On behalf of Richard A. Lewis posted in Estate Planning on Friday, May 27, 2016.
Often an important part of estate plans for people with significant assets, the revocable trust is a legal vehicle that provides for trustee management of your assets for your benefit during your lifetime. Without having to go through a probate proceeding in state court, your assets that you transferred to the trust are then given by the trustee to your named beneficiaries upon your death.
Without a revocable trust, a person’s property in that person’s name alone that does not pass to a named beneficiary outside of court would pass at death according to the terms of a will in a probate proceeding, or, if there is no will or trust, would be distributed to close family according to California intestacy laws in a probate proceeding. Either way, probate can be expensive and take substantial time.
(Alternatives to probate may be available in California in some situations when estates are relatively small.)
A revocable living trust has other benefits. For example, it provides privacy to the grantor and his or her family and beneficiaries because the details of his or her estate must not be part of a court proceeding at death. If a person without a revocable trust becomes incapacitated, unless other legal arrangements have been made, it may be necessary for family or friends to petition the court to appoint a conservator to manage the person’s assets.
The person who creates a revocable trust is called the grantor, trustor or settler, and the revocable trust may also be referred to as a living trust, revocable living trust, revocable inter vivos trust or grantor trust, according to an informational pamphlet by the State Bar of California.
The grantor of a revocable living trust often names him or herself as trustee, which allows him or her to manage his or her property in the trust for his or her own benefit. A successor trustee is normally named in the trust to take the reins when the grantor no longer wishes to serve, becomes unable to do so, such as because of incapacity, or passes away, at which time the successor trustee would distribute the trust assets to the grantor’s named beneficiaries.
Choice of trustee (if the grantor does not serve) or successor trustee is a major decision and could be a relative, friend, professional trustee or institutional trustee such as a bank.
Despite the benefits of revocable trusts, they are not appropriate for everyone. It is important to consult with an experienced California estate planning lawyer for complete analysis of your assets and goals. Legal counsel will provide advice about whether a revocable trust or other vehicles are advisable to manage your property during your lifetime and distribute it at death in your particular circumstances.
Sacramento attorney Richard Lewis of The Law Offices of Richard A. Lewis advises clients about all estate planning matters.