What You Need to Know About a Revocable Living Trust in California
A revocable living trust allows parties to create a trust but avoid going through a probate court when they pass away. Here’s everything you need to know about a revocable living trust in California.
For estates worth $150,000 or more in California, parties may consider putting their property in a living trust to avoid probate court. A revocable living trust allows the party to modify their trust while alive.
What is a revocable living trust?
A living trust is a trust a party creates while they are alive. While alive, they remain the trustee with complete control over its contents. The trust is revocable because the trustee can modify or revoke it at any time. A trust names a successor trustee who will distribute the trust’s contents when the original trustee passes away.
However, a trustee cannot modify or revoke an irrevocable trust after signing.
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What does a revocable living trust do?
A revocable living trust can distribute almost immediately after a party’s death. However, if parties primarily utilize a will instead of a living trust, their estates will go through a lengthy process through probate court. Estates worth more than $150,000 are subject to the complete probate process in California. An estate the probate court processes may also include court costs and lawyer fees.
A will has some functions that a living trust does not. While a party does not need to use a will, a will can designate a guardian for minor children. A trust may not include some property, and a will can account for that property.
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How to Make a Revocable Living Trust in California
First, the party should decide whether to make an individual or shared trust. For example, parties might want to make a shared trust with their spouse.
The party should decide what property they would like to include in the trust and designate the successor trustee. The party should also determine who the beneficiaries of the trust will be.
Finally, the party should draft and sign the trust in front of a notary public. A party might consider utilizing an attorney to draft the trust.
Any property in the trust should change its title to reflect the change.
FAQs about revocable living trusts in California
What does the probate court do?
The probate process determines how an estate divides after a party passes away. Even if a will exists, the probate process may be complex.
Does California levy estate taxes on property in a revocable living trust?
California does not have estate taxes, so parties only pay federal estate taxes. Federal estate taxes will only levy on individual estates worth around $12 million or combined estates worth about $24 million.
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