What is a Living Trust and Do You Need One?
What is a Living Trust?
First and foremost, a Living Trust is a written legal document which is generally the core of your Estate Plan. Think of your Living Trust like a wall safe, a place where you store your valuable assets that you have worked all your life to accumulate. During your lifetime, your trust is under the control of the appointed Trustee, generally yourself and/or your spouse in a married couple’s Trust. During your lifetime, you retain the keys to your Trust and to your assets, and you nominate a Successor Trustee to receive those keys if you become incapacitated or die. During your life, your Trust gives the acting Trustee legal right to manage and control assets in the Trust, provides instructions for the acting Trustee on how to manage the assets while you are still living, and gives guidance and power to distribute your trust assets upon your passing.
Living Trust and Incapacity Assistance
While most people are primarily concerned about how their assets are going to be handled after death, your Trust may also serve as a management tool if you become incapacitated. Should you become incapacitated, your appointed Successor Trustee can obtain the keys to your trust temporarily in order to manage your Trust Assets until you are able to manage them yourself again. Havin a Trust in place means that your appointed Successor Trustee does not need court intervention in order to take over management of your assets when needed. Without a Trust in place, your next of kin may need to petition the court for a conservatorship. The primary benefit of having a Living Trust is that you are able to avoid the time and expense of court involvement.
Avoiding Probate Court
As mentioned above, with a Living Trust in place, your Successor Trustee is able to help you manage your assets in the event you become incapacitated, thus avoiding the court process known as Conservatorship. The other court avoidance, and often the primary reason to establish a Living Trust in California, is to avoid a court proceeding known as Probate. You can read more about Probate, and why you want to avoid it. Suffice it to say, that Probate is a lengthy and expensive court process that is best avoided in most circumstances. Having a Living Trust in place, and thereby avoiding Probate also has the added advantage of maintaining privacy. Probate is a public court proceeding, which allows the general public the ability to find out what was left in your estate and who gets it.
Distributions on Death
The final purpose, and often the most important outside of avoiding probate, is the ability to leave instructions about how your assets are to be handled after your death. You get to choose your Successor Trustee, determining who gets the key to your safe. Not only does that individual get the keys, but they also get an extensive set of instructions from you advising them on exactly how you would like your assets to be handled. All of this is contained in the Living Trust, which you spent the time and effort to draft with your attorney with specific instructions for your Successor Trustee. Without a Living Trust in place, your property will pass according to any Will you leave behind, although you still must submit the Will to Probate and a public court proceeding. Without a Will, Probate court will decide what to do with your assets based on California intestacy laws.
In summary, having your estate plan in place, especially your Living Trust, will provide you with assistance during your lifetime should you become incapacitated, and maximum amount of control over your assets and their distribution after death. Having a revocable trust also makes the process of transferring everything much quicker and cheaper, and saves your family undue stress and anguish of court involvement. Having your estate plan in place offers peace of mind knowing that you are covered should you become disabled, and that your family’s future will be secure after you pass away. If you don’t have your estate plan in place currently, do some research and learn about estate planning, but most importantly, speak with a qualified lawyer. The attorneys at Naimish & Lewis are always ready to assist with your estate planning needs.
