What are the benefits of Establishing a Living Trust?

The number one benefit of setting up a Living Trust is to avoid probate.  In California the probate threshold is $206,000, which means that if your gross estate (everything you own not counting your debt) is more than that amount and you were to die today WITHOUT a Living Trust in place, your estate WILL go to probate.

Why does everyone want to avoid probate? 

• Probate is expensive: typically about 5% of the gross estate

• Probate is time consuming:  It takes about 18-24 months to get complete.

Top 7 reasons why people are choosing to set up their Living Trusts:

1. Avoiding Probate: One of the most common reasons is to avoid probate, which can be a lengthy, expensive, and public process in California. A living trust allows assets to be transferred directly to beneficiaries without going through the court system, saving time and reducing costs.

2. Privacy: Unlike a will, which becomes a public record during probate, a living trust is a private document. This means the details of the estate and the distribution of assets remain confidential.

3. Control Over Assets: A living trust allows the creator (also known as the grantor or settlor) to maintain control over their assets while they are alive. They can specify how and when their assets are distributed after their death, providing flexibility and ensuring their wishes are followed.

4. Incapacity Planning: A living trust can include provisions for managing the grantor's assets if they become incapacitated. This means that a successor trustee can step in and manage the trust assets without the need for court intervention, which can be crucial for maintaining continuity and financial stability.

5. Flexibility: Living trusts are revocable, meaning the grantor can make changes, add or remove assets, or even dissolve the trust altogether as long as they are alive and competent.

6. Potential Tax Benefits: While a living trust does not inherently provide tax benefits, it can be part of a broader estate planning strategy that includes tax planning, especially for larger estates.

7. Ease of Administration: After the grantor's death, the assets in the trust can be distributed to beneficiaries relatively quickly, without the delays and complexities of probate.

A Living Trust in California can provide significant benefits in terms of avoiding probate, maintaining privacy, ensuring the grantor's wishes are followed, and planning for incapacity, making it a valuable tool for estate planning.  At Living Trust Advisor, we offer comprehensive Estate Planning Packages and to help you protect what matters most.  Have more questions? Contact me for a free consultation.