Do You Need a California Revocable Living Trust?
There is no one-size-fits-all answer to whether you should create a revocable living trust in California since the decision depends on various factors. However, like many people, you may find that a revocable living trust is the best way to protect your assets and maintain control over them during your lifetime and after you pass away.
Creating a California Revocable Living Trust
If you live in California and decide to create a revocable living trust, you'll need to take some basic steps. First, you'll need to choose a trustee. This can be a family member, friend, or professional fiduciary. You'll also need to decide how your assets will be distributed after death. Once you've done that, you'll need to transfer your assets into the trust.
There are a few different ways to do this, but the most common is to execute a deed transferring ownership of your property into the trust. You'll also need to change the title of your bank accounts and other financial accounts to reflect that the trust now owns them. Finally, you'll need to update your beneficiary designations on your life insurance policies and retirement accounts to reflect that you are now leaving these assets to the trust.
Once you've completed these steps, your revocable living trust will be good to go, and you can begin enjoying its benefits.
Benefits of California Revocable Living Trust
Ideally, not everyone should create a California revocable living trust, but there are some benefits worth noting. The benefits include the following.
One of the most significant benefits of creating a revocable living trust is that it can help you avoid probate. Probate is a court-supervised process that can be time-consuming and expensive. However, if your assets are held in a revocable living trust, they will not need to go through probate. This can save your family a significant amount of time and money.
Privacy is critical for many people regarding their finances, and a California revocable living trust can help you maintain it. Unlike a will, which becomes a public record after your death, a revocable living trust remains private. Your financial affairs will not be open to the public after your death.
Protection in case of Incapacity
If you become incapacitated and you don’t have any form of trust, your family will need to go to court to get a conservatorship or guardianship. This can be a lengthy and expensive process. However, if you have a revocable living trust, your chosen trustee will be able to step in and manage your assets on your behalf without the need for a court order.
While some states have fully adopted the Uniform Probate Code, California has not. With this, the probate process in the state is complex, except for small estates, thanks to the simplified probate process.
This means your inheritors can skip the probate by using the simple affidavit process to get real estate properties worth up to $184 500 (for deaths on or after April 1, 2022). If the total value of your estate is $184,500 or less, you can use a separate probate shortcut. Overall, using any shortcuts, including the transfer-on-death deed, can help you avoid probate.
In another highlight, even if you make a living trust, you will still need a Will. While the biggest point to creating a living trust is to avoid requiring a Will, there are some instances where a Will is needed. These instances may include when assigning a guardian to a minor and taking care of a property not initially included in the trust.
When it comes to estate taxes in California, a living trust does not influence it in any way. So, you don't have to worry about the taxes because the federal estate tax levies only apply to estates valued at more than $12.06 million.
How to Create a California Revocable Living Trust
Revocable Living Trust in California can be created with a document outlining the terms of the trust. These terms may include who the trustee is, what assets are held in the trust, and how the assets will be distributed. You sign the document as the grantor in front of a Notary Public.
Creating a revocable living trust in California can be challenging, especially for first-timers. But Forms.legal can help you avoid the hassle when the time comes to make your free living trust.