Revocable Living Trusts
What Is a Revocable Living Trust?
A trust is a written agreement that appoints someone to be responsible for managing your assets for the benefit of yourself or others. A revocable living trust is a special kind of trust that gives you the flexibility to change or even end the trust during your lifetime. You also have the option to be your own trustee, managing the assets you’ve transferred into the trust. Typically a living trust only becomes irrevocable (not open to changes) when you die.
Partner Brad Baker says: “I tell my clients that a living trust is just a will substitute. It designates who gets your estate at your death. However, a living trust doesn’t have to be “probated” like a will does. What is probate? Probate is a Superior Court action to wind up the decedent’s affairs. It takes on average about a year before distribution.”
What a Revocable Living Trust Can and Can’t Do:
- It can dictate how you want your assets managed if you become disabled or incapacitated during your lifetime. (A will can’t.)
- It can provide for minor children if you die before they reach adulthood.
- It can help plan complicated family situations and blended marriages, including ensuring that children from previous marriages receive their proper inheritance.
- A properly funded trust will avoid probate and maintain your confidentiality. (Probate records are open to the public and probate fees are anywhere between 3%-5% of the estate’s fair market value.) The probate threshold in California is now $150,000. If the assets outside your trust are greater than $150,000, a probate will be necessary.
- It can shorten or eliminate delays in distributing property to beneficiaries. It can’t save you income taxes during your lifetime.
- It can’t reduce your estate and other death taxes more than any other estate planning tool.
- It can’t protect you from creditors.
- It doesn’t completely eliminate the need for a will, but the will serves a different purpose. It is a post-mortem safety net to ultimately get all of your assets into your trust.
Is a Revocable Living Trust Right For You?
With a revocable living trust, you will know that your assets will be going to the right people, in the right amounts, at the right times. It will avoid court conservatorship during your lifetime and probate proceedings at your death. With these unique features, a revocable living trust can provide something truly invaluable: peace of mind.
Attorney Brad Baker’s Trust & Estate Planning Process
“Before we draft anything, I will ask you about your family, your financial situation, and your values. This helps me make the document we create together the best possible design for your unique circumstances and goals. You can also use this first conversation to explore other estate law needs you may have. As we create your trust, I will instruct you on the funding aspects of the trust for each asset. I can also help you choose beneficiaries for certain contractual assets. Even after the trust is signed, as your life changes, we can adjust your trust for a reasonable fee.”
To learn more about how Baker, Burton & Lundy’s experienced attorneys can represent or advise you, please call (310) 376-9893 or fill out the form below.