People in California who have questions about estate planning issues may want to start with the basics. While every person should have a will as well as a health care directive in place, some people may also benefit from setting up a living trust.
A living trust covers a lot of the same territory as a will, insofar as property distributions are concerned, as it operates primarily to allow a person to use their assets for their own benefit during their lifetime but, upon their death, all property contained within the living trust is then distributed to their named heirs and beneficiaries. Unlike other kinds of trusts, a living trust allows a person to name themselves the trustee, and gives them full authority to manage and control the trust assets without restriction.
Most living trusts will also name a successor trustee, who will assume the responsibilities of the primary trustee should that person die or become incapacitated. The successor trustee is bound to follow the rules set forth in the trust, including distribution of trust assets to the named beneficiaries.
A living trust also has the advantage of being amendable and revocable during the trustee’s lifetime. For example, a 55-year-old man sets up an estate plan which includes a living trust for the purposes of helping his step-children pay for college. By the time he is 70, the step-children may have graduated or otherwise made plans that didn’t involve higher education. At any time, the trustee of the living trust is able to amend the terms of the trust. If he was so inclined, he could use the trust assets to plan his own retirement and leave the remaining assets to a charity of his choice.
The fact is that there are many different benefits to having a living trust, and an experienced California estates and trusts attorney can help people craft one that fits their needs and wishes.
Source: California State Bar, “Do I Need A Living Trust?,” accessed Dec. 20, 2014