Most estate plans usually include many different documents. A last will and testament, health care directives and various trusts all come together to create the most comprehensive plan possible, providing guidance for both end-of-life care and how an estate should be handled after a person’s death. Living trusts can be incredibly useful for most people in California, especially during asset distribution.
Living trusts are useful both during a person’s life as well as after his or her death. Certain property can be protected from heavy taxation by transferring it into a living trust, while still allowing an individual to actively manage his or her property. After death, the property can be more easily transferred to heirs by bypassing the probate process.
Transferring property into a living trust can vary. For property that has a title — including real estate, bank accounts, motor vehicles and more — owners must transfer the title into the trust. This means that the trustee’s name will then appear as the owner on the title. Property without titles can also be transferred, and only require that the property rights be handed over to the trustee. Beneficiary accounts — including 401(k)s and life insurance plans — must have the beneficiary changed to the trustee.
Ensuring that a living trust is fully funded even after death is possible. A pour-over will can make sure that all of a person’s assets that have not been assigned to heirs at the time of death will be pushed over into the living trust. However, this will also subjects the living trust to probate, which it would not otherwise have gone through.
Living trusts are just one component of a complete estate plan. When used in addition to wills and other important planning documents, California residents can be sure that their estate and asset distribution will be handled according to their wishes. This is true regardless of a person’s wealth or how many assets they own.
Source: FindLaw, “How Do I Put Money and Other Assets in a Living Trust?“, Oct. 30, 2017
