Working with an Orange County living trust attorney is the only way to ensure your loves ones are protected from probate when you pass.
The loss of a family member involves not only the trauma of losing a beloved relative, but could also involve a lengthy and confusing case in court. These cases are called probate. An Orange County living trust attorney can help you use an estate planning tool to avoid this process.
What Is Probate?
Probate is the court’s process of:
- transferring or inheriting property in California
- determining if a will is valid
- resolving outstanding debts of the deceased
Your property includes your home, bank accounts, cars, and anything with monetary value. This process occurs in the Superior Courts of California. It is this court who will supervise the payment of your debts, and then the transfer of your property.
A probate court will also become involved in your finances if you become incapacitated. The probate court will appoint someone (a “conservator”) to manage your property if you are no longer able to make decisions about your finances, and you will have to pay for those management costs as well as court fees to pick this person.
Why Should You Avoid Probate Court?
Any Orange County living trust attorney will advise you that if you have substantial assets upon your death, your family will be better off if you avoid going through probate. In court, the probate process can take from 9 months to 3 years. This is much longer than it would take to distribute assets if you used another estate planning tool to pass on your assets.
In addition, going through probate is expensive, and can cost thousands of dollars in probate fees. These fees are significantly lower if you use estate planning tools. Even beyond fees to the court, you lose money by going through probate court because estates taxes are imposed on assets transferred in probate, which can be 30 to 50% of the property’s value. With the right estate planning tools, estate taxes are only imposed on the assets over a certain threshold.
Probate court is also a public forum; as a result, filings are public records and your family will not have privacy. However, if you use estate planning tools, you can keep information about your assets and their transfer private.
When Do Your Assets Go to Probate Court?
Although many people believe that their assets will not go into probate if they have a will, this is a popular misconception. An Orange County living trust attorney will advise you that in reality, even with a will, in most cases, your assets will still go through probate. Your assets can end up with the probate court even before you pass, if you become incapacitated.
How Can You Avoid Probate?
In California, the best way to avoid probate is hiring an Orange County living trust attorney to set up a living trust. A living trust transfers your assets into the trust before you pass, and can avoid the time consuming and expensive process of probate. Further, if you become incapacitated, but have a living will that names a trustee to replace you, you can avoid having your case go to probate court where the court will appoint someone to manage your assets. Instead, you choose someone to work as a successor trustee as part of the living trust.
What Is a Living Trust?
A living trust is a legal document that places your assets into a trust during your lifetime, and names a person to manage the trust’s assets (the trustee) for the duration of your life. Most people appoint themselves as the trustee for the duration of their life. However, if you are too busy, or concerned that you lack the organizational skills or financial knowledge to manage the assets well, you can still appoint someone else.
If you appoint yourself, it is important to also name another person to become trustee in case you become unable to do so yourself, as well as for when you die. This person can be a relative or friend, or a professional who specializes in taking care of trusts. Regardless of who you chose to manage the trust, it’s important that you are confident that they are reliable and honest in order to reduce the risk that they could improperly handle the trust funds.
After you die, a living trust then transfers your assets to the people or organizations you choose. These people or organizations are called “beneficiaries.” The trustee you appointed will then be in charge of paying debts and taxes. He or she will also distribute the assets in the trust to the proper beneficiaries.
An Orange County living trust attorney will be familiar with setting up this estate planning tool, and is the only source of accurate and up-to-date legal advice on how to establish a trust.
Will I Lose Control of My Assets While They Are in a Living Trust?
No. A living trust allows you to have control over your assets until you pass. You can still change or terminate a living trust at any time as long as you are still competent.
How Do I Create a Living Trust?
An Orange County living trust attorney can create a trust document. This document states what property is part of the trust, who will inherit that trust property, and names you as a trustee. Then, you or your attorney will transfer your assets listed in the living trust to the trustee. Even if you appointed yourself as trustee, you will still have to transfer the trust property to yourself, in your capacity as trustee.
This transfer of property includes, for example, preparing and recording deeds to real estate, changing the beneficiary on life insurance or your 401k, and transferring bank accounts and stocks.
Do I Need a Lawyer to Create a Living Trust?
Absolutely. Only an Orange County living trust attorney has the skills to make sure this complicated and important legal process is executed properly. It is important that you draft the living trust itself properly. Moreover, it is also essential that you transfer the assets into the living trust correctly. Even if you involve other financial professionals in helping you set up your estate or reduce taxes, it takes an Orange County living trust attorney to properly prepare this legal document.
What Is the Difference Between a Trust and a Will?
Even if you have a living trust, you will likely still need a will, because the two documents serve different purposes. A will states how you will distribute property that is in your name (and not a part of the trust) when you die. A will can also state who should be a guardian to any child under 18 years old. However, it is important to note that as described above, a will still goes through probate, so it is better to rely predominately on a living trust. An Orange County living trust attorney can also help you determine what other estate planning tools you need to protect your assets.
Let an Orange County Living Trust Attorney Protect Your Assets
An experienced Orange County living trust attorney can work with you to effectively prepare for the transfer of your property. Call The Legacy Lawyers at 714-963-7543 to start planning today.