since the state of California does not use the Uniform Probate Code, it is a very good reason for Californians to obtain a living trust. While the code simplifies the probate process for individuals in other states, and California does not have it, having a living trust will only serve to make things easier for your heirs.

Aside from avoiding the probate process, a living trust can also be very beneficial if you want to leave property to a minor child. If you select someone else as trustee for the property, it can be held in the trust until the child reaches any age that you specify. For example, a grandfather may appoint his daughter as trustee of his lake house, of which his granddaughter is beneficiary.

Another extremely important reason to consider establishing a living trust is in the event that you should become incapacitated you would not have to have a conservatorship placed upon your assets since you will have already appointed a trustee.

Do I Still Need a Will?

Generally speaking, those with living trusts still require a Will since there may be assets or property that are not placed in the living trust. A Will can serve as the instruction for what you want to happen to those assets. Additionally, a living trust is not the same as a living will, which provides directives for medical action or inaction in the event of incapacitation.

Finally, Wills can also provide certain things that a living trust cannot. These actions include:

  • Naming an executor
  • Establishing guardianship of children
  • Leaving instructions for paying taxes and debts
  • Assigning managers for children’s property

Although a living trust does not replace a Will, it can work alongside it to help ensure that your heirs deal with as little aggravation as possible after you are gone.

Heritage Legal, PC Helps Those in California to Create a Living Trust

After the death of a loved one, the emotional toll is great enough, but when you add on the additional aggravation and unnecessary costs associated with the probate process, it can make things that much worse. That is why it is in your best interest – and theirs – to consult with a knowledgeable and experienced California Estate Planning Attorney.

At Heritage Legal, PC, we understand the importance of protecting the very things that you care about. We can help you to establish a living trust as well as a comprehensive estate plan that meets your needs and the needs of your family. To learn more or to schedule a free consultation, contact us today!

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