What is a revocable living trust?
A living trust is a legal entity created to own your assets during your life and distribute them to your beneficiaries at your death. Unlike a will, a living trust avoids probate court jurisdiction and is administered privately, without the need for court supervision or approval. Any California resident with children or who owns property, should have a living trust. The “Trustor” of the trust (the person who creates the trust) nominates a “Successor Trustee” to manage and distribute the property after their death, according to the trust’s specific terms and conditions. So long as the Trustor is living and has mental capacity, he or she can change the terms of their revocable living trust.
What is a will?
A legal document created by you, the “Testator,” that sets forth your wishes regarding distribution of your assets and guardianship of any minor children. A will takes effect at the death of the Testator and may be revoked or amended at any time before the Testator’s death. The Testator selects an “Executor” to administer the estate after the Testator’s death. A will requires the Testator’s assets be administered by the county Probate Court, and after publishing in the paper, notifying creditors and paying court and attorney fees, the estate is distributed among the Beneficiaries of the will. Wills are made public. If a person creates a living trust, they typically also create a “pour over will” which “pours over” assets to the individuals living trust at his or her death.
Who needs a will?
Anyone who wishes to control distribution of his or her property after death and anyone who wishes to nominate guardians for minor children needs a will. Without a will, the probate court will almost always distribute property according to the California Probate Code. Without a will, the probate court will nominate guardians who will have legal custody of minor children.
Are there different kinds of trusts?
A trust may be “living,” meaning it is created and controlled by the Trustor during his or her life and distributes property outside of probate court after death. A trust may be “testamentary,” meaning it is created by a probate court according to the terms of a will. A trust may be “revocable” or “irrevocable”- a revocable trust can be changed but an irrevocable trust cannot. A trust may be specially created for your family, a charity, a person with a disability, or even a pet.
What are the benefits of a trust over a will?
A properly executed trust avoids probate, whereas a will goes through the probate court. By avoiding probate, the Trustor’s family avoids the cost and time of probate court. A trust passes property to beneficiaries quickly and privately, according to the terms of the trust. A trust allows for more control of when and according to what terms property is to be distributed to beneficiaries, whereas a will passes property to beneficiaries outright.
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