California Living Trusts FAQ
Q. Why have a Living Trust?
A. As a practicing attorney since 1962, I have learned how the probate system works. And what I have learned is that generally probate should be avoided. However people allow their estates to fall into probate because they fail to make a plan. A Living Trust is the plan that you can make to avoid probate.
Q. Why should probate be avoided?
A. Probate is expensive! Your estate has to pay at least two people (the personal representative and the attorney) to oversee the transfer of your property to your heirs. Their fees are based on a percentage of the value of your estate. They can even charge more fees for additional services such as selling your property. Probate takes too long! The average probate estate is open from one to two years. Your heirs must wait to receive your property.
Q. Can probate be avoided with a Will, or without a Will?
A. No. A Will, or lack of a Will, does not avoid probate. A Will merely states who is to receive your property. Your estate will be probated if it exceeds $150,000.00 in value.
Q. What does Probate cost without a Living Trust?
A. Use the two columns to determine the probate costs for attorney and personal representative fees (these are in addition to other probate expenses such as court costs, bond premiums, and appraiser fees). Your GROSS ESTATE is the total fair market value of your property without subtracting debts:
|Gross Estate||Probate Fees|
Q. Does a Living Trust allow me to keep control of my property?
A. Yes. You still control your property and you can do whatever you please with it. You may buy, sell, change investments – just as you normally would. You may put property in and take property out of your Living Trust. You may always revoke the Trust.
Q. How can I protect my child’s inheritance?
A. The law allows an 18 year old child to freely spend an inheritance. If you feel this is unwise, your trust can restrict when and how the inheritance will be used. For instance, your Trust can state that the inheritance will be used only for the child’s education; after that, the inheritance will be given to the child in increments (i.e., half at age 25, the rest at 30). Or you can give the trustee discretion in deciding when and how much to give the child. You are limited only in your imagination in writing conditions into the trust. You should also name a guardian for minor children.
Q. Does a Living Trust have advantages for me during my lifetime?
A. Yes. If you become incapacitated and cannot handle your financial affairs, your Living Trust will keep you from being put under a court supervised guardianship or conservatorship. Your successor trustee will act for you. The Probate court will not be involved