Revocable living trusts and when they might be important
Californians may have heard of revocable living trusts and they might wonder if they need to set one up. Revocable living trusts allow people to pass assets directly to their beneficiaries without having their estates go through probate, but they are not necessary for many people.
In many cases, people have assets that already will be passed directly to their beneficiaries outside of probate, including life insurance policies, retirement accounts, bank accounts that have transfer-on-death provisions and their homes if they have spouses. For those types of estates, wills may be important but trusts may be unnecessary.
Revocable living trusts can be very helpful for people whose family members have a lot of conflict with one another, those who have very complicated estates and those who own real estate in more than one state. Living trusts are also important for people who want to leave unequal amounts to their beneficiaries or who want to disinherit a child. People who do set up living trusts will also need to establish pour-over wills. These provide that anything that wasn't transferred to the trust will be upon the person's death. It is important that people transfer title to the assets the trust will hold to the trust itself. They can then manage the trust and the assets held by it while they are still living.
When a person meets with his or herestate planning attorney, the attorney may review the person's estate and family situation and then provide advice on what types of tools will be appropriate. In addition to wills and trusts, the attorney might recommend such things as durable powers of attorney and living wills. There are also a variety of different trusts that are tailored to meet specific goals, such as special-needs trusts to provide for the care of disabled adult children.