A California living trusts can avoid probate and reduce or eliminate federal estate taxes for your estate. A living trust will avoid probate for all assets that have been transferred to the trust. Probate is a costly, time-consuming process that many estates do not need. A trust also can avoid a conservatorship, which is also expensive, time-consuming and restrictive. Conservatorships are needed when an individual can no longer manage his or her financial affairs. A conservator is appointed by a court and given the power to manage the conservatee’s financial affairs, and also make decisions concerning the conservatee’s living arrangements. A properly prepared trust can provide a successor trustee who will manage the trust for the benefit of the trustor, sometimes avoiding the need for a conservatorship.
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California Living Trust
A California living trust or an inter vivos trust, is a trust created while you are alive. A California living or inter vivos trust differs from a testamentary trust in that, by having one, all assets held in trust will not be probated by a California probate court.
The most common California living trust is the revocable trust. Revocable means that you can amend your living trust while you are alive. In contrast, an irrevocable trust cannot be amended or terminated once it has been created.
The person who creates a trust is generally called the trust “settlor” in California. The person who is legally responsible to manage the trust property, called “res,” is the “trustee.” The person who will receive trust property, or benefit from the trust, is called the “beneficiary.” The settlor, trustee, and beneficiary can be the same person in a California revocable trust.
California revocable living trusts are very useful in that they avoid the burdensome probate process. By creating and implementing a California living trust you can avoid a probate. At death, the trust assets are distributed according to the settlor’s instructions written in the trust. The successor trustee, person or entity who manages the trust after the settlor’s death, will distribute all assets without involvement by a California court. Trust provisions and instruction need not be disclosed to others or the public.
Often, the settlor is the trustee (and beneficiary) of a California revocable living trust during their life. Thus the settlor maintains control of all trust assets during their lifetime. Spouses can act together as co-trustees of a joint trust and when one spouse becomes incapacitated or dies the remaining spouse can be the sole trustee.
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