LIVING TRUST CALIFORNIA
Following a person’s death, their assets and estate will be distributed according to their estate plan and California law. Having an effective estate plan in place can help streamline the process and allow beneficiaries to receive their assets faster and easier during what will inevitably be a difficult time for them. Whether you use a will, living trust or other tool, it is crucial that your estate plan adheres to California law in order to ensure that your assets are distributed according to your wishes, which is why many people seek professional legal assistance.
At Kushner Legal, our Beverly Hills estate planning lawyers are geared towards protecting our clients’ assets through careful and strategic estate planning. While there is a wide array of legal techniques that attorneys draw upon to protect their clients’ legacies, the ideal estate plan is one that is tailored to your unique assets and family structure.
Kushner Legal is an estate planning law firm in Beverly Hills that can help answer your questions now. Timing can be critical in estate planning so it is important to call Kushner Legal at 310-279-5166 or get your questions about living trusts answered online here today and begin setting up your living trust today. We can discuss your matter over the phone, over Zoom, or meet you at our office or a convenient location.
What Is A Living Trust?
Like a will, a living trust is also used to indicate how an individual would like their estate distributed following their death. It is created during a person’s lifetime and specifies an individual, known as a trustee, who will manage the person’s assets for the eventual heir or heirs. A living trust is funded when assets are placed within it, which can be essentially anything with value such as property, cash, or life insurance policies. There are two types of living trusts that one can utilize, namely:
- Revocable living trust: Allows a trust settlor to name him or herself as the trustee and maintain control of the assets within the trust. The assets remain part of the settlor’s estate, however, making them subject to possible estate taxes.
- Irrevocable living trust: In this case, the settlor gives total control to the trustee, who becomes the rightful owner of the trust. In return, tax liability is reduced.
Read more about the differences between Revocable and Irrevocable Living Trusts in California. Individuals opt for living trusts for a variety of reasons and these documents can be key components of an estate plan.
Wills Vs. Living Trusts
While both wills and living trusts are estate planning tools that help transfer estate to heirs, there is a key difference between the two: the necessity of probate: Probate is a court process that handles an individual’s affairs after they die. It is used to determine the validity of a will and manage assets for potential beneficiaries. All wills must pass through probate, but trusts do not.
Read more about the difference between a Last Will and Testament and a Revocable Living Trust.
Steps and Considerations for Creating a Living Trust in California
Creating a living trust in California involves a series of steps to ensure that assets are managed and distributed according to your wishes, bypassing the probate process. Here’s an overview of the process:
- Determine if a Living Trust is Right for You
- A living trust can help avoid probate, maintain privacy, and manage assets if you're incapacitated. However, if your estate is simple, a will may be enough.
- Decide Between a Revocable and Irrevocable Living Trust
- Revocable Living Trust: You can modify or revoke it during your lifetime.
- Irrevocable Trust: Once created, it cannot be changed without the beneficiaries' consent; it may offer additional tax benefits but has more limitations.
- Draft the Trust Document
- The living trust document will specify:
- The trustee (often the trust creator while they're alive) and successor trustee (to manage the trust after the creator's death or incapacity).
- The beneficiaries who will receive the assets.
- Instructions on how and when assets are distributed.
- The living trust document will specify:
- Transfer Assets into the Living Trust
- Transfer ownership of assets you want in the living trust. This might include:
- Real estate: File a new deed to transfer your property or properties into the trust.
- Bank accounts: Change the account's title to the trust’s name.
- Investments and insurance policies: Re-title or name the trust as a beneficiary.
- Leaving assets out of the living trust, or putting them in a pourover will, means they may still go through probate.
- Transfer ownership of assets you want in the living trust. This might include:
- Sign and Notarize the Living Trust Document - In California, signing the living trust document before a notary is required to make it legally binding.
- Create a ‘Pour-Over Will’ - A pour-over will ensures that any assets not transferred to the trust during your lifetime can still be distributed according to your wishes, funneling them into the trust upon your death.
- Maintain and Update the Living Trust as Needed. Life changes like marriage, divorce, or a new child may require updating the trust to reflect your current wishes.
Additional Considerations on creating a Living Trust in California:
- Taxes: Living trusts generally don’t provide tax advantages, but an irrevocable trust may have tax implications.
- Legal Guidance: Consulting a California estate planning attorney can ensure that your living trust is set up in compliance with state laws.
Trust an Experienced Estate Planning Attorney at Kushner Legal for your Living Trust in California
Handling the affairs of a loved one after they pass can be stressful and overwhelming. Having an effective estate plan in place can help alleviate that burden. Following California rules and guidelines is of utmost importance, however, and seeking legal assistance can ensure that your estate plan complies with California law.
Our experienced team of Beverly Hills estate planning attorneys at Kushner Law can help you understand your options. Call our Beverly Hills office today at 310-279-5166 to learn more.
https://oag.ca.gov/consumers/general/estate-finance
https://www.occourts.org/self-help/self-help-probate/medical-financial-end-life/living-trusts