What Is A Revocable Living Trust California – For California residents, living trusts are a common estate planning tool. Due to high property values throughout the state, especially the San Francisco Bay Area, estate assets can easily reach millions of dollars. Trusts allow asset distributions to beneficiaries without going through the California probate process, avoiding additional costs and saving time when closing an estate.
In a living trust, as the person creating the trust (the grantor), you place your assets in a revocable trust. While you are alive, you are also the trustee and the beneficiary, and you control your assets. Because the trust is revocable, you can add or sell assets, change beneficiaries, etc. Upon your death, the trust becomes an irrevocable trust. The person(s) you named as your successor trustee(s) then assumes control. and administer the assets for the beneficiaries according to your instructions.
What Is A Revocable Living Trust California
The trustee(s) have a fiduciary duty to the beneficiaries. They must at all times put the interests of the beneficiaries before their own while following the mandates in the trust agreement. Many long-term or complex trusts also name a trust protector, who advises, oversees and can replace a trustee if necessary. This offers an additional layer of protection for the beneficiaries.
Estate Planning, Trusts, & Probate In California
Note that living trusts do not avoid estate taxes or disclosure of estates that exceed current exemptions. Instead, trusts avoid probate and the associated costs. In addition, there are several other reasons why families want to avoid probate for estate planning. Privacy is one consideration. Probated estates are public. All documents are filed in the court and subject to public review.
In addition, testing can be time-consuming. The testing process typically lasts from six months to two years. During this time, heirs may not be able to access the assets or sell any property. However, costs associated with probate in California are often the main consideration.
For example, an estate with $2 million in assets (disregarding property debt), pays required fees for the executor and attorney at $33,000 each ($66,000 total). An executor who is also the spouse or an heir may choose to waive their fees, but attorney fees are generally unavoidable.
Some types of assets may pass outside of a trust. Often, assets such as retirement accounts and insurance proceeds can pass directly to a named beneficiary. This will also allow to avoid testing. However, assets without a direct beneficiary that are not properly placed in the trust may still be subject to probate. It is vital that estate planning is done comprehensively to ensure that all aspects work together to fulfill your final wishes.
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More information can also be obtained on the California Attorney General’s Estate Planning – Wills and Trusts page and by discussing your own estate planning wishes with your financial advisor. Callahan Financial Planning has offices throughout the San Francisco Bay Area (including San Francisco, San Rafael and Mill Valley) with a team of Certified Financial Planner™ professionals who can help create an integrated estate plan for your situation.
Rebecca is a tax and financial planning practitioner with Callahan Financial Planning Company, serving clients in San Rafael, San Francisco, and Mill Valley in Northern California, in Omaha and Lincoln in Nebraska, and in the Denver metro area in Centennial Colorado. A living trust is a document that allows a grantor to specify how their assets and property are to be managed during their lifetime and after their death. The assets designated to the trust may be managed by the grantor
If the grantor chooses to act as trustee (person responsible for maintaining the trust), however, this option is only available with a revocable trust. An irrevocable trust can benefit the grantor in other ways, such as protecting the grantor from estate tax and creditors. Regardless of the type of trust created, all items in the trust are not subject to probate and will be transferred to the beneficiaries immediately after the grantor’s death.
Step 3 – In Article 4, Section A (continued on page three (3)), name the individual (s) or organization (s) chosen by the grantor to benefit from specific assets (describe the assets).
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Step 4 – In Article 4, Section B, indicate who should receive the tangible assets of the grantor; Select either “The Beneficiaries” or, to specify an alternate person, select the second option and enter the person’s name and last four (4) digits of SSN/Tax ID #.
Step 5 – In the first two entry fields available in Article 4, Section C, provide the name and address of the pet caretaker; The pet caretaker will own rights to the grantor’s pet(s) upon the death or incapacity of the grantor. In the remaining two entry fields, enter the name and address of an alternate pet caretaker.
Step 6 – In Article 4, Section C, part (ii), specify whether it is to give funding to the pet caretaker for this purpose or provide adequate care for the grantor’s pet (s). If financing is to be provided, enter the dollar amount as well as the length of time (months or years) in which the pet caretaker must take possession of the pet(s) and provide the necessary care before the funding is withdrawn.
Step 7 – In Article 4, Section C, Part (iii), use the first entry field to enter the name of the person with permission to request an accounting for the money provided to the pet caretaker. Continue by entering the address of the same individual in the second entry field.
California Revocation Of Living Trust
Step 8 – In Article 4, Section D (found on page 5), enter the name of each beneficiary (maximum four (4)) as well as their address and the last four (4) digits of their SSN or Tax ID #.
Step 9 – In Article 10, enter the amount of time (months or years) in which a beneficiary can make a single request for an accounting of the property placed in the trust.
Step 10 – In Article 13, provide the names and addresses of two (2) successor trustees (persons who will assume control of the trust if the initial trustee becomes incapacitated or unable to do so.
Step 11 – In Article 13, Section H, Part I, indicate whether the trustee will be compensated or not for performing their duties.
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Step 12 – In Article 15, enter the number of days the beneficiary party must wait before a claim can be made on the trust.
Step 13 – In Article 17, choose one of the available options to indicate whether the grantor is married or not. If the grantor is married, enter the name of his spouse.
Step 15 – In Article 21 (continued on page 17), mention the name (s) of the individual (s) or organization (s) that should be excluded from the trust.
Step 16 – In Article 22 (page 17), each relevant party (grantor, trustee, successor trustee) must provide their signature, printed name and the date of signing.
A Separate Revocable Living Trust (rlt): What Is It?
Step 18 – On page 18, “Notary Acknowledgment”, it is recommended that a Notary Public fill in the following details:
Step 19 – Using Attachment A found on the last page of the trust form, describe each asset designated to the trust.
The proper procedure to amend or cancel your revocable trust is set forth in Probate Code Section 15401. The first thing Section 15401 tells you to do is to look at your trust document itself. Generally, here in California, estate planners will include in the revocable trust, instructions on how to amend or revoke the trust.
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Sometimes the language is lacking. If missing, there is a fallback provision in Section 15401, which requires that a settlor of a California revocable trust, who wants to amend or revoke their trust during their lifetime, needs to do so in a separate written document. The written document must be created in the same manner as the original trust was created and be executed in the same manner as the original trust was executed. Here in California, that generally means before a notary.
The written document must set out the specific amendments to the trust. If there is a revocation, the document must specify the fact that the trust is revoked. In order for the amendments or revocation to be effective, the trust amendment or trust revocation must be delivered to the current acting trustee. Another thing to note about section 15401 is that the written document cannot be your last will and testament.
If you are going to change your revocable trust here in California during your lifetime, or revoke it during your lifetime, and there is no language in your trust that tells you how to do that, you must create a separate written document, created in the same way Like your original Trust. Executed in the same way as your original Trust. State specifically the amendments you want to make or the fact that you are