Why You Need a Revocable Living Trust in California

A revocable living trust can help you avoid probate, protect your privacy, and plan for incapacity.

What is a revocable living trust?

• A revocable living trust is a legal arrangement that allows you to transfer your assets to a trust during your lifetime, and to name a trustee who will manage them according to your instructions.
• You typically name yourself as the initial trustee, and retain full control over your assets, unless you are no longer willing and able to be your own trustee.  (Married persons are typically at first their own co-trustees.)
• You can revoke or amend the trust at any time, as long as you are mentally competent.
• When you die, the successor trustee will distribute the remaining trust estate to your beneficiaries, without going through probate, the court-supervised process of settling an estate.

Why do you want to avoid probate in California?

• Probate can be costly and time-consuming. In California, the probate fees are based on a percentage of the gross value of the estate, regardless of any debts or expenses. For example, an estate worth $500,000 would pay $13,000 in statutory fees to the attorney and the executor (2 x $13,000), plus court costs and any extra fees for extraordinary services.
• Probate can also take a long time to complete.  In California, probate cases typically take about 12 to 18 months, and they can take longer if there are any disputes, creditors, or complications.
• Probate is a public proceeding, so anyone can access the court records and find out the details of your estate, such as the value of your assets, the identity of your heirs, and the terms of your will. This can expose your estate and your family to identity theft, fraud, or unwanted solicitations.

How does a revocable living trust protect your privacy?

• A revocable living trust is a private document that need not be filed with the court or recorded with the county recorder.
• The trust assets are not subject to probate, and therefore do not become part of the public record.
• The only people who need to know the assets of your trust are your trustee, your beneficiaries, and your attorney.
• But California law entitles your heirs at law to see the terms of your trust, even if an heir is not a named beneficiary of your trust.

How does a revocable living trust help you plan for incapacity?

• A revocable living trust can also serve as a tool for managing your finances if you become incapacitated, either temporarily or permanently, because of illness, injury, or disability.
• You can name a successor trustee, who is someone you trust, to take over the management of the trust assets if you cannot do so yourself.
• You can also give your successor trustee the authority to make decisions on your behalf, such as paying your bills, filing your taxes, or selling your property.
• This way, you can avoid the need for a conservator — a court-appointed guardian who would have control over your finances and/or personal affairs.  A conservatorship can be expensive, intrusive, and stressful for you and your family.

Who can benefit from a revocable living trust in California?

• A revocable living trust is not only for wealthy people. Anyone who owns property or has assets in California can benefit from the advantages of a revocable living trust.
• Under current California law, if assets in a deceased person’s name do not transfer at death through a trust, by beneficiary designation, by right of survivorship, or by some other non-probate transfer mechanism, and those “probate-able” assets exceed a total of $184,500, probate court administration may be necessary.
• A revocable living trust can help you save money, time, and hassles for yourself and your loved ones.
• A revocable living trust can also give you peace of mind, knowing that your wishes will be respected, and your legacy will be protected.

If you are interested in creating a revocable living trust or have any questions about estate planning in California, contact us today for a consultation. We are an experienced and reputable law firm that specializes in estate planning, probate, and trust administration.  We can help you design a customized plan that suits your needs and goals.