Living trust maintenance tips
A living trust has become a popular legal vehicle for many people when they’re preparing their estate plans because of the many benefits it has to offer. A living trust makes it possible for you to pass on your assets without having to go through probate. California does not use the Uniform Probate Code which simplifies the probate process. Therefore, creating a living trust in California may be a good option in order to avoid California’s complex probate process.
A living trust protects your privacy because it doesn’t become part of the public record. It allows for someone of your choosing to manage your affairs if you should become incapacitated. When you create a revocable living trust, you are the trustee of your own living trust, keeping full control over all of the assets held in the trust. And, you have the option of amending or dissolving the trust during your lifetime.
Funding your trust is the process by which you transfer your assets into the trust. In order to do this, you’ll need to change the title from your name to the name of your trust on all applicable documents. An attorney can transfer real estate into your trust and can also provide you with the paperwork and instructions for transferring other assets, but, ultimately, you’re the one that is responsible for maintaining your trust.
Unfortunately, problems arise with living trusts when they’re not properly maintained. The following are examples of real life scenarios that can happen when a trust is not maintained:
- A grantor placed his car in his living trust. After a few years, he decides to purchase a new vehicle, but he forgets to title the new car to his trust. If he still owns the car when he dies, it will be considered as part of his estate and will have to go through probate
- A grantor names a successor trustee when creating his living trust. However, in the ensuing years, the successor trustee dies, but the grantor fails to name a new successor trustee. The trust could then end up in probate court.
These examples illustrate the importance of knowing how to maintain a living trust.
Things change, so should you’re living trust
Failure in making updates to a living trust is a very common mistake when it comes to living trust maintenance. Some common occurrences during your lifetime that would require making updates include:
- Marriage
- Divorce
- Birth of a child or grandchild
- Estrangement from or death of a beneficiary or successor trustee
- Marriage of a child
Some changes in circumstances could result in your removing items or adding items to your trust or amending the terms of your trust. It’s important to have conversations with family when making updates should they have a direct impact on them.
Protecting your legacy
Living trust maintenance is a crucial element in having an effective estate plan. Creating a trust maintenance plan in partnership with your trust attorney is a great way to ensure that your beneficiaries are protected and that your wishes will be carried out after your death.
The Law Office of David W. Foley, living trust attorneys in San Diego, provide a variety of estate planning services for their clients, including living trust maintenance.
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