When you are planning for what will happen to your estate when you pass away, you likely want to make things as easy as possible for your loved ones. There are several options to make this happen. One of the options that California residents might like to explore is living trusts, which allow you to turn property over to loved ones as soon as you pass away instead of going through probate.
How are living trusts set up?
In most cases, you will list yourself as the settlor, beneficiary, and trustee of the property being held in the trust. When you die or if you become incompetent, the trust would roll over to the person you have listed as your successor. Many living trusts are revocable, so they can be changed. If you are deemed incompetent or if you pass away, the trust becomes irrevocable.
Why should I consider a living trust?
A living trust makes it easier for your loved ones to take control of your property when you pass away. They won't have to go through the probate process, which can save time and money. This also saves your family from having to go through the privacy issues that plague some probate processes because trusts aren't a matter of public record. You can also set terms on the living trust that dictate how it is handled after you die. You can stipulate how the trust can be used, as well as stipulate when it will be distributed. A living trust can also help them to reduce taxes or eliminate them.
While a trust is a great estate planning tool, you should make sure that it fits your needs. It is also important that you use trust planning as part of a comprehensive estate plan instead of relying solely on a trust for your estate plan.
Source: Superior Court of California, County of Santa Clara, "Living Trusts" Sep. 17, 2014