Example:

• • Tom left a $1.2 million estate through a will. Probate took 14 months and cost $85,000. Details became public.
  • Beth’s similar estate in a living trust passed to heirs in just 6 weeks with minimal cost and total privacy.

Action Steps:

• • Set up a living trust to keep your estate out of probate court.
  • Properly “fund” assets into the trust – titles, deeds must be transferred.
  • Coordinate beneficiary designations on accounts with your trust terms.

FAQs:

• • How long does trust administration take vs. probate? Typically 6-8 weeks vs. 9-24 months.
  • What is the cost of a living trust vs. probate? 1-2% of estate value vs. 5-10%.
  • Isn’t trust administration still required after death? Yes, but it is much simpler and faster than probate proceedings.

Examples:

• • A stroke left Ed unable to manage his rental properties. His trust let his daughter step in seamlessly to handle things.
  • Sheila’s trust holds money for her son until he’s 25 and finishes college. It can also provide for a special needs niece without disrupting benefits.
  • Sam and Ann use an AB trust to double their estate tax exemption to pass on more assets tax-free.

Action Steps:

• • Name trusted successors to manage assets if you become incapacitated.
  • Include specific provisions for minor children, blended families, and those with special situations.
  • Work with an estate attorney to minimize estate taxes if you have a high net worth.

FAQs:

• • Can a trust protect assets from creditors? Certain spendthrift trusts can. Consult an attorney for your specific needs.
  • How can I provide for a child with special needs? A special needs trust can help without jeopardizing government benefits.
  • What is an AB Trust? A tool for married couples to maximize estate tax exemptions. Talk to an estate lawyer to see if it fits your situation.

Examples:

• • Jason keeps a secure file for his trustee with all his passwords to important online accounts like email, banking, social media, crypto wallets.
  • Olivia includes provisions giving her successor trustee authority to deal with her digital real estate business and related online assets.
  • Amir provides the seed phrases and instructions to distribute his Bitcoin and NFT collections to his beneficiaries.

Action Steps:

• • Inventory all important digital accounts & assets. Update regularly.
  • Integrate digital asset provisions into your living trust documents.
  • Provide trustee with access information in a secure but accessible method.

FAQs:

• • What digital assets should I include in my trust? Any online accounts or files with monetary or sentimental value. When in doubt, include it.
  • How do I safely store & share passwords? Consider secure digital vaults like LastPass or 1Password.
  • Are social media accounts really “assets”? Some have value as business or influencer accounts. For personal ones, think about privacy and memorial legacy.

Examples:

• • Jorge chose his CPA sister Rosa as successor trustee, with a trusted cousin as backup. An estate lawyer friend serves as trust protector.
  • With an $8 million estate and dysunctional family, Melanie opted for a professional fiduciary firm to act as impartial trustee.
  • When son Leo struggled with addiction, Ava named a bank trust department to manage his inheritance and make payments for his care.

Action Steps:

• • Carefully consider who has the time, skills and integrity to serve as successor trustee. Have candid discussions with them.
  • Name at least one backup trustee in case the primary can’t serve. Consider a professional for complex situations.
  • Set clear, reasonable fees for trustee duties. Consider a trust protector to add checks and balances.

FAQs:

• • What if my trustee proves unfit or dishonest? A trust protector or court can remove them if proper proof is shown. Naming good successors is key.
  • How much should I pay a trustee? It varies by duties, but 1% of assets/year is common. Get professional guidance for your situation.
  • Can I replace a trustee while I’m alive? Yes, as long as you’re mentally competent you can change trustees anytime.

Examples:

• • With vacation homes, a family business and special needs son, Julia spent $6K with an estate attorney to set up and fund her custom living trust – far less than probate costs.
  • When Kate died with an unfunded, outdated trust, her family spent thousands in legal fees and months in court to resolve issues. A little effort in life would have saved a lot after.

Action Steps:

• • Don’t fear the cost of a living trust – it’s far less than the cost of probate. Quality online options make it affordable for simple estates.
  • For complex situations, spend the money for bespoke legal advice – it’s an investment that will save heirs even more.
  • Once the trust is created, take the crucial next steps to properly title assets into it. This modest effort avoids major problems later.

FAQs:

• • How much should a basic living trust cost? Online forms (not recommended) can cost under $1,000. Attorney-drafted trusts average $2,000-4,000. Complex ones can be $5,000+.
  • What if I spend money on a trust but my family fights anyway? That’s always a risk, but having a clear, legally-valid trust gives them less to fight about than dying without one!
  • How often should I update my trust? Review it every few years and after major life changes – births, deaths, divorces, etc. Expect to make updates a few times a decade.

Questions:

1. What’s the main advantage of a living trust vs. a will in California?
   • A) Avoiding probate
   • B) Saving on taxes
   • C) Nothing – they’re the same
   • D) Trusts are easier to set up
2. How long does California probate typically take?
   • A) 2-4 months
   • B) 6-12 months
   • C) 12-24 months
   • D) 3+ years
3. What happens if you die without a will or trust in place?
   • A) The state decides who gets your assets
   • B) Everything goes to your spouse
   • C) Your oldest child inherits all
   • D) Your assets go to the government
4. Which of these is NOT a benefit of a living trust?
   • A) Avoiding conservatorship if incapacitated
   • B) Shielding assets from estate taxes
   • C) Eliminating the need for a will
   • D) Maintaining privacy
5. What’s the MOST important thing after creating a living trust?
   • A) Telling your family about it
   • B) Properly funding the trust
   • C) Naming guardians for kids
   • D) Signing the documents

Answers:

1. A) Avoiding probate. Assets in a living trust bypass lengthy, costly probate.
2. C) 12-24 months. Probate averages 1-2 years even for modest estates.
3. A) The state decides. Without a valid will or trust, intestate succession laws determine inheritance.
4. C) Eliminating the need for a will. You still need a “pour-over” will for guardianship & assets outside the trust.
5. B) Properly funding the trust. Failing to title assets correctly negates the main benefits. Consult a lawyer for guidance.

Disclaimer

The information in this article on California living trusts is general in nature and not a substitute for personalized legal advice. Estate planning laws and options vary based on individual circumstances and may change over time.

Examples, action steps and answers provided are for illustrative purposes only and may not apply to or be appropriate for every situation. Seeking counsel from a qualified California estate planning attorney is strongly advised to assess your specific needs and create a custom solution tailored to your unique goals and circumstances.

While we strive to provide accurate and useful information, this article is not intended to be an exhaustive guide to California living trusts. Additional steps, considerations and exceptions may apply in certain situations. Use this as a starting point for exploring your estate planning options and consult professional advisors for personalized guidance.