A Revocable Living Trust…
… provides many benefits to those who fund the trust (grantors) and their beneficiaries, like the ability to avoid probate and put a quick end to the estate administration process. However, just creating a Revocable Living Trust will not automatically make these things happen; for a trust to truly be effective, it needs to be crafted with your goals in mind and then needs to be properly funded with assets and property. The following is a list of the four most common types of property that California estate planning lawyers advise their clients about when funding their Revocable Living Trusts.
Real Estate Property
Real estate is almost always placed in a Revocable Living Trust. During the estate planning process, California will and trust attorneys will draft a quit-claim deed that grants all of a person’s interest in the real estate property to the trust which then makes the trust the owner of the property. Real estate property typically makes up the bulk of a person’s estate and placing it in the trust can mean the difference between going through a full California probate process or dealing with a small estate administration.
Bank accounts usually fall into three different categories for estate planning purposes: solely-owned, solely-owned with beneficiary designations, and jointly-owned. The difference between the three is how they pass through California probate. Any account that has a beneficiary designation or is jointly-owned does not have to go through probate while solely-owned accounts do. California will and trust lawyers usually recommend that all solely-owned bank accounts, including those with beneficiary designations, should be placed into a Revocable Living Trust not only to avoid probate but also to allow for ease of access to your funds by your successor trustees if you should ever become incapacitated.
Usually, California estate planning attorneys do not advise their clients to place cars and other vehicles into Revocable Living Trusts because they can bring up liability concerns in the case of an automobile accident and issues with the California Department of Motor Vehicles, as well as auto insurance agencies. However, exceptions can be made if the automobile in question is an antique or a show car that will not be driven daily or if it is worth a considerable amount of money. It’s best to consult with an estate planning attorney to find out what would work best in your situation.
Small Business Interests
Transferring a small business interest, such as a corporation, LLC, or LLP, into a Revocable Living Trust can be beneficial if you’d like someone to have the ability to immediately assume your business responsibilities if you become incapacitated or pass away suddenly. There may be some complications depending on the type of small business structure you have an interest in, so it’s a good idea to meet with a California will and trust lawyer before you make any decisions concerning the transfer of your small business interest into a Revocable Living Trust.
If you want to learn more about funding your Revocable Living Trust, or if you want to have your current estate plan reviewed to make sure your trust is properly funded and you are otherwise protected, please contact our California estate planning law firm at (800) 244-8814 to set up a consultation.