Target Focus: California Living Trusts, Probate Avoidance & Estate Planning
For many California homeowners, a home represents one of the largest assets they will ever own. Yet owning valuable real estate without a coordinated estate plan can create significant legal and administrative issues for family members after death.
A will and a living trust are not interchangeable documents, and neither should be selected solely because of a generic online recommendation. The appropriate estate plan depends on the individual’s assets, family circumstances, beneficiary designations, tax considerations, and goals.
What Happens If Property Goes Through Probate?
California probate is a court-supervised process for administering certain estates.
California law provides statutory formulas for attorney and personal representative compensation in many probate matters. For larger estates, those statutory amounts can become significant.
For example, the statutory calculation applicable to an estate with a $1 million gross value can result in substantial compensation before considering other potential costs and expenses.
Importantly, probate fees are not simply a “tax” on the home. The applicable rules, deductions, estate composition, creditor issues, and other circumstances matter.
How Can a Revocable Living Trust Help?
A properly created and funded revocable living trust can allow assets held in the trust to pass to designated beneficiaries without going through the ordinary probate process for those trust assets.
However, simply signing a trust does not necessarily place every asset into the trust.
Funding and asset titling are critical.
For example, if a homeowner creates a trust but fails to properly transfer the home or other assets into it, the intended probate-avoidance strategy may not work as expected.
A Complete Estate Plan Is More Than a Trust
A well-designed estate plan may include several documents, such as:
- Revocable living trust;
- Pour-over will;
- Durable power of attorney;
- Advance health care directive;
- Beneficiary designations; and
- Appropriate property-transfer documentation.
The correct combination depends on the client’s circumstances.
Planning for Your Family
Estate planning is particularly important for homeowners, business owners, parents, married couples, and individuals with substantial or complicated assets.
A properly coordinated plan can help provide clearer instructions regarding who should receive property, who should manage assets, and who should make financial or health decisions if the individual becomes unable to do so.
Leeran S. Barzilai, A Professional Law Corporation provides estate-planning services for California individuals and families.
If you own a California home or other significant assets and have not reviewed your estate plan recently, contact our office to discuss whether a living trust or broader estate plan may be appropriate.
Phone: (619) 436-7544
Email: receptionist@lbatlaw.com
Website: https://lbatlaw.com/
