The probate process in California can be time-consuming, expensive, and emotionally draining for the loved ones left behind. Fortunately, a powerful legal tool exists which offers a solution to this problem: the living trust. A living trust is a special instrument that exists at the crossroads of law and finance, allowing you to transfer ownership of your assets to a special, legally recognized entity—your trust—during your lifetime. After you pass, the assets in the trust are distributed per the exact terms of the trust rather than entering into the probate process.
Once established, the trust and the assets therein are managed by a trustee of your choosing, often a lawyer or close associate. If you don’t relish the idea of handing over control of your assets to a third-party trustee, you can also choose to serve as trustee of your own living trust while you are alive by adding language to the trust which designates a successor trustee to take over only after your death.
A living trust is a robust and highly adaptable instrument, but one of its main benefits is that it can help your estate avoid probate. A trust creates a totally separate legal entity to hold your assets—in some ways, this is more like establishing a company than it is writing a will. Therefore, when you transfer ownership of your assets to this living trust, those assets are no longer part of your personal estate. Instead of entering probate upon your passing, your assets can be distributed to beneficiaries by your designated trustee.
In California, avoiding probate can save significant time, money, and stress. Bypassing probate allows your heirs and beneficiaries to access the funds you’ve allotted them as quickly as possible. Probate proceedings can take months or even years to conclude, depending on the complexity of the estate and whether there are any disputes among the named beneficiaries. During this time, your loved ones will be left without access to assets they may desperately need to cover your final expenses or routine bills associated with your estate.
In addition to the inconvenience, probate can be expensive. In California, court fees for probate are set by law and based on the size and value of the estate. For larger estates, these fees can be substantial and rapidly cut into the value of the assets being distributed. If your heirs need to hire their own attorney(s) to handle probate, that will be a significant financial factor as well. By creating a living trust, you avoid fees and ensure that your beneficiaries receive the maximum possible share of your estate.
Another benefit of a living trust is that it allows you to maintain a greater level of control over your assets, even after your death. You can specify precisely how you want your estate to be distributed and even include provisions for how your assets should be managed over the short- or medium-term if you become incapacitated.
If you are interested in creating a living trust to keep your most important assets out of probate court, it is important to work with an experienced estate planning attorney who can help you navigate the complex legal issues involved.
Here are the key reasons to consider using a living trust to help your assets avoid the probate process:
A: Yes, a living trust protects assets in California in a number of ways by allowing you to transfer ownership of your assets to a trust with specific stipulations while you are still alive. This trust is then managed by a trustee of your choosing (or by you personally, up until your passing or incapacitation). By placing the assets in a trust, those assets are no longer considered part of your estate and, therefore, not subject to the legally mandated probate process.
A: Your living trust can protect assets like real estate, bank accounts, investment accounts, personal property, and business interests. Note that living trusts are not the only types of assets that are excluded from probate court.
A: Setting up a living trust as a key part of your California estate plan offers many benefits, including avoiding probate, more control over your estate, privacy and flexibility, and even potential tax benefits.
A: Unfortunately, if there is no valid will, an estate in California cannot legally bypass the probate process. In the absence of a will, the estate is distributed according to California law, which provides a set order of inheritance for surviving family members and other guidelines for liquidating and distributing the estate of a decedent.
Planning for a future beyond your lifetime can feel overwhelming, but with the right help on your side, it can leave you with greatly increased peace of mind. The probate law and estate planning team at Sweeney Probate Law is here to help you navigate the complex world of estate planning and create a fully customized living trust that works with your unique needs, goals, financial position, and family situation. We don’t offer “cookie cutter” estate planning solutions; instead, we will work with you every step of the way to ensure that your assets are protected, your wishes are carried out, and your loved ones are taken care of today and many years in the future. Contact us today to schedule a no-pressure consultation.