If you’re thinking about creating an estate plan in Rancho Cucamonga, we’re willing to bet that you prefer to give as much money as possible to your spouse, children, or other heirs, such as your favorite non-profit organizations or charities. You probably don’t want a big chunk of your estate to be used for probate court fees and attorney fees. This is where a living trust enters into the equation. Trusts help estates avoid the hassle and expense of probate.
Probate is the process of validating a will, appointing an executor or personal representative to handle the estate, paying all debts and taxes, and distributing what’s left of the estate to the heirs. When you create a living trust, it allows your surviving family members to transfer your property to your heirs quickly and easily and without the hassle and delays associated with probate.
Not only does a living trust ensure the quick transfer of your property to those you wish to inherit it, but they get to keep more of your property because it doesn’t get used for probate proceedings, which can be costly.
Benefits of a Living Trust
Here are the key benefits of establishing a living trust:
- It allows assets to pass to your beneficiaries outside of probate.
- If you’re married, you and your spouse can use a living trust to handle your community (marital) property and your separate property.
- You name yourself as the “trustee” while you are living.
- If you create a trust with your spouse, you are both co-trustees.
- The trust is “revocable” so it can be changed by you at any time.
- Living trusts are easy to maintain.
- You do not have to file a separate tax return for your trust.
- When you die, the successor trustee (the person you named) takes over and administers the trust on your behalf.
We recommend that whenever someone creates a living trust that they also create what’s called a “pour-over will,” or a backup will. This ensures that any property not transferred into your trust still goes to the heirs or organizations that you wish to receive it.
If you do not make a backup will, any property not transferred to the trust will be transferred according to California’s intestate succession laws. Meaning, it will likely go to your closest relatives, such as your spouse and children.
Related: How Do I Revoke a Will?