The most common purpose for setting up a living trust is to protect your heirs from having to go through the probate process when you pass away. Probate is the term used to describe the legal process in which the state court determines how the assets of a deceased’s estate must be distributed to the heirs. Probate can be costly and time-consuming. Probate can be avoided in a number of ways. In California, the best way to avoid probate is to create and fund a living trust.
If the entire value of your estate is under $150,000, you may not need a living trust because your heirs could use the small estate probate process. Also, bank accounts and investment accounts can have a “Transfer on Death” designation placed on the accounts, which allows for immediate transfer of those assets to the designated beneficiary without the need for probate upon providing proof of the deceased’s death to the institution holding the assets.
By setting up a living trust, you are basically creating a set of instructions that will determine which heirs will receive your property when you pass away without the need to resort to the probate courts. There are some special rules that must be followed to effectively create a living trust, so it is highly recommended that you hire an attorney to guide you through the process.
A living trust is also an important tool in avoiding major headaches in the event that you are incapacitated due to Alzheimer’s, dementia or some other incapacity. Assets in a living trust can then be managed for your benefit by the trustee you have designated without the need or expense of court involvement or a conservatorship.
At Max Alavi, Attorney at Law, APC we are here to advise you on planning documents that best fit you and your family’s specific situation. Give us a call today at 949-706-1919.
The purpose of this article is to provide a general overview of the probate process and is not specific legal advice. By viewing this blog, you understand that no attorney client relationship is being formed. If you are dealing with a potential probate matter, it is highly recommended that you contact an attorney.