Why you need a living trust

Living Trusts in California

Most of us have heard that a “trust” can be highly beneficial in helping to protect our valuables and provide security for our families, but many people are confused when it comes to actually forming that trust. Yes you can purchase a trust template from LegalZoom for a couple hundred bucks, but you will get what you pay for, and it’s not much. Below are some of the reasons why it’s important to hire an experienced attorney to help draft your trust, and how a properly prepared trust can help you achieve your estate planning objectives:

1. Avoiding Probate.

Avoiding probate is probably the most common goal of California trusts since the cost of preparing and administering a trust is typically a fraction of the expense, inconvenience and privacy invasion involved in probating a will. However, simply forming a living trust is not enough. The new trustees must fund the trust by transferring assets (property, real estate, etc.) into the trust. Pursuant to the California Probate Code Section 13100, if assets valued at more than $150,000.00 remain outside of the trust on the grantor’s death, then full probate of the grantor’s will and estate is still required.

2. Avoid conservatorship.

Avoiding Conservatorship is also a commonly stated goal of many trust clients. Together with a durable power of attorney and health care directive, grantors can predetermine who will manage their assets (and themselves) in the event of their incapacity. Further, grantors can predetermine how those assets will be managed, saving thousands of dollars in court costs and administrative fees.

3. Flexibility.

While a will is capable of devising assets at death through probate, only a living trust has the flexibility to provide for delayed distribution, protection of beneficiaries from creditors, as well as other objectives, all without the need for probate. A trust can be administered for years following the grantor’s passing for the purpose of ensuring that the trust beneficiaries reach a certain age or milestone before receiving a distribution, refrain from restricted activities (alcohol and/or drug use), or allow for periodic distributions for needs like education, professional services or purchasing a home.

4. Enforcement.

A living trust can include provisions such as a no-contest clause, spendthrift clause, and governing law provisions, which preserve the distribution provisions and protect against the potential for disgruntled beneficiaries to interfere with the grantor’s original intent. Such provisions aid in ensuring the grantor’s wishes are carried out under a variety of possible scenarios without unnecessary court intervention.

5. Privacy.

A living trust, unlike a Will, does not typically become part of the public record, which aids in maintaining the grantor’s privacy in many respects. Rather than requiring court oversight, a living trust is administered by a trustee appointed by the grantor, often a capable and trusted friend or family member.

A living trust can be created by anyone, but experienced estate-planning attorneys can draft trust documents that are specifically tailored to unique family situations. Providing for a family’s future is one of the most important tasks anyone will ever undertake, and this reality has become even more evident under the current COVID-19 pandemic when the future is increasingly uncertain.

A living trust drafted by a seasoned attorney is an excellent way to retain asset control, establish financial continuity and provide security for generations to come. Contact SLG for a free consultation and evaluation.