Top 4 Ways a California Living Trust Can Enhance Your Estate Plan

I am thinking about executing a revocable living trust, but I am not sure if it will be beneficial. How will a trust help my family administer my estate? 

A revocable living trust is a popular and powerful tool for estate planners, and offers a number benefits for both surviving family members and beneficiaries. The following lists the top four ways in which executing a revocable living trust can help effectuate convenience, as well as possibly help high-net worth clients preserve assets and even avoid the over-imposition of estate tax.

#4: Increased Privacy – A revocable living trust is created with a trust agreement. It lists the creators (known as “trustors”), the trustees, and the beneficiaries. In the appendix, the trust lists the real and personal property placed in trust and subject to the distribution terms in the residuary estate clause. 

Assuming the trust is properly funded, and assets are fully re-titled in the name of the trust, the language of the trust agreement will govern the transfer of property. In other words, no public revelation of transfers will occur, and recipients will receive their inheritances seamlessly and privately – unlike the typical situation involving probate court (discussed further below). 

#3: Seamless Transition – As a follow-up to the explanation offered above, beneficiaries will not have to wait months (or years) for the estate to travel through the probate administration process. In many cases, beneficiaries will have access to their assets immediately, or within a few weeks if a deed or title transfer is necessary. As the testator, you may be able to further reduce the wait-time by creating payable-on-death accounts on behalf of your children or beneficiaries, which will transfer immediately upon remittance of a death certificate. 

#2: Possible Avoidance of Estate Tax – With more advanced estate and trust planning, married couples may be able to maximize their marital estate tax deduction to avoid the double-imposition of estate taxes upon the death of both spouses. Fortunately, there is no separate estate tax imposition by the State of California, however the federal government’s estate tax exemption is currently set at $5.43 million, with a 40 percent tax bill imposed on all assets above and beyond this limit. For married couples, using trusts can help maximize this even further upon the death of the second spouse – thereby leaving more for surviving children and heirs. 

#1: Avoidance of Probate – For estate valued at greater than $150,000, the administrator or executor will likely be required to file a Petition for Probate – which jumpstarts the official probate administration process, that can take up to 1 ½ years. Using a trust, assets will transfer from the trust corpus to the named beneficiary, and will not be subject to any probate proceedings or unnecessary inconvenience. 

If you are considering a revocable living trust, please contact experienced estate planning attorney Brian Chew. Conveniently located in Orange County, California, you can reach the office by calling (949)347-5256. 

Brian Chew, the managing partner of OC Wills & Trust Attorneys, has extensive experience in the areas of estate planning, asset protection planning, business succession planning, long-term care planning, and veterans’ benefits. By devoting his practice to estate planning matters, he has founded a firm that strives to provide exceptional service to their clients by working closely with individuals and their families to create comprehensive and customized estate plans. For the past twenty five years, Brian has served thousands of clients in the matters of estate planning, wills and trusts. If you have any questions about this article, you can reach Brian Chew here.