Numerous California residents create revocable living trusts every year, but not all of these individuals will take advantage of their numerous benefits. In fact, it's not uncommon for individuals to waste the amount of money they spend on trust creation by never reaping their full advantages.
In most living trusts, two married individuals will transfer ownership of the majority of their assets into the trust, and then the spouses will be named as co-trustees. These spouses will then maintain complete control over their trust assets and continue using them as before; however, they will be serving as trustees of the assets rather than as the owners.
Here are some of the advantages such a living trust will provide:
- Probate avoidance: The assets in the trust can bypass probate and go directly to the intended beneficiaries to be distributed in the manner indicated by the trust. This avoids the costs and delays associated with probate.
- Privacy: Since probate proceedings are public, the other advantage of a living trust is the way it keeps the distribution of the assets in the trust private and confidential.
- Easy management of assets in the event of incapacitation: If you're looking to manage your assets more easily in the event you become incapacitated, a living trust could also be useful because it makes the transfer of trusteeship -- and trust management authority -- relatively easy upon the incapacitation of the trust grantor.
If you create a living trust for your estate, make sure that you take full advantage of its many benefits. If you're not sure what benefits you receive, make sure you look deeper into California trust law so you fully understand all the legal options available for your trust.
Source: Forbes, "7 Big Estate Planning Mistakes - Not Making Full Use Of A Living Trust," Bob Carlson, accessed March 30, 2018