A revocable living trust is a written agreement designating someone (a trustee) to be responsible for managing your property. It’s called a living trust because it’s established while you’re alive. It’s “revocable” because, as long as you’re mentally competent, you can change or dissolve the trust at any time at your own discretion for any reason. Typically, a living trust becomes irrevocable (cannot be changed) when you die.
Experienced and Committed Oakland Attorneys, Answering Questions About Revocable Living Trusts
The benefits of creating a living trust include:
- 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. However, there are some cases in which having a living trust will not provide protection against probate because the estate has few probate assets and probate is not required.
- A trust also can avoid a conservatorship, which is a court proceeding that is 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.
- For married couples with estates subject to the federal estate tax, a living trust can reduce or eliminate federal estate taxes by setting up an exemption trust. The trust can also include a disclaimer trust, intended to reduce or eliminate federal estate taxes.
Conversely, the disadvantages of creating a living trust include:
- A living trust costs more than just having a will.
- Transferring assets to the trust involves costs and paperwork not required for less elaborate estate plans.
- Administration of an exemption trust can involve additional effort for the surviving spouse.
Setting Up and Funding a Trust
A trust document is prepared that usually names the trustors (the persons who are setting up the trust) as the trustees of the trust. The trustees are responsible for managing the trust and its assets. The successor trustee(s) will take over management of the trust after the death, resignation or incompetency of the original trustee(s).
The trust also provides for distribution of the estates of the trustors after the deaths of both trustors. Depending on the size of the estate, the trust might also include provisions that will reduce or eliminate federal estate taxes.
After the trust is signed, the trustors transfer their assets to the trust. If this is not done, additional legal work, possibly including a probate of these assets, will be required after the deaths of the trustors. (Probate Code Section 15200-15212)
Exemption Trust Lawyers Serving Sacramento and Other California Communities
To discuss how the benefits and disadvantages of a revocable living trust apply to your situation, please call 415-441-8669 or contact our lawyers online via e-mail. We are happy to book appointments to meet at your convenience. Located in San Francisco, we accept cases in Oakland and communities throughout California.