Do You Need a Living Trust?

Nearly ALL California property owners should have a Living Trust.

Is a "Will" Sufficient?

A "last will and testament" must be formally supervised by a court in a process called "probate."

Probating an estate typically takes over a year, can easily run two years, and if the estate is larger or contested, even longer!

Then there are the fees. By law, the Executor is paid a percentage of the estate. On a $600,000 estate, that legally-mandated fee is $15,000. Most times, the Executor needs the assistance of a probate attorney who also, by law, is paid an equal amount. So, now your estate has paid out $30,000!

Not only that, the probate process, including all your personal details and who gets what, is entirely public. Isn’t there a better way?

* Even with a Trust, you’ll still want a Will.

Why You Need a Living Trust

Like a Will, a Trust is legal document specifying your wishes. However, when you are incapacitated, the person (or institution, such as a bank) named to manage your assets (the "trustee") takes over, without supervision of a court.

Trust administration can be as easy as showing up at the bank with the Trust and a death certificate, closing the accounts, paying off the bills, and splitting up what’s left between the beneficiaries. That’s not typical, but it is possible.

There are fees for administering a trust (because your trustee should be paid for their time and for the responsibility), but you can set the fee. The trustee will probably consult with an attorney to ensure they are doing it correctly, so there will be fees there, too. However, the overall cost is usually less than for probate.

Unlike probate, a trust is a private document and only those involved with the trust need know of its contents.

There are a few formalities, such as putting title to your assets into the name of the trust, but that is easy and inexpensive.

* A trust does not prevent lawsuits, etc.

How to Get Started

"Ok, you’ve convinced me! How do I get started?" For the do-it-yourselfer, buy "Make Your Own Living Trust" by Nolo Press, available at nolopress.com or at most bookstores. Approximately $40, including a CD with sample forms.

(Nolo Press publishes books on legal topics written for the layman).

If you prefer professional help, there are many estate attorneys to choose from — get referrals. We know of some attorneys who will prepare a comprehensive will & trust package for $750 and others often charge $2000~3000.

For more information

The State Bar Association offers two free pamphlets, "Do I need a Will?" and "Do I need Estate Planning?" Send a stamped, self-addressed envelope to:

The State Bar of California
Office of Media & Information Services
180 Howard Street
San Francisco, CA 94105-1639

Important disclaimer: This is general information, not tax advice. Federal and state tax laws change frequently. We are not tax or legal advisors. Please consult a qualified tax or legal professional before acting on anything described here.

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